Sharjah Islamic Bank Reports 35% Increase in Net Profit

Sharjah Islamic Bank (SIB) has announced a remarkable 35 percent increase in its net profit, reaching Dh767.3 million for the nine months ending on September 30, 2023.

This is compared to Dh568.6 million for the same period in the previous year, reflecting robust financial performance.

Impressive Growth in Net Operating Profit:

The bank also witnessed substantial growth in its net operating profit before provisions, which increased by 29 percent to Dh939.8 million for the first nine months of 2023, compared to Dh730.3 million for the same period in the previous year.

The continuous rise in profit rates and the UAE’s economic recovery played a pivotal role in this performance. 

Net income on financing and investment products saw a significant increase of 22.4 percent, equivalent to an additional Dh198.2 million, reaching Dh1.1 billion for the nine months of 2023.

Increased Income Streams:

Net fees, commissions, and other income also experienced substantial growth, surging by 24.0 percent to reach Dh329.6 million, compared to Dh265.8 million for the same period in the previous year, contributing to the bank’s overall income.

Despite an increase in general and administrative expenses, amounting to Dh473.0 million for the first nine months of 2023, compared to Dh420.5 million for the same period in 2022, SIB improved its cost-to-income ratio. 

It achieved a ratio of 33.5 percent, well within the target set by management and significantly better than the 38.0 percent recorded the previous year.

Enhancing Coverage Ratio:

SIB increased its net impairment provisions to enhance the coverage ratio, reaching Dh172.5 million, compared to Dh161.7 million for the previous period, signifying an increase of Dh10.8 million or 6.7 percent.

Strong Asset Growth:

The bank’s total assets on the balance sheet stood at Dh63.4 billion at the end of September 2023, reflecting a notable increase of 7.3 percent compared to Dh59.1 billion as of December 31, 2022.

SIB maintained robust liquidity, amounting to Dh13.8 billion, representing 21.8 percent of total assets, compared to 23.9 percent at the end of the previous year. 

The bank also continued diversifying its financing portfolio across various economic sectors, with total customer financings reaching Dh31.9 billion.

Investments and Sukuk Payable:

The bank significantly increased its total investment securities, with a growth of Dh3.8 billion (41.0 percent), reaching Dh12.1 billion. 

Sukuk payable decreased to Dh1.8 billion at the end of September 2023, demonstrating excellent liquidity, as it had been repaid through the bank’s sources.

Strong Customer Deposits and Capital Adequacy:

SIB’s customer deposits improved to Dh45.2 billion, compared to Dh39.5 billion at year-end 2022, representing a 14.5 percent increase. 

The bank maintained a robust capital base, with a capital adequacy ratio of 19.6 percent, by Basel III, compared to 19.09 percent the previous year.

The rate of return on average assets and average equity exhibited significant growth, reaching 1.67 percent and 13.1 percent annualized, respectively, compared to 1.14 percent and 8.49 percent at the end of the previous year, underscoring the bank’s strong financial performance and increased profitability.