Mohamed Ali, CEO and Managing Director of Abu Dhabi Islamic Bank – Egypt, has said that the bank plans to launch a consumer finance company with a capital of EGP 100m during the second quarter of this year.
Ali added, during a roundtable attended by Daily News Egypt, to reveal the business results of the bank during 2022 and its future plan, that a microfinance company will also be launched before the end of the second quarter of this year.
He explained that the bank is seeking to achieve integration in non-banking financial services, as it established Abu Dhabi Islamic Capital Egypt, Del Capital, to be the investment banking arm, and ADIFinance, the financial leasing company, to which factoring and real estate financing activities were added.
Ali indicated that the bank is restructuring some of its subsidiaries with the aim of making them profitable, as happened with the National Company for Glass and Crystal, which incurred losses up to 2017 of about EGP 70m, and the bank succeeded, after the restructuring was done, in selling them in 2022 at a value of EGP 231m.
He added that the bank plans to liquidate some old non-profit companies, which are fully covered by provisions without any impact on the bank’s business as a result of the liquidation. These include Assiut Agricultural Company, which owns 1,100 feddan in Assiut. On the other hand, it aims to keep other companies such as Cairo National Company for Investments listed on the Egyptian Exchange.
He indicated that the bank is also seeking to launch a digital bank, adding that it is awaiting the Central Bank of Egypt’s announcement of the rules for launching these banks and its approval during the coming period.
Ali revealed that the bank aims to start working with financial derivatives before the end of the second quarter of this year, in accordance with Islamic Sharia systems and the instructions of the Sharia Board of the bank.
On a different note, Ali said that Abu Dhabi Islamic Bank participated in the sale of the first sovereign sukuk to Egypt last February, at a value of $1.5bn, pointing out that the bank acquired 15% of the value of this issuance.
Ali explained that the bank’s relationship with the Ministry of Finance began by dealing with the sukuk law in February 2019, and the best sukuk law in the world was applied, which is in line with the goals of the Egyptian state and does not harm its interests.
He added that the bank launched a company for checks with a capital of EGP 10m to increase the bank’s cooperation in this field.
He stressed that the bank’s role is not only based on maximizing its profitability and increasing the size of its budget, but also working to achieve value in addition to supporting the Egyptian economy. Additionally, the bank is working to enhance trade exchange between Egypt and the UAE.
The CEO of Abu Dhabi Islamic Bank, Egypt, stated that the bank’s strategy aims to maximize the size of the budget, which jumped from EGP 37bn in 2017 to EGP 117bn in 2022, exceeding the bank’s planned targets.
The bank’s financial results revealed that its net profits increased by EGP 739m during 2022, to reach EGP 2.190bn, with a growth rate of 51% over 2021.
Independent annual operating profits rose to EGP 4.447bn, an increase of EGP 1.678bn, with a growth rate of 60.6% compared to 2021, while the combined operating profits increased to EGP 4.559bn, an increase of EGP 1.675bn, with a growth rate of 58% compared to 2021.
The net customer financing portfolio continued to grow, reaching EGP 56.6bn at the end of 2022, an increase of 25% over 2021, with a market share of 1.65%. This growth was also offset by an increase in total deposits by 29%, to reach EGP 97.6bn, with a market share of 1.25%.
According to Ali, the increase in customer financing came as a result of an increase in the financing portfolio of the retail banking sector, which rose by EGP 1.3bn, with a growth rate of 10% to reach EGP 13.6bn. The corporate sector financing portfolio also achieved an increase of about EGP 10.1bn, with a growth rate of 31% reaching EGP 42.9bn.
As for the small and medium enterprises (SMEs) sector and the business sector, Ali explained that Abu Dhabi Islamic Bank is one of the first private banks that pays great attention to this sector. The bank succeeded in increasing the portfolio of SMEs to 25.3% of the total credit portfolio. The portfolio jumped from EGP 1.1bn in 2018, to over EGP 10bn by the end of 2022, and it includes about 3,360 SME clients.
He pointed out that the was a noticeable increase in total deposits, which was a reflection of the increase in the individual deposits portfolio by about EGP 2.1bn, a growth rate of 4.5% to EGP 49.4bn, and corporate sector deposits witnessed an increase of EGP 19.8bn, with a growth rate of 70%, to EGP 48.2bn at the end of 2022.
The bank’s latest consolidated financial reports showed an increase in total revenues by about EGP 1.8bn, with a growth rate of 41% compared to 2021. This growth is due to the increase in net income from return by EGP 1.3bn, a growth rate of 38%, in addition to the increase in other revenues by EGP 13m, with a growth rate of 6% compared to 2021.
On the other hand, total annual expenditures amounted to EGP 1.529bn, an increase of EGP 86m, while the cost-to-revenue ratio improved to 29% in 2022 compared to 38% in 2021.
The CEO and Managing Director of the bank said, “The year 2022 witnessed difficult economic conditions and tensions at the global level, but despite all these challenges, we maintained a level of profitability, as the financial reports of the bank’s performance over the past year showed remarkable growth. Our banking operations were compatible with the principles of Islamic Sharia.”
He added that these strong results achieved were thanks to the ambitious business strategy adopted by the bank, and the relentless pursuit to implement expansion initiatives in providing the latest innovative products and serving different segments of customers and economic sectors. Ali continued: “In addition to the distinguished financial results achieved by ADIB-Egypt in 2022, the bank was exceptionally able to outperform itself by winning 20 prestigious international awards, in recognition of its excellence in serving its individual and corporate clients. The bank also won 15 awards during 2021. Many of the most influential economic and banking magazines also praised the new initiatives taken by ADIB-Egypt that proved its worth throughout the year, thus enhancing its position as one of the most successful, innovative and advanced banks in Egypt and the region.”