Mohamed Ali, the CEO and Managing Director of Abu Dhabi Islamic Bank (ADIB) Egypt, shared the bank’s vision and strategy. He discussed the bank’s performance, expansion plans, digital transformation, and investment arms.
Ali stated that the bank aims to achieve sustainable growth linked to the level of service, employee efficiency, and market share growth, which it has achieved in recent years through exceptional growth rates.
He pointed out that the total assets of the bank grew by 27.21%, reaching EGP 148.6bn in September 2023, making it one of the five fastest-growing banks listed on the Egyptian Exchange (EGX).
He mentioned that the bank’s financing portfolio achieved EGP 65.07bn in September 2023, of which EGP 49.04bn is for institutions and EGP 16.03bn for individuals.
Expansion plans and investment arms
The bank currently rules out expansion through acquiring another bank, emphasizing a fundamental focus on expansion through new ideas, services, and products, and the growth of subsidiary companies. However, he confirmed that the bank’s efforts to launch a digital bank are still under study, as it has submitted an application to the central bank for a digital bank license.
Ali revealed that Abu Dhabi Islamic Bank-Egypt is seeking integration in its services, working through its subsidiaries to invest in activities related to the bank’s core business, supporting profitability and enhancing sustainable growth and market share expansion.
He noted that the bank has investment arms, such as Abu Dhabi Islamic Capital Egypt (ADICAPITAL), ADI Finance for Leasing and Real Estate, ADI Consumer Finance, and ADI Micro Finance, responding to the increasing needs of customers and providing suitable services using digital financial technology compatible with Islamic principles.
Ali stated that ADI MicroFinance “Arzaq” is the first of its kind to offer all financing products and services compatible with Islamic principles in the microfinance market. In September 2023, the Financial Regulatory Authority approved the contracts for these new products as the first Sharia-compliant product in Egypt.
He revealed that the bank aims to increase the paid-up capital for the company to EGP 75m, compared to the current EGP 25m.
Digital transformation and financial inclusion
The CEO believes that rapid developments have led the Egyptian banking sector to adopt an expansion strategy in digital transformation, especially with the entry of information technology companies and the proliferation of financial technology companies. This strategy offers multiple benefits to banks and customers, including transaction ease, operating cost reduction, and meeting the needs of customers who prefer online and mobile banking transactions.
He disclosed that the bank adopts an expansion strategy in digital transformation to reach the largest customer base and enhance financial inclusion and financial technology for all segments of society. This includes facilitating transactions and facilitating the provision of online and mobile banking services, accounts, and other banking services.
New services for customers
Ali also revealed that Abu Dhabi Islamic Bank-Egypt recently introduced several services, including online commercial banking transactions, whether documentary credits or letters of guarantee. They also introduced the “Escrow Account”, guaranteeing the rights of the seller and the buyer for non-commercial transactions, “ADIB Gov”, supporting electronic government payments, and “ADIB Pay”, supporting easy batch transfers.
He added that the bank also provides financing for post-shipment export operations for documentary credits, which are carried out under Islamic Sharia rules, for the first time in the Egyptian market.
Diversifying the base of beneficiaries
He said that the bank aims to diversify the base of beneficiaries from its financing, reaching 25.3% of the total credit portfolio. The small and medium-sized project portfolio jumped from EGP 1.1bn in 2018 to about EGP 11bn in 2022, serving about 3,360 clients from small and medium-sized companies.
He pointed out that the supported financing agreement with the International Finance Corporation, structured as Murabaha and valued at $50m, will primarily provide financing for small and medium-sized companies, thus supporting local industries in Egypt and driving sustainable development.
Financial inclusion and social responsibility
The CEO stated that financial inclusion is one of the main pillars of the bank’s strategy, ensuring the provision of diverse Sharia-compliant financing products to suit all segments of society. This aligns with the directives of the Central Bank and the Financial Regulatory Authority. The bank is also continuously present in financial inclusion events under the auspices of the Central Bank, participating in several universities to introduce and offer a variety of banking services and products, including opening fee-free accounts with no minimum balance, issuing electronic wallets, and issuing debit cards.
He said that Abu Dhabi Islamic Bank-Egypt believes that success in banking and societal development are two complementary goals. Since entering the Egyptian market, the bank has been committed to its social responsibility role and increasing spending on it annually. The bank has completed the necessary licenses for the establishment of Abu Dhabi Islamic Bank-Egypt Charity, which began its activities this year, supporting health and education for the less fortunate.
Sustainability and environmental initiatives
On the other hand, Ali stated that sustainability is one of the bank’s top priorities, and their commitment to it in the banking operations is a fundamental aspect of business at all stages of the business cycle.
As a step to support its sustainable development strategy, Abu Dhabi Islamic Bank-Egypt participated in the COP27 climate summit last year, during which it launched the first report on the carbon footprint of banking operations.
The bank has also implemented several environmentally friendly sustainability initiatives, such as giving customers the option to choose to print receipts or statements from ATMs to reduce paper consumption. Additionally, most of the bank’s marketing materials are digital to achieve the same goal.