ADIB's first quarter net profit before tax rises 18%
Q1 2025 net profit before tax increased 18 per cent compared to Q4 2024, reflecting significant growth and reinforcing the positive trajectory we have built over recent quarters. Net profit after tax for Q1 2025 was Dh1.7 billion, reflecting a 18 per cent increase compared to Q1 2024.
Revenue for Q1 2025 improved by 14 per cent to Dh2.9 billion compared to Dh2.5 billion for Q1 2024. This was supported by an increase in both income from financing activities and non-funding income. The strong business volumes along with continued strength in fee-based businesses, played a significant role in this improvement.
Funded income recorded a 4 per cent year-on-year growth to Dh1.8 billion in Q1 2025, compared to Dh1.7 billion last year supported by higher business volumes and our ability to generate sustainable returns despite the lower rate environment.
Net Profit Margin (NPM) reached 4.31 per cent contracting 36 bps. Non-funded income grew by 35 per cent year-on-year to reach Dh1.1 billion in Q1 2025, compared to Dh827 million last year. This growth reflects continued strength in fee-generation revenues, which saw a 30 per cent increase from various product sales across retail and corporates, reflecting increased customer activity and successful cross-sell efforts. Non-funded income now contributes 39 per cent to operating income, up from 33 per cent in Q1 2024, underlining the continued strategic focus on revenue diversification.
Expenses
Operating expenses for Q1 2025 were Dh830 million, reflecting an 8 per cent year-on-year increase as the bank continued its ongoing investments in people, digital initiatives, and new technology. The cost to income ratio improved by 1.5 percentage points to 28.9 per cent in Q1 2025, compared to 30.4 per cent in Q1 2024.
Provisions and asset quality
Impairments fell 3 per cent to Dh106 million during Q1 2025, translating to a cost of risk (CoR) of 37bps.
The non-performing asset ratio improved to 3.7 per cent, its lowest level since Q4 2016, due to active remediation of our legacy portfolio coupled with strong underwriting standards.
The provision coverage ratio, including collaterals, improved by 16.6 percentage points to 161.3 per cent. The provision coverage ratio (excluding collaterals) improved to 82.8 per cent from 73.0 per cent year-on-year.
Balance sheet
Total assets increased by 25 per cent year-on-year to reach Dh244 billion. This growth was driven by financing growth in both retail and corporate banking, as well as an expansion in the investment portfolio.
Customer financing grew by 28 per cent year-on-year, representing Dh33 billion increase compared to last year and Dh8 billion increase year to date. This reflects market share gains across key segments and wholesale banking closing landmark deals.
Customer deposits rose by 25 per cent year-on-year to Dh200 billion, compared with Dh160 billion at Q1 2024. This growth maintained a healthy funding mix, with a 12 per cent year-on-year growth in Current and Savings Accounts (CASA), which now comprise 69 per cent of total deposits.
Liquidity and capital
ADIB maintained a robust capital position with a Common Equity Tier 1 ratio of 12.24 per cent and a total Capital Adequacy Ratio of 16.23 per cent. The bank's liquidity position was healthy and within regulatory requirements, with the advances to stable funding ratio at 78.9 per cent and the eligible liquid asset ratio at 17.1 per cent.
Total shareholders' equity rose 12 per cent year-on-year to Dh27 billion, led by growth in earnings. The return on equity (RoE) stood at 28.8 per cent in Q1 2025.
'We started the year with a strong performance, continuing the positive trajectory built over previous quarters. Our results are a clear reflection of our ability to grow profitably and execute our strategy with discipline,' said Jawaan Awaidah Al Khaili, ADIB Chairman.
'Building upon the achievements of 2024, we have successfully carried forward our momentum into the new year, establishing new benchmarks with an ROE of 29 per cent and delivering a commendable performance across all our business segments. UAE market conditions remain resilient, and our franchise is well positioned to capture business opportunities,' said Mohamed Abdelbary, ADIB's group chief executive officer.
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