Jan 20, 2022
Sharjah Islamic Bank's net profit increased by 27%
Sharjah Islamic Bank (SIB) recorded an increase of 26.7% in the net profit reaching at AED514.1 million for the year ended 31 December 2021 compared to AED 405.8 million for the same period in 2020. The Bank also reported an increase in operating profits by 21.9%, reaching AED 850.7 million for the year of 2021, compared to AED 697.7 million in the previous year.
Despite the partial recovery from the repercussions of the “COVID-19” pandemic, the Bank continued its hedging policy to face the challenges resulting from the operational conditions that the global economy is still going through. Consequently, the Bank has reported AED 244.5 million in the net impairment provisions, which has decreased by AED 11.3 million, compared to AED 255.8 million for the previous year.
The growth of the Bank’s net profit indicates strong performance across all the business units of the Bank. As a result, the net income from financing and investment products increased by 12.4%, or AED 120.3 million, to reach AED 1.1 billion for the year of 2021, compared to AED 1.0 billion for the same period of 2020. While net fees, commissions and other income increased by 16.8% to reach AED 333.2 million, compared to AED 285.2 million for the same period of 2020.
The SIB maintained general and administrative expenses at the same level with a slight change compared to previous year amounting AED 576.8 million for the year ended 2021 and AED 561.5 million for year ended 2020.
The statement of financial position of the Bank showed an increase in total assets by 2.5% to reach AED 55.0 billion as at 31 December 2021, compared to AED 53.6 billion as at 31 December 2020.
The Bank continues to maintain a strong liquidity ratio for future opportunities, as it reached AED 14.3 billion, or 26.1% to the total assets, compared to AED 11.2 billion, or 20.9% of the total assets at the end of the previous year. Financing to deposits ratio reached 75.4%, which reflects the strength and stabily of liquidity position of the Bank.
Sukuk payable decreased by AED 1.8 billion and stands at AED 3.7 billion as at 31 December 2021 as against AED 5.5 billion as at 31 December 2020, due to the repayment of USD 500.0 million in the 3rd quarter through Bank’s own sources, evidencing strong liquidly position.
The Bank continues to diversify its financing portfolio in various economic sectors and follows a wise credit policy that takes into account all developments associated with the Corona pandemic and its impact on financial markets, as the total customer financings stabilized at an amount of AED 29.0 billion, at the same level of previous year end.
The bank was able to attract a larger volume of customer deposits during the year of 2021, as deposits significantly increased by 14.5% or AED 4.9 billion, bringing the total deposits to AED 38.5 billion, compared to AED 33.6 billion as at 31 December 2020.
Sharjah Islamic Bank has a strong capital base, as the total shareholders’ equity at the end of September 2021 amounts to AED 7.7 billion, which represents 16.3% of the Bank’s total assets. Thus, the Bank maintains a high capital adequacy ratio in accordance with Basel III at 20.84%.
The profitability of the Bank has an improvement, whereas rate of return on average assets and average equity increases significantly as well, at 0.95% and 6.7% annualized, respectively, compared to 0.81% and 5.35% at the end of the previous period.
During its meeting, the Bank’s board of directors proposed a cash dividend of 8%, provided that it is put to a vote in the general assembly meeting.