Sharjah Islamic Bank (SIB) has delivered exceptional financial results for the first half of 2023, with a remarkable 37% increase in net profit compared to the previous year. The bank’s strong performance was driven by a significant surge in net income from financing and investment products, as well as a rise in net fees and commissions. With a stable balance sheet, robust liquidity, and prudent capital management, SIB continues to showcase its resilience and strategic approach in the financial market.
SIB witnessed substantial growth in its operating profit before provisions, soaring by 31% to reach Dh648.7 million in H1 2023, compared to Dh497.2 million in the same period the previous year. The bank’s net profit recorded an impressive surge, reaching Dh494.6 million, showcasing a remarkable growth rate of 36.7% from the corresponding period in the previous year, where it stood at Dh361.9 million.
A key contributor to SIB’s outstanding performance was the significant increase in net income from financing and investment products. The bank recorded a remarkable 22% surge, equivalent to Dh129.4 million, bringing the total to Dh716.7 million for H1 2023, compared to Dh587.3 million in the same period last year. Additionally, net fees, commissions, and other income rose by 34.6% to reach Dh247.8 million, showcasing the bank’s diverse revenue streams.
Despite an increase in general and administrative expenses, SIB managed to improve its cost-to-income ratio significantly. With expenses amounting to Dh315.7 million in H1 2023, compared to Dh274.3 million in the same period in 2022, the bank achieved an improved cost-to-income ratio of 32.7%, compared to 38.0% last year. This highlights SIB’s effective cost-management strategies.
Sharjah Islamic Bank maintains a robust liquidity position, with Dh12.2 billion equivalent to 20.0% of total assets. Although slightly decreased from Dh14.1 billion or 23.9% of total assets at the end of the previous year, the bank continues to demonstrate strong liquidity management. Furthermore, SIB’s total shareholders’ equity stands at Dh7.8 billion, representing 12.7% of the bank’s total assets, ensuring a high capital adequacy ratio of 19.4%, complying with Basel III standards.
SIB continues to diversify its financing portfolio, catering to various economic sectors. The bank’s total customer financing reached Dh31.6 billion, reflecting an increase of Dh906.3 million or 3% from Dh30.7 billion at the end of the previous year. The bank’s prudent management is evident in the reduction of Sukuk payables by Dh1.8 billion, standing at Dh1.8 billion at the end of June 2023, down from Dh3.7 billion at year-end 2022.
SIB’s investment securities portfolio displayed significant growth, increasing by Dh3 billion or 34.6% to reach Dh11.5 billion in H1 2023, compared to Dh8.5 billion at the end of the previous year. This reflects the bank’s strategic approach to investment management.
Sharjah Islamic Bank‘s remarkable financial results for H1 2023 demonstrate its resilience and strategic vision in navigating the market. The substantial surge in net profit, driven by impressive growth in net income and diverse revenue streams, showcases SIB’s commitment to delivering value to its stakeholders. With a stable balance sheet, strong liquidity, and prudent capital management, SIB stands as a robust institution in the Islamic banking landscape. As the bank continues to diversify its financing portfolio and optimize its cost-to-income ratio, it is well-positioned for sustained growth and success in the dynamic financial industry.