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Best Islamic bank in the Middle East
Best Islamic Bank in the UAE
A changing of the guard this year. Abu Dhabi Islamic Bank is not the biggest Islamic bank in the region – a title still held by Saudi Arabia’s Al Rajhi, our long-time winner – but it deserves recognition this year for its strength, the clarity of its ambition, and its ability to bring innovation to Islamic finance without compromising its values.
It’s not as if ADIB is small: it ranks itself the fourth-largest Islamic bank in the world, with total assets of Dh96.4 billion ($26 billion). So it already has critical mass, particularly in the United Arab Emirates, where it reaches half a million retail customers through 80 branches. But it’s more the sense of direction that impresses. The bank has doubled its asset base within five years and has long since moved on from being purely an Abu Dhabi institution, with a growing presence in Egypt in particular (75 branches, through its ownership of National Development Bank Egypt) as well as Saudi Arabia, Sudan, Iraq, Qatar and the UK.
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| Tirad Al Mahmoud, CEO, ADIB |
But expansion has not come at the expense of the key financial metrics: far from it. Net profits increased 20.4% year on year in the third quarter of 2013, while customers grew 14%. By then net profits had already topped Dh1 billion for the year to date, with revenues close to Dh3 billion. Capital adequacy as of September 30 was 17.12%, the advances to stable funds ratio was 79%, and customer deposits had grown by 14.7% year on year to Dh70.2 billion. ADIB also stands out for its impressive position not just as an underwriter but as an issuer in the Islamic capital markets. Last year’s Shariah-compliant hybrid tier 1 sukuk, one of Euromoney’s deals of the year, was a landmark: the first Islamic security of its type and the first publicly issued perpetual and tier 1 instrument from the Gulf in any form. That $1 billion non-call six-year deal achieved one of the lowest rates ever seen from an Islamic bank.
The innovation of that instrument is reflected across the bank, particularly in retail banking. Its ADIB Ghina savings programme aims to promote a savings culture – albeit by automatically entering clients into a cash-prize draw, which might not be everyone’s idea of prudent investment – and it offers capital-protected notes on gold, silver and oil. There is a successful new children’s account, an innovative cash cover takaful service, co-branded debit and covered cards with Etihad Airways, new ideas in priority banking and a ‘Smart money’ financial education campaign.
Finally, there are the deals. ADIB is turning up on more and more of the transactions that matter most in Islamic finance, including one of our deals of the year, an amortizing sukuk for Emirates, as well as other notable transactions for Gems (the first international corporate hybrid sukuk), Gulf Marine Services, the Investment Corporation of Dubai and, in project finance, the Emal aluminium smelter project.
