SHARJAH, 22nd July, 2020 (WAM) — Sharjah Islamic Bank, SIB, recorded an 8.6 percent increase in its operating profits amounting to AED 332.3 million in the first half of 2020 compared to AED 305.9 million for the same period last year. The net profit for the first half amounted to AED 251.2 million, compared to AED 290.5 million from last year, a decrease of 13.5 percent. This decline was a result of the increase in net provisions for impairment, which amounted to AED 81.1 million, compared to AED 15.3 million from the same period last year. an increase of AED 65.8 million, equivalent to 429 percent.
The balance sheet reflects the bank’s total assets of AED 52.7 billion at the end of June 2020, a projected growth of 13.5 per cent compared to AED 46.4 billion at the end of 2019.
The bank continued to diversify its financing facilities portfolio across different economic sectors in accordance with its prudent credit policy that takes into consideration the effects of the prevailing market volatility and instability in global and regional capital market on banking operations. Financing facilities reached AED 29.7 billion, an increase of AED 3.9 billion or 15.6 percent compared to AED 25.1 billion last year.
SIB successfully attracted more deposits during the period as customer deposits increased by 18.0 percent, to reach AED 32.2 billion compared to AED 27.3 billion at the end of 2019.
Liquid assets reached AED 10.8 billion or 20.6 per cent of total assets at the end of June 2020, compared to 19.8 per cent in the first quarter.
Despite instability witnessed by the global and regional financial markets as a result of the COVID-19 pandemic, the bank succeeded in issuing Sukuk worth $500 million with a maturity of 5 years from the date of issuance, where the total applications for subscription exceeded $3.6 billion, i.e. more than 7.2 times the size of the issuance. The issuance is considered part of the $3 billion medium-term Sukuk program and is an enhancement of the bank’s international standing in the field of Sukuk and their eighth issuance since 2006. This issuance is an important achievement for the bank, as it has strong demand from local and international investors, which reflects the bank’s solvency in line with their strategy to diversify funding sources.
On the expenses side, general and administration expenses declined to AED 269.0 million at the end of the second quarter of 2020 compared to AED 284.2 million for the same period 2019, a decrease of AED 15.2 million or 5.3 percent, due to operational efficiencies achieved by the bank.
Sharjah Islamic Bank has a strong capital base. Total shareholders’ equity at the end of June 2020 reached AED 7.5 billion, representing 14.3 per cent of the bank’s total assets with a strong capital adequacy ratio of 21.11 percent according to Basel III requirements.