Sharjah Islamic Bank reports net profit for Q1 2025

Zawya

18-04-2025

SHARJAH: Sharjah Islamic Bank (SIB) commenced the year 2025 with strong financial performance during the first quarter, achieving a net profit after tax of AED318.9 million, an increase of 24.6 percent compared to AED255.9 million in the first quarter of 2024.
Income from investments in Islamic financing and Sukuk grew by AED56.2 million, or 6.6 percent, reaching AED914.3 million in the first quarter of 2025, compared to AED858.1 million in the first quarter of 2024.
Meanwhile, total distributions to depositors and Sukuk holders amounted to AED546.9 million, compared to AED490.0 million, reflecting SIB's stability in net income and its ability to balance financing growth with an equitable profit distribution mechanism that aligns with Sharia principles. It also demonstrates the Bank's resilience in maintaining consistent income even in the face of volatile funding costs and competitive pricing pressures in the market.
Sharjah Islamic Bank continues to emphasise the diversification of its revenue base, as evidenced by a significant growth in the net fee and commission income which rose sharply by 38.3 percent to AED107.6 million in the first quarter of 2025, up from AED77.8 million in the first quarter of 2024.
As a result, the Bank recorded a total operating income of AED531.7 million, an increase of AED27.0 million, or 5.3 percent, compared to AED504.7 million in the same period last year. This upward trend reflects the Bank's ability to maintain stable operating income in a changing economic environment while effectively capitalising on opportunities across various economic sectors.
Total general and administrative expenses for the first quarter of 2025 amounted to AED198.3 million, an increase of 11.3 percent compared to AED178.1 million in the same period of 2024. This rise is mainly attributed to the Bank's continued investment in human capital, technology, and operational infrastructure to support business expansion and improve customer service.
Despite the increase in expenses, the Bank's net operating income before impairment provisions reached AED333.4 million, compared to AED326.7 million in the first quarter of 2024, reflecting a 2 percent increase, which shows the Bank's ability to absorb cost pressures while maintaining stable profitability, reinforcing its operational efficiency and sound financial management.
Reflecting prudent credit risk management and successful recovery efforts, the Bank recorded a net recovery of impairment provisions of AED17.2 million during the first quarter of 2025, compared to an impairment provision of AED45.0 million in the first quarter of 2024, indicating a significant improvement in the quality of the financing portfolio.
This positive development contributed significantly to the 24.5 percent increase in profit before tax, which reached AED350.6 million, compared to AED281.7 million in the same period last year. These results confirm the effectiveness of the Bank's risk mitigation strategies and its commitment to preserving asset quality amid a changing global economic environment.
On the balance sheet side, total assets increased by AED3.6 billion, or 4.5 percent, to reach AED82.8 billion as of March 31, 2025, compared to AED79.2 billion at the end of the previous year.
The Bank continued to maintain a strong liquidity ratio of 21.8 percent of total assets, amounting to AED18.1 billion, compared to 21.6 percent at the end of the previous year. Meanwhile, total customer financing increased to AED40.3 billion, compared to AED37.7 billion at the end of 2024, marking a 4.5 percent increase.
Customer deposits amounted to AED52.1 billion, compared to AED51.8 billion at the end of the previous year. As a result, the financing to deposit ratio stood at 77.4 percent, compared to 72.8 percent at the end of the previous year.
Sharjah Islamic Bank enjoys a strong capital base, with total shareholders' equity reaching AED8.2 billion as of the end of March 2025, representing 9.9 percent of the Bank's total assets. This led to a noticeable increase in the return on assets (ROA) and return on equity (ROE) ratios, which stood at 1.58 percent and 15.5 percent, respectively, after tax, compared to 1.44 percent and 12.76 percent at the end of the previous year.