Emirates Islamic’s net profit rises Emirates Islamic’s net profit rises

Emirates Islamic holds its 46th General Assembly Meeting

Dubai, 23 February 2022: Emirates Islamic, one of the leading Islamic financial institutions in the UAE, held its forty-sixth General Assembly Meeting (GAM), virtually, due to ongoing COVID-19 precautions.

Hesham Abdulla Al Qassim, Chairman of Emirates Islamic, and Vice Chairman and Managing Director of Emirates NBD presented a comprehensive review of the financial year ended 31 December 2021.

Commenting on the bank’s performance, Hesham Abdulla Al Qassim said: We are pleased to report that 2021 was an exceptional year for Emirates Islamic. In a competitive market, the bank recorded a solid performance, earning a net profit of AED 823 million for 2021. This remarkable achievement reflects our resilience in the face of global economic uncertainties, as we solidify our firm position on the global Islamic banking map.”

Emirates Islamic Full year 2021 Financial Highlights:

Strong operating performance on higher non-funded income coupled with a reduction in cost of risk

  • Total income up 15% y-o-y driven by higher non funded income
  • Operating expenses increased 10% y-o-y
  • Impairment Allowances reduced 74% y-o-y with a lower cost of risk at 91 bps
  • Operating profit improved 20% y-o-y
  • Net profit increased to AED 823 million
  • Net profit margin at 2.62%, following stable profit rates in 2021

Strong capital and liquidity combined with a healthy deposit mix enables the Bank to continue supporting customers

  • Total assets remained robust at AED 65 billion, maintaining a strong asset base
  • Customer financing at AED 42.6 billion, increased 4% from 2020
  • Customer deposits at AED 47.3 billion, increased 1% from 2020 with CASA balances at 78% of total deposits
  • Credit Quality: Non-performing financing ratio improved to 8.2% with strong coverage ratio at 115%
  • Capital: Tier 1 ratio of 18.6% and 19.7% Capital adequacy ratio reflects Bank's strong capital position
  • Headline Financing to Deposit ratio at 90%, remaining within the management's target range

Al Qassim added, “We will continue to play an instrumental role in contributing to the advancement of the Islamic banking sector and supporting the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai to consolidate Dubai’s position as the global capital of Islamic economy.”

The following resolutions were passed at the GAM:

    • Review and approval of the Directors’ Report about the activities and financial position of the Group for the fiscal year ended 31/12/2021 and approving it.
    • Review and approval of the Auditors’ Report for the fiscal year ended 31/12/2021.
    • Review and approval of the Internal Shariah Supervision Committee’s Report.
    • Review and approval of the Group’s balance sheet and profit & loss account for the fiscal year ended 31/12/2021.
    • Appointment of the Internal Shariah Supervision Committee members.
    • Review and approval of the Bank’s staff bonus.
    • Absolve the Board of Directors from responsibility for the fiscal year ending 31/12/2021.
    • Absolve the Auditors from responsibility for the fiscal year ending 31/12/2021.
    • Election of Board of Directors.
    • Appointing Deloitte & Touche as auditors of the Group for the year 2022 and determining their fees.
    • Appointing two representatives for the shareholders and determine their fees in accordance with paragraph (4) of Article (40) of the Corporate Governance Guide issued by Resolution of the Chairman of the SCA No. (3/R.M) of 2020.

Special Resolutions that were highlighted at the GAM:

  • Approval of the Directors’ Proposals with respect to Shariah Compliant non-convertible securities to be issued by the Bank subject to obtaining the necessary approvals from the relevant regulatory authorities, as per the following actions (the “Actions”):
    • An update of the EI Sukuk Company Ltd. U.S.$2,500,000,000 trust certificate issuance programme (the "Sukuk Programme");
    • Establishing any Shariah-compliant funding programme up to a maximum of US$2,500,000,000 or its equivalent in any other currencies (the "New Programmes" and, together with the Sukuk Programme, the "Programmes") and undertake any subsequent update of the New Programmes;
    • Issue Shariah-compliant instruments under any of the Programmes from time to time up to a maximum of US$2,500,000,000 (or its equivalent in any other currencies) per instrument;
    • Issue Shariah-compliant instruments on a standalone basis up to a maximum amount of US$2,500,000,000 (or its equivalent in any other currencies) per instrument (including, without limitation, through the issuance of sukuk, structured sukuk/ trust certificates or other similar Shariah-compliant instruments or, as the case may be, through collateralised arrangements in Shariah-compliant format, as the same may be listed and/or admitted to trading on a stock exchange or any other trading platform and/or unlisted) ("Islamic Funding");
    • In respect of:
      • Instruments issued or to be issued under any of the Programmes; and/or
      • Instruments issued or to be issued under Islamic Funding,

        undertake any liability management exercises with respect thereto (including, without limitation, by way of consent solicitation, exchange offer, tender offer, buyback or any combination thereof);
    • Prepare and enter into such finance agreements and related documents as may be necessary (including, without limitation, any offering documents / base prospectus, relevant programme agreements / dealer agreements, subscription agreements, dealer manager agreements, guarantees, hedging arrangements and all related and ancillary documents) in respect of the foregoing;
    • Establish one or more special purpose vehicles incorporated in suitable jurisdictions anywhere in the world, with the specific purpose of acting as the issuers of any sukuk or securities issued under any of the Programmes or, as the case may be, any securities issued by way of Islamic Funding;
    • Enter into any document(s) and to take such further steps as may be necessary in connection with the Actions; and
    • Authorize the Board of Directors to take any and all actions necessary to give effect to the Actions, within the aforementioned maximum limits, for a period not exceeding one year from the date of this resolution in accordance with the provisions of Article 230 of the Companies Law.
  • To consider and approve the amendment of the Company’s Memorandum & Articles, to comply with the Federal Decree-Law No. 32 of 2021 after obtaining Authorities approval.

Amended Articles will be available on the Bank and Dubai Financial Market websites before the General Assembly Meeting.