ABU DHABI ISLAMIC BANK PJSC
Condensed consolidated interim financial statements
30 September 2024 (Unaudited)
ABU DHABI ISLAMIC BANK PJSC
Condensed consolidated interim financial statements 30 September 2024 (Unaudited)
Contents | Page |
Review report on interim financial information | 1 |
Condensed consolidated interim income statement | 2 |
Condensed consolidated interim statement of comprehensive income | 3 |
Condensed consolidated interim statement of financial position | 4 |
Condensed consolidated interim statement of changes in equity | 5 |
Condensed consolidated interim statement of cash flows | 6 |
Notes to the condensed consolidated interim financial statements | 7 - 49 |
Deloitte & Touche (M.E.)
Level 11, Al Sila Tower
Abu Dhabi Global Market Square
Al Maryah Island
P.O. Box 990
Abu Dhabi
United Arab Emirates
Tel: +971 (0) 2 408 2424
Fax:+971 (0) 2 408 2525
www.deloitte.com
REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION
TO THE BOARD OF DIRECTORS OF ABU DHABI ISLAMIC BANK PJSC
Introduction
We have reviewed the accompanying condensed consolidated statement of financial position of Abu Dhabi Islamic Bank PJSC (the "Bank") and its subsidiaries (together the "Group") as at 30 September 2024, and the related condensed consolidated interim income statement, condensed consolidated interim statement of comprehensive income, condensed consolidated interim statement of changes in equity and condensed consolidated interim statement of cash flows for the nine-month period then ended. Management is responsible for the preparation and presentation of these interim financial information in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting" ("IAS 34"). Our responsibility is to express a conclusion on these interim financial information based on our review.
Scope of review
We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34.
Deloitte & Touche (M.E.)
Obada Alkowatly
Registration No. 1056
30 October 2024
Abu Dhabi
United Arab Emirates
Akbar Ahmad (1141), Cynthia Corby (995), Faeza Sohawon (5508), Firas Anabtawi (5482), Georges Najem (809), Jazala Hamad (1267), Mohammad Jallad (1164), Mohammad Khamees Al Tah (717), Musa Ramahi (872), Mutasem M. Dajani (726), Nurani Subramanian Sundar (5540), Obada Alkowatly (1056) and Rama Padmanabha Acharya (701) are registered practicing auditors with the UAE Ministry of Economy.
ABU DHABI ISLAMIC BANK PJSC | 2 |
Condensed consolidated interim income statement
Three months and nine months ended 30 September 2024 (Unaudited)
Three months ended | Nine months ended | |||||||||||||
30 September | 30 September | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
Notes | AED '000 | AED '000 | AED '000 | AED '000 | ||||||||||
Operating income | ||||||||||||||
Income from murabaha, mudaraba and wakala with | ||||||||||||||
financial institutions | 550,265 | 471,925 | 1,644,723 | 1,157,924 | ||||||||||
Income from murabaha, mudaraba, ijara and other | ||||||||||||||
Islamic financing from customers | 5 | 2,311,868 | 1,945,881 | 6,571,517 | 5,497,891 | |||||||||
Income from sukuk measured at amortised cost | 224,663 | 158,245 | 650,258 | 422,722 | ||||||||||
Income from investments measured at fair value | 6 | 109,935 | 58,405 | 242,606 | 189,807 | |||||||||
Share of results of associates and joint ventures | 18,758 | 19,681 | 69,415 | 59,483 | ||||||||||
Fees and commission income, net | 7 | 530,315 | 369,522 | 1,385,459 | 1,037,939 | |||||||||
Foreign exchange income | 168,424 | 125,925 | 366,247 | 325,107 | ||||||||||
Income from investment properties | 9,561 | 9,354 | 28,623 | 27,761 | ||||||||||
Other income | 2,601 | 112,220 | 349,498 | 125,158 | ||||||||||
3,926,390 | 3,271,158 | 11,308,346 | 8,843,792 | |||||||||||
Operating expenses | ||||||||||||||
Employees' costs | 8 | (476,430) | (448,316) | (1,397,813) | (1,335,447) | |||||||||
General and administrative expenses | 9 | (233,177) | (207,342) | (672,426) | (600,679) | |||||||||
Depreciation | (83,606) | (80,488) | (245,600) | (238,149) | ||||||||||
Amortisation of intangibles | 25 | (2,371) | (3,720) | (8,153) | (11,152) | |||||||||
Provision for impairment, net | 10 | (46,288) | (201,845) | (447,992) | (570,910) | |||||||||
(841,872) | (941,711) | (2,771,984) | (2,756,337) | |||||||||||
Profit from operations, before distribution to | ||||||||||||||
Depositors and sukuk holders | 3,084,518 | 2,329,447 | 8,536,362 | 6,087,455 | ||||||||||
Distribution to depositors and sukuk holders | 11 | (1,280,982) | (841,263) | (3,313,543) | (2,149,632) | |||||||||
Profit for the period before zakat and tax | 1,803,536 | 1,488,184 | 5,222,819 | 3,937,823 | ||||||||||
Zakat and tax | 12 | (198,177) | (63,993) | (588,054) | (187,586) | |||||||||
Profit for the period after zakat and tax | 1,605,359 | 1,424,191 | 4,634,765 | 3,750,237 | ||||||||||
Attributable to: | ||||||||||||||
Equity holders of the Bank | 1,538,096 | 1,354,540 | 4,388,075 | 3,581,680 | ||||||||||
Non-controlling interest | 67,263 | 69,651 | 246,690 | 168,557 | ||||||||||
1,605,359 | 1,424,191 | 4,634,765 | 3,750,237 | |||||||||||
Basic and diluted earnings per share attributable | ||||||||||||||
to ordinary shares (AED) | 13 | 0.396 | 0.346 | 1.132 | 0.914 | |||||||||
The attached notes 1 to 41 form part of these condensed consolidated interim financial statements.
ABU DHABI ISLAMIC BANK PJSC | 3 |
Condensed consolidated interim statement of comprehensive income
Three months and nine months ended 30 September 2024 (Unaudited)
Three months ended | Nine months ended | ||||
30 September | 30 September | ||||
2024 | 2023 | 2024 | 2023 | ||
Notes | AED '000 | AED '000 | AED '000 | AED '000 | |
Profit for the period after zakat and tax | 1,605,359 | 1,424,191 | 4,634,765 | 3,750,237 | |
Other comprehensive income (loss) |
Items that will not be reclassified to consolidated income statement
Net movement on valuation of equity investments carried at fair value through other comprehensive income
Other movement in reserves
Directors' remuneration paid
Items that may be subsequently reclassified to consolidated income statement
Net movement in valuation of investments in sukuk carried at fair value through other comprehensive income
Exchange differences arising on translation of foreign operations
(Loss) gain on hedge of foreign operations Fair value (loss) gain on cash flow hedge
Other comprehensive income (loss) for the period
Total comprehensive income for the period
Attributable to:
Equity holders of the Bank
Non-controlling interest
31 | (464) | 1,399 | (3,550) | 13,413 |
31 | 127 | (347) | 3,966 | (29,078) |
35 | - | - | (16,100) | (16,100) |
- | 102,259 | (63,004) | 76,784 | (49,614) |
31 | (10,215) | (2,069) | (550,971) | (230,900) |
31 | (2,719) | 2,646 | (707) | 587 |
31 | (4,172) | (1,918) | (728) | 3,667 |
________ | ________ | ________ | ________ | |
84,816 | (63,293) | (491,306) | (308,025) | |
________ | ________ | ________ | ________ | |
1,690,175 | 1,360,898 | 4,143,459 | 3,442,212 | |
_____ __ | _____ __ | ____ ___ | ____ ___ | |
1,622,912 | 1,291,247 | 3,896,769 | 3,273,655 | |
67,263 | 69,651 | 246,690 | 168,557 | |
________ | ________ | ________ | ________ | |
1,690,175 | 1,360,898 | 4,143,459 | 3,442,212 | |
_ ______ | _ ______ | __ _____ | __ _____ |
The attached notes 1 to 41 form part of these condensed consolidated interim financial statements.
ABU DHABI ISLAMIC BANK PJSC | 5 | |||||||||||||||||||||||
Condensed consolidated interim statement of changes in equity | ||||||||||||||||||||||||
Nine months ended 30 September 2024 (Unaudited) | ||||||||||||||||||||||||
Equity attributable to the equity and Tier 1 sukuk holders of the Bank | ||||||||||||||||||||||||
Credit | Non- | |||||||||||||||||||||||
Share | Legal | General | risk | Retained | Other | Tier 1 | controlling | Total | ||||||||||||||||
capital | reserve | reserve | reserve | earnings | reserves | sukuk | Total | interest | equity | |||||||||||||||
Notes | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | AED '000 | ||||||||||||||
Balance at 1 January 2024 - audited | 3,632,000 | 2,647,420 | 3,431,547 | 400,000 | 11,358,406 | (1,094,992) | 4,754,375 | 25,128,756 | 1,113,612 | 26,242,368 | ||||||||||||||
Profit for the period | - | - | - | - | 4,388,075 | - | - | 4,388,075 | 246,690 | 4,634,765 | ||||||||||||||
Other comprehensive loss | - | - | - | - | (16,100) | (475,206) | - | (491,306) | - | (491,306) | ||||||||||||||
Profit paid on Tier 1 sukuk - Listed (third issue) | 32 | - | - | - | - | (199,692) | - | - | (199,692) | - | (199,692) | |||||||||||||
Profit paid on Tier 1 sukuk - Government of Abu Dhabi | 32 | - | - | - | - | (77,583) | - | - | (77,583) | - | (77,583) | |||||||||||||
Dividends paid | 39 | - | - | - | - | (2,595,469) | - | - | (2,595,469) | - | (2,595,469) | |||||||||||||
Dividends paid to charity | - | - | - | - | (20,000) | - | - | (20,000) | - | (20,000) | ||||||||||||||
Transfer to Impairment reserve - General | 31 | - | - | - | - | (89,227) | 89,227 | - | - | - | - | |||||||||||||
Transfer from Impairment reserve - Specific | 31 | - | - | - | - | 16,972 | (16,972) | - | - | - | - | |||||||||||||
Transfer to reserves | - | 24,001 | - | - | (54,441) | 30,440 | - | - | - | - | ||||||||||||||
Other movement in non-controlling Interest | - | - | - | - | - | - | - | - | (426,208) | (426,208) | ||||||||||||||
Balance at 30 September 2024 - unaudited | 3,632,000 | 2,671,421 | 3,431,547 | 400,000 | 12,710,941 | (1,467,503) | 4,754,375 | 26,132,781 | 934,094 | 27,066,875 | ||||||||||||||
Balance at 1 January 2023 - audited | 3,632,000 | 2,640,705 | 2,975,819 | 400,000 | 8,642,250 | (564,647) | 4,754,375 | 22,480,502 | 980,168 | 23,460,670 | ||||||||||||||
Profit for the period | - | - | - | - | 3,581,680 | - | - | 3,581,680 | 168,557 | 3,750,237 | ||||||||||||||
Other comprehensive loss | - | - | - | - | (16,100) | (291,925) | - | (308,025) | - | (308,025) | ||||||||||||||
Profit paid on Tier 1 sukuk - Listed (second issue) | 32 | - | - | - | - | (196,250) | - | - | (196,250) | - | (196,250) | |||||||||||||
Profit paid on Tier 1 sukuk - Government of Abu Dhabi | 32 | - | - | - | - | (65,837) | - | - | (65,837) | - | (65,837) | |||||||||||||
Dividends paid | 39 | - | - | - | - | (1,779,312) | - | - | (1,779,312) | (1,350) | (1,780,662) | |||||||||||||
Dividends paid to charity | - | - | - | - | (20,000) | - | - | (20,000) | - | (20,000) | ||||||||||||||
Loss on disposal of FVTOCI investment | - | - | - | - | (5,215) | 5,215 | - | - | - | - | ||||||||||||||
Transfer to Impairment reserve - General | 31 | - | - | - | - | 132,499 | (132,499) | - | - | - | - | |||||||||||||
Transfer to Impairment reserve - Specific | 31 | - | - | - | - | 103,866 | (103,866) | - | - | - | - | |||||||||||||
Transfer to reserves | - | 6,721 | 227 | - | (6,948) | - | - | - | - | - | ||||||||||||||
Redemption of Tier 1 sukuk - second issue | - | - | - | - | - | - | (2,754,375) | (2,754,375) | - | (2,754,375) | ||||||||||||||
Issuance of Tier 1 sukuk - third issue | - | - | - | - | - | - | 2,754,375 | 2,754,375 | - | 2,754,375 | ||||||||||||||
Issuance cost on Tier 1 sukuk - third issue | - | - | - | - | (12,305) | - | - | (12,305) | - | (12,305) | ||||||||||||||
Other movement in non-controlling Interest | - | - | - | - | - | - | - | - | (128,395) | (128,395) | ||||||||||||||
Balance at 30 September 2023 - unaudited | 3,632,000 | 2,647,426 | 2,976,046 | 400,000 | 10,358,328 | (1,087,722) | 4,754,375 | 23,680,453 | 1,018,980 | 24,699,433 | ||||||||||||||
The attached notes 1 to 41 form part of these condensed consolidated interim financial statements.
ABU DHABI ISLAMIC BANK PJSC | 6 | ||||||
Condensed consolidated interim statement of cash flows | |||||||
Nine months ended 30 September 2024 (Unaudited) | |||||||
Nine months ended 30 September | |||||||
2024 | 2023 | ||||||
Notes | AED '000 | AED '000 | |||||
Operating activities | |||||||
Profit for the period | 4,634,765 | 3,750,237 | |||||
Adjustments for: | |||||||
Depreciation on investment properties | 22 | 10,937 | 10,971 | ||||
Depreciation on property and equipment | 191,829 | 177,949 | |||||
Depreciation on right-of-use assets | 42,834 | 49,229 | |||||
Amortisation of intangibles | 25 | 8,153 | 11,152 | ||||
Share of results of associates and joint ventures | (69,415) | (59,483) | |||||
Realised gain on investments carried at fair value through profit or loss | 6 | (38,215) | (17,501) | ||||
Unrealised gain on investments carried at fair value through profit or loss | 6 | (32,365) | (8,165) | ||||
Dividend income | 6 | (665) | (5,775) | ||||
Finance cost on lease liabilities | 9 | 4,915 | 5,801 | ||||
Provision for impairment, net | 10 | 447,992 | 570,910 | ||||
Gain on disposal of investment properties | (326) | - | |||||
Changes in operating assets and liabilities | 5,200,439 | 4,485,325 | |||||
Increase in balances with central banks | (6,400,319) | (7,085,251) | |||||
(Increase) decrease in balances and wakala deposits with Islamic banks and other financial institutions | (3,916,297) | 415,319 | |||||
Decrease in murabaha and mudaraba with financial institutions | 85,835 | 157,584 | |||||
Increase in murabaha and other Islamic financing | (17,272,456) | (5,583,751) | |||||
Increase in ijara financing | (7,197,121) | (1,401,663) | |||||
Net movement in investments carried at fair value through profit or loss | 17,006 | (405,530) | |||||
Increase in other assets | (1,245,699) | (703,735) | |||||
Increase in due to financial institutions | 2,853,899 | 32,334 | |||||
Increase in depositors' accounts | 30,562,907 | 16,288,212 | |||||
Increase in other liabilities | 3,143,954 | 1,198,073 | |||||
Cash from operations | 5,832,148 | 7,396,917 | |||||
Directors' remuneration paid | (16,100) | (16,100) | |||||
Net cash from operating activities | 5,816,048 | 7,380,817 | |||||
Investing activities | |||||||
Net movement in investments carried at fair value through other comprehensive income | (130,990) | 155,094 | |||||
Net movement in investments carried at amortised cost | (4,171,330) | (3,419,753) | |||||
Dividend received | 6 | 665 | 5,775 | ||||
Dividend received from associates | 18,124 | 16,250 | |||||
Proceeds from disposal of investment properties | 1,450 | - | |||||
Purchase of property and equipment | (212,369) | (128,453) | |||||
Net cash used in investing activities | (4,494,450) | (3,371,087) | |||||
Financing activities | |||||||
Issuance of Tier 1 sukuk - Listed (third issue) | - | 2,754,375 | |||||
Issuance cost paid for Tier 1 sukuk - Listed (third issue) | - | (12,305) | |||||
Redemption of Tier 1 sukuk - Listed (second issue) | - | (2,754,375) | |||||
Profit paid on Tier 1 sukuk - Listed (second issue) | - | (196,250) | |||||
Profit paid on Tier 1 sukuk - Listed (third issue) | 32 | (199,692) | - | ||||
Profit paid on Tier 1 sukuk - Government | 32 | (77,583) | (65,837) | ||||
Finance cost on lease liability | 9 | (4,915) | (5,801) | ||||
Dividends paid | (2,595,469) | (1,870,841) | |||||
Net cash used in financing activities | (2,877,659) | (2,151,304) | |||||
(Decrease) increase in cash and cash equivalents | (1,556,061) | 1,858,696 | |||||
Cash and cash equivalents at 1 January | 12,727,308 | 5,106,695 | |||||
Cash and cash equivalents at 30 September | 34 | 11,171,247 | 6,965,391 | ||||
Operating cash flows from profit on balances and wakala deposits with Islamic banks and other financial institutions, murabaha and mudaraba with financial institutions, customer financing, sukuk and customer deposits are as follows:
Profit received | 8,306,702 | 6,715,080 | |
Profit paid to depositors | 2,770,762 | 256,982 |
The attached notes 1 to 41 form part of these condensed consolidated interim financial statements.
ABU DHABI ISLAMIC BANK PJSC | 7 |
Notes to the condensed consolidated interim financial statements 30 September 2024 (Unaudited)
1 Legal status and principal activities
Abu Dhabi Islamic Bank PJSC ("the Bank") was incorporated in the Emirate of Abu Dhabi, United Arab Emirates (UAE), as a public joint stock company with limited liability, in accordance with the provisions of the UAE Federal Commercial Companies Law No. (8) of 1984 (as amended) and the Amiri Decree No. 9 of 1997. Federal Law No. 32 of 2021 on Commercial Companies (the "New Companies Law") was issued on 20 September 2021 and came into effect on 2 January 2022 and entirely replaced Federal Law No. 2 of 2015 on Commercial Companies, as amended (the "2015 Law").
The Bank and its subsidiaries ("the Group") carry out full banking services, financing and investing activities through various Islamic instruments such as Murabaha, Istisna'a, Mudaraba, Musharaka, Ijara, Wakalah, Sukuk etc. The activities of the Bank are conducted in accordance with Islamic Shari'a, which prohibits usury as determined by the Internal Shari'a Supervisory Committee of the Bank, and within the provisions of the Articles and Memorandum of Association of the respective entities within the Group.
In addition to its main office in Abu Dhabi, the Bank operates through its 58 branches in UAE (2023: 58 branches) and 3 overseas branches in Iraq, Qatar and Sudan and subsidiaries in the UAE, Egypt and the United Kingdom. The condensed consolidated interim financial statements combine the activities of the Bank's head office, its branches and subsidiaries.
The registered office of the Bank is at P O Box 313, Abu Dhabi, UAE.
The condensed consolidated interim financial statements of the Group were authorised for issue by the Board of Directors on 30 October 2024.
2 Definitions
The following terms are used in the condensed consolidated interim financial statements with the meanings specified:
Murabaha
A sale contract, in which the Group sells to a customer a physical asset, goods, or shares already owned and possessed (either physically or constructively) at a selling price that consists of the purchase cost plus a mark- up profit.
Istisna'a
A sale contract, in which the Group (Al Saanee) sells an asset to be developed using its own materials to a customer (Al Mustasnee) according to pre-agreed upon precise specification, at a specific price, installments dates and to be delivered on a specific date. This developed asset can be either developed directly by the Group or through a subcontractor and then it is handed over to the customer on the pre-agreed upon date.
Ijara
A lease contract whereby the Group (the Lessor) leases to a customer (the Lessee) a service or the usufruct of an owned or rented physical asset that either exists currently or to be constructed in future (forward lease) for a specific period of time at specific rental installments. The lease contract could be ended by transferring the ownership of a leased physical asset through an independent mode to the lessee.
ABU DHABI ISLAMIC BANK PJSC | 8 |
Notes to the condensed consolidated interim financial statements 30 September 2024 (Unaudited)
2 Definitions (continued)
Qard Hasan
A non-profit bearing loan that enables the borrower to use the borrowed amount for a specific period of time, at the end of which the same borrowed amounts would be repaid free of any charges or profits.
Musharaka
A contract between the Group and a customer to entering into a partnership in an existing project (or to be established), or in the ownership of a specific asset, either on ongoing basis or for a limited time, during which the Group enters in particular arrangements with the customer to sell to him/her its share in this partnership until he/she becomes the sole owner of it (diminishing musharaka). Profits are distributed according to the mutual agreement of the parties as stipulated in the contract; however, losses are borne according to the exact shares in the Musharaka capital on a pro-rata basis.
Mudaraba
A contract between the Group and a customer, whereby one party provides the funds (Rab Al Mal) and the other party (the Mudarib) invests the funds in a project or a particular activity and any generated profits are distributed between the parties according to the profit shares that were pre-agreed upon in the contract. The Mudarib is responsible of all losses caused by his misconduct, negligence or violation of the terms and conditions of the Mudaraba; otherwise, losses are borne by Rab Al Mal.
Wakalah
A contract between the Group and a customer whereby one party (the principal: the Muwakkil) appoints
the other party (the agent: Wakil) to invest certain funds according to the terms and conditions of the Wakala for a fixed fee in addition to any profit exceeding the expected profit as an incentive for the Wakil for the good performance. Any losses as a result of the misconduct or negligence or violation of the terms and conditions of the Wakala are borne by the Wakil; otherwise, they are borne by the principal.
Sukuk
Certificates which are equal in value and represent common shares in the ownership of a specific physical asset (leased or to be leased either existing or to be constructed in future), or in the ownership of cash receivables of selling an existing-owned asset, or in the ownership of goods receivables, or in the ownership of the assets of Mudaraba or Partnership companies. In all these cases, the Sukuk holders shall be the owners of their common shares in the leased assets, or in the cash receivables, or the goods receivable, or in the assets of the Partnership or the Mudaraba.
3 Basis of preparation
3.1 (a) Statement of compliance
The condensed consolidated interim financial International Accounting Standard 34 Interim principles of the Shari'a as determined by the applicable requirements of the laws of the UAE.
statements have been prepared in accordance with Financial Reporting and in compliance with general Group's Internal Shari'a Supervisory Committee and