Emirates Islamic Records Historic AED1 Billion Profit in Q1 of 2025
Emirates Islamic, a leading bank in the United Arab Emirates, has reported a remarkable financial performance in the first quarter of 2025, with a record quarterly profit of over AED 1 billion. This represents a significant 24% year-on-year increase, underscoring the bank's strong financial health.
The bank's financial growth is not limited to net profit margin but also includes an increase in total assets, customer financing, and customer deposits. Total assets of Emirates Islamic increased by 11% to AED123 billion in Q1 2025, while customer financing rose by 7% to AED75 billion and customer deposits grew by 8% to AED83 billion.
The bank's net profit margin remained healthy despite an increase in operating expenses in Q1 2025, remaining at 3.85%. This resilience is a testament to Emirates Islamic's effective strategy and disciplined cost management.
The bank's strong financial momentum in Q1 2025 is amid continued positive business sentiment in the UAE. Emirates Islamic's ability to capitalise on a stable economic environment is evident in its growth.
The growth in income was driven by growth in both funded and non-funded income streams. Total income was 11% higher year-on-year, propelled by strong loan growth and an improving deposit mix, which collectively boosted net interest margins and overall earnings.
Emirates Islamic saw an AED 18 billion increase in loans, with over half coming from its international network. In particular, its Saudi Arabian (KSA) business momentum continued with lending growing 15% in Q1 2025, contributing significantly to income growth.
The bank also made strategic investments in expanding its regional network, enhancing digital capabilities, and leveraging generative AI (GenAI) to generate new income streams, which helped offset the impact of lower interest rates.
Moreover, Emirates Islamic maintained a net interest margin (NIM) of 3.58%, a Common Equity Tier 1 (CET1) ratio of 14.7%, and a non-performing loan (NPL) coverage ratio of 158%, reflecting strong credit quality and risk management.
In summary, Emirates Islamic's record profit was a result of strong loan growth, especially internationally and in Saudi Arabia, higher income from improving deposit mix and margins, strategic digital investments, and a robust balance sheet with disciplined cost management. The bank's solid financial results in Q1 2025 are a testament to its effective strategy and resilience.
The increasing loan growth, particularly in the international network and Saudi Arabian business, has significantly contributed to Emirates Islamic's financial health and income growth. Furthermore, the bank's strategic investments in digital capabilities and leveraging generative AI have helped offset the impact of lower interest rates, contributing to its robust financial performance.
