Sharjah Islamic Bank reports net profit of Dhs318.9 million for Q1

Income from investments in Islamic financing and Sukuk grew by Dhs56.2 million, reaching Dhs914.3 million in the first quarter of 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 Dhs318.9 million, an increase of 24.6 per cent compared to Dhs255.9 million in the first quarter of 2024.

Income from investments in Islamic financing and Sukuk grew by Dhs56.2 million, or 6.6 per cent, reaching Dhs914.3 million in the first quarter of 2025, compared to Dhs858.1 million in the first quarter of 2024.

Meanwhile, total distributions to depositors and Sukuk holders amounted to Dhs546.9 million, compared to Dhs490.0 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 per cent to Dhs107.6 million in the first quarter of 2025, up from Dhs77.8 million in the first quarter of 2024.

As a result, the Bank recorded a total operating income of Dhs531.7 million, an increase of Dhs27.0 million, or 5.3 percent, compared to Dhs504.7 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 Dhs198.3 million, an increase of 11.3 per cent compared to Dhs178.1 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 Dhs333.4 million, compared to Dhs326.7 million in the first quarter of 2024, reflecting a 2 per cent 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 Dhs17.2 million during the first quarter of 2025, compared to an impairment provision of Dhs45.0 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 per cent increase in profit before tax, which reached Dhs350.6 million, compared to Dhs281.7 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 Dhs3.6 billion, or 4.5 per cent, to reach Dhs82.8 billion as of March 31, 2025, compared to Dhs79.2 billion at the end of the previous year.

The Bank continued to maintain a strong liquidity ratio of 21.8 per cent of total assets, amounting to Dhs18.1 billion, compared to 21.6 per cent at the end of the previous year. Meanwhile, total customer financing increased to Dhs40.3 billion, compared to Dhs37.7 billion at the end of 2024, marking a 4.5 per cent increase.

Customer deposits amounted to Dhs52.1 billion, compared to Dhs51.8 billion at the end of the previous year. As a result, the financing to deposit ratio stood at 77.4 per cent, 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 Dhs8.2 billion as of the end of March 2025, representing 9.9 per cent 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 per cent, respectively, after tax, compared to 1.44 per cent and 12.76 per cent at the end of the previous year.

In February, Sharjah Islamic Bank shareholders have approved a 15 percent cash dividend distribution of the company’s capital for the fiscal year 2024, amounting to Dhs458.7 million.

The decision was announced during the Annual General Assembly Meeting (AGM), presided over by Abdul Rahman Al Owais, Chairman of the Board of Directors of Sharjah Islamic Bank.

The meeting took place in person at the Sharjah Chamber of Commerce and Industry headquarters in Al Khan and was also conducted virtually.

The meeting was attended by members of the Board of Directors, executive management, internal committee representatives, auditors, the Securities and Commodities Authority, and the Sharjah Economic Development Department, along with SIB shareholders.

The AGM approved various agenda items, including the Board of Directors’ reports, the auditors’ report, and the Internal Shariah Supervision Committee’s report for the fiscal year ending December 31, 2024. Shareholders also renewed their confidence in the Board of Directors to continue leading the bank toward excellence and success. Additionally, the Assembly approved the appointment of two new board members and other key proposals.

WAM