ADIB-Egypt's Mohamed Aly formulates an investment strategy considered as a turning point

1/16/2023 12:44:55 PM

Abu Dhabi Islamic Bank Egypt (ADIB-Egypt), a leading financial institution, has been pushed to achieve a historic growth in its net profits over 5 years under the leadership of its current CEO and Managing Director, Mohamed Aly.

Aly’s investments strategy has led ADIB to achieve a sturdy performance in all its financial portfolios and financial indicators as its net profits, assets and loans portfolios jump by 265.34%, 215.24% and 204.23% during his current tenure as CEO and MD during 5 years.

Mohamed Aly is considered to be one of the most prominent bankers in the Egyptian banking sector and his existence on the top management of ADIB Egypt was vital to its success in Egypt, thanks to his ambitious ideas and his strategic vision he led the bank to its current position as one of the leading Islamic banks in the Egyptian market.

Abu Dhabi Islamic Bank (ADIB), a leading financial institution, has appointed Mohamed Aly as Chief Executive Officer of ADIB Egypt in 2017. He has over 30 years of international experience in the financial services and banking industry having held senior leadership roles at several banks in the MENA region.

Prior to joining ADIB, Mohamed was the CEO at Mashreq Bank’s Egypt business. He has also held senior positions at Credit Agricole, National Bank of Abu Dhabi and American Express, bringing ADIB extensive experience from working across corporate, retail and private banking, as well as an in-depth knowledge of the Egyptian market.

Upon studying Muhammad Ali’s investment strategy since assuming his position at ADIB Egypt Abu; It has been found that the bank has expanded in employing its resources in granting loans at the expense of financial investments and other financial activities, which is clearly evident in the increase of the loans to the total assets ratio from 45.19% at the end of 2016 to 52.25% at the end of September 2022. Yet the ratio of financial investments to the bank’s total assets declined from 32.79% at the end of 2016, to 27.20% at the end of September 2022

Moreover, his investments strategy has also attributed to enhancing the quality of the bank’s loan portfolio by reducing the ratio of non-performing loans by more than half. Thus, non-performing loans to total loans ratio reached 1.98% at the end of September 2022, one of the lowest rates among banks operating in Egypt, compared to 4.90% at the end of 2016.

He also managed to reduce the ratio of employing deposits in granting loans to maintain ADIB Egypt’s financial soundness, so that the loans to deposits ratio declined from 73.59% at the end of 2016 to 66.84% at the end of September 2022. As for the bank's tendency to towards employing its deposits into financial investments, it has also declined to 27.20% at the end of September 2022, compared to 31.80% at the end of 2016.

Muhammad Ali’s investment has also pushed ADIB Egypt towards achieving strong performance in terms of financial portfolios. Thus, the bank’s assets portfolio jumped by about 215.54%, recording EGP104.85 billion at Q3-2022, compared to EGP 33.23 billion at the end of 2016 with an increase of EGP72.619 billion.

However, the bank’s deposit portfolio also increased to EGP 85.459 billion at the end of September 2022, compared to EGP 25.513 billion at the end of 2016, achieving a growth rate of 234.96%, and an increase of EGP 59.945 billion.

In addition, ADIB Egypt’s financial investments has jumped by 169.89% or EGP 17.951 billion, recording EGP28.518 billion pounds at Q3-2022, compared to EGP 10.566 billion at the end of 2016.

Moreover, the bank’s finances and credit facilities to its customers jumped to EGP 57.122 billion at the end of September 2022, compared to EGP 18.776 billion at the end of 2016, achieving a growth rate of 204.23% and an increase of EGP 38.346 billion.

Furthermore, the bank has seen a major leap in its net profits jumping by 265.34% to record EGP 1.450 billion in 2021, compared to EGP 397.038 billion in 2016 with an increase of EGP 1.053 billion. As for the bank's consolidated net profits during 2022, It has jumped by 48.10% recording EGP 1.583 billion in 9M-22, compared to EGP 1.069 billion during the same comparable period of 2021 with an increase of EGP 514.185 million.

However, the return on assets ratio (a criterion to measure banks efficiency in investing its assets) increased to 1.77% in 2021 in comparison to 1.40% in 2016, while it reached 1.62% during 9M-22. In addition, the return on equity ratio (a criterion to measure banks efficiency in investing its shareholders equities) stood at 23.34% in 2021 compared to 29.43% in 2016. Despite the ROE’s ratio decline, it is still considered to be one of the highest rates in the banking sector which reached 20.89% in 9M-22.