ADIB Egypt sees a strong performance on First Bank financial soundness index

12/7/2022 2:21:42 PM

Abu Dhabi Islamic bank (ADIB Egypt) was able to achieve a strong performance on First Bank’s financial soundness index scoring 52.9552 points, compared to the sector average of 50 points, reflecting the strength and soundness of the bank's financial position.

The financial soundness index set by First Bank, measures the strength and soundness of the banks' financial positions and their ability to preserve the funds of depositors and shareholders.

The financial soundness index is based on six measures: the capital adequacy ratio, the financial leverage ratio, assets to deposits ratio, shareholders equity to deposits ratio, loans to deposits ratio and non-performing loan ratio.

ADIB’s capital adequacy ratio reached 13.79% at the first half of 2022, while the average rate of banks operating Egypt was at 20.9% during the same period, exceeding the regulatory limits set by the Central Bank of Egypt which are consistent with Basel Accord of 12.5.

The Bank’s financial leverage ratio recorded 6.6 % at the end of June 2022 compared to the average rate of 6.9 %, which reflected the relation between tier I used in capital adequacy ratio and the bank’s non-risk-weighted assets, exceeding the regulatory limits set by the Central Bank of Egypt which is consistent with Basel Accord of 3 %.

However, ADIB has witnessed a decrease in the ratio of non-performing loans to total loans portfolio to record 2.3% in H1-22 compared to an average of 3.2 % of the total banking sector.

In addition the bank’s assets to deposits ratio declined below the banking sector average recording 119% at the end of June 2022, compared to an average of 136.14% of the total banking sector during the same period

However, ADIB’s shareholders equity to assets ratio to recorded 9.09% at the end of June 2022, compared to an average 9% of the total banking sector during the same period.

Furthermore, loans to deposits ratio has seen a remarkable increase record 65.15% at the end of June 2022, compared to an average 48.5% of the total banking sector during the same period.