ADIB finances UK real estate assets worth $128m in H1 2023

Abu Dhabi Islamic Bank (ADIB) continues to grow its UK commercial real estate financing portfolio with more than $128m (GBP100m) in new financing assets in the first six months of 2023.

The Shariah-compliant lender closed deals, including providing structured financing for various projects such as a 343-unit co-living scheme in North Acton, West London, a 400-key hotel at Gatwick Airport and a 133,000 square feet Grade A multi-let office campus in Guildford.

The deals come amid a challenging period for UK commercial real estate market, which has experienced a significant correction in capital values over the past 12 months, due to adjustments in the higher rate environment, impacting investment activity.

ADIB has closed senior financing transactions worth more than GBP650m over the past five years, offering bespoke and competitive Shariah-compliant property financing solutions

The bank’s London-based team is offering financing support and advisory services for GCC clients considering commercial and residential property investments in the UK.

The Bank of England said in April 2023 that net financing to the UK commercial real estate market (including developments) reached GBP1.2bn, a 137 per cent month-on-month increase.

ADIB H1 2023 performance

Meanwhile, ADIB reported a 61 per cent increase in first-half profit to Dhs2.3bn compared to Dhs1.4bn, driven by a solid growth in revenues as rising interest rates and the UAE’s resilient economy helped to boost business.

The bank’s quarterly net profit reached Dhs1.2bn, a 68 per cent year-on-year (YoY) growth compared to the corresponding period a year earlier.

ADIB’s group revenues in the six months to June 30 surged by 50 per cent to Dhs4.3bn from Dhs2.8bn in 2022, thanks to the excellent income diversification mix and strong growth across all business segments and products.

“Both our retail and corporate businesses have performed well with high-quality income growth and double-digit returns,” said Nasser Abdulla Al Awadhi, the group CEO of ADIB.

Funded income grew by 75 per cent to Dhs2.9bn compared to Dhs1.7bn a year ago, driven by higher volumes and better margins. On the other end, non-funded income rose by 14 per cent to reach Dhs1.3 billion in the first half of 2023 compared to Dhs1.2bn last year.

Customer deposits soared by 31 per cent to reach Dhs150bn from Dhs115bn in H1 2022, driven by 14 per cent growth in current and savings accounts (CASA) despite the high-rate environment as CASA now comprises 66 per cent of total deposits.

“We have benefited from strong deposit inflows and grew our market share by attracting approximately 96,000 new customers to ADIB in the first half of 2023 emphasising the strength of our brand,” said Jawaan Awaidah Al Khaili, chairman of ADIB.

ADIB’s total assets edged up to Dhs182.2bn as of June 30, up 28 per cent compared to the same period last year, driven by growth in net financing, growth in cash and balances with the central bank and growth of the investment’s portfolio.

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