Sharjah Islamic Bank Achieves AED 697.2 Million Net Profit In First Half Of 2025

Sharjah Islamic Bank (SIB) reported a robust financial performance in the first half of 2025, with net profit after tax rising to AED697.2 million. This marks a 25% increase from AED558.7 million in the same period of 2024. The bank's income from investments in Islamic financing and sukuk also grew by AED113.6 million, reaching AED1.9 billion, up from AED1.8 billion the previous year.

Total distributions to depositors and Sukuk holders amounted to AED1.1 billion, compared to AED1.0 billion previously. This reflects SIB's ability to maintain stable net income while balancing financing growth with fair profit distribution according to Sharia principles. The bank has shown resilience amidst volatile funding costs and competitive market pricing pressures.

SIB has focused on diversifying its revenue streams, evidenced by a significant rise in net fee and commission income by 53.5%, reaching AED276.0 million in the first half of 2025, compared to AED179.8 million in 2024. Consequently, total operating income increased by AED133.5 million, or 13%, totalling AED1.2 billion compared to AED1.0 billion last year.

This growth highlights SIB's capability to sustain stable operating income despite economic challenges while seizing opportunities across various sectors. Total general and administrative expenses rose by 16.9% to AED405.4 million, up from AED346.9 million in the same period of 2024.

The increase in expenses is mainly due to ongoing investments in human capital, technology, and operational infrastructure aimed at supporting business expansion and enhancing customer service. Despite these higher costs, SIB's net operating income before impairment provisions reached AED757.2 million, reflecting an 11% increase from AED682.1 million in the first half of 2024.

This demonstrates the bank's ability to manage cost pressures while maintaining profitability, reinforcing its operational efficiency and sound financial management practices.

Impairment Provisions and Asset Quality

SIB recorded a net reversal of impairment provisions amounting to AED9.3 million during the first half of 2025, compared to an impairment provision of AED67.3 million in 2024's first half. This improvement indicates better financing portfolio quality alongside effective credit risk management and recovery efforts.

This positive development significantly contributed to the 25% profit increase after tax, confirming the effectiveness of SIB’s risk mitigation strategies and its commitment to preserving asset quality amid global economic changes.

Balance Sheet Growth

On the balance sheet front, total assets grew by AED5.5 billion or 6.9%, reaching AED84.7 billion as of June 30, 2025, compared to AED79.2 billion at the end of last year.

This growth is supported by an increase in total customer financing which rose by 12.9% to reach AED43 billion from AED38.1 billion at the end of 2024.

Customer Deposits and Liquidity Ratio

Customer deposits increased slightly to AED52.7 billion from AED51.8 billion at last year's end, resulting in a financing-to-deposit ratio of 81.5%, up from 73.6%. SIB maintained a strong liquidity ratio at 21.1% of total assets or AED17.8 billion compared to last year's end figure of 21.6%.

The return on assets improved to 1.70%, while return on equity rose to 14.88%, both showing growth from last year's figures of 1.44% and 12.76%, respectively.

With inputs from WAM