EIIC Acquires Minor Stake in Abu Dhabi Islamic Bank

Emirates International Investment Company (EIIC), the strategic investment arm of National Holding, ON Friday announced that it has acquired a minor stake of 7.6% in Abu Dhabi Islamic Bank (ADIB) from Mubadala Investment Company.

This transaction brings EIIC’s total shareholding in ADIB to 47%. EIIC has interests across diverse sectors including banking, asset management, real estate, hospitality, fintech as well as food and agriculture.

“As a global investor, this transaction is in line with Mubadala’s strategy to create long-term value by optimising a global portfolio of investments across a variety of sectors,” EIIC explained in a statement.

ADIB reported a growth in net profit of 54% to reach $300 million, driven by significant growth as well as higher margins. The bank reported record revenues of $540 million for the same period, up by 45% year-on-year.

This was underpinned by an 81% growth in funded income to $380 million, derived from growth in customer financing and higher margins. ADIB also delivered a record return on equity of 23.4%. The Shariah-compliant bank continues to attract customers, welcoming 46,000 new customers in the first three months of 2023 alone.

Largest Investor in UAE Banks

Mubadala, Abu Dhabi’s sovereign wealth fund, remains the largest investor in the UAE banking sector following the divesture. The state-owned investor, which manages $232 billion of assets across the world in various sectors, has 60.2% stake in Abu Dhabi Commercial Bank and owns 37.9% in First Abu Dhabi Bank, the UAE’s largest lender.

EIIC was launched in 2013 and established itself as an outstanding investor by generating huge returns from its investments and by continually reaching out to new and different points of view to succeed in the global marketplace.

The various investments made by EIIC were strategic and in Commercial, Industrial, Agricultural, Fintech, Water, Sports, Healthcare, Tourist Enterprises & Management. By creating new opportunities in these sectors, EII has been making a valuable contribution to the economic development of the UAE.

ADIB, which has more than $47 billion in assets, provides retail, corporate, business, private banking, and wealth management services to more than 1 million customers.

Announcing the Q1-2023 results in April, ADIB reported a 48% surge in its net profit on the back of higher revenue and fee income. Net profit attributable to equity holders of the bank for the three months to the end of March climbed to $272 million compared to with $194.70 million for the same period last year.

ADIB’s net revenue from funds jumped 81% annually to $390 million, while fees and commission income rose by 4% to $81.69 million.

Besides in the UAE, ADIB, which was founded in 1997, operates in Egypt, where it has 70 branches, Saudi Arabia, the UK, Sudan, and Iraq.

According to Moody’s Investors Service, the profitability of the four largest banks in the UAE is expected to grow this year amid soaring oil prices, rising interest rates and continuing economic momentum.

The combined reported net profit of First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank and Dubai Islamic Bank — which account for about 77% of banking assets in the UAE, climbed to $9 billion at the end of last year — up from $8 billion recorded in 2021 and $8.3 billion in 2019.