Sharjah Islamic Bank

1. Company Overview & Earnings Context

Sharjah Islamic Bank PJSC (SIB) is an Abu Dhabi Securities Exchange-listed Islamic bank headquartered in Sharjah, UAE. The Bank conducts banking, financing and investment activities in accordance with Islamic Shari’a principles and operates through 35 branches in the UAE. Its Group also includes businesses involved in hotels and resorts, securities intermediation and real estate.

The nine months ended September 2026 represented a strong earnings period for SIB. Net profit increased 9.0% YoY to AED 1.21 billion, while total operating income rose 13.6% to AED 2.10 billion. Profitability was supported by higher income from the Bank’s Islamic financing and investment portfolio, alongside strong growth in financing assets and customer deposits.

2. Financial Performance Snapshot

• Total Operating Income: AED 2.10 Billion (+13.6% YoY)

• Net Operating Income Before Impairment: AED 1.37 Billion (+11.6% YoY)

• Profit Before Tax: AED 1.33 Billion (+9.3% YoY)

• Net Profit: AED 1.21 Billion (+9.0% YoY)

• Earnings Per Share: AED 0.31, vs. AED 0.27

• General & Administrative Expenses: AED 726.61 Million (+17.4% YoY)

• Net Impairment Charge: AED 42.14 Million, vs. AED 11.95 Million

• Annualised ROAE: 14.66%

• Annualised ROAA: 1.69%

Income from investments in Islamic financing and sukuks increased 11.7% to AED 3.22 billion, while distribution to depositors and sukuk holders increased 3.4% to AED 1.79 billion. Investment, fee, commission and other income declined 4.1% to AED 662.2 million.

Despite the increase in operating expenses and impairment charges, SIB maintained positive earnings momentum, with profit before tax rising to AED 1.33 billion and net profit reaching AED 1.21 billion.

3. Operating Performance & Major Programs

SIB recorded significant balance-sheet expansion during the period. Total assets increased 10.4% from AED 90.31 billion at December 2025 to AED 99.67 billion at September 2026. Investments in Islamic financing were the main growth driver, increasing 18.9% to AED 54.14 billion from AED 45.55 billion.

Customer deposits increased 8.4% to AED 60.36 billion from AED 55.67 billion, reflecting continued deposit mobilisation and supporting the Bank’s funding base. CASA balances improved to approximately 43.0% of customer deposits from 42.7% at December 2025.

Asset quality also improved. The NPF ratio declined to 3.2% from 3.8% at December 2025, supported by recoveries on doubtful financing and growth in the overall financing portfolio. NPF coverage remained strong at approximately 108%.

Liquidity remained comfortable, with liquid assets representing 21.3% of total assets. The financing-to-deposit ratio increased to 89.7% from 81.8%, reflecting faster growth in Islamic financing relative to deposits.

4. Key Performance Drivers

The principal earnings driver was growth in SIB’s Islamic financing and investment portfolio. Income from Islamic financing and sukuks increased to AED 3.22 billion from AED 2.88 billion, helping total operating income increase to AED 2.10 billion.

Financing growth was particularly strong, with investments in Islamic financing increasing by approximately AED 8.6 billion during the nine-month period. Management attributed the expansion to its growth strategy and utilisation of capital and liquidity resources.

The Bank also strengthened its funding and capital position. SIB completed a rights issue of approximately 1.079 billion shares at AED 2.4 per share, generating AED 2.58 billion and contributing to shareholders’ equity rising to AED 12.39 billion.

In addition, the Bank completed a USD 500 million sukuk issuance, equivalent to approximately AED 1.8 billion, taking sukuk payable to AED 7.3 billion. Management highlighted strong demand from regional and international investors.

A partial offset came from higher costs. General and administrative expenses increased 17.4% to AED 726.6 million, while net impairment charges increased to AED 42.1 million from AED 11.9 million. Nevertheless, the cost-to-income ratio improved to 34.7% from 36.1% at December 2025.

5. Balance Sheet, Capital & Cash Flow

SIB ended September 2026 with:

• Total Assets: AED 99.67 Billion

• Investments in Islamic Financing: AED 54.14 Billion

• Customer Deposits: AED 60.36 Billion

• Total Liabilities: AED 87.28 Billion

• Shareholders’ Equity: AED 12.39 Billion

• Sukuk Payable: AED 7.32 Billion

• Cash & Cash Equivalents: AED 10.19 Billion

• Capital Adequacy Ratio: 19.4%

• Common Equity Tier 1 Ratio: 15.6%

• NPF Ratio: 3.2%

The capital position strengthened materially following the rights issue. Total capital adequacy increased to 19.4%, while CET1 increased to 15.6%, compared with 11.9% at December 2025.

Cash and cash equivalents stood at AED 10.19 billion at September 2026, compared with AED 13.26 billion at the beginning of the period. Net cash used in operating activities was AED 6.61 billion, largely reflecting growth in Islamic financing and placements with financial institutions, partly offset by higher customer deposits. Financing activities generated AED 3.61 billion, supported by the rights issue and sukuk issuance.

6. Investor Takeaway

Sharjah Islamic Bank delivered a strong nine-month 2026 performance, combining 9.0% net profit growth with double-digit operating income and financing growth. Net profit reached AED 1.21 billion, while total operating income increased 13.6% to AED 2.10 billion.

Balance-sheet growth was particularly notable. Total assets approached AED 100 billion, Islamic financing increased 18.9% to AED 54.14 billion and customer deposits rose 8.4% to AED 60.36 billion. Asset quality also improved, with the NPF ratio falling to 3.2%.

The successful AED 2.58 billion rights issue materially strengthened the capital base, while the USD 500 million sukuk issuance diversified funding. These actions helped shareholders’ equity rise to AED 12.39 billion and supported a capital adequacy ratio of 19.4%.

Key areas to monitor going forward include financing growth versus deposit growth, funding costs, operating expenses, impairment charges and asset quality. Regional geopolitical developments also remain relevant: management noted increased uncertainty across the Middle East and incorporated this into its forward-looking ECL assessment.

The independent reviewer issued an unmodified conclusion, stating that nothing had come to its attention indicating that the interim financial statements were not prepared, in all material respects, in accordance with IAS 34.