National Holding, an Abu Dhabi-based investment firm, has acquired a 7.6% stake in Abu Dhabi Islamic Bank (ADIB) from Mubadala Investment Company, Abu Dhabi’s second-biggest sovereign wealth fund. The transaction was carried out by Emirates International Investment Company (EIIC), the strategic investment arm of National Holding. The move brings EIIC’s total shareholding in ADIB to 47%, positioning it as the bank’s top shareholder.
According to a joint statement from Mubadala and EIIC, the transaction demonstrates “strong confidence in the prospects for the long-term growth of the UAE’s second-largest Islamic lender by assets.” The statement added that the move was in line with Mubadala’s strategy of creating long-term value by optimizing a global portfolio of investments across a variety of sectors, and that Mubadala remains committed to the UAE’s banking sector.
ADIB’s stock has increased more than 16% year-to-date, according to Refinitiv data. Its market capitalization is about $10.3 billion, with Mubadala’s 7.6% stake valued at over $780 million at ADIB’s current share price, according to Reuters calculations. The statement did not disclose the value of the transaction.
For Q1 2023, ADIB reported a 54% growth in net profit to reach Dh1.1 billion, driven by significant growth and higher margins. The bank also reported record revenues of Dh2 billion for the same period, up by 45% YoY, underpinned by an 81% growth in funded income to Dh1.4 billion, derived from growth in customer financing and higher margins. ADIB also delivered a record return on equity of 23.4%, while welcoming 46,000 new customers in Q1 2023 alone.
The acquisition by National Holding is expected to support ADIB’s growth plans, particularly in the digital banking space, as the bank continues to expand its customer base in the UAE and beyond. ADIB has been focusing on digitizing its operations and services, launching innovative digital solutions to meet customers’ evolving needs and enhance their banking experience.
This transaction is another step in National Holding’s expansion strategy, as the investment firm looks to strengthen its position in key sectors of the UAE economy, particularly in banking and financial services. EIIC’s investment in ADIB is a testament to the bank’s strong fundamentals, solid performance, and promising outlook. ADIB’s Shariah-compliant banking model, coupled with its robust risk management practices and innovative approach, continue to attract investors and customers alike.
The acquisition of Mubadala’s stake in ADIB by National Holding’s EIIC comes as the latest move in the ongoing consolidation of the banking sector in the UAE. The transaction will likely further strengthen ADIB’s position as a leading Islamic bank in the region.
National Holding’s increased stake in ADIB may also pave the way for closer collaboration between the two companies, as well as opportunities for synergies and operational efficiencies.
Moreover, the sale of Mubadala’s stake in ADIB is in line with the sovereign wealth fund’s broader strategy of optimizing its global portfolio of investments across various sectors. Mubadala remains committed to the UAE’s banking sector and will likely continue to explore opportunities for strategic investments in the future.
ADIB’s strong performance in the first quarter of 2023 reflects the bank’s resilience amid challenging economic conditions. The bank’s focus on customer financing and higher margins has helped it deliver impressive growth and profitability, despite the impact of the pandemic on the banking sector.
The acquisition of Mubadala’s stake in ADIB is a clear indication of National Holding’s confidence in the UAE’s banking sector and its long-term growth prospects. As the country continues to attract foreign investment and drive economic diversification, the banking sector is expected to play a pivotal role in supporting sustainable development and promoting financial inclusion.
Overall, the acquisition of Mubadala’s stake in ADIB by National Holding’s EIIC marks a significant milestone in the evolution of the UAE’s banking sector. The transaction is expected to create value for all stakeholders involved and support the continued growth and development of the sector in the years to come.
