2 3 HEAD OFFICE 4 Emirates Islamic Bank (Public Joint Stock Company) Head Office 3rd Floor, Building 16, Dubai Health Care City, Dubai Tel.: +97 1 4 3160336 Fax: +97 1 4 3582659 P.O. Box: 6564, Dubai, United Arab Emirates emiratesislamic.ae 5 To be the leading provider of high standard Shari’a- compliant innovative financial products, quality service OUR VISION and superior value for our customers, shareholders, employees and the community. 6 Providing innovative and high standard financial products OUR MISSION and services governed by Islamic Shari’a provision to enrich the society. 7 His Highness Sheikh Khalifa Bin Zayed Al Nahyan President of the United Arab Emirates 8 His Highness Sheikh Mohammed Bin Rashid Al Maktoum Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai 9 BOARD OF DIRECTORS 10 Mr. Hesham Abdulla Al Qassim Mr. Buti Obaid Buti Al Mulla Chairman Vice Chairman Mr. Shoaib Mir Hashem Khoory Mr. Mohamed Hadi Ahmad Mr. Mohamed Hamad Obaid Director Abdulla Al Hussaini Khamis Al Shehi Director Director Mr. Ali Humaid Ali Al Owais Mr. Shayne Nelson Director Director 11 CONTENTS 12 Chairman’s Message 14 CEO’s Message 16 Corporate Social Responsibility 20 Review of Performance 22 Board Committees 27 Financial Highlights 30 List of Branches 33 List of Offsite ATMs 35 13 CHAIRMAN´S MESSAGE 14 Hesham Abdulla Al Qassim Chairman, Emirates Islamic The United Arab Emirates (UAE) attributes its unprecedented success story to our visionary leadership’s foresight and planning. As we move closer towards Expo 2020, the nation continues its growth story by excelling in every sector of public development, from economic policy to technological infrastructure, serving as a model of progress to countries across the region. The government’s diversification policy has been instrumental in solidifying the UAE’s position as a regional financial centre and international trading hub. Emirates Islamic is proud to be a contributor to this success story. In 2017, Emirates Islamic continued to assert its position as a leading financial institution in the UAE, making a solid contribution to the development of the overall Islamic finance sector. We delivered strong results for the year, demonstrated with a six-fold increase in net profit to AED 702 million. The Bank significantly increased its returns to shareholders with Return on Equity (ROE) of 10% in 2017, up from 2% in 2016. In 2017, the Year of Giving, we strengthened our commitment to the UAE community with various charitable donations to support the less fortunate and needy, particularly in the areas of food, shelter, health, education, rehabilitation and social welfare. The Emirates Islamic Charity Fund distributed a total of AED 59 million to charitable institutions and deserving causes, both locally and internationally. Going forward, as we celebrate the Year of Zayed in 2018, the Bank reaffirms its commitment to the vision and values of our founding father, the late Sheikh Zayed Bin Sultan Al Nahyan, which have laid the foundation to a prosperous and successful UAE. Overall, we are optimistic about our outlook and growth prospects for the year ahead. Islamic banking continues to grow in popularity, as evidenced in our annual Islamic Banking Index which shows that an increasing number of people in the UAE are recognising the positive attributes of Islamic banking over the past years, leading to a wider adoption of Shari’a-compliant products and services. This is a trend we welcome as it bodes well for the future of the Islamic banking sector and supports the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai to make Dubai the global capital of Islamic economy. Moving forward, we will continue to play our pioneering role in the Islamic banking sector, helping further increase the uptake of Islamic banking products in the UAE. In closing, I would like to thank our Board of Directors, the Bank’s management team and all Emirates Islamic employees for their continued contribution to our performance. I would also like to extend appreciation to our loyal and valued customers and shareholders for their support as we look forward to another successful year ahead. 15 CEO’S MESSAGE 16 Jamal Bin Ghalaita CEO, Emirates Islamic 2017 marked a significant year for Emirates Islamic, with the Bank reporting the highest ever recorded net profit of AED 702 million and the highest ever recorded total assets of AED 61.9 billion since our establishment in 2004. Our focus on consistent control of operating costs resulted in an improvement by 7% over last year, while net impairment allowances have improved by 48% year-on-year due to a lower cost of risk and an enhanced collection drive. We continued to play a leading role in the development of Islamic banking in the UAE through our focus on banking and technological innovation. We made tremendous progress in our digital transformation drive with investments in technology-led solutions to enhance back and front-end processes. Highlights during the year included a successful transition to a new Core Banking System and upgrade of our mobile banking app with a completely revamped interface and an enhanced user experience. We are the first and only Islamic bank in the UAE to launch both Apple Pay and Samsung Pay, providing convenient payment solutions to our customers. Recognising the need to cater to the growing mass-affluent segment, the Bank launched Advantage Banking, a valuable proposition for customers to enjoy a wide range of banking solutions. We enhanced our cards offering in 2017, launching the Emarati Credit Card, providing unique benefits to our UAE National customers. To cater to the growing needs of Emirates Islamic’s corporate, commercial and institutional clients, we invested in enhancing our product capabilities to include new treasury and trade finance solutions. In 2017, the Bank was also involved in landmark syndication and structured financing deals for institutional and corporate clients within the Islamic Syndication and Structured Finance space in the UAE and the region. Our efforts were recognised across the industry and continued to win accolades, including Banker Middle East Product Awards for ‘Best Savings Account’ (Kunooz) and ‘Best Islamic Premium Card’ (Flex Elite), ‘Islamic Personal Finance Provider of the Year’ by YallaCompare, and the Service Olympian Awards for ‘Most Improved Website’ and ‘Best Social Media Reach’. Looking ahead, we will continue to invest in innovation-led solutions to cater to the growing demand for convenient, accessible banking. We will also continue to strengthen our internal processes, building on the enhancements in our Customer Experience journey and Risk Function, rolled out last year. To conclude, I would like to thank our Board of Directors for their ongoing support and contribution to our success. I would also like to extend our appreciation to our valued employees for their role in our continued progress and development. 17 AMBITION Our vision is limitless and we work together to make it a reality 18 19 CORPORATE SOCIAL RESPONSIBILITY As one of the country’s largest Islamic Banks, we play an active and major role in supporting the communities in which we serve to grow stronger. This commitment reflects our Corporate Social Responsibility approach and can be seen in the way we run our business, the inclusive and supportive workplace we create for our employees, the products and services we offer our customers, and the impact we make in helping the local economy thrive. In line with this belief and values, Emirates Islamic launched the ‘Emirates Islamic Charity Fund’ in 2016 to govern and manage the bank’s strategy for charitable donations and giving, one of the key pillars of its overall CSR framework. In accordance with the Year of Giving initiative announced in 2017 by H.H. Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, Emirates Islamic has distributed over AED 59 million to various charitable causes including Sharjah Charity International, Tarahum Foundation, Dubai Cares, Faraj Fund, Awqaf & Minor Affairs Foundation, Al Jalila Foundation, Islamic Affairs and Charitable Activities Department, Dubai Taxi Corporation, Sheikh Saud Bin Saqr Al Qasimi Foundation and more. As a homegrown bank, we firmly believe in supporting projects that will raise the regional and global profile of the country’s medical institutions and position the UAE as the healthcare hub of the wider Middle East region. In healthcare, Emirates Islamic has disbursed funds towards medical and rehabilitation equipment to government and privately-run institutions including Dubai Health Authority, Ministry of Health and Prevention, Ajman Club for Disabled, and Abu Dhabi Rehabilitation and Care Center for People with Special Needs. 20 Reaffirming Emirates Islamic’s strong support for the UAE’s heritage and culture, including fishing which has been practised by local Emirati fisherman for centuries as a traditional form of livelihood, the bank has contributed AED 200,000 to Umm Al Quwain Co-operative Society for Fishermen. The contribution supported local fishermen, keeping in mind the financial burden of the seasonal profession and the large expenses required for fishing equipment. In line with the UAE Vision 2021 which has education as its foundation and aims to provide world-class education to build a knowledge economy and establish initiatives for scientific research, Emirates Islamic has also contributed to support Ajman University, University