2Q26: Strong Non-ll and lower provisioning drive beat

Research evidence excerpt

2Q26: Strong Non-ll and lower provisioning drive beat

Update

July 29, 2026 02:34 PM GMT

Morgan Stanley & Co. International plc (DIFC Branch)+MAbu Dhabi Islamic Bank | Europe Shabbir Malik

Equity Analyst

2Q26: Strong Non-II and lower Shabbir.Malik@morganstanley.com +971 4 709-7057

Abu Dhabi Islamic Bank (ADIB.AD, ADIB DH)

EEMEA - Banks & Fintech | United Arab Emiratesprovisioning drive beat

Stock Rating Overweight

Industry View In-Line

Price target AED 24.00

AlphaSignals Earnings Reaction Shr price, close (Jul 29, 2026) AED 21.50

52-Week Range AED 27.96- 18.28

Unchanged Modest upside Modest revision higher Mkt cap, curr (mn) AED 78,088

Impact to our thesis Financial results versus consensus Direction of next 12-month Net debt (12/26e) (mn)* AED 4,754

consensus EPS

EV, curr (mn)* AED 79,636

Source: Company data, Morgan Stanley Research

* = GAAP or approximated based on GAAP

Key Takeaways

Positives: i) strong loan growth, ii) higher Non-II, & iii) lower provisioning

Negatives: i) pressure on NIM, ii) NIM guidance downgrade

Bottom-line: Positive. Despite NIM compression, the bank was able to deliver NII

growth QoQ. Loan growth revised guidance looks conservative despite upgrade

2Q26 profit beats estimates: ADIB reported 2Q26 profit of AED1.8bn (EPS:

AED0.48), +6% QoQ and +8% YoY, with ROE at 29%. Earnings were 8% higher than

our estimate (+10% vs. consensus), on higher Non-II and lower provisioning. The

group's 1H26 profit was AED3.5bn, +7% YoY on 14% higher NII. Management raised

loan growth guidance to 18-20% from 12-14%. The revised guidance looks

conservative considering the YTD trend (+14%). ADIB however cut its NIM guidance

to 3.7-3.8% from 3.8-4.0%.

NIM tightens; Non-II surprise: Revenue rose 4% QoQ, with NII up 1% and Non-II up

4%. NIM declined c24bps QoQ to 3.67%.