Tuesday 11, April 2017 by Nabilah Annuar

DIB reports AED 1.04 billion in profits for the first quarter

Net profit up by 4 per cent compared to same period in 2016.

Dubai Islamic Bank (DIB) reported a sustained profitability growth with group net profit increasing to AED 1.04 billion, up four per cent compared with AED 1 billion for the same period in 2016. Total income increased to AED 2.38 billion, up 13 per cent compared with AED 2.1 billion for the same period in 2016. Net operating revenue increased to AED 1.8 billion, up seven per cent compared with AED 1.69 billion for the same period in 2016.


Impairment losses stood at AED 169 million compared with AED 118 million for the same period in 2016. Cost to income ratio declined to 32.8 per cent compared with 33.7 per cent for the same period in 2016. Net funded income margin stood at 3.16 per cent compared with 3.26 per cent for the same period in 2016.


The bank’s asset growth remains robust as net financing assets rose to AED 121.4 billion up by six per cent, compared to AED 114.9 billion at the end of 2016. Sukuk investments increased to AED 24.2 billion, a growth of four per cent, compared to AED 23.4 billion at the end of 2016. Total assets stood at AED 186.9 billion, an increase of seven per cent, compared to AED 174.9 billion at the end of 2016.


Demonstrating resilient asset quality, DIB’s NPA ratio continues its downward trajectory improving to 3.7 per cent, compared to 3.9 per cent at the end of 2016. Provision coverage ratio improved to 118 per cent, compared to 117 per cent at the end of 2016. Overall coverage including collateral at discounted value now stands at 160 per cent, compared to 158 per cent at the end of 2016.


The bank’s liquidity position remains strong with customer deposits recorded at AED 137.2 billion compared to AED 122.3 at the end of 2016, up by 12 per cent. CASA constituted 37 per cent of the otal deposit base while financing to deposit ratio stood at 88 per cent.


DIB’s capital adequacy ratio remained strong standing at 16.5 per cent, as against 12 per cent minimum required, while its Tier 1 CAR stood at 16.1 per cent, against minimum requirement of 8 per cent.


Shareholders’ return remains robust and in line with guidance for the year as earnings per share stood at AED 0.16 in Q1 2017 and return on assets steady at 2.34 per cent in Q1 2017.


Commenting on these results, HE Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said, “The UAE economy saw a strong start to 2017 following the stabilisation of commodity prices and continuation of infrastructure spending around all key areas. capitalising on a strong beginning, all key metrics for the bank have shown robust growth, a performance that once again, puts the bank at the top end of the market. Whilst the UAE market continues be the biggest contributor by far, the bank’s international expansion strategy has progressed very well with the official launch of our operations in Indonesia and the recent positive developments with the regulators for our Eastern Africa ambitions.”


Sharing similar sentiments, Abdulla Al Hamli, DIB’s Managing Director, added, “Over the last few years, we have focused on not only growing our business, but also on solidifying our position in the market. Today, the bank is clearly recognised as not just a leader in Islamic finance but a prominent and leading franchise within the entire banking sector in UAE. The bank continues to demonstrate its commitment to shareholders with solid and healthy returns emanating from growing profitability in a challenging global environment.”


Dr. Adnan Chilwan, Group Chief Executive Officer of DIB further explained, “Earlier this year, we unveiled the new Growth 2.0 strategy, effectively focused on two key areas – one, safeguard and protect the franchise we established in the first phase of growth and two, capitalise on the capacity created within the balance sheet to deliver the next stage of growth for the bank. Clearly our strategy built around business sustainability and growth has once again yielded strong results with core businesses providing the major impetus to robust bottom line growth. Liquidity continues to be a key factor in driving growth and the last quarter has once again witnessed DIB’s ability to generate and mobilise deposits as needed. Though pressure may continue on cost of funding, it is expected to be relatively muted in 2017. With a six  per cent rise in core financing assets, liquidity ratio of 88 per cent and constantly improving asset quality, DIB is very well positioned to further penetrate and increase the share of wallet in its existing operative segments whilst simultaneously capturing new businesses and acquiring new clientele from across the entire banking sector in UAE.”

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