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DIB posts Dh1.01b net profit in 2011
Issac John / 3 February 2012
DUBAI — Dubai Islamic Bank (DIB), the first and the largest Shariah-compliant bank in the UAE, said on Thursday that it recorded a 25 per cent rise in net profit in 2011 compared to the previous year.
The bank’s net profit for 2011 increased to Dh1.01 billion from a net profit before restatement of Dh806 million in 2010, demonstrating sustained growth across the bank’s core operations, DIB said in a statement. DIB’s net profit for 2010 has been adjusted due to the restatement of the results of an associate company.
DIB reported an operating profit of Dh1.03 billion. The bank also proposed a 15 percent cash dividend to shareholders for 2011.
The bank’s shares fell 3.2 per cent in early trading in a largely negative market.
Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said the bank continued to perform strongly in a year of global economic uncertainty.
“These positive results show the bank’s strong liquidity position and stable funding base. The bank’s prudent focus on diversification and managed growth has ensured the interests of all stakeholders are safeguarded, and enabled DIB to make a meaningful contribution to the economic growth of the UAE,” he said.
DIB is a pioneer in Islamic banking services in the UAE, where currently the Shariah-compliant financial services sector represented 30 per cent of the global Islamic banking industry in 2011. DIB’s total assets as of December 31, 2011, stood at Dh90.59 billion compared to Dh89.8 billion at the end of the same period in 2010. In 2012, Islamic banking assets in the UAE are predicted to grow to 20 per cent of the total banking sector from an estimated 18 per cent in 2011.
DIB said its customer base continued to expand in 2011, with customer deposits reaching Dh64.77 billion as of December 31, 2011, a year-on-year increase of 2.1 per cent.
The bank’s core business grew in 2011, with income from financing and investing assets and investment sukuks reaching Dh3.96 billion, a year-on-year increase of 10.2 per cent.
DIB reported a robust Basel II capital adequacy ratio of 18.2 per cent, and a Tier I Capital ratio of 13.7 per cent.
The bank said in 2011, the bank continued with its ambitious plans to expand its physical presence across the UAE, opening seven new branches, including the bank’s first stand-alone Al Islami Private Banking branch. DIB also expanded the alternative banking channels available to customers with the launch of its Express Banking Terminals, giving customers 24-hour access to a wide range of banking services usually only available in branch, online or through phone banking.
“Through our focus on innovation and expansion, DIB has reinforced its position as the UAE’s leading Islamic bank,” said Abdulla Al Hamli, chief executive officer of DIB. “By continuing to successfully combine traditional Islamic values with the technology and innovation that characterise the best of modern banking, DIB is excellently placed to achieve sustained growth in the coming years.”
Islamic assets are expected to constitute 38 per cent of total consumer banking assets in the UAE in 2012, compared to about 35 per cent in 2010. According to the Dubai Chamber of Commerce and Industry, the collective assets of the eight Islamic banks in the UAE were Dh269 billion at the end of 2010, accounting for around 16.2 per cent of the overall banking assets of Dh1.66 trillion.
Globally, the Islamic banking industry is estimated to be worth $1 trillion, the bank said as it unveiled its new customer offerings for UAE customers, in response to growing interest in and customer demand for Islamic finance in the country and across the region.
Ernst & Young said in a report that Islamic banking assets with commercial banks globally would reach $1.1 trillion in 2012, a jump of 33 per cent from the 2010 level of $826 billion. In the Middle East and North Africa, Islamic banking assets increased to $416 billion in 2010.
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