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Emirates Islamic H1 profit drops to Dh12m

Issac John /Dubai
issacjohn@khaleejtimes.com Filed on July 20, 2020

(KT file)

Emirates Islamic reported on Monday a net profit of Dh12 million for the first half of 2020, and attributed the drop "to the prudent actions taken by the bank to create higher impairment" on its financing and investment book to cater to the future impact of Covid-19.

The bank's total income declined by 15 per cent year on year to Dh1.1 billion as its total assets dropped one per cent to Dh64.2 billion in the first half, the Dubai-based Islamic finance institution said in a statement.

For 2019 first-half, the bank reported a net profit of Dh673 million, an increase of 39 per cent year-on-year, while net profit for the whole year surged by 15 per cent to Dh1.061 billion.

Hesham Abdulla Al Qassim, chairman of Emirates Islamic, and vice chairman and MD of Emirates NBD, said while Covid-19 has had an impact on the bank's business, it remains resilient and confident as the UAE economy responds to a phased re-opening.

"The country's leadership has demonstrated exceptional strength and foresight in creating the necessary regulation and frameworks to address immediate challenges and support the long term recovery and growth of the economy. True to our core Shariah principles and reflecting our commitment to society, we were among the first Islamic banks to offer relief measures to our customers facing financial difficulties as a result of Covid-19," said Al Qassim.

In 2020, the bank assisted over 35,400 customers to the tune of Dh2.09 billion in installment deferments. "As the UAE's leading Islamic financial institution, we will continue to take decisive and proactive steps to ensure we continue to support our customers during these challenging times. We remain committed to the health and safety of our people, our customers and the wider community," said Al Qassim.

Salah Mohammed Amin, chief executive officer of Emirates Islamic, the half-year financial results reflect the bank's measured and cautious approach as the UAE eases lockdown restrictions and begins a phased plan towards economic recovery.

"Our strong balance sheet and healthy market share enable the bank to continue to support our loyal customer base so that we all can emerge even stronger from these unprecedented times," said Amin.

He said the bank's strong focus on digitisation and innovation has been critical to offering customers an uninterrupted banking service. "We are pleased that an increased number of customers are now more digitally active on our secure platform. Going forward, we will keep enhancing our digital banking solutions to address our customers' needs in this new environment and maintain our market-leading position."

The bank reported a broadly flat customer accounts of Dh45 billion in the first half. The bank's impaired financing ratio is at 8.2 per cent with strong coverage ratio of 103.2 per cent while the headline financing to deposit ratio remained at 90 per cent, demonstrating healthy liquidity position. Bank maintain as Tier 1 capital ratio of 18.9 per cent and capital adequacy ratio at 20 per cent.

"Emirates Islamic continued to play its role in supporting the less fortunate and under-privileged sections of the society. Through the Emirates Islamic Charity Fund, the bank distributed Dh22 million in the first half of 2020," the bank said.

issacjohn@khaleejtimes.com

 

author

Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.


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