DIB profit climbs 35% in H1

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DIB profit climbs 35% in H1
Dubai Islamic Bank with their new logo at Internet City, Dubai on Wednesday, April 2015.

Dubai - Bank's income soars 21%, Kenya operations to commence in third quarter.

By Muzaffar Rizvi

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Published: Thu 30 Jul 2015, 12:00 AM

Last updated: Thu 30 Jul 2015, 10:15 AM

Dubai Islamic Bank, or DIB, on Wednesday said DIB Group's first-half net profit climbed 35 per cent to Dh1.80 billion as the bank successfully tapped the emerging opportunities across the growing local and international markets.
The Dubai-listed bank - which is also the first Islamic lender in the world - said its year-on-year total income increased during the January-June 2015 period by 21 per cent to Dh3.62 billion. Net revenue also rose by 21 per cent and reached at Dh3.16 billion from Dh2.6 billion in the same period last year.
The largest Shariah-compliant lender in the UAE said its sukuk investments increased by 16 per cent for the period ended June 30, 2015 to Dh18.7 billion from Dh16.1 billion at the end of 2014.
The bank has benefited from a decline in impairment charges as the domestic economy strengthens. Impairment losses during the January-June period declined to Dh276 million from Dh355 million in the same period of 2014. Capital adequacy ratio stood firm at 17.1 per cent as of June 30, 2015, and T1 ratio reached at 16.8 per cent, both ratios being well above the regulatory level. Mohammed Ibrahim Al Shaibani, director-general of the Ruler's Court of Dubai and chairman of DIB, said the bank's robust first-half results demonstrate its ability to successfully tap the emerging opportunities across the growing local and international markets, providing optimal returns for its shareholders.
"The growth strategy that we have embarked on the last year ensures that a strong performance is sustained on the back of improved macro-economic conditions within the country, as well as the external markets we operate in," he said.
The bank's customer deposits reached Dh109.2 billion in the first half of 2015 compared to Dh92.3 billion at the end of 2014, reflecting an increase of 18 per cent. Its low-cost deposits continue to remain significant with a large and stable current and saving accounts book at 42 per cent of total deposits.
Dr Adnan Chilwan, chief executive of DIB, said the bank's solid first-half results is a testament to its commitment to progressively growing this franchise at a local and international level. He said the bank will also start operations in Kenya in the third quarter of 2015.
"With core business growth leading to an increase of 18 per cent in the financing book in the first six months, we expect to penetrate the market further during the year and increase DIB's share of business across banking sector in 2015," he said, adding that the bank is targeting a 20 per cent loan growth this year.
"The bank had set a target of 15-20 per cent loan growth for 2015 at the start of this year, but we aimed to be at the higher end of that target. We would want to be at 20 per cent for the full year," he said in an analysts' conference call.
The bank's operating expenses increased by 20 per cent to Dh1.08 billion for the period ended June 30, 2015 as against Dh902 million in the same period last year. The increase is attributed to variable operating cost in line with growth in business volumes and direct sales and marketing staff costs, the bank said.
"Despite cost growth, the cost-to-income ratio improved to 34.1 per cent in the first half of 2015 on account of higher revenue growth leading to widening of cost-income jaws. The cost-to-income ratio improved from 38.9 per cent in financial year 2013 to 35 per cent in 2014," according to the bank's statement.
- muzaffarrizvi@khaleejtimes.com

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