Dubai Islamic Bank net profit rises by 18% to Dh4.8 billion in third quarter

Dubai Islamic Bank, the largest Islamic bank in the UAE, on Wednesday announced that third quarter group net profit came in at Dh4,823 million, up 17.6 per cent year-on-year compared to Dh4,101 million. Growth was driven by rising core revenues, non-funded income and lower impairment charges.

Net financing and sukuk investments stoood at Dh265 billion, up 11.3 per cent year-to-date. Gross new underwriting and sukuk investments during the first nine months of 2023 reached Dh72 billion vs Dh43 billion in the first nine months of 2022.

Total income reached to Dh14,548 million compared to Dh9,873 million, a solid expansion of 47.4 per cent year-on-year .

Net Operating Revenues showed a robust increase of 11.7 per cent year-on-year to reach Dh8,547 million.

Net Operating Profit reached Dh6,286 million, a 12 per cent year-on-year increase compared to Dh5,612 million in the first nine months of 2022.

Balance sheet expanded strongly by 8.7 per cent year-to-date to cross to Dh313 billion.

Customer deposits increased to Dh221 billion, up 11.2 per cent year-to-date with CASA comprising 37 per cent of DIB’s deposit base. Traction towards investment deposits has continued increasing their contribution to total deposits to 63 per cent from 56 per cent in YE 2022.

Impairment charges registered Dh1,409 million against Dh1,450 million in the first nine months of 2022, down by 3.0 per cent. Similarly, 3Q 2023 impairments are also down by 10.5 per cent year-on-year and 2.7 per cent quarter-on-quarter.

Cost to income ratio further improved to 26.5 per cent, down 20 bps year-on-year and stable quarter-on-quarter.

Liquidity remains healthy with LCR at 166 per cent.

Continued improvement on ROA now at 2.2 per cent (+20 bps year-to-date) and ROTE at 18.4 per cent (+140 bps year-to-date).

Capitalisation levels remain robust with CET1 at 13.6 per cent (+70bps year-to-date) and CAR at 18.1 per cent (+50bps year-to-date), both well above the minimum regulatory requirement. Total equity now stands at Dh46 billion.

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 continues to thrive with strong fundamentals amidst the volatile global economic environment. The recent IMF growth figures on the UAE demonstrate the country’s resilience and the confidence that business and investors have on the economy. The domestic banking sector remains solid with expanding balance sheets and improving asset quality and profitability. DIB’s the first nine months of 2023 performance has been remarkable generating more than Dh14.5 billion in total income, a stellar growth of 47 per cent year-on-year . With the approaching COP28 here in Dubai, DIB has been progressing on its climate ambitions with strong partnerships and pledges which will pave the way for DIB to unlock further opportunities within the ESG space in line with the country’s sustainability goals. We look forward to welcoming the international leaders, policy makers and delegates and DIB remains committed to this important event in helping to deliver climate solutions.”

Dr Adnan Chilwan, group chief executive officer of Dubai Islamic Bank, said: “Dubai’ economy remained focused on the acceleration of all national projects under its Economic Agenda, D33, reflected in its 1H 2023 GDP growth of 3.2 per cent year-on-year and further lifted by exceptional performance during 2Q 2023 alone of 3.6 per cent. Remarkable growth across all sectors including transportation, retail trade, tourism, real estate and manufacturing led to this positive performance. DIB’s profitability during the nine months surged with net profit reaching Dh4.8 billion, up 18 per cent year-on-year , supported by higher revenues, controlled costs and lower impairments.

"DIB’s gross new financing and sukuk underwriting has been monumental during the reporting period reaching Dh72 billion, up 69 per cent year-on-year fueled by all business segments, particularly the corporate accounts, underpinning the bank’s robust growth strategy.

"Accordingly, the bank’s balance sheet crossed the Dh300 billion mark for the first time, reaching Dh313 billion a rise of 9 per cent year-to-date. The financing book grew by 7 per cent year-to-date to Dh199 billion (+5 per cent quarter-on-quarter) across corporate and consumer businesses reinforced by a surge in corporate cross border and private sector financing. Including Sukuk, the bank’s financing and sukuk assets has grown 11.3 per cent, already surpassing full year guidance.

"Our commitment to sustainability remains a top agenda for DIB with various bank-wide strategic initiatives aligned on this important theme. Our recently launched ‘One Tree for Everyone’, on-going collaboration with the COP28 team and regulators and our fast growing sustainable finance portfolio will help drive economic and social growth in the country. ESG and sustainability are fully embedded in the bank’s growth plans which revolve around positive impact on the environment and well being of the people in line with UAE’s agenda for a brighter, greener future."

• Business