Islamic finance lifts Dubai Islamic Bank's Q3 profit

dubai - The bank recorded a 26 per cent increase in third-quarter net profit

Dubai Islamic Bank (DIB), the largest Shariah-compliant lender in the UAE, said on Wednesday it recorded a 26 per cent increase in third-quarter net profit as higher income from Islamic financing and investing offset a rise in impairment charges.

The bank said its profit for the third quarter surged to Dh1.11 billion in the three months to September 30, from Dh876.3 million in the corresponding 2016 period.

In a statement, DIB said group net profit increased to Dh3.301 billion, up 10 per cent compared with Dh3.011 billion for the same period in 2016.
Total income increased to Dh7.51 billion, up 17 per cent compared with Dh6.41 billion for the same period in 2016.

Net operating revenue increased to Dh5.681 billion, up 13 per cent compared with Dh5.048 billion for the same period in 2016.

"Efficient and proactive cost management led to operating expenses remaining nearly flat at Dh1.741 billion compared to Dh1.716 billion for the same period in 2016," DIB said. Bank's deposits increased by 17 per cent to Dh143.5 billion.

Mohammed Ibrahim Al Shaibani, director-general of His Highness The Ruler's Court of Dubai and chairman of Dubai Islamic Bank, said the recovery of international oil prices and the stability witnessed in the recent past would be a major source of support in the area of funding and liquidity for the banking sector. "With the solidity and resilience displayed by the UAE's financial market, credit growth is expected to more than double to five per cent in 2018, spurred by the government's unabated progress on infrastructure development in line with its economic aspirations," said Al Shaibani. He said DIB continues to remain at the forefront of the industry with solid earnings growth as net profit increased by 10 per cent year on year, primarily driven by the bank's persistent efforts in maximising its share of wallet across a diverse array of sectors and segments.

DIB's managing director, Abdulla Al Hamli, said the bank has given another remarkable performance this quarter with total income growing by 17 per cent as DIB continues to outpace the sector growth.

"The progress we have made in implementing our growth aspirations has led to the bank strengthening its market share with both the financing book and the deposit base growing by mid to high double digits in the first nine months of 2017," said Al Hamli.

Group CEO Adnan Chilwan said crossing the landmark of Dh200 billion in total assets is "another momentous milestone in our growth journey over the last four years. This performance demonstrates the strength of the franchise and the potential the organisation has to continue to defy the trend despite the challenges thrown by the global economic environment."

Chilwan said the recent move by the rating agencies with positive impacts on long term as well as standalone ratings is an affirmation of the fact that the 14 per cent growth in the financing assets so far this year and the performance in preceding years has not come at the expense of asset quality or underwriting standards.

- issacjohn@khaleejtimes.com