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Robust growth in key metrics lifts DIB's profit to Dh1.04 billion

issacjohn@khaleejtimes.com Filed on April 11, 2017
Robust growth in key metrics lifts DIBs profit to Dh1.04 billion
The bank's first-quarter total income rose 13 per cent to Dh2.378 billion. - Supplied photo

Dubai Islamic Bank (DIB) reported on Tuesday a four per cent growth in net profit for the first quarter of 2017 compared to the same quarter last year on the back of robust growth recorded by all key metrics.    

DIB, the first Islamic bank in the world and the largest Islamic bank in the UAE by total assets, said in a statement that its group net profit increased to Dh1.042 billion from Dh1.001 billion for the same period in 2016.

Total income rose to Dh2.378 billion, up 13 per cent compared with Dh 2.102 billion for the same period in 2016 while net operating revenue rose by seven per cent to  Dh1.804 billion from Dh1.690 billion in the same 2016 quarter.

Mohammed Ibrahim Al Shaibani, director-general of His Highness The Ruler's Court of Dubai and chairman of DIB, said the UAE economy saw a strong start to 2017 following the stabilisation of commodity prices and continuation of infrastructure spending around all key areas.

"Capitalising on a strong beginning, all key metrics for the bank have shown robust growth, a performance that once again, puts the bank at the top end of the market. While the UAE market continues be the biggest contributor by far, the bank's international expansion strategy has progressed very well with the official launch of our operations in Indonesia and the recent positive developments with the regulators for our Eastern Africa ambitions," said Al Shaibani.

Abdulla Al Hamli, DIB managing director of the bank, said over the last few years, DIB has focused on not only growing its business, but also on solidifying its position in the market.

"Today, the bank is clearly recognised as not just a leader in Islamic finance but a prominent and leading franchise within the entire banking sector in UAE. The bank continues to demonstrate its commitment to shareholders with solid and healthy returns emanating from growing profitability in a challenging global environment," said Al Hamli.

Dr Adnan Chilwan, chief executive officer of DIB, said a strategy built around business sustainability and growth has once again yielded strong results with core businesses providing the major impetus to robust bottom line growth.

"Clearly liquidity continues to be a key factor in driving growth and the last quarter has once again witnessed DIB's ability to generate and mobilise deposits as needed. Though pressure may continue on cost of funding, it is expected to be relatively muted in 2017," he said.

Chilwan said with a six per cent rise in core financing assets, a liquidity ratio of 88 per cent and constantly improving asset quality, DIB is very well positioned to further penetrate and increase the share of wallet in its existing operative segments whilst simultaneously capturing new businesses and acquiring new clientele from across the entire banking sector in UAE.   

DIB's impairment losses stood at Dh169 million compared with Dh118 million for the same period in 2016. Cost to income ratio declined to 32.8 per cent compared with 33.7 per cent for the same period in 2016. Net funded income margin stood at 3.16 per cent compared with 3.26 per cent for the same period in 2016, the banks statement revealed

Net financing assets rose to Dh121.4 billion up by six per cent, compared to Dh114.9 billion at the end of 2016. Sukuk investments increased to Dh 24.2 billion, up four per cent compared to Dh23.4 billion at the end of 2016. The bank's total assets stood at Dh186.9 billion, an increase of seven per cent, compared to Dh174.9 billion at the end of 2016.

The bank said its NPA ratio continues its downward trajectory improving to 3.7 per cent, compared to 3.9 per cent at the end of 2016 while provision coverage ratio improved to 118 per cent, compared to 117 per cent at the end of 2016.

Customer deposits stood at Dh137.2 billion compared to Dh122.3 at the end of 2016, up by 12 per cent while financing to deposit ratio stood at 88 per cent. Capital adequacy ratio remained strong standing at 16.5 per cent, as against 12 per cent minimum required, while Tier 1 CAR stood at 16.1 per cent, against minimum requirement of eight per cent.

Earnings per share stood at Dh 0.16 while return on assets remained steady at 2.34 per cent  and return on equity stood at 18 per cent in first quarter1 2017, 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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