DIB’s Q1 profit doubles on strong economy
Dubai, May 1, 2014
Dubai Islamic Bank's (DIB) net profit for the first quarter doubled, it said on Thursday, as the booming local economy boosted revenue and cut bad debts.
The result is consistent with the trend of rising profits for United Arab Emirates banks in the first quarter, benefiting from the local economy's recovery after a real estate crash and debt problems at Dubai government-linked entities.
DIB, the largest sharia-compliant lender in the UAE, made 636.6 million dirhams ($173.3 million) in the first three months of the year, it said in a statement to the stock exchange. This was up from 301.7 million dirhams in the same period last year.
The average forecast of four analysts polled by Reuters was for a net profit in the period of 506.1 million dirhams.
DIB's profits were boosted by higher income, partly driven by increased lending to both corporates and consumers.
Loans and advances had increased to 59.9 billion dirhams by the end of March - up 6.8 percent on the figure at the end of 2013.
The improved conditions of the local economy also helped asset quality, with bad loan provisioning in the first quarter of 2014 down 45.9 percent year-on-year to 195 million dirhams.
DIB is in talks with an Islamic bank in Indonesia to take a 40 percent stake, said Chilwan.
He told reporters that DIB hoped to conclude a deal before the end of the year and that it would pay for the purchase using its own cash reserves.
He declined to name the acquisition target but said its parent was a listed company. – Reuters