Finance & Capital Market

Dubai Islamic 9-month profit slides 22% to $850m

Dubai Islamic Bank, the largest Islamic bank in the UAE, has posted a gross net profit of AED3.124 billion ($850 million) for the first nine months of the year, as against AED4.015 billion during the same period of 2019, marking a decline of 22%.

The bank’s total income reached nearly AED9.9 billion for the nine months of 2020 whilst net operating revenue grew to AED6.9billion supported by core business growth as well as robust fees & commissions and FX income of AED1.32 billion, an increase of 19% YoY.

Key results highlights for the first nine months of 2020:

•    Net financing and Sukuk investments rose to AED234.5 billion vs AED184.2 billion in 2019, up by 27% YTD.
•    Customer deposits increased to AED214.6 billion up by 31% YTD.
•    CASA component increased to 39% from 33% when compared to YE2019.
•    Cost to income ratio stable at 29.4%.
•    ROA stood at 1.70% and ROE at 14.0%.
•    Financing to deposit ratio stood at 92%, signifying ample liquidity.
•    NPF ratio at 4.8% remains robust given the current market conditions.
•    Overall coverage, including collateral at discounted value, stands at 114%.
•    Capital adequacy (CAR) and CET 1 ratios improved to 17.3%and 12.9%respectively, despite growth and conservative provisioning.

Mohammed Ibrahim Al Shaibani, Director-General of The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said: “The global environment remains uncertain with geographies around the world yet to fully recover. At home, the UAE remains committed towards economic development with a strong focus on precautionary safety measures as we witness the gradual recovery of trade and business services. In addition, the proactive fiscal policies of the UAE government have supported the domestic banks to continue to operate profitably whilst simultaneously assisting and servicing customers during these trying times.

“The on-going consolidation of the banking sector in the GCC region is expected to continue with constrained growth opportunities and lower oil prices. DIB’s strategic acquisition of Noor remains on target for completion by year end. The anticipated synergies have already started to materialize which will pave the way for robust growth and greater returns for our shareholders in the years to come.”

Dubai Islamic Bank Managing Director, Abdulla Al Hamli, said: “The UAE’s strong international economic relations, stable government and advanced technology infrastructure will further support the recently announced government initiatives such as the retirement and remote working programs. DIB’s robust consumer business coupled with digital offerings remains aligned towards supporting immediate on-boarding of new customers as well as continuing to service and engage with them on the same.

“During these unprecedented times, our business continuity and crisis management plans were immediately engaged. This has enabled our highly dedicated and capable employees to continue on with their duties and be able to service our customers with minimal disruptions supported by technology enablers and extreme precautionary and safety measures.

Dubai Islamic Bank Group Chief Executive Officer, Dr Adnan Chilwan, said: Even with the continued economic uncertainties and market volatilities over the past few months, the bank’s total income for the nine months of 2020 remained stable at nearly AED10 billion, a significant achievement during these unprecedented times. Our diversified revenue streams continue to sustain the bank’s healthy profitability levels during the period as we see the net operating revenue actually increase to over AED6.9 billion despite the pandemic.”

“Focusing on low risk segments, the bank remains at the top in the market from earning assets growth perspective with nine months increase of 27% supported by gross new financing of around AED42 billion. Despite the growth, liquidity remained strong at 92%.

Notwithstanding significant growth, and substantial provisioning and impairments due to the conservative approach adopted, the strong profitability has pushed the capitalization ratios upwards with CET1 rising by 90 bps to circa 13% and overall CAR 17.3%, depicting a robust capital position,” he added. – TradeArabia News Service