Finance & Capital Market

Dubai Islamic posts 9-month income at $2.4bn

Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE, has posted a net income of AED8.9 billion ($2.4 billion) during the first nine months of the year, marking a quarter-on-quarter increase of 4%.

Nine-month results highlights:

Sustained sequential growth in profitability supported by disciplined cost management and lower impairments.
•    Robust growth in net operating revenues of 5% QoQ and 3% YoY which now stands at AED7.1 billion YTD.
•    Continued reduction in operating expense, down by12% YoY from AED2,134million to AED1,874million as investments in digitalization as well as synergies from acquisition continue to realize.
•    Profits before impairments of AED5,275 million up 7% QoQ and 10% YoY.
•    Impairment losses of AED2,174 million lower by 10% QoQ and 18% YoY.
•    Net profits maintains its improving trend over the past few quarters with a 19% QoQ jump to reach nearly AED3.1 billion YTD supported by effective cost management and lower impairments.

Maintained a robust balance sheet with healthy liquidity and improved capitalization.
•    Earning assets remained stable with net financing and Sukuk investment at AED232.7 billion despite significant corporate prepayments which were offset by gross new financing of nearly AED30 billion YTD.
•    Customer deposits improved by 4% YTD now at AED214.1 billion with CASA stands at 39% amounting to AED83.9 billion during 9M 2021.
•    Liquidity remains strong with finance to deposit ratio of 90% and LCR of 160%.
•    Balance sheet remained stable with total assets now at AED289.4 billion.
•    Continued healthy QoQ improvements on ROA and ROE now at 1.4% (+10 bps QoQ) and10.9% (+50 bps QoQ) respectively.
•    Capitalization levels increased with CET1 at 12.8% (+50 bps QoQ) and CAR at 17.5% (+50 bps QoQ), well above the minimum regulatory requirement.
•    Total equity now stands at AED40.6 billion.

Mohammed Ibrahim Al Shaibani, Director-General at The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said: “The economic recovery of the UAE remains on track with strong performance of the non-oil sectors driven by improving demand of business activities and rising consumer confidence that is supported by high vaccination rates of the domestic population.”

“The successful opening of the World EXPO has demonstrated the nation’s ability to quickly recover from the global pandemic with all key economic sectors geared towards supporting this major event. DIB remains at the forefront of helping businesses as well as government entities deliver a truly remarkable global event.

“The UAE banking sector has remained resilient with healthy liquidity, strong capital buffers and improving profitability since the start of this year. DIB’s net operating revenues has reached AED7.1 billion, a robust growth of 5% QoQ and 3% YoY on the back of improving economic conditions and the gradual return of business activities,” he added.  

 Abdulla Ali Obaid Al Hamli, Board Member and Managing Director, said: “The various structural reforms on employment and residency has made the UAE amongst the top preferred city to live in globally. With the introduction of strategic economic programs to coincide with the nation’s golden jubilee, Dubai is headed towards the fastest pace of recovery throughout this pandemic that any country has seen globally.

“Our funding sources and liquidity continue to be a key strength of the bank with customer deposits now reaching AED214 billion, a robust growth of 4% YTD primarily supported by the wholesale business representing more than 50% of the deposit base. LCR ratio now stands at 160% up from 129% at YE2020”

Dr Adnan Chilwan, Dubai Islamic Bank Group Chief Executive Officer, said: “The UAE recovery momentum continues to accelerate following the successful regulatory measures supported by economic stimulus of more than $100 billion, high oil prices and a targeted implementation of a robust vaccination campaign nationwide. Aligned to the positive trend,  DIB’s business direction mirrors that of the nation with a strong sequential quarterly growth in total income reaching AED8.9 billion (+4% QoQ) and net profit of AED3.1 billion (+19% QoQ) supported further by renewed business optimism with the successful opening of the World Expo.”

“The steady improvement in our profitability is supported by our consistent efforts to continue to extract synergies from the acquisition, whilst pushing for further efficiencies via our digitalization drive and further optimization of our branch and ATM network. Evidence of the success of our cost management approach is clearly visible with OPEX reducing by a considerate 12% YoY to reach AED1.9 billion thereby leading to one of the lowest cost income ratio in the market at 26.2% (lower by 320 bps YTD).

“Liquidity remains robust as always with Finance to Deposit Ratio at 90%, while capital and profitability remain strong with all key metrics seeing steady sequential QoQ improvements on ROA and ROE now at 1.4% (+10 bps QoQ) and 10.9% (+50 bps QoQ) respectively as well as capitalization levels with CET1 at 12.8% (+50 bps QoQ) and CAR at 17.5% (+50 bps QoQ).  

“As the UAE aims to transition towards the green economy, we remain committed to and fully aligned with the nation’s sustainable ambitions on energy, climate and the society and our future strategic direction will see the bank taking key and decisive steps to protect the future of the nation and the world in line with UN SDGs.

“Whilst the economic recovery continues, our prudent approach to growth and profit protection saw us strengthen our fixed income book with Sukuk investments now reaching AED40 billion from AED35 billion at the start of the year depicting a solid growth of 13% YTD and 8% YoY. This portfolio primarily consists of sovereigns and financial institutions and the strategic growth is in line with our objective and focus on extending business in low risk sectors,” he added. – TradeArabia News Service