Dubai: Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE by total assets, reported on Wednesday a group net profit of Dh2.14 billion in the first half of 2017, up 7 per cent compared to Dh 2 billion for the same period last year.
Total income increased to Dh4.86 billion, up 15 per cent compared with Dh4.23 billion for the same period in 2016.
Net operating revenue increased to Dh3.67 billion, up 10 per cent compared with Dh3.35 billion for the same period in 2016.
“DIB continues to show remarkable progress with total income now reaching nearly Dh5 billion, a significant increase of 15 per cent compared to the same period last year,” said Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of DIB.
Expenses
Operating expenses remained nearly flat at Dh1.16 billion compared to Dh1.15 billion for the same period in 2016.
Gross cost of credit risk reduced to 55 basis points (bps) compared to 75 bps for the same period in 2016. Cost to income ratio declined to 31.6 per cent compared with 34 per cent at the end of 2016.
DIB reported robust asset growth across all core businesses during the first six months of 2017.
Total assets stood at Dh193.1 billion, an increase of 10 per cent, compared to Dh174.9 billion at the end of 2016.
Net financing assets rose to Dh125.4 billion up by 9 per cent, compared to Dh114.9 billion at the end of 2016. Sukuk investments increased to Dh 26.4 billion, a growth of 13 per cent, compared to Dh23.4 billion at the end of 2016.
“DIB continues to demonstrate robust earnings on the back of strong and unyielding focus on key economic growth sectors in the markets and jurisdictions we operate.
"The 9 per cent growth in financing assets supported by the 16 per cent rise in customer deposits clearly showcases the franchise’s incredible ability to continue to generate liquidity at will while simultaneously deploying the same in quality earning assets,” Dr. Adnan Chilwan, Group CEO of DIB.
The bank’s asset quality remained strong during the first half of 2017. Non- performing assets (NPA) ratio continues its downward trajectory improving to 3.6 per cent, compared to 3.9 per cent at the end of 2016.
Provision coverage ratio improved to 120 per cent, compared to 117 per cent at yearend 2016. Overall coverage including collateral at discounted value now stands at 161per cent, compared to 158 per cent at yearend 2016.
Customer deposits stood at Dh141.4 billion compared to Dh122.3 billion at the end of 2016, up by 16 per cent. Current and savings account (CASA) deposits increased by nearly 13 per cent to Dh53.5 billion from Dh47.4 billion as at end of 2016 leading to a robust 38 per cent constitution of the total deposit base. At the close of the first half of this year DIB’s financing to deposit ratio stood at 89 per cent.
“With liquidity pressure easing this year along with hikes in Fed rates, we expect relative improvement in margins, as a significant portion of our financing book will have a favorable impact due to its variable pricing nature” said Dr. Chilwan.
Capital adequacy ratio remains strong at 16.6 per cent with tier 1 ratio at 16.2 per cent. Earnings per share at the close of the quarter stood at Dh0.37.
Return on assets steady at 2.34 per cent at the end of first half 2017. Return on equity stood at 18.4 per cent at the end of first half 2017.
