Dubai: Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE by total assets, on Sunday reported a net profit of Dh2.8 billion for 2014, up 63 per cent compared to Dh1.7 billion for 2013.
Gross revenue increased to Dh6.3 billion, up 20 per cent from Dh5.3 billion for the year 2013.
“The strong results have been achieved despite challenging conditions in the latter part of the 2014 around oil price and equity market volatility. Dubai is strongly positioned to withstand the current volatilities in the oil market given its diversified economy and infrastructure,” said Mohammad Ebrahim Al Shaibani, Director-General of The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank.
Net operating revenue increased to Dh5.6 billion, up 32 per cent from Dh4.2 billion for 2013 on account of growth in core business. Net operating profit before impairment stood at Dh3.52 billion, up 38 per cent from Dh2.55 billion for 2013.
DIB’s net financing assets at Dh74 billion at the year end 2014 was up by more than 32 per cent compared to Dh56 billion at the end of 2013. Sukuk investments increased to Dh16.1 billion compared to Dh11.6 billion at the end of 2013, an increase of nearly 38 per cent.
The bank’s total assets were up b 9 per cent Dh123.9 billion at the year end 2014 compared to Dh113.2 billion at the end of 2013. The bank’s customer deposits were up by 17 per cent to Dh92.3 billion at end 2014 from Dh79 billion at end of 2013. Low cost deposits continue to remain a significant chunk with a large and stable CASA [current and savings account] book comprising 45 per cent of total deposit base.
“Despite the relatively subdued market, the bank has witnessed a 63 per cent hike in net profit and 32 per cent jump in financing book compared to the same period last year, and all stemming from regular, core and normal banking activities,” said Dr. Adnan Chilwan, CEO of DIB.
DIB is targeting loan growth in 2015 of between 15 per cent and 20 per cent, with the profitability of its lending activity expected to remain around the same level as last year.
Operating expenses increased by 21 per cent to Dh2.04 billion for the year ended 2014 from Dh1.68 billion in 2013 driven by growth in business activities. This resulted in cost to income ratio improving to 36.7 per cent from 39.9 per cent in 2013.
DIB’s non-performing assets have shown a consistent decline with NPL ratio improving to 8 per cent for the year ended 2014 compared to 11.1 per cent at the end of 2013. Impaired financing ratio also improved to 6.5 per cent in 2014 from 8.8 per cent at the end of 2013.
The bank built further provisions during the current period leading to a marked improvement in coverage ratio, which now, stands at more than 78 per cent.
Bank’s return on assets improved by 74 bps from 1.62 per cent in 2013 to 2.36 per cent in 2014 while return on equity improved by 410 bps from 13.8 per cent in 2013 to 17.9 per cent in 2014. Earnings per share increased from Dh0.38 in 2013 to Dh0.61in 2014.
In view of the performance, DIB board has recommended distribution of a cash dividend of 40 per cent.