DIB’s first half net profit up 35 per cent to Dh1.8 billion

Dubai: Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE by total assets, on Wednesday reported a 35 per cent increase in first half net profit to Dh1.8 billion compared to Dh1.33 billion in the same period last year.

“DIB’s robust first half results demonstrate the bank’s ability to successfully tap the emerging opportunities across the growing local and international markets providing optimal returns for its shareholders,” said Mohammad Ebrahim Al Shaibani, Director General of the Court of Dubai Ruler and Chairman of DIB.

Bank’s first half total income increased to Dh3.62 billion, up 21 per cent compared with Dh3 billion for the same period of 2014. Net Revenue increased 21 per cent year on year to Dh3.16 billion compared with Dh2.6 billion for the same period of 2014.

In the first six months of the year the banks total assets increased 18 per cent to Dh146.7 billion compared to Dh123.9 billion at the year end 2014. Net financing assets at Dh87 billion, was up 18 per cent compared to Dh74 billion at end of 2014. DIB’s customer deposits in the first half of the year were up 18 per cent to Dh109.2 billion compared to Dh92.3 billion at end of 2014. Low cost deposits continue to remain significant with a large and stable current and savings account (CASA) book at 42 per cent of total deposits. Sukuk investments at Dh18.7 billion increased by 16 per cent from Dh16.1 billion at year end 2014.

Net revenue for the period ended June 30, 2015 amounted to Dh3.16 billion, an increase of 21 per cent compared to Dh2.6 billion in the same period of 2014 on the back of strong growth in core business coupled with improvement in cost of funds. Net interest margins (NIMs) for the first half of 2015 was up at 3.68 per cent from 3.34 per cent in same period of last year.

“With core business growth leading to an increase of 18 per cent in the financing book in the first six months, we expect to penetrate the market further during the year and increase DIB’s share of business across banking sector in 2015,” said Dr Adnan Chilwan, Dubai Islamic Bank Chief Executive Officer.

The bank continued to report robust improvement in asset quality. Impairment losses declined to Dh276 million compared in the first half of this year compared to Dh355 million for the same period last year. While the bank’s non performing loans (NPLs) declined on a consistent basis, the NPL ratio improved to 6.2 per cent, compared to 8 per cent at year end 2014. Impaired financing ratio also improved at 5 per cent from 6.5 per cent at end of 2014, provision coverage ratio improved to 86 per cent compared to 78 per cent at end of 2014.

Capital and liquidity levels remained strong at the end of the first half of the year with capital adequacy ratio at 17.1 per cent compared to 14.9 per cent at end of 2014. While financing to deposit ratio was at 80 per cent, overall liquidity improved further with issuance of $750 million 5 year senior sukuk in May 2015.

Key performance ratios continue to show strong improvement in the first half of the year with the bank’s cost to income ratio improving to 34.1 per cent from 34.6 per cent for the same period of 2014. While return on assets increased by 40 basis points to 2.66 per cent in the first half of this year from 2.26 per cent in the same period last year, return on equity increased by 201 bps to 19.8 per cent from 17.8 per cent in the same period in 2014. DIB’s earnings per share increased to Dh0.41 from Dh0.29 in the first half of last year.