Dubai: Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE by total assets, on Wednesday reported a group net profit of Dh850 million, up 34 per cent compared with Dh637 million for the same period in 2014.
DIB’s total income increased to Dh1.77 billion, up 19 per cent compared with Dh1.49 billion for the same period in 2014. Net operating revenue increased to Dh1.56 billion, up 20 per cent compared with Dh1.3 billion for the same period in 2014.
“The strong first quarter results demonstrate the bank’s strength and capability to continuously grow and expand its franchise despite the global market volatilities,” said Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank.
DIB reported strong growth in earning and assets across all business segments in the first quarter. Net financing assets were up 11 per cent to Dh82 billion compared to Dh74 billion at the close of 2014. Sukuk investments grew 9 per cent to Dh17.5 billion at the end of the first quarter compared to Dh16.1 billion at the end of 2014. Total assets at Dh139.6 billion was up 13 per cent in the first three months of this year compared to Dh123.8 billion at the end of 2014.
“Expanding our financing book at two to three times the market has been achieved through a multi-pronged approach combining product innovation, technology, renewed sales and service focus and optimisation of balance sheet to create additional growth capacity,” said Dubai Islamic Bank Chief Executive Officer, Dr. Adnan Chilwan,
Strong asset quality
The bank’s impairment losses declined to Dh136 million compared with Dh195 million for the same quarter of 2014. DIB’s non performing loans (NPL) ratio improved to 7 per cent at the end of the quarter compared to 8 per cent at the close of 2014. Impaired financing ratio also improved to 5.5 per cent, from 6.5 per cent at the end of 2014. While cash coverage ratio improved to 81 per cent compared to 78 per cent at the end of 2014, overall coverage including collateral at discounted value now stands at 135 per cent.
On the liability side, Customer deposits for the period ended March 31, 2015 increased by 13 per cent to Dh104.1 billion from Dh92.3 billion as of end of 2014. CASA [current and savings account] continues to be a significant portion comprising 50 per cent of total deposits amounting to Dh52 billion compared with Dh41.9 billion in 2014. Investment deposits have also grown by 3.4 per cent for the period ended in March 31, 2015 to Dh52.1 billion from Dh50.4 billion in 2014. The increase in customer deposits has led to a financing to deposit ratio of just under 79 per cent as at the end the first quart of 2015.
At the close of the quarter, DIB’s capital adequacy ratio stood at 17 per cent. While return on assets increased by 42 basis points (bps) to 2.58 per cent in the first quarter of this year form from 2.17 per cent in the same period last year, return on equity increased by 204 bps to 19.3 per cent in the Q1 2015 from 17.3 per cent last year.
