190707 dubai islamic bank dib
Dubai Islamic Bank, the largest Islamic Bank in the UAE, on Tuesday reported nine-month net profit of Dh4.01 billion Image Credit: DIB

Dubai: Dubai Islamic Bank (DIB), the largest Islamic Bank in the UAE, on Tuesday reported nine-month net profit of Dh4.01 billion, up 8 per cent year on year compared to Dh3.70 billion reported in the same period in 2018.

Strong growth in core income for the period supported by cost management focus has attributed to the healthy growth in profitability.

“Focus on quality growth has seen a double digit rise in the top line income of 20 per cent which combined with efficient cost management has translated into cost to income ratio being stable at 27.9 per cent, among the best in the market,” said Dr. Adnan Chilwan, Dubai Islamic Bank Group Chief Executive Officer.

DIB’s total income for the 9-month period reached Dh10.25 billion, up 20 per cent year on year. Income from financing and investments in sukuk continues to be a key driver for the growth.

Net revenue for the 9-month period amounted to Dh6.87 billion, an increase of 14 per cent compared with Dh6.05 billion in the same period last year.

The bank’s net financing & sukuk investments increased to Dh185.7 billion during the 9-month period from Dh175.9 billion at the end of 2018, an increase of over 6 per cent. Corporate banking financing assets currently stand at Dh106 billion whilst the consumer financing assets stood at Dh41 billion. New gross financing for the consumer book has now crossed Dh10 billion year to date driven by key products of auto, personal as well as home finance.

DIB’s high margin sukuk portfolio has also grown strongly now reaching Dh34 billion compared to Dh31 billion at the end of 2018. The portfolio primarily consists of rated sovereign institutions in domestic and strategic growth markets.

Customer deposits during the 9-month period reached to Dh163 billion from Dh156 billion in end of 2018. Current and savings account (CASA) deposits is now at Dh50.7 billion as of September 30, 2019, representing 31 per cent of customer deposits. Net financing to deposit ratio stood at 93 per cent.

The bank’s total assets now stand at nearly Dh230 billion with a growth of 3 per cent year to date.

For the period ended September 30, 2019, non-performing financing ratio and impaired financing ratio stood at 3.64 per cent and 3.57 per cent respectively. Cash coverage stood at 104 per cent and overall coverage ratio including collateral at discounted value reached 136 per cent.

Operating expenses for the 9-month period remained broadly stable at Dh1.77 billion compared to Dh1.75 billion in the same period last year. Cost to income ratio continuous to improve now at 27.9 per cent compared to 28.3 per cent at the end of 2018.

Capital adequacy ratios remains robust with overall capital adequacy ratio and common equity ratio as at September 30, 2019, at 17.6 per cent and 13.1 per cent, respectively.