Dubai: Dubai Islamic Bank on Monday reported a net profit of Dh3.7 billion for the first nine months of 2018, up 12.1 per cent from Dh3.3 billion reported in the same period last year.
For the third quarter of 2018, the bank reported a net profit of Dh1.26 billion up 9.5 per cent compared to Dh1.15 billon in the same period in 2017.
“DIB continues its strong balance-sheet growth of 7.4 per cent in the nine months of 2018 supported by a well-managed cost discipline leading to significant improvements in profitability” said Mohammad Ebrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of DIB.
DIB’s total income for the nine months of 2018 was up 13.6 per cent year on year to Dh8.53 billion driven by growth in income from Islamic financing which grew by 20.5 per cent year on year to reach Dh6.89 billion from Dh5.72 billion for the same period in 2017.
“The bank has constantly shown the ability to rapidly respond to changes in the economic environment leading to strong growth in profitability of 12 per cent year on year crossing the $1 billion profit in the nine months of the year,” said DIB Group chief executive officer, Dr Adnan Chilwan.
Net revenue for 9 months ended September 30, 2018 amounted to Dh6.05 billion, an increase of 6.6 per cent compared with Dh5.68 billion in the same period of 2017. Commissions and fees increased by 8.3 per cent during the nine months of 2018 reaching Dh1.11 billion.
DIB’s net financing assets to customers increased to Dh142.6 billion as of September 30, 2018 from Dh133.3 billion at the end of 2017, up 7 per cent. Customer deposits for the period increased by 9 per cent to Dh160.6 billion from Dh147 billion as at end of 2017. CASA [current and savings account] maintained component at around Dh52 billion and financing to deposit ratio stood at just under 89 per cent implying strong liquidity.
Operating expenses for the 9 months of 2018 remained stable at Dh1.75 billion compared to Dh1.74 billion in the same period in 2017. As a result, cost to income ratio significantly improved to 29 per cent compared to 30.4 per cent in December 2017.
“Optimal management of costs has further improved the cost income ratio, which is an incredibly efficient position for a large retail franchise based out of Dubai,” said Dr Chilwan.
As at the close of the third quarter of 2018, non-performing financing ratio and impaired financing ratio improved to 3.3 per cent and 3.2 per cent, respectively. Cash coverage for the 9 months ended September 30, 2018 stood at 121 per cent compared with 118 per cent at the end of 2017. Overall coverage ratio, including collateral at discounted value, reached 155 per cent.
The recent rights issue boosted the bank’s core capital metrics. At the end of the third quarter, capital adequacy ratio was 18.6 per cent and common equity tier 1 (CET 1) ratio at 13.3 per cent.
“With a market cap of over Dh35 billion DIB today is among the fastest growing franchise in the region,” said Abdullah Al Hamli, Dubai Islamic Bank Managing Director.
At the end of the third quarter DIB’s return on assets was at 2.31 per cent and return on equity was at 18.2 per cent in line with guidance.