Dubai: Dubai Islamic Bank (DIB) said on Wednesday its 2016 net profit rose 6 per cent, beating analysts expectations.
The company said it saw robust growth in profitability despite slow economic environment even as impairment losses declined.
The bank reported a net profit of Dh4.05 billion in 2016, compared with Dh3.839 million in 2015 as total income increased 14 per cent to be at Dh8.636 billion, the bank said in a statement posted on Dubai Financial Market’s website.
Net interest margins stood at 3.23 per cent compared with 3.63 per cent in 2015, the bank said.
“The results were slightly better than expected. The positive was the fact that they were able to maintain the dividend even though number of shares increased,” Sanyalaksna Manibhandu, director Research, National Bank of Abu Dhabi Securities told Gulf News. Manibhandu expected near flat earnings for the bank.
The bank proposed a dividend of 45 per cent subject to approval of annual general meeting.
Impairments:
The bank said their impairment losses declined to Dh392 million compared with Dh410 million in 2015.
“With oil price volatility and ensuing tighter liquidity along with global economic and political uncertainty, of course there were challenges along the way,” Chief Executive Officer Adnan Chilwan said in a statement.
The NPL (non-performing loan) ratio has been consistently improving. The NPL ratio came in at 3.9 per cent, compared to 5.0 per cent in 2015. The provision coverage ratio improved to 117 per cent, compared to 95 per cent in 2015.
In the past three years, the bank said its profitability has grown by nearly two and a half times, and their financing portfolio has more than doubled and the balance sheet and underlying liquidity has gone up by over 50 per cent.
“The time and effort extended to build this business over the last few years has rewarded us well, as today, we possess the operational strength and a platform that allows us to create growth opportunities,” Chilwan said.
For the quarter to December, the bank reported a net profit of Dh1.37 billion compared to Dh864.7 million.
Confident:
“With solid capitalisation, boosted by the successful rights issue in 2016, we are confident of continuing on successfully implementing our growth plans in the coming years,” Chilwan said.
In the conference call, the bank said they would still grow by 10-15 per cent at balance sheet level in 2017 and 2018.
NBADS rate DIB as accumulate rating from the earlier buy, maintaining the target of Dh7.
The dividend proposal “should sustain short-term interests in the stock,” Manibhandu said.
DIB shares rose 0.49 per cent to end at Dh6.14. DIB gained more than 40 per cent in 2016, compared to 12 per cent rise on Dubai index.
