DIB's second quarter numbers show benefits flowing through from a higher rate environment and lowering impairments. Image Credit: Supplied

Dubai: The Dubai Islamic Bank recorded a net income of Dh5.03 billion for the first six months of 2022, against Dh4.62 billion a year ago. This was helped by a solid performance in the April-June phase, when net income weighed in with Dh2.57 billion (against Dh2.40 in H1-21).

In the first six months, one of the world’s biggest Islamic banking institutions, saw impairment charges trimmed to Dh947.62 million, from Dh1.49 billion. DIB's net profit for H1-22 came to Dh2.7 billion against Dh1.86 billion a year ago, which works out to 45 per cent up.

The bank recorded Dh47.24 million as gains from selling investment properties (Dh9.56 million in H1-21), while overall income from its real estate portfolio came to Dh60.75 million during the six months. DIB’s numbers mirror a solid first-half for the UAE banking sector, with Mashreq and ADIB both reporting net profit at well over Dh1 billion. A slew of bank results are expected in the coming days, including from Emirates NBD and FAB.

"Despite global headwinds, the bank’s total income rose strongly by 7 per cent year-on-year to more than Dh6.3 billion," said Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank. "This clearly demonstrates the bank’s robust fundamentals and the strength of the balance sheet to navigate the uncertainties in the market.

Mohammed Ibrahim Al Shaibani

Global growth has been moderate during the first half of the year due to events that have led to trade and supply chain disruptions. Despite these occurrences, the GCC and the UAE remain strong building on the economic foundations and reforms implemented earlier.

- Mohammed Ibrahim Al Shaibani of Dubai Islamic Bank

Financing ways

DIB's net financing and sukuk investments 'expanded strongly' by around 6 per cent in the year-to-date to Dh241 billion and 'supported by increasing volumes across all businesses'. "The first 6 months have already seen new gross financing and sukuk investments to the tune of Dh33 billion, and normal repayments and early settlements aside, we are left with Dh13 billion of growth, which is remarkable achievement," said Dr. Adnan Chilwan, Group CEO.

Dr. Adnan Chilwan

This significant jump primarily stems from core business growth with net operating revenues rising by 9 per cent y-o-y and 4 per cent q-o-q to Dh5 billion, while a fall in the impairments charges by 37 per cent y-o-y reflects the fast improving asset quality.

 - Dr. Adnan Chilwan, Group CEO

  1. DIB's H1-2022 numbers:
  2. Customer deposits as of end June were at Dh202.2 billion with CASA making up 44% of the deposit base;
  3. Impairments at Dh948 million against Dh1.498 billion in H1-201, which represents a decline of 37%;
  4. The NPF (Non-Performing Financing) ratio 'continues its downward momentum now at 6.5%, lower by 30bps year-to-date compared to 6.8% in 2021; and
  5. Liquidity is 'healthy' with finance-to-deposit ratio of 96% and LCR (Liquidity Coverage Ratio) of 117%.