Stock Dubai Islamic Bank
Dubai Islamic Bank has strung together a solid set of numbers across key parameters for the first-half 2023. Image Credit: Gulf News Archive

Dubai: The UAE’s banking sector continues its momentum-building run, with Dubai Islamic Bank being the latest to post a set of solid growth numbers, with net income at Dh5.57 billion against Dh5.03 billion a year ago.

DIB, which recently launched its digital banking arm, tallied a net profit for H1-23 of Dh3.11 billion, up from Dh2.7 billion. That for the three-month period April to June was Dh1.6 billion against Dh1.35 billion.

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Impairment charges came in slightly higher at the 6-month mark, totalling Dh958.6 million s opposed to H1-22’s Dh947.6 million.

"The banking sector continues to remain resilient with rising profitability, strong and growing credit and deposit portfolio supported by the private sector, GREs as well as the retail sector," said Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank.

Mohammed Ibrahim Al Shaibani
"This expansion is reflected in a continued upward momentum on PMI levels, growing domestic population and increasing FDI inflows," said Al Shaibani.

As for DIB's performance specifically, he said: "A strong set of first-half results with total income reaching Dh9.3 billion - up 49 per cent y-o-y - with rising profitability ratios on ROA (return on assets) and RoTE (return on tangible equity) is a clear indication of the bank’s robust financial position, improved cost efficiencies and strong growth across its consumer and corporate business portfolios."

Heft on the balance-sheet

DIB's balance sheet has now touched Dh300 billion, which is a 4 per cent rise year-to-date. The financing portfolio hit Dh190 billion and was 'reinforced by a surge in our digital sales', according to the CEO.

"DIB’s profitability during the first-half has once again been notable with net profit reaching Dh3.1 billion, up 15 per cent y-o-y, reflecting higher revenues, controlled costs and impairments and a keen focus on executing our medium-term strategic objectives," said Dr. Adnan Chilwan.

Dr. Adnan Chilwan, Group CEO, DIB
"Dubai has been on a remarkable recovery path during the first half of the year with most key sectors depicting strong levels of growth," said Dr. Chilwan.

Deposits gain

Against the backdrop of higher rates on savings, customer deposits increased Dh211 billion, with CASA (current accounts, savings accounts) making up 39 per cent of the DIB deposit base. "The high rate environment has led to investment deposits increasing its contribution to total deposits to 61 per cent from 56 per cent in FY-2022. CASA has shown an improving trend q-o-q, growing by Dh1.5 billion," the bank said.

Margins firm up

What will please DIB's management - and shareholders - is the gain in net profit margin, which is at 3.2 per cent against 2.8 per cent same time last year.

"DIB’s gross new financing and sukuk underwriting of Dh45 billion during the quarter was up a considerable 36 per cent compared to Dh33 billion in H1-22, fuelled by corporate and retail lending underpinning DIB’s strong market position and business appetite for growth," said Dr. Chilwan.

"The fixed income book grew by an astonishing 18 per cent year-to-date and 31 per cent y-o-y reaching Dh61 billion from Dh52 billion in FY-22. The portfolio is primarily invested in highly rated sovereign instruments across the region."