Dubai: Dubai Islamic Bank (DIB), reported a net profit of Dh4.4 billion for the full year 2021, up 39 per cent year on year.
“Despite the on-going global market uncertainties, the UAE banking sector remains robust with rising profitability and strong capitalization," said Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank. "DIB has successfully navigated through the ongoing economic environment generating a significant 39 per cent growth in net profits.”
With strong cost controls and lower impairment charges, the bank reported strong net profits despite a decline in total income, which stood at Dh11.79 billion compared to Dh13.14 billion in 2020. The 10 per cent decline in total income was a result of lower funded income due to marginal decline in earning assets and the continued subdued lower rate environment. Global headwinds with the re-emergence of the outbreak were witnessed during the closing quarter of the year, which also impacted business volumes.
Net operating revenue remained steady at Dh9.42 million supported by lower cost of funds during the year. “Amidst the headwinds that the global economies are still facing, DIB has remained resilient with a remarkable 39 per cent year on year growth in profitability," said Dr. Adnan Chilwan, Group CEO of DIB.
Balance-sheet trends
Net financing and sukuk investments stood at Dh228.5 billion, marginally lower than in 2020. Sukuk investments saw a robust growth of 18 per cent to Dh41.8 billion as the bank continues to focus investing in highly rated sovereign instruments. New consumer financing amounted to nearly Dh14 billion in consumer and another Dh22 billion for wholesale banking during 2021.
Customer deposits stood at Dh205.8 billion during the year with CASA [current and savings accounts] increasing by 4.4 per cent to Dh90.1 billion representing 44 per cent of customer deposits. Net operating revenue remained steady at Dh9.42 million supported by lower cost of funds during the year. Operating expenses improved 7 per cent year on year to Dh2.52 billion compared to Dh2.72 billion in the same period of last year as cost synergies and on-going bank wide digitalisation efforts continue to materialize.
DIB’s impairment charges declined significantly by 46 per cent to Dh2.44 billion compared to Dh4.55 billion in 2020, a clear result of prudent underwriting and improving general market conditions.
Liquidity and capital
Liquidity coverage ratio (LCR) at 136 per cent remains well above regulatory requirement with finance to deposit ratio of 91 per cent depicting a healthy and comfortable liquidity position. Capital ratios continue to remain strong with capital adequacy ratio now at 17.1 per cent and CET 1 (common equity tier 1) ratio at 12.4 per cent, both well above the regulatory requirement.
