Photo: A branch of Dubai Islamic Bank in Dubai, UAE, in December 2019.

Islamic Finance

Dubai Islamic Bank 2019 profit nudges up 2%, assets rise by 4% beating industry slowdown

UAE’s largest Islamic bank reported a 2% increase in net profit to 5.103 billion dirhams ($1.39 billion) compared to 5.004 billion dirhams in 2018.

Asset growth for Dubai Islamic Bank was 4% for 2019 to 231.9 billion dirhams, the bank said in a statement on Thursday (Feb 13).

This beat UAE’s overall Islamic banking sector asset growth of 1.75%, according to Salaam Gateway calculation of preliminary data from the central bank. However, it is down from the 7.9% growth in assets DIB reported for 2018.

Similarly, DIB’s net profit growth of 2% for 2019 is a plunge from its 11.1% growth in 2018 when it first crossed the 5 billion dirhams mark.

DIB’s assets make up 40.51% of the UAE’s aggregate Islamic banking assets, according to Salaam Gateway calculation.

The bank’s profit growth was driven by a 17% rise in total income to 13.684 billion dirhams from 11.73 billion dirhams in 2018.

“Prudent risk management practices remain at the core of this growth, in line with our strategies to mitigate risks and build cushions to insulate against any event in today’s ever changing economic landscape,” said CEO Adnan Chilwan.

“Our persistent efforts to strengthen asset quality have led to NPF ratio declining from 11% in 2013 to under 4% in 2019,” he added.

Net financing and sukuk investments increased by 5%to reach 184.2 billion dirhams.

On the liabilities side, customer deposits went up by 6% to 164.4 billion dirhams.

DIB last month concluded the acquisition of fellow Shariah-compliant Noor Bank and will integrate the smaller financial institution into its operations.

DIB Board has recommended an increase in foreign ownership limit to 40%, which is subject to regulatory and corporate approvals.

($1 = 3.6725 dirhams)

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