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Abu Dhabi, UAEMonday 25 June 2018

DIB seeks shareholder approval for up to $5bn sukuk issuance

Board of Islamic lender recommends 45 fils per share dividend

DIB, the country’s oldest Islamic lender, posed a 25 per cent increase in fourth-quarter net income. Mona Al Marzooqi / The National
DIB, the country’s oldest Islamic lender, posed a 25 per cent increase in fourth-quarter net income. Mona Al Marzooqi / The National

The board of directors of Dubai Islamic Bank (DIB), the emirate’s biggest Sharia-compliant lender, approved a resolution to issue up to $5 billion of senior or subordinated sukuk and/or similar non-convertible instruments, subject to approval from shareholders.

The bank's board also adopted a resolution to increase the ceiling of non-convertible Sharia-compliant tier 1 capital instruments by $1bn to reach $3bn, subject to approval from shareholders, the lender said on Wednesday in a statement to the Dubai Financial Market, where its shares are traded.

The board also instructed the bank management to prepare a plan to boost its issued capital and seek approval for the proposal from regulatory authorities and shareholders during the general assembly to be held in February.

It also recommended a cash dividend of 45 fils per share for 2017, subject to the approval of regulatory authorities and shareholders.

DIB, the country’s oldest Islamic lender, last week posted a 25 per cent increase in fourth-quarter net income to Dh1.15bn, beating analysts’ projections.

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Dubai Islamic Bank annual profits surge 20% to beat estimates

Global sukuk issuance to drop as much as 28% in 2018

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The bank reported a net profit of Dh4.32bn for the past year, compared with Dh3.6bn for 2016, as the growth of Islamic financing offset higher impairment charges.

Net income from Islamic financing rose to Dh7.8bn for the year, a 19.5 per cent increase compared with the previous year.

Impairments for the year rose by 110 per cent year-on-year to Dh823.5 million, but came in below analysts' estimates. DIB's non-performing finance (NPF) ratio dropped 50 basis points during the year to 3.4 per cent.

Global sukuk issuance may drop by as much as 28 per cent in 2018 on the back of tighter liquidity, mounting geopolitical risks, and slow progress on standardisation, ratings agency S&P predicted earlier this month.

Sukuk issues rose 45 per cent year-on-year to $97.9bn in 2017, the highest level since 2014, boosted by Saudi Arabia’s $9bn inaugural sukuk in April and other GCC sovereign issuances, S&P said earlier this month.