Dubai Islamic Bank posts 8% profit rise for third quarter
Lender says improved cost management and deposit growth drives performance
Dubai Islamic Bank, a Sharia-compliant lender, reported an 8 per cent rise in third-quarter net profit, due to strong business performance and efficient management of costs.
Net profit attributable to owners of the bank rose to Dh1.2 billion in the three months ended September 30, from Dh1.1bn in the year-earlier period.
Net income was flat at Dh2bn and total assets for the nine-month period stood at Dh222.8bn, up 7.4 per cent from the end of 2017, DIB said in a filing on Wednesday to the Dubai Financial Market, where its shares are traded.
“Optimal management of costs has further improved the cost income ratio to 29 per cent [over the nine-month period], which is an incredibly efficient position for a large retail franchise based out of Dubai,” said Adnan Chilwan, group chief executive of DIB.
“With two credit rating reaffirmations during the quarter, the bank’s financial position remains solid with significant improvements in asset quality, liquidity and profitability.”
Rating agency Moody’s said in a research note in June it expects DIB’s credit growth to be 10 to 15 per cent in 2018, which, combined with capital increase, will maintain strong and stable capital buffers over the next 12 to 18 months.
DIB also reported “robust” growth in customer deposits during the first nine months of the year to reach to Dh160bn, up 9.1 per cent from Dh147.2bn in December 2017.
Over the nine-month period, the cumulative balance sheet grew by 7.4 per cent year-on-year to cross $1bn for the first time in the bank’s history, added Mohammed Ibrahim Al Shaibani, director general of The Ruler’s Court of Dubai and chairman of Dubai Islamic Bank.
“DIB continues its strong balance sheet growth … supported by a well-managed cost discipline leading to significant improvements in profitability,” he said.
The bank's capital adequacy ratio stood at 18.6 per cent against the minimum 12.75 per cent threshold, and it has stronger capital ratios following its Dh5.1bn rights issuance in June, which was three times oversubscribed.
Updated: October 10, 2018 03:06 PM