Dubai Islamic Bank expects its loans portfolio to grow at above average levels in 2015 after its profit rose to a record last year as financing rates fell and deposits boomed.
The lender’s ambitious target of 15 to 20 per cent growth in loans this year, more than double the average nationwide figure in recent years, comes even as economists lower 2015 forecasts for UAE economic growth amid the steepest plunge in oil prices in six years.
“Economists looked at 2014 to be a very challenging year for the right reasons and if you look the other players in the industry have hardly grown above a single digit but we’ve grown high double digits,” Adnan Chilwan, the bank’s chief executive, said at a media conference at the bank’s headquarters in Dubai yesterday.
“So I think 2015 is not going to be any different,” he added. “I see the industry also going through its challenges. But our strategies have gone through the litmus test in 2014 and I see no reason why 2015 will be any different for us. “
Mr Chilwan said that loan growth would continue to come from corporations and individuals because the government is expected to continue spending on infrastructure projects even after the price of oil, upon which the federal government funds 60 per cent of its spending, had dropped almost 60 per cent since June.
The bank’s net income in 2014 increased 63 per cent to Dh2.8 billion from Dh1.7bn in 2013. Loans grew 32 per cent to Dh74bn during the same time frame. The bank in 2013 had also forecast 15 to 20 per cent loan growth for 2014.
And at the end of 2014, the bank’s total assets stood at Dh123.9bn, a 9 per cent increase from the previous year. The UAE economy is estimated to have grown more than 4 per cent last year. That was even after the price of oil fell by more than 30 per cent in the fourth quarter.
The decline has prompted banks including Standard Chartered and HSBC to lower their growth forecasts for this year.The UAE economy is expected to grow 3.8 per cent this year, slowing from last year, according to StanChart.
That drop may make DIB keener to accelerate its international expansion plans.
Mr Chilwan said he is forging ahead with expansion into Indonesia, with DIB in talks to up its stake to 40 per cent in an Islamic lender, as well as opening up shop in Kenya, where it will seek to tap East African growth.
He said he was optimistic that both would happen this year.
“We have a global agenda, we have been spreading our wings across international businesses and international geographies also,” Mr Chilwan said.
“It will be there on the horizon but we don’t anticipate that our international businesses will substantially contribute in 2015. There’s a gestation period.”
mkassem@thenational.ae
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