Noor Bank profit triples as Sharia lender rides economic recovery
Noor Bank yesterday said that its net income last year more than tripled to a record, boosted by corporate lending and debt syndication amid a turnaround in the economy.
Profit rose to Dh255 million from Dh76m the previous year, the Dubai-based Sharia-compliant lender said. The bank’s total assets advanced 29 per cent to Dh23.2 billion, while total customer financing grew 32 per cent to Dh14.3bn. Customer deposits increased 33 per cent to Dh18.6bn, reflecting the 24 per cent growth in its customer base. The capital adequacy ratio remains strong at 17.6 per cent and it has a coverage ratio of almost 100 per cent.
“Our corporate business is our major business,” said Hussain Al Qemzi, the group chief executive of Noor Investment Group and chief executive of Noor Bank, after releasing the annual results. “However, we have been diversifying across trade, consumer banking and treasury business.”
Noor’s debt underwriting last year propelled the bank to the top of the list of Bloomberg’s 2013 Emea Islamic Loans Book. Noor was also ranked first in Bloom-berg’s Islamic loans mandated arranger league table.
On the corporate financing side, the bank is trying to become more active in trade finance to tap Dubai’s competitive advantage as a massive import and export hub, Mr Al Qemzi said.
The bank itself has no need for extra funding at the moment, either through sukuk or an initial public offering, he added.
As part of its growth plan to have a wider market appeal, Noor changed its name to Noor Bank from Noor Islamic Bank earlier this year.
Islamic banks have about a 20 per cent market share in the UAE, and in recent years they have made a greater effort to make their services appeal to non-Muslim customers. They have done this primarily by capitalising on the dent in the reputation of conventional banks in the aftermath of the 2008 financial crisis and have focused on marketing what they say is a more ethical style of banking.
“I think that model is a needed model,” Mr Al Qemzi said. “With what happened to the banking industry after the financial crisis, it’s very important that we build our brand and we build our value proposition based on the ethical value and transparency with our clients. I’ve always thought naturally that we should command 50 per cent of the market and I think in 20 years we’ll achieve that.”
Noor Bank is also keen to grow its consumer banking business, although as relative newcomer – established in 2008 – it faces stiff competition from the likes of Emirates NBD and Abu Dhabi Islamic Bank.
Mr Al Qemzi says he is not so interested in branch growth as he is keen on getting ahead in online banking, through which he expects most future financial transactions to take place.
“It’s very competitive in the retail offering,” he said. “We will take our time to differentiate ourselves and recently we’ve been thinking of expanding our horizons to the digital field, apps. In the product and customer that we are targeting we’ve noticed today that the branch network is not very instrumental. Unlike before, people are looking for alternatives of reaching you through the internet.”
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Updated: March 31, 2014 04:00 AM