DIB profit up 27% to Dh310m

Drop in impairments boosts profitability in second quarter

Dubai Islamic Bank (DIB) net profit in the second quarter of 2012 increased 27 per cent to Dh310 million as compared to Dh245m for the same period last year on improve core banking performance and drop in impairments.

Net profit for the first half of 2012 reached Dh555 million, up from Dh552 million in the same period of 2011.

Net revenue for the first half of 2012 increased to Dh1,826 million from Dh1,801 million in the same period of 2011, an increase of 1.4 per cent. For the three months ending June 30, 2012, DIB reported net revenue of Dh923 million, compared to Dh903 million in the first quarter in 2012, an increase of 2 per cent.

As of June 30, 2012, the bank’s total assets stood at Dh93.9 billion, compared to Dh90.6 billion at the end of 2011, an increase of 4 per cent.  As of June 30, 2012, customer deposits stood at Dh68.3 billion, compared to Dh64.8 billion as of December 31, 2011, an increase of 5 per cent.

For the six months ending June 30, 2012, net funded income reached Dh1,312 million, compared with Dh1,282 million for the first half of 2011, an increase of 2 per cent. Net funded income for the second quarter of 2012 remained consistent at Dh659 million, comparing with Dh653 million for the first quarter of 2012.

As of June 30, 2012, DIB maintained a healthy financing-to-deposit ratio of 78 per cent and robust capital adequacy ratio of 18.4 per cent.

The first half of 2012 also witnessed DIB continue its conservative approach to provisioning with Dh539 million set aside for impairments, compared with Dh500 million in the first half of 2011, further improving the bank’s provision coverage ratio. For the second quarter of 2012, DIB set aside Dh241 million for impairments, compared to Dh299 million in the first quarter of the year.

The bank also further diversified its funding base in May when it successfully returned to the International Capital Markets with the issue of a $500 million 5 year Sukuk.

“DIB has been able to achieve sustained profitability while continuing to strengthen its balance sheet,” said Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank.

“Assisted by a prudent strategy of diversifying our funding sources, DIB remains highly liquid and superbly placed to support the financing needs of the UAE, its economy and its people. Moreover, our recent Sukuk, which was four times oversubscribed, served to underscore investor confidence in the DIB business model.”

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