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19 July 2024

Dubai Islamic Bank's net profit exceeds AED1.5bn during Q1'23

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By E247

DUBAI, 19th April, 2023 (WAM) -- Dubai Islamic Bank (DFM: DIB), the largest Islamic bank in the UAE, today announced its results for the period ending 31st March, 2023.

The Bank's net profit came in at AED 1.506 billion, up 12 percent year-on-year (YoY) compared to AED1.345 billion, a growth was driven by rising core revenues and effective cost management. Net financing and sukuk investments stood at AED 240 billion, up 1 percent YTD with nearly AED 21 billion in new underwriting during Q1 2023 vs AED 15 billion in Q1 2022.

DIB's total income rose to AED 4.431 billion compared to AED 3.016 billion, a solid expansion of 47 percent YoY. Net operating revenues showed a robust 12 percent YoY to reach AED 2.755 billion, while net operating profit stood at AED 2.013 billion, a solid increase of 14 percent YoY compared to AED 1.770 billion in Q1 2022.

Moreover, the bank's balance sheet expanded by 1.3 percent YTD to AED 292 billion, while customer deposits settled at AED 198 billion with CASA comprising 40 percent of DIB’s deposit base.

Mohammed Ibrahim Al Shaibani, Director-General of His Highness the Ruler of Dubai’s Court and Chairman of Dubai Islamic Bank, said, "The UAE’s economy continue to expand at a fast rate supported by high energy prices, increasing business trade and activities and the return of tourism which has boosted domestic retail spending. The banking sector remains well-insulated from the global contagion and continues to be on a solid footing with steady growth in their balance sheets and rising profitability levels with DIB closing the first quarter of the year with very strong and remarkable set of results.

“The nation’s transition into a green economy is well underway and we at DIB remain fully committed towards sustainable development and have integrated a full-fledged sustainability strategy in our medium- and long- term goals. In addition with this commitment, we also successfully issued our 2nd sustainable sukuk (US$1 billion) during the quarter which was very well accepted and oversubscribed in the financial markets.”

For his part, Dr. Adnan Chilwan, Group Chief Executive Officer, said, “The UAE’s operating environment has been steadfast amidst the global economy’s complex challenges. The return of trade & tourism, increasing retail spending as well as rising profitability in banking & finance reflect the growing confidence that consumers have on the domestic economy. Accordingly, Government related entities (GREs) continue to maintain strong balance sheets, with cash surplus, on the back of the UAE’s stable economy; allowing them to reinvest in the nation’s expansionary agendas.

“In light of the global events, DIB’s asset quality has been remained robust with NPF ratio stable at 6.5 percent. Additionally, our overall coverage ratio and cash coverage ratio have been increasing depicting the bank’s prudent approach to risk management,” Dr. Chilwan added. “DIB’s profitability during the first quarter continues to impress with net income reaching AED 1.5 billion, up 12 percent YoY, on the back of stronger margins and ongoing cost controls. Net Profit Margin improved strongly by 50 bps YoY to reach to 3.2 percent reflecting rising rates globally. DIB’s gross new financing during the quarter registered AED 15.8 billion increase up by a sizeable 35 percent compared to AED 11.7 billion in Q1 2022. This is fueled by both corporate and retail financing underpinning DIB’s strong market position and business appetite for growth. Our fixed income portfolio has now reached AED 55 billion, a 6 percent YTD growth as the bank continues to invest in primarily highly rated sovereign sukuk instruments.”

The bank’s total income rose to AED 4.431 billion in Q1 2023 demonstrating a notable YoY growth of 47 percent compared to AED 3.016 billion primarily driven by strong income from financing assets. This is clearly reflected in the Net Operating Revenue which grew by 12 percent YoY to reach to AED 2.755 billion compared to AED 2.467 billion last year.