Dubai Islamic Bank's first-half profit surges to over $735mln

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Dubai Islamic Bank announced on Wednesday a significant surge of 45 per cent to Dh2.7 billion in first-half profitability compared to Dh1.86 billion in the same period last year.

The strong year-on-year growth was driven by rising core revenues and sustained lower impairments, the bank said in a statement.

The bank said gross new financing and sukuk investments saw a remarkable increase by Dh33 billion during the period. Excluding regular repayments and maturities, the bank saw a Dh20 billion growth in the first half that ended on June 30, 2022.

The bank, the largest Islamic bank in the UAE, said it had significantly lower impairments of Dh948 million compared to Dh1.498 billion in previous year, down by 37 per cent year-on-year basis, demonstrating continued improvement in asset quality.

Mohammed Ibrahim Al Shaibani, director-general of His Highness The Ruler’s Court of Dubai and Chairman of DIB, said Dubai’s progressive economic recovery remains on track and DIB’s momentous first half results reflect the improving macroeconomic conditions.

“Global growth has been moderate during the first half of the year due to events that have led to trade and supply chain disruptions. Despite these occurrences, the GCC region and the UAE remain strong building on the economic foundations and reforms implemented earlier.”

Al Shaibani said with a comprehensive and integrated sustainability strategy, the bank is fully aligned towards the vision of the UAE President and is committed towards enhancing the nation’s economic competitiveness, while simultaneously advancing the sustainability objectives of the country.

Despite global headwinds, the bank’s total income rose strongly by seven YoY to more than Dh6.3 billion. This clearly demonstrates the bank’s robust fundamentals and the strength of the balance sheet to navigate the uncertainties in the market.

Dr Adnan Chilwan, group chief executive officer, said the significant jump in profit primarily stems from core business growth with net operating revenues rising by 9.0 per cent YoY and four per cent QoQ to Dh5 billion, while a fall in the impairments charges by 37 per cent YoY reflects the fast improving asset quality.

“The improving profitability trend has had a positive impact on shareholder returns with ROA now at 2.0 per cent (+47bps YTD) and ROTE at 17 per cent (+400bps YTD),” said Chilwan.

“Our net financing and sukuk investments expanded strongly to reach Dh241 billion supported by increasing volumes across all businesses. The first six months have already seen new gross financing and sukuk investments to the tune of Dh33 billion, and normal repayments and early settlements aside, we are left with Dh13 billion of growth, which is remarkable achievement,” said Chilwan.

The bank’s net financing and sukuk investments grew by six per cent YTD to Dh241.3 billion compared to Dh228.5 billion in 2021 indicating a strong rebound in 2022, despite regular repayments and sukuk settlements of Dh13 billion as well as early repayments of Dh7 billion.

Net operating revenues showed a growth of 9.0 per cent YoY and 4.0 per cent sequentially to reach Dh5.039 billion. Total income rose to Dh6.265 billion from Dh5.842 billion, substantially up by seven per cent YoY and eight per cent sequentially.

Net operating profit stood at Dh3.684 billion, a strong increase of 9.0 per cent compared to Dh3.382 billion in H1 2021.

DIB’s customer deposits reached Dh202.2 billion with CASA comprising 44 per cent of the deposit base.