Dubai Islamic posts $3.57bln income in 2020

Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE, said its total income in 2020 reached AED13.142 billion ($3.57 billion) vs AED13.684 billion in 2019, only a marginal decline despite significantly subdued economic activity.

Operating revenue grew to AED9,471 million up by 2%, depicting the strength of the bank’s core franchise which continues to grow despite the macro-economic landscape signifying the ability to generate higher profitability as the environment improves.

Group net profit declined by 38% to AED3,160 million primarily driven by a deliberate and pointed prudent approach to provisioning ensuring that the bank is protected against any unforeseen scenarios and positioned for a strong rebound in the near future.

NPF ratio at 5.7%, whilst in line with the market given the current conditions, drops to 4.3% excluding the credit impaired portfolio acquired from Noor Bank and a one-off isolated corporate exposure.

“In line with the government efforts to support the domestic economy during the pandemic, DIB has provided relief measures of nearly AED9 billion to over 54,000 customers in retail and corporate under the UAE CB’s TESS Program. These measures were extended to benefit our client base and to ensure business continuity,” said Mohammed Ibrahim Al Shaibani, Director-General of The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank.

“The successful early completion of our integration with Noor Bank amidst unfamiliar working conditions is a testament to the capabilities of executing our strategic aspirations irrespective of testing economic conditions. The efficient coordination amongst all key stakeholders resulted into one of the fastest integration in the region.

“The DIB franchise is capable of weathering challenging situations and possesses the ability to come out as a winner, as it has done in similar situations in the past. The confidence shown by investors, stakeholders and customers alike towards the DIB Group is testament to the trust and dependability that it owns,” he added.

Dr Adnan Chilwan, Dubai Islamic Bank Group Chief Executive Officer, said: “The bank’s total income of more than AED 13 billion and net operating revenue of AED 9.5 billion has been remarkable considering subdued global and domestic economic activities. The growth in pre-provision profits despite the muted landscape and declining interest rates signifies the strength of the bank’s franchise and its ability to grow in a tough macro environment. The focused strategic growth in 2020 will yield rich dividends generating additional income in subsequent periods as the environment improves.”

“Our deliberate shift in strategy at the height of the pandemic and strong relationships enabled us to tap into lower-risk sectors, primarily on government related lending. This allowed us to grow our balance sheet to AED289 billion (growing 25% year-on-year). This also ensured quality returns in the succeeding quarters with minimal use of our capital whilst maintaining strong margins and healthy liquidity.

“Today for DIB, as it is for the UAE and the world over, is a new day and the past is behind us. We have aligned our future vision to that of the UAE by embarking on a new journey, with a renewed purpose and revamped positioning that is called #ReadyForTheNew. The aim is to make financial solutions simple, convenient and accessible to all through engaging experiences. Supported with a new set of corporate values, this will ensure alignment to the new norms in continuing to protect and nurture our business relationships in the years to come,” he added. – TradeArabia News Service