Dubai Islamic Bank, the largest Islamic bank in the UAE and the second largest Islamic bank in the world, has posted a net profit of AED853 million ($232.2 million) for the first quarter (Q1) of the year, rebounding strongly from last quarter.

Q1 highlights:

•    Total income reached AED2.8 billion as the bank continued to display resilience in the given economic scenario.
•    Profit before impairments rose to AED1,614 million compared to AED1,592 million in the same period last year.
•    Operating expenses of AED612 million were lower by 27% year on year vs AED839 million, driven by stringent cost discipline and materializing of substantial integration cost synergies.
•    Cost to income ratio improves by 190bps to 27.5% from 29.4%at YE2020, positioning the bank as the most efficient player in the sector.
•    Impairment charges reduced by a significant margin signifying the success of the risk management strategy as well as improving market trend.

Mohammed Ibrahim Al Shaibani, Director-General of The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said: “IMF has revised positively the economic outlook on the UAE on account of the country’s robust and quick response to the challenges faced in times of the pandemic. Being a global leader in the vaccination race, the economic recovery is expected to accelerate consumer spending and business activities in the coming periods.”

“The UAE banking sector continues to remain robust with healthy and well capitalized balance sheets. The further extension of the UAE CB’s TESS program will benefit and support the sector and DIB remains aligned to providing support to the domestic economy throughout this recovery period.

“Amidst the on-going market volatilities, DIB continues to deliver strong operating performance with total income of AED2.8 billion during the first quarter of 2021. With robust fundamentals in place, DIB is well positioned to connect with the country’s large-scale economic programs such as the World EXPO, Dubai Industrial Strategy 2030 and the Dubai Urban Master Plan that will support future growth of the bank and the emirate of Dubai,” he added.

Abdulla Ali Obaid Al Hamli, Board Member and Managing Director, said: “DIB’s focus on digitization and optimization has further strengthened the bank’s position in the sector. With strong increase year on year on key digital metrics, the bank’s customers are now benefitting from enhanced customer journeys and experiences in a fast evolving operating environment.

“The introduction of agile ways of working have led to enhanced efficiencies and productivity. Digital trainings and virtual collaborations, constant safety and health measures across our branches, simplification of business processes and enhanced business continuity will ensure the bank to be less vulnerable to business disruptions and maintain a robust growth trajectory.”

Dr. Adnan Chilwan, Dubai Islamic Bank Group Chief Executive Officer, said: “The signature strength of the balance sheet with 6% year on year expansion demonstrates the bank’s resilience in challenging conditions as well as the effective execution of its strategy to capture organic growth opportunities during economic uncertainties.”

“Liquidity remains a strong suit with robust growth in customer deposits of7% YoY and 4% YTD to reach to AED214 billion. With LCR ratio of 127% well above the minimum regulatory requirements, the bank is ideally positioned to capture growth opportunities as market improves.

“Efficiency build up is critical to stability and profitability in a challenging environment. A focused and disciplined approach to managing OPEX has led to a cost income ratio of 27.5%, the lowest in the market.

“As significant headwinds remain in the current environment, we continue to approach the year with extreme prudence, with focus on low risk sectors and those showing consistent signs of recovery as the market improves. The bank has continued to build provisions during the quarter amounting to nearly twice the value for the same period last year on a normalized basis.

“Business momentum remains positive with profit before impairments increasing by 1%. As a result, we have achieved a substantial QoQ net profit increase when compared to Q4 2020, and a modest QoQ net profit decrease when compared to same period last year despite the one-off gain in Q1 2020,” he added. – TradeArabia News Service