Dubai Islamic Bank, the largest Islamic bank in the UAE, has seen its first-half (H1) Group net profit rise 15% YoY to reach AED3.1 billion ($850 million), the highest in the bank’s history for the period versus AED2.7 billion in H12022. The robust showing was driven by rising core revenues, controlled impairments and effective cost management. 

 

Meanwhile, DIB’s second quarter net profit was AED1.61 billion up 6.6% QoQ and 18% YoY.

 

Net profit margin increased to 3.2% (+40bps YoY) with ROA and ROTE at a healthy 2.1% and 18.2% up by 10 bps and 120 bps YTD respectively.

 

Sukuk investments

Net financing and sukuk investments were at AED251 billion, up 5.3% YTD. Gross new underwriting and sukuk investments during H1 2023 reached AED45 billion vs AED33 billion in H1 2022. Total income reached AED9.31 billion compared to AED6.27 billion, a solid expansion of 49% YoY.

 

Net Operating Revenues showed a robust 11% YoY to reach AED5,58 billion. Net Operating Profit is now at AED4.11 billion, a 12% increase YoY compared to AED3.68 billion in H1 2022.

 

Balance sheet expanded by 4.0% YTD to nearly AED300 billion. Customer deposits increased to AED211 billion with CASA (current account and savings account) comprising 39% of DIB’s deposit base. The high-rate environment has led to investment deposits increasing its contribution to total deposits to 61% from 56% in YE 2022. CASA has shown an improving trend QoQ growing by AED1.5 billion.

 

Impairment charges

Impairment charges registered AED959 million against AED948 million in H1 2022, marginally up by 1.2%. However, 2Q 2023 impairments are down 7% QoQ and 13% YoY. NPF dropped to 6.35% compared to 6.46% FY2022, lower by 11 bps.

 

Cost to income further improved to 26.4%, down 50 bps YoY. Liquidity remains healthy with LCR at 159%. Continued improvement on ROA now at 2.1% (+13 bps YTD) and ROTE at 18.2% (+120 bps YTD).

 

The bank’s capitalisation levels remain robust with CET1 at 13.4% (+50bps YTD) and CAR at 17.9% (+30bps YTD), both well above the minimum regulatory requirement. Total equity now stands at AED44 billion.

 

Robust finances

Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of DIB, said: “A strong set of first half results with total income reaching AED9.3 billion up 49% YoY with rising profitability ratios on ROA and RoTE is a clear indication of the bank’s robust financial position, improved cost efficiencies and strong growth across its consumer and corporate business portfolios.”

 

 

Dr Adnan Chilwan, Group Chief Executive Officer, said: “DIB’s profitability during the first half has once again been notable reflecting higher revenues, controlled costs and impairments and a keen focus on executing our medium-term strategic objectives.

 

Key milestone

“We have reached another key historic milestone as the bank’s balance sheet has now reached AED300 billion, a strong rise of 4% YTD. The financing book grew by 2% YTD to AED190 billion across corporate and consumer and further reinforced by a surge in our digital sales and transactions particularly on the consumer business. Including Sukuk, the bank has grown 5.3% well ahead already of the full year growth guidance.

 

“DIB’s gross new financing and sukuk underwriting of AED45 billion during the quarter was up by a considerable 36% compared to AED33 billion in H12022 fuelled by corporate and retail lending underpinning DIB’s strong market position and business appetite for growth.”-- TradeArabia News Service