Dubai Islamic Bank has reported a net profit of AED2.11 billion ($571.73 million) for the first half of 2020, down 23 per cent year on year from Dh2.73 billion reported in the same period last year.
The bank’s total income reached AED6.82 billion in H12020 whilst net operating revenue grew to AED4.72 billion. Despite a subdued quarter, the bank continues to deliver broadly stable total income and net operating revenues in comparison to the same period in 2019.
DIB’s total assets now stands at AED295 billion, up by 27% from yearend 2019.
Net financing & sukuk investments has now increased to AED237.1 billion in the first half of 2020 from AED184.2 billion at the end of 2019, a robust rise of 29 per cent. Around AED20 billion were deployed in new financing growth driven by the realignment of strategy focusing on lower risk sectors, particularly sovereigns. Gross new consumer financing amounted to AED6.1 billion during the first quarter of 2020.
DIB’s Customer deposits grew to AED207 billion from AED164 billion at year-end 2019 reflecting a growth of 26% year to date, reaffirming the bank’s strength to mobilise deposits despite challenging environment. CASA [current and savings account] rose by nearly 57 per cent to AED85.7 billion, growing from AED54.6 billion in year-end 2019 and Dh73.4 billion in Q1 2020. This currently represents about 41 per cent of customer deposits.Its net impairment charges were AED637 million, much lower than the AED1.48 billion booked in the first quarter, which included AED818 million in extraordinary charges. The bank said its capital adequacy ratio stood at 16.7% at the end of June, slightly above 16.5% last quarter. “In a bid to realign our strategy and build on our strength in the domestic market, the quarter saw a strong advancement in our financing book of 11% quarter-on-quarter, driven by our calculated focus on sovereign and related businesses,” CEO Dr Adnan Chilwan said.
He added DIB had begun the execution phase of integrating Noor Bank, which it bought this year. Dr Chilwan, said: “Despite everything, the year has seen us hit new milestones, with both customer financing and deposits crossing the AED200 billion mark and the balance sheet now approaching the coveted AED300 billion level. Whilst monitoring the situation closely, we have managed to sustain our overall business performance, thus resulting in quality growth, healthy capitalisation and ample liquidity.”
“In a bid to realign our strategy and build on our strength in the domestic market, the quarter saw a strong advancement in our financing book of 11% QoQ, driven by our calculated focus on sovereign and related businesses. This deliberate strategy may result in a short-term dilution of margins, but we believe, will lead to a more sustainable business model, particularly given the current uncertain macro-environment, and will also help preserve the strength of our balance sheet and continue to generate stable returns in the future.”
Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said: “During these critical times, we continue to engage effectively with all our stakeholders in order to ensure that our business operations are seamless. DIB remains focused on delivering its strategic aspirations that are primarily aimed at providing sustainable long-term returns for our valued shareholders.” Dubai Islamic Bank Managing Director, Abdulla Al Hamli, said: “We continue to see significant growth across our digital platforms in the online space, driven by the on-going commitment towards DIB’s digital journey. Knowing that the digital economy is a critical pillar in UAE’s future economic development, DIB remains focused on capturing the growth opportunities in the post-Covid era.” Total income reached AED6.82 billion, marginally below the similar period last year, despite headwinds. Group net profit reached AED2.12 billion during the first half of the year.Net financing and Sukuk investments grew to AED237.1 billion vs AED184.2 billion in 2019, up by 29% YTD. Customer deposits increased to AED206.5 billion up by 26% YTD. CASA component increased to 41% from 33% in 2019 supported by strong focus on operating accounts. Total assets stood now at AED295 billion, up by 27% YTD while cost to income ratio improved to 29.4% as impact of Noor Bank integration synergies start to flow through. ROA is at 1.94% and ROE at 15.5%.Financing to deposit ratio stood at 97%. NPF ratio is at 4.5%. Overall coverage, including collateral at discounted value, stands at 114%. Capital adequacy ratio is at 16.7% whilst CET 1 ratio is at 12.3%. — Tradearabia News.
—Service Courtesy Zawya