Dubai: Dubai Islamic Bank, the largest Islamic bank in the UAE, reported net profits of Dh2.75 billion for the first-half of 2019, up 13 per cent compared to Dh2.44 billion a year ago. Strong income growth from the bank’s key businesses coupled with a well-disciplined cost management supported the robust growth in net profit.
“Whilst we continue to show robust balance-sheet growth, profitability is and will always remain the key area of focus for DIB, evidenced by return on assets at 2.46 per cent and return on equity at 18.5 per cent, which is amongst the strongest in the market,” said Dubai Islamic Bank Group CEO, Dr. Adnan Chilwan.
Total income for the period ended June 30 reached Dh698 billion, up 25 per cent year-on-year. The gains can be attributed to robust growth in income from Islamic financing and investing assets growing at 19 per cent as well as income from investments in Islamic sukuk, which grew 33 per cent.
Net revenue totalled Dh4.69 billion, an increase of 16 per cent from last year. The bank’s continued efforts to diversify into key sectors of the domestic economy have supported the continued core revenue growth in recent years.
Operating expenses remained broadly stable at Dh1.2 billion compared to Dh1.18 billion in H1-2018. The cost-to-income ratio continuous to improve, now at 27.8 per cent compared to 28.3 per cent at the end of 2018. Continued investments in digital capabilities have enabled the bank to unlock significant operational efficiencies within its network.
Net financing and sukuk investments increased to Dh182.5 billion for the period from Dh175.9 billion at the end of 2018, an increase of over 3.7 per cent, primarily driven by continued healthy core business growth and the focus on diversification.
Non-performing financing ratio and impaired financing ratio stood at 3.5 and 3.4 per cent, respectively, at the close of H1-2019. Cash coverage stood at 108 per cent and overall coverage ratio, including collateral at discounted value, reached 140 per cent with cost of risk (on gross financing assets) at 85 basis points.
Customer deposits for the period reached Dh157 billion from Dh156 billion end 2018. Capital adequacy ratios remained robust with overall CAR and CET 1 ratio for the period ended June 30 at 17.5- and 12.9 per cent, respectively.