Dubai Islamic Bank reports net profit of Dhs820m in first half of 2009

During the second quarter of 2009, the Bank's net profit reached Dhs450m, a rise of 22% compared to Dhs370m during the first quarter of the year. The Bank has made impairment provisions of Dhs135m for the same period. The Bank's total impairment provision for first half of 2009 now stands at Dhs239m. This reflects a prudent and conservative approach during a period of marked global financial instability.

The Bank's total assets as at 30 June 2009, stood at Dhs87.8bn, up 3% compared to Dhs85.0bn at 31 December 2008. Customer deposits increased 8% to reach Dhs71.5bn at June 2009, compared to Dhs66.4bn at 31 December 2008, reflecting the strong loyalty DIB enjoys amongst its customers.

In the first half of 2009, DIB's investing and financing assets reached Dhs50.7bn compared to Dhs52.6bn at 31 December 2008. The Bank's financing-to-deposit ratio stood at 71% as of 30 June 2009. The improved ratio reflects the Bank's conservative credit policy as well as a strong liquidity position, which will enable DIB to expand its credit portfolio when the economy recovers.

His Excellency Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler's Court of Dubai and Chairman of Dubai Islamic Bank, said:

"The past few months have been challenging for the banking and finance industry in the region and globally. As we begin to see gradual stabilisation of the markets in the past quarter, DIB is optimistic of the recovery of regional markets. The Bank has successfully integrated its diversification strategy and this is reflected in its improved liquidity position and strong performance."

"Our customers are our top priority, and we remain committed to playing a leadership role in the financing sector by providing financial solutions, products and services that help government and semi-government organisations and private-sector firms realise their long-term growth potential," added Al Shaibani.

The second quarter of 2009 was marked with significant developments at DIB. The Bank launched a one-year Islamic Certificate linked to the Crescent Commodity Twister Strategy developed by ABN AMRO Bank. This US dollar-denominated certificate, offers investors ideal exposure to the global commodities market, and seeks to generate 96% capital protection upon maturity. Jordan Dubai Islamic Bank received a preliminary banking licence by the Central Bank of Jordan to operate as an Islamic financial institution, with a share capital of $100m.

During the current quarter, DIB also bought back its sukuk amounting to $83m through a $200m cash tender offer to its sukukholders, which was announced in May 2009. The Bank purchased the trust certificates at 88% of the face value. Through this transaction, DIB has become the first Islamic bank to buy back its outstanding trust certificates through a cash tender offer.