Complex Made Simple

Dubai Islamic Bank Q4 net profit rises 58.4 per cent

Dubai Islamic Bank (DIB), the United Arab Emirates’ largest sharia-compliant lender, posted a 58.4 percent increase in fourth-quarter net profit on Wednesday, beating analysts’ forecasts by a considerable margin.

The bank made AED1.37 billion ($373 million) in the three months to Dec. 31, according to Reuters calculations. This compares with a profit of AED864.7m in the corresponding period of 2015.

The average forecast of three analysts polled by Reuters was for DIB to make a quarterly profit of AED850.4m.

The bank did not provide a quarterly breakdown. Net profit for the year stood at AED4.05bn, the bank said, against AED3.56bn a year earlier.

Cash dividend

DIB also said its board proposed a 45 per cent cash dividend to shareholders for the year.

Its board adopted resolutions to increase the bank’s Tier 1 issued capital by $1 billion, and to issue senior or subordinated sukuk for an amount not exceeding $5 billion.

The bank is targeting loan growth of 10 to 15 per cent for 2017, Adnan Chilwan, Gropu CEO, said on a conference call. Its loan book grew by 18 per cent in 2016.

Remarkable growth

Chilwan said the results “truly remarkable” despite “oil price volatility and ensuing tighter liquidity along with global economic and political uncertainty.”

“Our recent financial performance has put us at the top end of the market year on year. In the last three years, our profitability has grown by nearly two and a half times, our financing portfolio has more than doubled and our balance sheet and underlying liquidity has gone up by over 50 per cent,” he said.

“The portfolio quality has simultaneously improved to extremely robust levels with NPLs down from double digits to 3.9 per cent, a testament to the strong risk management practices and systems put in place.”

In December, credit rating agency Moody’s re-affirmed DIB’s issuer rating to be at ‘Baa1’.

(With inputs from Reuters)