Dubai Islamic Banks Report Net profit of $500 million

Higher total income coupled with lower impairment charges helped Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE, to post a net profit of $500 million, up 22% year-on-year (y-o-y).

The net financing and sukuk investments reached $75.42 billion, up 3% year-to-date (YTD) while gross new underwriting and sukuk investments recorded $5.74 billion in Q1 of 2024 as against $5.66 billion in the same period of last year.

The first of this year quarter saw net growth in new financing and sukuk disbursements to $2.42 billion compared with $520 million in the previous year, Dubai Islamic Bank said in a filing with Dubai Financial Market (DFM).

The bank also said that the total income reached $1.526 billion compared with $1.206 billion, a solid expansion of 26.5y-o-y. Net operating revenues showed a robust increase of 8.8% y-o-y to reach $816.26 million and the net operating profit stood at $585.11 million, a 6.7% y-o-y increase compared with $548.08 million in Q1 of 2023.

The customer deposits too increased to $64.26 billion, up 6% year-to-date with CASA comprising 38% of DIB’s deposit base. Impairment charges were lower at $81.41 million as against $135.05 million in Q1 of 2023, significantly down by 40% y-o-y, the bank said.

Economic Growth Continues

Mohammed Ibrahim Al Shaibani, Director-General of H H the Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said that despite tighter market conditions on elevated rate environment and geopolitical turbulence, the UAE remained steadfast in its economic growth with rising business confidence, increasing tourism inflows and expanding PMI index levels.

He further said that the domestic financial market saw strong activities from new listings as well as institutions delivering healthy returns to their shareholders and investors. The banking system remains well capitalised supported by higher earnings with stable funding and liquidity.

“DIB has remained a strong and solid player in the market. Irrespective of the introduction of corporate tax into our earnings and regional tensions, the bank has managed to deliver a net profit (pre-tax) of $500 million, achieving robust growth of 22% y-o-y,” he added.

DIB’s Group CEO Dr Adnan Chilwan said that the global markets remained volatile with elevated inflation levels and regional instability that have led to further business challenges. Undeterred by global events, the UAE remains strong supported by robust business fundamentals and economic policies that have paved the way for continuous growth of both the public and private sectors over the past few years.

“The UAE banking sector remains financially sound supporting credit growth in key sectors such as construction, manufacturing as well as retail and wholesale trade sectors,” he noted.

The bank’s balance sheet continues to expand now reaching $89.03 million depicting a stable growth of 4% year year-to-date. Growth was supported by gross new financing across the key business to the tune of $5.72 billion during the quarter. We continue to reinforce our fixed income book with sukuk portfolio now reaching $20.76 billion, a significant increase of 11% year-to-date,” he added.

ESG Aspirations

DIB’s ESG aspirations remain at the forefront with the successful issuance of third sustainable sukuk ($1 billion) which now brings our total sustainable issuance to $2.75 billion.

In addition, the bank also acted as a JLM & Bookrunner in various sustainable sukuk transactions, arranging $1.85 billion for issuers within the region during the quarter, depicting our strong capabilities within the green and sustainable Islamic capital markets space.