Dubai Islamic Bank (listed on the Dubai Financial Market under the trading symbol DIB), the largest Islamic bank in the United Arab Emirates, today announced its financial results for the period ending on September 30, 2020.
Key financial results for the first nine months of 2020:
- Group net profit was AED 3,124 million in the first nine months of the year.
- Net financing and sukuk investments increased to AED 234.5 billion compared to AED 184.2 billion in 2019, an increase of 27% year-to-date.
- Customer deposits increased to AED 214.6 billion, an increase of 31% year-to-date.
- Current and savings account deposits increased to 39% compared to 33% at the end of 2019.
- Cost to income ratio remained steady at 29.4%.
- The rate of return on assets was 1.70% and the rate of return on equity was 14.0%.
- Funding to deposit ratio reached 92%, indicating ample liquidity.
- The NPF ratio was at 4.8%, remaining strong given current market conditions.
- Overall coverage, including collateral at discounted value, reached 114%.
- The capital adequacy ratio (CAR) and the first tier ratio for joint capital (CET1) improved to 17.3% and 12.9% respectively, despite growth and conservative provisions.
Management’s comments regarding the financial performance for the period ending September 30, 2020:
His Excellency Mohammed Ibrahim Al Shaibani, Director of the Court of His Highness the Ruler of Dubai and Chairman of Dubai Islamic Bank, said:
- Ambiguity and uncertainty still dominate the world map, and it has not yet fully recovered. At the local level, the United Arab Emirates remains committed to economic development, with an emphasis on adherence to preventive safety measures, while we are witnessing a gradual recovery of trade and business services. In addition, the proactive financial policies implemented by the UAE government helped local banks to continue operating productively while at the same time maintaining their ability to provide complete services to customers during these difficult times.
- The current consolidation of the banking sector in the GCC countries is expected to continue, in parallel with limited growth opportunities and low oil prices. The strategic acquisition of Dubai Islamic Bank of Noor Bank is underway as scheduled for completion at the end of this year, and the expected results of the strategic merger have begun to appear in practice, paving the way for strong growth and greater returns for our shareholders in the coming years.
Abdullah Al Hameli, Managing Director of Dubai Islamic Bank, said:
- The strong international economic relations, stable and advanced government and digital services infrastructure in the UAE is a magnet for participation in recently announced government initiatives, such as retirement and remote work programs. Dubai Islamic Bank’s well-established retail banking business, along with its digital services, remains effective in encouraging new customers to join while continuing to serve and communicate with them.
- In these unprecedented times, we immediately put into action our business continuity and crisis management plans. This allowed our dedicated and empowered employees to continue performing their tasks and maintain their ability to serve customers with minimum interruptions, taking advantage of the latest supportive technologies and full adherence to the highest prevention and safety measures.
Dr. Adnan Chilwan, Group CEO, Dubai Islamic Bank said:
- Despite the continuing economic uncertainty and the fluctuations witnessed in the market in the past few months, the total income of the bank for the first nine months of 2020 amounted to about 10 billion dirhams to remain stable, which is a very strong income in light of these exceptional circumstances. The continued flow of revenue from our diversified sources has maintained good levels of profitability for the bank during this period, as we see net operating revenues increasing to over 6.9 billion dirhams despite the pandemic.
- Focusing on low risk categories, the bank remains at the top in the market in terms of profitable asset growth, with a growth of 27% during the nine months, supported by total new financing, which amounted to about 42 billion dirhams. Despite the growth, liquidity remained strong at 92%.
- Despite the strong growth, strong provisions and depreciation as a result of the conservative approach adopted, strong profitability pushed capital ratios up, with the first tier of CET1 rising by 90 basis points to nearly 13% and the total capital adequacy ratio (CAR) by 17.3% , Indicating a strong capital position.
- As a major player in the capital markets, we have executed over US $ 20 billion in sukuk and joint venture deals to support the market. In addition, we have taken the initiative to provide the necessary vital support to our affected individuals and companies, with nearly 8 billion Emirati dirhams to more than 50,000 customers as part of the measures to reduce financial burdens under the targeted comprehensive economic support plan launched by the Central Bank of the United Arab Emirates.
- The acquisition of Noor Bank is progressing to the fullest, with the aim of completing it during the year within the set plan. As the merger begins to emerge, this major deal will help accelerate our business and achieve our strategic ambitions in maintaining our leading position in this sector, now and in the post-Covid future.
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