Dubai Islamic Bank, the UAE's biggest Sharia-compliant lender by assets, reported a 33 per cent jump in its 2021 net profit, driven by lower impairment charges and higher income from investment properties, as the country’s economy continued to recover from the coronavirus-induced slowdown.
Net profit attributable to owners of the bank for the full year surged to more than Dh4.39 billion ($1.2bn), the lender said in a statement on Wednesday to the Dubai Financial Market, where its shares are traded.
Impairment charges during the period fell 46 per cent to Dh2.44bn while income from investment properties more than doubled to Dh224.6 million.
“The bank remains on solid ground moving into the new year as we continue to unearth business opportunities in an improving local economic climate to deliver solid returns to all our valued shareholders whilst maintaining the highest standards of governance across the bank,” said Mohammed Al Shaibani, director general of His Highness The Ruler’s Court of Dubai and chairman of Dubai Islamic Bank.
The UAE economy continues to recover from the pandemic on the back of stimulus measures worth Dh388bn, a rapid vaccination programme and the easing of travel restrictions.
The seasonally adjusted purchasing managers' index – a gauge designed to give a snapshot of operating conditions in the non-oil private sector economy – stood at 55.6 in December, indicating a sharp rise in new business and output.
“We enter the year with a new five-year strategy that will propel the bank to strengthen and grow the business over the period,” DIB group chief executive Adnan Chilwan said.
“Building on the progress that we have made, DIB will transition into a more sustainable business model and create further capacity to generate stronger returns for our shareholders whilst simultaneously ensuring a superior banking experience for all our customers.”
The bank’s operating expenses during the period fell 7 per cent to Dh2.5bn while customer deposits touched Dh205.8bn.
The outlook for GCC banks over the next 12 to 18 months is stable, as the region continues its recovery from the pandemic on the back of higher oil prices, Moody’s Investors Service said in a report last month.
Oil prices have rallied to their highest since 2014, with international benchmark Brent trading at $88.51 a barrel at 11.46am UAE time on Wednesday, while West Texas Intermediate, the gauge that tracks US crude, was tradind at $85.67.