Dubai Islamic Bank’s profit jumps 11% on strong fee income

The lender reports $400 million in profit for the three-month period

Dubai Islamic Bank's total customer deposits by the end of March reached Dh198 billion. Handout

Dubai Islamic Bank, the UAE's biggest Sharia-compliant lender by assets, reported an 11 per cent increase in its first-quarter profit on higher fee income.

Net profit attributable to owners of the bank for the three months to the end of March climbed to Dh1.47 billion ($400 million), from the same period last year, the lender said in a statement on Wednesday to the Dubai Financial Market, where its shares are traded.

Income from Islamic financing and investing transactions for the period rose about 67 per cent to Dh3.8 billion, while income from properties held for development and sales more than doubled to about Dh57 million. Income from investment properties also grew during the three months.

“The UAE’s economy continues to expand at a fast rate supported by high energy prices, increasing business trade and activities and the return of tourism which has boosted domestic retail spending,” said Mohammed Al Shaibani, chairman of DIB.

“The banking sector remains well-insulated from the global contagion and continues to be on a solid footing with steady growth in their balance sheets and rising profitability levels with DIB closing the first quarter of the year with very strong and remarkable set of results.”

The UAE’s economy rebounded strongly from the coronavirus pandemic induced slowdown on the back of higher oil prices and government initiatives to spur growth.

After growing 7.6 per cent last year, the highest in 11 years, the UAE economy is expected to expand 3.9 per cent this year and 4.3 per cent in 2024, the UAE Central Bank said in March.

Business activity in the UAE’s non-oil private sector expanded at the strongest pace in five months in March, as new orders increased and employment grew at the fastest rate since 2016.

The bank’s total customer deposits by the end of March reached Dh198 billion, while total assets grew to about Dh292 billion.

“The return of trade and tourism, increasing retail spending as well as rising profitability in banking and finance reflect the growing confidence that consumers have on the domestic economy,” Adnan Chilwan, group chief executive of the bank said.

“Accordingly, government related entities continue to maintain strong balance sheets, with cash surplus, on the back of the UAE’s stable economy, allowing them to reinvest in the nation’s expansionary agendas.”