Dubai Islamic Bank, the UAE's biggest Sharia-compliant lender by assets, has reported a 17 per cent increase in second-quarter net profit, boosted by a surge in income from Islamic financing and investing activities amid a continued economic resurgence.
Net profit attributable to owners of the bank for the three months to the end of June stood at Dh1.57 billion ($427.5 million), the lender said on Wednesday in a filing to the Dubai Financial Market, where its shares are traded.
Income from Islamic financing and investing transactions for the reporting period surged 55 per cent to Dh4.17 billion.
The lender’s quarterly income from properties held for development and sales rose to Dh59 million, up from Dh38 million at the end of the same period last year.
Commissions, fees and foreign exchange income also jumped more than 18 per cent on an annual basis to Dh489.69 million.
“Amidst moderating global growth, the UAE economy continues to expand, driven by recovering tourism, real estate and rising financial markets,” said DIB chairman Ibrahim Al Shaibani.
“This clearly indicates a strong domestic economy supported by the UAE’s non-oil sector, which is estimated to grow at above 4 per cent this year.
“The banking sector continues to remain resilient with rising profitability, strong and growing credit and [a] deposit portfolio supported by the private sector, GREs [government-related entities], as well as the retail sector.”
This economic growth is reflected in a “continued upward momentum” in purchasing managers' index levels, a growing population and increasing foreign direct investment inflows, Mr Al Shaibani said.
The UAE's economy has made a strong recovery from a slowdown caused by Covid-19.
The resurgence has come on the back of higher oil prices and government measures to mitigate the impact of the pandemic.
The Arab world’s second-largest economy grew by 7.9 per cent in 2022, the most in 11 years. It is expected to expand by 3.3 per cent this year and 4.3 per cent in 2024, according to UAE Central Bank data.
Non-oil gross domestic product and oil output were estimated to have grown 6.6 per cent and 10.1 per cent, respectively, in 2022.
The UAE's non-oil GDP is expected to accelerate by 4.5 per cent this year and 4.6 per cent in 2024.
With economic momentum continuing and interest rates still on the rise, the profitability of the four largest banks in the Emirates is set to grow further this year, Moody's Investors Service said in March.
Banks in the UAE, as is the case with their regional peers, are benefitting from a rise in interest rates.
Most central banks in the six-member GCC economic bloc peg their currencies to the US dollar and follow the US Federal Reserve's interest rate moves.
The Fed has aggressively increased its benchmark policy rates over the past several quarters in an attempt to bring inflation down to 2 per cent in the world's largest economy.
It is expected to raise interest rates further at least twice this year.
DIB said its net profit for the first six months of the years climbed 14 per cent on an annual basis to Dh3.05 billion, driven by “rising core revenue, controlled impairments and effective cost management”.
Net financing and sukuk investments rose 5.3 per cent in the year to date to Dh251 billion, driving total income to Dh9.31 billion, a 49 per cent increase over the same period in 2022.
Impairment charges for loans and advances rose to Dh959 million at the end of June, up from Dh948 million in the first half of last year. However, they fell 13 per cent on an annual basis in the second quarter.
“Sectors such as tourism, construction, real estate and investment in clean energy provide tailwinds to an expanding non-oil economy, further reiterating DIB’s strategic alignment to the UAE’s expansionary agenda,” said Adnan Chilwan, group chief executive of DIB.
Assets at the end of the first half of the year climbed to Dh299 billion, a 4 per cent rise from the end of December.
The bank's total customer deposits climbed 6 per cent in the year to date to Dh211 billion, driven by a 5 per cent increase in corporate deposits and an 8 per cent rise in retail deposits.
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The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
MATCH INFO
Who: UAE v USA
What: first T20 international
When: Friday, 2pm
Where: ICC Academy in Dubai
UAE currency: the story behind the money in your pockets
UAE%20v%20West%20Indies
%3Cp%3EFirst%20ODI%20-%20Sunday%2C%20June%204%20%0D%3Cbr%3ESecond%20ODI%20-%20Tuesday%2C%20June%206%20%0D%3Cbr%3EThird%20ODI%20-%20Friday%2C%20June%209%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3EMatches%20at%20Sharjah%20Cricket%20Stadium.%20All%20games%20start%20at%204.30pm%0D%3Cbr%3E%0D%3Cbr%3E%3Cstrong%3EUAE%20squad%3C%2Fstrong%3E%0D%3Cbr%3EMuhammad%20Waseem%20(captain)%2C%20Aayan%20Khan%2C%20Adithya%20Shetty%2C%20Ali%20Naseer%2C%20Ansh%20Tandon%2C%20Aryansh%20Sharma%2C%20Asif%20Khan%2C%20Basil%20Hameed%2C%20Ethan%20D%E2%80%99Souza%2C%20Fahad%20Nawaz%2C%20Jonathan%20Figy%2C%20Junaid%20Siddique%2C%20Karthik%20Meiyappan%2C%20Lovepreet%20Singh%2C%20Matiullah%2C%20Mohammed%20Faraazuddin%2C%20Muhammad%20Jawadullah%2C%20Rameez%20Shahzad%2C%20Rohan%20Mustafa%2C%20Sanchit%20Sharma%2C%20Vriitya%20Aravind%2C%20Zahoor%20Khan%0D%3C%2Fp%3E%0A
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
THE%20SPECS
%3Cp%3EEngine%3A%203-litre%20V6%20turbo%20(standard%20model%2C%20E-hybrid)%3B%204-litre%20V8%20biturbo%20(S)%0D%3Cbr%3EPower%3A%20350hp%20(standard)%3B%20463hp%20(E-hybrid)%3B%20467hp%20(S)%0D%3Cbr%3ETorque%3A%20500Nm%20(standard)%3B%20650Nm%20(E-hybrid)%3B%20600Nm%20(S)%0D%0D%3Cbr%3EPrice%3A%20From%20Dh368%2C500%0D%3Cbr%3EOn%20sale%3A%20Now%3C%2Fp%3E%0A
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
Simran
Director Hansal Mehta
Stars: Kangana Ranaut, Soham Shah, Esha Tiwari Pandey
Three stars
ULTRA PROCESSED FOODS
- Carbonated drinks, sweet or savoury packaged snacks, confectionery, mass-produced packaged breads and buns
- Margarines and spreads; cookies, biscuits, pastries, cakes, and cake mixes, breakfast cereals, cereal and energy bars
- Energy drinks, milk drinks, fruit yoghurts and fruit drinks, cocoa drinks, meat and chicken extracts and instant sauces
- Infant formulas and follow-on milks, health and slimming products such as powdered or fortified meal and dish substitutes
- Many ready-to-heat products including pre-prepared pies and pasta and pizza dishes, poultry and fish nuggets and sticks, sausages, burgers, hot dogs, and other reconstituted meat products, powdered and packaged instant soups, noodles and desserts
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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Klopp at the Kop
Matches 68; Wins 35; Draws 19; Losses 14; Goals For 133; Goals Against 82
- Eighth place in Premier League in 2015/16
- Runners-up in Europa League in 2016
- Runners-up in League Cup in 2016
- Fourth place in Premier League in 2016/17
The specs
Engine: 4.0-litre, twin-turbocharged V8
Transmission: nine-speed automatic
Power: 630bhp
Torque: 900Nm
Price: Dh810,000
