Dubai Islamic Bank posts 59.6% gain in second-quarter profit

The result continues a positive earnings reporting season for banks in the UAE, whose profits have jumped in recent quarters because of a growing domestic economy and improved asset quality.

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Dubai Islamic Bank (DIB), the United Arab Emirates’ largest Sharia-compliant lender, posted a 59.6 per cent jump in second-quarter net profit on Thursday, aided by higher fee and investment income.

Beating analysts’ forecasts, the bank made Dh667.5 million in the three months to June 30, it said in a bourse filing, up from Dh418.2m in the corresponding period of 2013.

The average forecast of four analysts polled by Reuters was for a net profit of Dh627.3m.

The result continues a positive earnings reporting season for banks in the UAE, whose profits have jumped in recent quarters because of a growing domestic economy and improved asset quality. At the end of last decade, corporate debt problems and a real estate market crash slashed banks’ profits.

Fellow Dubai lender Emirates NBD posted a 34.8 per cent increase in its second-quarter net profit on Thursday, while the majority of banks in Abu Dhabi recorded double-digit profit growth for the three months to June 30.

DIB’s earnings were boosted by a 34.5 per cent increase in income from commissions, fees and foreign exchange, as well as hikes in revenue generated from property and other investments.

The lender, which completed the purchase of a 24.9 per cent stake in Indonesian lender Bank Panin Syariah in June, was also aided by a 13.3 per cent year-on-year reduction in loan impairments, which dropped to Dh160.3m in the second quarter.

Customer deposits stood at Dh94.8 billion at the end of June, up 20 per cent on the end of 2013, while total loans were 18 per cent higher over the same timeframe at Dh66.1bn.

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