Dubai Islamic Bank, the UAE's biggest Sharia-compliant lender by assets, reported a 14 per cent rise in third-quarter net profit, driven by lower impairment charges, higher operating revenue and income from financing and investing transactions.
Net profit attributable to the owners of the bank for the three months to the end of September climbed to Dh1.38 billion ($375 million) from the same quarter last year, the lender said in a filing on Tuesday to the Dubai Financial Market, where its shares are traded. The results were in line with the estimates of EFG Hermes.
Total income for the third quarter increased by about 4 per cent annually to Dh2.6bn while impairment charges during the period narrowed 26 per cent to Dh502m.
“Business and operating conditions in the UAE continue to strengthen despite moderating global growth, driven by [a] recovery in travel and tourism, retail business spending and the implementation of new residency reforms,” said Mohammed Al Shaibani, director general of The Ruler’s Court in Dubai and chairman of DIB.
Net profit attributable to the owners of the bank for the first nine months of the year surged 32 per cent to Dh4.05bn from the same period a year earlier, on higher revenue and lower provisioning.
Total income in the nine-month period increased 10 per cent to Dh9.87bn from the same period a year earlier while impairment charges narrowed 33 per cent to Dh1.45bn during the period.
Net operating revenue increased 7 per cent to Dh7.65bn.
Net financing and sukuk investments grew 3.3 per cent to Dh236 billion in the year to date. The bank had about Dh43bn in gross new underwriting since the start of the year.
Customer deposits stood at Dh187bn, with current account savings accounts accounting for 42 per cent of the lender's deposit base.
“The strong improvements in our asset quality has been gaining momentum over the past few quarters, with significantly lower impairments,” said group chief executive Adnan Chilwan.
“DIB continues to demonstrate resilience, with strong capital and liquidity ratios which are expected to remain robust over the upcoming period.”