Dubai Islamic Bank (DIB), the largest Sharia-compliant lender in the UAE by assets, reported a 34 per cent drop in its full-year net profit as impairment charges and operating expenses rose amid the coronavirus pandemic. Net profit attributable to owners of the bank for the period ending December 31, 2020 declined to Dh3.29 billion ($895 million). Impairment charges more than doubled to Dh4.5bn as the lender took a "prudent approach" to its loan book to protect against unforeseen scenarios, the lender said in a <a href="https://feeds.dfm.ae/documents/2021/Feb/16/60b016f6-c77a-4211-8da3-9e2919babae1/DIB_FS_ANN_E_16_02_2021.pdf">statement</a> to the Dubai Financial Market, where its shares trade. Operating expenses climbed 16 per cent to Dh2.7bn. “The DIB franchise is capable of weathering challenging situations and possesses the ability to come out as a winner, as it has done in similar situations in the past,” Mohammed Al Shaibani, director-general of the Ruler’s Court of Dubai and chairman of Dubai Islamic Bank, said. “The confidence shown by investors, stakeholders and customers alike towards the DIB Group is testament to the trust and dependability that it owns.” Last year, the Dubai-based lender completed its <a href="https://www.thenationalnews.com/business/banking/dubai-islamic-bank-completes-integration-of-noor-bank-1.1103939">acquisition</a> of rival Noor Bank to create one of the largest Islamic banks in the world, with more than Dh275bn in assets. Customer deposits, as well as total assets of the bank, grew 25 per cent year-on-year to Dh205.9bn and Dh289.6bn, respectively. Net financing and sukuk investments rose 26 per cent to Dh232bn. “Our deliberate shift in strategy at the height of the pandemic and strong relationships enabled us to tap into lower-risk sectors, primarily on government-related lending,” Adnan Chilwan, Dubai Islamic Bank’s group chief executive, said. “This allowed us to grow our balance sheet ... and also ensured quality returns in the succeeding quarters with minimal use of our capital whilst maintaining strong margins and healthy liquidity.” The lender's capital adequacy ratio increased by 200 basis points to 18.5 per cent despite "significant growth in financing assets". Banks globally have reported falling profits and higher provisions in the wake of the pandemic, which disrupted global trade and slowed economic activity as countries implemented lockdowns to contain the coronavirus. The global economy is set to grow 5.5 per cent in 2021, following a 3.5 per cent contraction last year, the International Monetary Fund said in a report last month.