Dubai Islamic Bank profits fall by almost half

The UAE's sixth-largest lender said its profit fell 46 per cent in the first quarter to Dh200 million (US454.4) after larger provisions for bad loans.

Dubai Islamic Bank (DIB) today reported Dh200 million (US$54.4m) of profits in the first quarter of this year, down by 46 per cent from the same period a year earlier. The bank, the UAE's sixth-largest lender by assets, said its performance was affected by larger-than-usual provisions for bad loans and lower contributions to profits from subsidiaries. DIB did not say how much money it had set aside as provisions, but the country's banks have rapidly added to provisions in recent months. Banks added Dh4.8 billion to their overall provisions in the first quarter of the year, according to Central Bank figures, as they raise reserves to cope with a rise in loan defaults.

Mohammed Ibrahim al Shaibani, the chairman of DIB and the director-general of The Ruler's Court of Dubai, said: "As we enter a phase of both continued challenges but also increased global and regional economic stability, Dubai Islamic Bank remains focused on meeting the needs of its clients in the UAE and overseas." While profits fell, DIB said its total assets edged up to Dh85bn at the end of the quarter from Dh84.3bn at the end of the previous one. Its deposits also rose, to Dh64.7bn, from Dh64.2bn at the end of last year.

The bank said it had a capital adequacy ratio of 17.9 per cent at the end of the first quarter, well above the regulatory minimum of 11 per cent. [e-mail]