Dubai Islamic Bank profit climbs 20% driven by higher revenue

Lender's net profit for the three months to the end of September jumps to $449 million

Last month, DIB said it was acquiring a 20 per cent stake in Turkey's TOM Group of Companies, marking its entry into the nation's banking sector. Photo: DIB

Dubai Islamic Bank, the UAE's biggest Sharia-compliant lender by assets, reported a nearly 20 per cent increase in third-quarter net profit, as revenue rose on economic growth in the emirate.

Net profit attributable to owners of the bank for the three months to the end of September stood at Dh1.64 billion ($449 million), the lender said on Tuesday 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 nearly 45 per cent to Dh4.50 billion.

The lender’s quarterly income from properties held for development and sales rose to nearly Dh80 million, up from Dh39.33 million at the end of the same period last year.

Commissions, fees and foreign exchange income also jumped more than 16 per cent on an annual basis to Dh385.45 million.

“The UAE economy continues to thrive with strong fundamentals amid the volatile global economic environment … the domestic banking sector remains solid with expanding balance sheets and improving asset quality and profitability,” DIB chairman Ibrahim Al Shaibani said.

The UAE economy expanded by 3.7 per cent annually in the first half of the year, driven by strong non-oil sector growth, Abdulla bin Touq, Minister of Economy, said this week.

The country's economy rebounded strongly last year from the slowdown caused by Covid-19, growing by 7.9 per cent in 2022, the most in 11 years, to Dh1.62 trillion at constant prices.

DIB said its net profit for the January-September period climbed 16 per cent on an annual basis to Dh4.69 billion.

The growth was driven by “rising core revenues, non-funded income and lower impairment charges”.

Net financing and sukuk investments rose 11 per cent in the year to date to Dh265 billion, driving total income to Dh14.54 billion, a 47 per cent increase over the same period in 2022.

The lender’s operating expenses stood at Dh2.26 billion during the first nine months of the year, from Dh2 billion in the same period last year.

The bank’s balance sheet crossed the Dh300 billion mark for the first time, reaching Dh313 billion, a rise of 9 per cent year to date, said Adnan Chilwan, group chief executive of DIB.

“The financing book grew by 7 per cent year to date to Dh199 billion across corporate and consumer businesses reinforced by a surge in corporate cross border and private sector financing,” Mr Chilwan said.

The bank's total customer deposits climbed 11 per cent in the year to date to Dh221 billion, driven by an increase in corporate as well as retail deposits.

Assets at the end of September climbed to more than Dh313.38 billion, an 8.7 per cent rise from the end of December.

In a move to diversify its portfolio, last month, DIB said it was acquiring a 20 per cent stake in Turkey's TOM Group of Companies, marking its entry into the nation's banking sector.