H1 2016 net profit up by 11% to over AED 2 billion

Dubai, July 27, 2016: Dubai Islamic Bank (DFM: DIB), the first Islamic bank in the world and the largest Islamic bank in the UAE by total assets, today announced its 1st half results for the period ended June 30, 2016.

H1 2016 Results Highlights: 

Resilient performance amidst market volatilities

Group Net Profit increased to AED 2,004 million, up 11% compared with AED 1,801 million for the same period in 2015.

Total Income increased to AED 4,236 million, up 17% compared with AED 3,625 million for the same period in 2015.

Net Operating Revenue increased to AED 3,356 million, up 6% compared with AED 3,166 million for the same period in 2015.

Impairment losses declined to AED 191 million compared with AED 276 million for the same period in 2015.

Cost to income ratio remained stable at 34.3% compared with 34.1% for the same period in 2015, in line with guidance for the year. 

Strong balance sheet driven by growth in core business activities

Net financing assets at AED 108.9 billion up by 12%, compared to AED 97.2 billion at the end of 2015, in line with guidance for the year.

Sukuk investments at AED 22.8 billion, an increase of 14%, compared to AED 20.1 billion at the end of 2015.

Total Assets at AED 172 billion, an increase of 15%, compared to AED 149.9 billion at the end of 2015.

Improving asset quality

NPLs on a consistent decline with NPL ratio improving to 4.5%, compared to 5.0% at the end of 2015.

Provision coverage ratio improved to 100%, compared to 95% at the end of 2015. Overall coverage including collateral at discounted value now stands at 150%, compared to 147% at the end of 2015.

Steady growth in customer deposits

Customer deposits at AED 125 billion compared to AED 110 billion at the end of 2015, up by more than 13%.

CASA book enhance to 41.3% of total deposit base compared to 40.6% at the end of 2015, despite challenging liquidity environment.

Maintaining strong capitalization ratios

Capital adequacy ratio at 18.0% as of June 2016, as against 12% minimum required.

Tier 1 CAR stood at 17.8% against minimum requirement of 8%.

Financing to deposit ratio is at 87% highlighting significant liquidity.

Enhancing value for shareholders

Earnings per share stood at AED 0.40 in 1H 2016.

Return on assets is at 2.48% in 1H 2016, in line with guidance given for the year.

Return on equity stood at 18.1% in 1H 2016, in line with guidance given for the year.

Management's comments on the financial performance of the financial period:

His Excellency Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler's Court of Dubai and Chairman of Dubai Islamic Bank, said:

These continue to be challenging times with substantial economic impacts stemming from global events. The Brexit decision further added an air of uncertainty to the global economic scenario.

DIB continues to impress with its performance as one the most attractive and profitable franchise in the country.

The board and the management remain focused on effectively executing the growth strategy that not only achieves results in the short term but also builds capabilities and platform to sustain the same in the years to come.

Dubai Islamic Bank Managing Director, Abdulla Al Hamli, said:

The bank has once again, delivered robust results during the first half of 2016 aligned with the UAE economy's resilience to the commodity prices volatility.

The bank's recent capital increase via a rights issue was heavily oversubscribed denoting the strong shareholder interest in the franchise.

Dubai Islamic Bank Group Chief Executive Officer, Dr. Adnan Chilwan, said:

DIB's performance over the last two years, despite the current economic conditions, has been remarkable to say the least. Our growth guidance was well above the market and we have managed to beat those consistently.

In a challenging and highly competitive liquidity landscape, we have shown the ability to generate not just a double digit deposit growth, but also growth in the low cost funding for the bank.

Whilst NIMs continue to be under pressure across the industry, DIB remains at healthy levels and at the higher end of the market, another remarkable feat and a testament to the bank's ability to generate low cost funding whilst maintaining competitive pricing on its financing book.

The recent rights issuance has led to enhanced capitalization with overall CAR standing at 18%, and has created room for further advancement and penetration in existing clientele and industry sectors as we push forth our growth strategy for 2016.

Given the solid performance so far and the robust balance sheet positioning, I believe that that we have the ingredients in place to navigate the economic challenges posed by the market and continue our performance leadership in line with the expectation of all our stakeholders.

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© Press Release 2016