Dubai Islamic Bank (DIB) posted flat net earnings for the first quarter of the year, impacted by a declining rate environment, while revenues surged on the back of robust non-funded income.

Net profit for the quarter reached AED 1.799 billion ($489.8 million), hardly changed from AED 1.798 billion a year earlier. Pre-tax net profit stood at AED 2.1 billion.

Net profit margin contracted by 40 bps to 2.5%, while the non-performing financing ratio improved to 2.5%, declining by 14 bps year-to-date.

“The modest YoY growth in profitability reflects a … contraction in net profit margin ..., driven by a declining rate environment,” the major lender said.

Operating revenue reached AED 3.548 billion, marking a 13% increase over the same period last year. This was driven by non-funded income, which jumped 30% to AED 1.249 billion, showing broad-based momentum.

Funded income was also strong at AED 2.3 billion, rising by 5% compared to a year ago.

The lender also showed a healthy loan book, with net financing, combined with sukuk investments, rising 3% year-to-date to AED 364 billion.

(Writing by Cleofe Maceda; editing by Seban Scaria) seban.scaira@lseg.com