UAE's top Islamic banks saw impairment losses widening in 2020

Both Dubai Islamic Bank and Emirates Islamic Bank saw their impairment losses increasing year-on-year

  
Image used for illustrative purpose.

Image used for illustrative purpose.

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Leading Islamic banks in the UAE, Dubai Investment Bank (DIB) and Emirates Islamic Bank (EIB) posted increasing impairment losses in the financial year 2020.

Full year financial results showed DIB impairment losses reached AED 4.552 billion ($1.239 billion), up from AED 1.764 billion 2019.

EIB’s results, published at the end of January, showed impairment losses on financial assets reached AED 1.434 billion in 2020, up from AED 439 million in 2019, with impairment losses on non-financial assets of AED52 million in 2020, up from AED 43 million in 2019.

DIB’s chairman, Mohammed Ibrahim Al Shaibani, also the director general of the Ruler’s Court of Dubai, said the bank had provided AED 9 billion in relief to 54,000 customers in retail and corporate under the UAE’s Targeted Economic Support Scheme (TESS) programme. TESS was announced in March 2020 to provide support during COVID-19.

“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,” he said. 

“The confidence shown by investors, stakeholders and customers alike towards the DIB Group is testament to the trust and dependability that it owns.”

The bank saw a net profit of AED 3.16 billion in 2020, down from AED 5.1 billion profit in 2019.

EIB saw a net loss of AED 482 million in 2020, after a profit of AED 1.061 billion in 2019.

The bank’s chairman Hesham Abdulla Al Qassim cited a low profit rate environment coupled with a more challenging business environment due to the COVID-19 pandemic.

“The bank’s balance sheet remains strong with total assets growing by nine percent during 2020, to reach AED 70.6 billion,” he said.

“We continued to main healthy liquidity and capital, demonstrating our resiliency in navigating the crisis with relatively reduced impact.”

(Reporting by Imogen Lillywhite; editing by Daniel Luiz)

 imogen.lillywhite@refinitiv.com

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© ZAWYA 2021

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