Dubai Islamic Bank full year 2020 group financial results

Balance sheet up by 25% YoY to AED 289.6 billion

Dubai Islamic Bank full year 2020 group financial results

Financing & Sukuk investments  up by 26% YoY to AED 232.0 billion

Operating revenue up by 2% YoY to AED 9.5 billion

Deposits up by 25% to AED 205.9 billion

Liquidity remains healthy with financing to deposit ratio of 96%

Net Profit of AED 3.2 billion

Noor Bank integration completed well ahead of schedule

Dividend of 20% subject to shareholder approval

Dubai: Dubai Islamic Bank (DFM: DIB), the largest Islamic bank in the UAE and the second largest Islamic bank in the world, today announced its results for the period ending December 31, 2020.

FY 2020 results highlights: 

Prudent approach to risk management to ensure long term sustainable growth

  • Total Income reached AED 13,142 million vs AED 13,684 million in 2019, only a marginal decline despite significantly subdued economic activity, clearly highlighting the depth and diversity of the bank’s business and the strength of the relationships with its customer base.
  • Operating revenue grew to AED 9,471 million up by 2%, depicting the strength of the bank’s core franchise which continues to grow despite the macro-economic landscape signifying the ability to generate higher profitability as the environment improves.
  • Group Net Profit declined by 38% to AED 3,160 million primarily driven by a deliberate and pointed prudent approach to provisioning ensuring that the bank is protected against any unforeseen scenarios and positioned for a strong rebound in the near future.
  • NPF ratio at 5.7%, whilst in line with the market given the current conditions, drops to 4.3% excluding the credit impaired portfolio acquired from Noor Bank and a one-off isolated corporate exposure.

Strategic shift towards low risk sectors during the year supported growth in balance sheet amidst a difficult economic environment

  • Total assets grew by 25% to AED 289.6 billion vs AED 231.8 billion in 2019 despite headwinds clearly showcasing the ability of the bank to unearth business opportunities using its well-entrenched franchise.
  • Net financing and Sukuk investments rose to AED 232.0 billion vs AED 184.2 billion in 2019, up by 26% YoY as the bank focused on sectors with minimal risk and capital consumption – a deliberate and strategic shift to counter challenges posed by the pandemic environment.
  • Customer deposits increased to AED 205.9 billion up by 25% YoY, a testament to bank’s ability to generate and manage liquidity in the testing scenario during the year.
  • CASA component increased to 42% from 33% when compared to YE2019, supported by the Noor acquisition as well as the strategic focus on salary and transactional accounts.
  • Cost to income ratio at 29.4% from 26.9% in 2019 marginally rising primarily due to the manpower integration cost incurred during the early part of the year - expected to improve as cost synergies start to materialize further in 2021.
  • ROE at 10.4% still remains at the higher end of the market, despite the conditions underlining the focus of the bank on shareholder returns.
  • Financing to deposit ratio stood at 96% clearly underpinning DIB’s consistently strong liquidity and the ability to generate the same irrespective of market challenges.
  • Overall coverage, including collateral at discounted value, stands at 104% despite the general market rise in NPFs during 2020 due to adverse conditions.
  • Capital adequacy (CAR) ratio improved to 18.5%, a rise of 200 bps despite significant growth in financing assets. CET 1 also remain stable at 12.0% well above the minimum regulatory requirements.

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