Dubai Islamic Bank (DFM: DIB), the largest Islamic bank in the UAE, today announced its results for the period ending September 30, 2019.

9M 2019 key highlights:

Profitability consistently on the rise (9M ‘19 vs 9M’ 18)

• Total Income reaches to AED 10,250 million, up by 20% YoY compared to AED 8,532 million.
• Group Net Profit increased to AED 4,015 million, up 8% YoY compared to AED 3,701 million.
• Net Operating Revenue grew to AED 6,877 million, up 14% YoY compared to AED 6,055 million.
• Operating expenses stable at AED 1,771 million vs AED 1,754 million in 9M 2018.
• Net operating profit before impairment charges grew by 19% YoY to AED 5,105 million.
• Cost to income ratio continues to improve now at 27.9% compared to 28.3% at the end of 2018.
• Net Profit Margin at 3.16% in line with guidance for the year.
• ROA increased to 2.36% and ROE at 17.6%, both in line with guidance.

Strong balance sheet growth

• Net Financing & Sukuk investments rose to AED 185.7 billion up by 6% YTD.
• Total Assets stood at AED 229.9 billion, up by 3% YTD.
• Customer deposits increased to AED 162.9 billion up by 5% YTD.
• CASA deposits stands at AED 50.7 billion as of 9M 2019 representing 31% of customer deposits.
• Financing to deposit ratio stood at 93%.
• NPF ratio is at 3.6% with cash coverage ratio is at 104%.
• Overall coverage, including collateral at discounted value, stands at 136%.

Capital ratios remain strong

• Capital adequacy ratio is at 17.6%, as against 13.50% minimum required.
• CET 1 has increased to 13.1% vs 12.4% in end of 2018 and as against minimum required of 10.00%.

Management’s comments for the period ending September 30, 2019:

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

• Amidst a subdued global environment, the UAE banking sector continues to demonstrate strength and resilience with total assets of more than USD $700 bn, growth of 9% YoY. The sector today has the largest share of total listed banking assets in the GCC at more than 30%.
• The on-going economic reforms particularly in strengthening the private sector has boosted the non-oil portion of the economy on the back of an expansionary budget and supportive fiscal policies.
• The UAE has continued to emphasize its position as a global business hub, by leading the Arab World in the recent World Economic Forum 2019 Global Competitiveness Index. The country’s current position amongst the top 25 in the world has been largely driven by several innovative measures by the government to ensure the presence of an environment that is attractive to both local and global investors alike.

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

• In line with the national Emiratization agenda, DIB remains committed in developing talent and leadership skills within the bank with Emiratisation ratio now reaching close to half of the workforce. This has been a key element of the bank’s heritage and strategy which aims to grow and develop future leaders to support the global ambitions of the UAE.
• The Islamic banking sector in the UAE continue to remain robust with assets crossing AED 560 billion and a healthy 23% domestic market share. DIB continues to be the market leader in UAE and remains committed to accelerate the penetration of the sector in the wider economy.

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

• DIB’s fundamentals remain strong with profitability reaching AED 4.0bn, up by 8% YoY whilst focus on delivering strong returns to our shareholders continues with ROE at 17.6%.
• The quarter saw both Moody’s and Fitch re-affirm the bank’s credit ratings with a ‘stable’ outlook signifying the strength of the franchise to navigate through the current global economic environment and sustain profitable growth.
• Focus on quality growth has seen a double digit rise in the top line income of 20% which combined with efficient cost management has translated into cost to income ratio being stable at 27.9%, amongst the best in the market. Given the bank’s future plans around digitalization, we expect to remain around these levels going forward.
• Net profit margin at 3.16% has now surpassed the highest end of the guidance and remains amongst the top in the domestic banking sector.
• DIB continues to be very well capitalized, with both CAR and CET1 at 17.6% and 13.1%, well above the regulatory requirements of 13.5% and 10% respectively.