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Earnings growth driven by strong increase in income from core businesses
Group Net Profit increased to AED 2,441 million, up 14% compared with AED 2,143 million for the same period in 2017.
Total income rose to AED 5,577 million, up 15% compared with AED 4,865 million for the same period in 2017.
Net Operating Revenue jumped to AED 4,036 million, up 10% compared with AED 3,677 million for the same period in 2017.
Impairment losses stood at AED 392 million.
Efficient cost management continues with cost to income ratio at 29.4%.
Net funded income margin improved to 3.15%, now at the higher end of the guidance for the year.
Sustained balance sheet growth
Net financing assets rose to AED 141.8 billion, up by 6%, compared to AED 133.3 billion at the end of 2017.
Sukuk investments increased to AED 28.4 billion, a growth of 18%, compared to AED 24.0 billion at the end of 2017.
Total Assets stood at AED 215.6 billion, up by 4%, compared to AED 207.3 billion at the end of 2017.
Asset quality metrics in line with guidance
NPF ratio shows steady improvement now at 3.3%.
Provision coverage ratio now up to 120%.
Overall coverage, including collateral at discounted value, stands at 158%, indicating significant cushion in the balance sheet.
Stable liquidity continues to be a critical driver for growth
Customer deposits stood at AED 151.4 billion as of H1 2018, a rise of 3% from year end 2017.
Significant CASA proportion, constituting 39% of total deposit base, improved from 37% from year end 2017.
Financing to deposit ratio stood at 94%, as efficiency buildup continues.
Stronger capital ratios under Basel III following successful rights issuance
Capital adequacy ratio is at 18.3%, as against 12.4% minimum required.
CET 1 is at 13.0%, providing significant room for growth under the new Basel III regime.
Focused on long term value to shareholders
Earnings per share further improved to AED 0.38 in H1 2018 compared to AED 0.33 in the same period.
Return on assets remained stable at 2.33% in H1 2018.
Return on equity maintained around 18.8% in H1 2018.
Management’s comments on the financial performance for the period ending June 30, 2018
His Excellency Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said:
New initiatives recently announced by the UAE to fuel economic growth across various key sectors look very positive for businesses as well as the financial markets in the coming years
The roll out of the new capital regulations is another solid step by regulator aimed at boosting the financial strength of the sector as a whole and to safeguard the interest of all stakeholders whilst creating new growth opportunities.
The tremendous response of the shareholders to the recent capital raising via issuance of rights is a heartening sight for the Board and management. Given the issue was subscribed nearly three times clearly denotes the strong support and confidence the investors have in the franchise.
Dubai Islamic Bank Managing Director, Abdulla Al Hamli, said:
Our stringent risk management practices and cautious approach towards lending have led to the creation of a franchise far more immune to economic volatility than ever before.
The bank’s investments in strengthening our digital capabilities continues with our recently enhanced web and mobile platforms aimed at providing our customers with advanced functionalities and delivering a more enriching and user-friendly experience.
The reaffirmation of DIB’s credit rating recently clearly indicates the robust financial position of the bank across all key financial metrics and ratios.
Dubai Islamic Bank Group Chief Executive Officer, Dr. Adnan Chilwan, said:
2018 so far is panning out as planned with expansion across all businesses leading to core income growth as the key performance indicators remain aligned with the guidance.
Overall income levels continue their northbound trajectory aided by an increase in CASA as well as expansion in net funded margin, the latter having moved towards the higher end of the guidance given earlier.
Efficiency buildup remains a focus area, a fact clearly evidenced in the trends depicted in key metrics of RoE, RoA and Cost- Income ratios
With international operations getting fully aligned with the DIB Group agenda, we expect the non-UAE contribution to increase over the years as we continue to spread our proven growth strategy across other markets.
The recent capital increase has once again created capacity for further growth, allowing us to continue to unlock the potential that the franchise offers both in terms of financial strength and market leadership position.
The stage is set for another successful year for DIB, and with the foundation laid, we will soon reveal a new direction and an expansionary agenda for the bank which will largely revolve around digitalization directed squarely at changing the way customers interact across the organization with two simple aims – Greater efficiency, Higher returns.
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