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Dubai Islamic Bank (DFM: DIB), the largest Islamic bank in the UAE, today announced its results for the period ending December 31, 2019.
Full Year 2019 Results Highlights:
Sustained Performance
- Total Income reached AED 13,684 million, up by 17% YoY compared to AED 11,730 million.
- Group Net Profit increased to AED 5,103 million, up 2% YoY compared to AED 5,004 million.
- Net Income grew to AED 9,267 million, up 13% YoY compared to AED 8,202 million.
- Operating expenses continue to be stable at AED 2,358 million vs AED 2,322 million in 2018.
- Net operating profit before impairment charges grew by 17% YoY to AED 6,908 million.
- Cost to income ratio continues to improve now at 26.9% compared to 28.3% at the end of 2018.
- Net Profit Margin at 3.15%, is at the higher end of the guidance for the year.
- ROA is at 2.25% and ROE is at 17.1% for the year.
Managed Expansion, focused on profitable growth
- Net Financing & Sukuk investments rose to AED 184.2 billion up by 5% YoY.
- Total Assets stood at AED 231.8 billion, up by 4% YoY.
- Customer deposits increased to AED 164.4 billion up by 6% YoY.
- CASA deposits stand at AED 54.6 billion in 2019, representing 33% of customer deposits.
- Financing to deposit ratio stood at 92%.
- NPF ratio is at 3.9%, with cash coverage ratio at 101%.
- Overall coverage, including collateral at discounted value, stands at 135%.
Robust capital ratios
- Capital adequacy ratio is at 16.5%, as against 13.50% minimum requirement.
- CET 1 is at 12.0% as against minimum requirement of 10.00%.
- DIB’s Board of Directors recommends the distribution of a cash dividend of 35%, subject to AGM approval.
Management’s comments for the period ending December 31, 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:
- Over the past decade, the UAE has witnessed various regulatory advancements, aiding economic progress, including higher investment flows and rising visitor numbers. As we prepare to embark on the biggest national strategy towards the future of the nation, DIB is firmly positioned towards achieving these great opportunities within local as well as international markets.
- The UAE banking system and financial markets remain strong, with sound capitalization, whereby Dubai Financial Market (DFM) was amongst the top 3 performing markets in the region in 2019. This clearly demonstrates the government’s sound reforms and investment policies, ensuring Dubai’s position as the leading financial hub in the region.
- The bank’s growth performance over the years has resulted in a balance sheet expansion to more than AED 230 bn, with a market cap crossing USD 10 billion. With the much anticipated 2020 major economic events, DIB’s strategic focus remains solid towards growing our customer base and maximizing the value for our shareholders.
Dubai Islamic Bank Managing Director, Abdulla Al Hamli, said:
- Dubai is on its way to stronger economic growth, with a rising GDP and higher non-oil trade volumes, driven by positive economic reforms, which serve to continuously attract investments into the emirate. DIB remains committed to develop the key sectors driving the growth, thus ensuring Dubai’s market competitiveness on the global map.
- In 2019, we have set the foundations towards enhancing the digital journey of our customers, and the year saw major milestones, such as the launch of our digital lab and academy. The future is bright for financial institutions embracing technological advancements, and we at DIB, will continue to be at the forefront in providing our customers with premium and enhanced services and experiences.
Dubai Islamic Bank Group Chief Executive Officer, Dr. Adnan Chilwan, said:
- We have and will continue to redefine the Islamic Banking landscape. Our aim is to make DIB the source of innovation for the industry as a whole. This is what is driving us today to deliver the promise of digital with agility, the positive impacts of which are already being experienced by our customers. Our recently launched services under the “Banking in Minutes” theme has seen new to bank customers opening relationships with DIB from the comfort of their homes and offices, without the need for paper, branch visits, or interaction with a person – everything is simply done through our growing suite of services offered on the DIB mobile app, and perhaps more importantly, in a matter of minutes. The mobile banking experience will get richer and richer as we progress this year for both existing and potential customers.
- Whilst our organic growth has been well above the market over the last five years, CAGR of 13% (assets ’14-’19), we are always on the lookout on how to accelerate this further. Noor Bank acquisition is a prime example of the same, and with the transaction completed, we are now fully geared to push forward with the integration in the shortest possible timeframe, and realize the extensive synergies expected from this deal.
- DIB has continued to challenge the norms and prove its resilience year on year, despite global and regional growth constraints. Our sustained earnings, with profitability of over AED 5bn, is a clear manifestation of the strategic direction we have set in place, in order to provide only the best and most innovative services to our ever-growing customer base.
- We remain focused on managing the growth and risk of our balance sheet, aligned to the vulnerabilities of the current operating environment and broader market conditions, whilst retaining our capital and liquidity strength indicated by strong overall capitalization of 16.5% and LDR of 92%. Efficiency building continues, thus resulting in an industry leading cost to income ratio of 26.9%.
- With quality business at the top of the agenda, our revenues continue to rise, with significant growth in total income of 17% YoY. Prudent risk management practices remain at the core of this growth, in line with our strategies to mitigate risks and build cushions to insulate against any event in today’s ever changing economic landscape. Our persistent efforts to strengthen asset quality have led to NPF ratio declining from 11% in 2013 to under 4% in 2019.
- As the UAE enters a new phase of economic growth, DIB’s unwavering commitment towards aligning with trends shaping the global economy, strengthening the relationship with our customers and investing in our business, will continue to drive our long-term sustainable growth agenda.
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