Dubai Islamic Bank posted a strong rebound in first-quarter 2021 profit compared to the preceding three months, bringing cheer to the Group that otherwise has not returned to pre-pandemic levels of growth.
The United Arab Emirates’ largest standalone Islamic bank reported 853 million dirhams ($232 million) in net profit for the three months through March, a 2,337% growth compared to the last quarter of 2020.
The bank said in a statement on Wednesday (April 28) that this signals a “clearly improving economic trend”.
The first quarter of 2020 was the last before the full-blown onset of the COVID-19 pandemic. DIB’s net profit for that period was 1.11 billion dirhams, 23% higher than the same period of this year.
Despite pointing to an economic uptick, the bank’s total income for January through March 2021 was a lower 2.85 billion dirhams compared to 3.25 billion dirhams for the fourth-quarter 2020 and 3.56 billion dirhams for the same three months last year. DIB explained this as a reflection of a “softer operating environment and muted domestic retail activity”.
Its non-performing financing ratio, that measures the proportion of non-performing loans to the total amount of outstanding loans, reached 6.2% for January through March this year, up from 4.3% for the same three months in 2020.
Impaired financing stood at 12.9 billion dirhams compared to 12 billion dirhams at the end of last year.
On the balance sheet, assets grew by 1% from the end of last year to 291.71 billion dirhams. Year-on-year growth was 6% compared to 276.42 billion dirhams in the first-quarter of 2020.
The growth in assets was propped up by a 7% year-on-year increase in deposits to 214 billion dirhams and 6% rise in liabilities to 238.2 billion dirhams.
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