Dubai Islamic Bank Q3 profit flat as impairment charges soar, 9-mth profit crosses 4 bln dirhams
Dubai Islamic Bank’s net profit growth was almost flat for the three months ending September 30 versus the same period last year.
The United Arab Emirates’ largest Islamic bank saw 0.08 per cent increase in net profit to 1.262 billion dirhams ($343.6 million) for the third quarter, according to Salaam Gateway calculation of its financial statement submitted in an exchange filing on Wednesday.
Net income rose 7.9 per cent to 2.178 billion dirhams but this was dragged down by 331.546 million dirhams in impairment charges, up 86.4 per cent from 177.909 million dirhams at September 30 last year. Operating expenses nudged up 0.64 per cent to 570.506 million dirhams.
For the nine-month period ending September 30, DIB’s net profit crossed the 4 billion dirhams mark to 4.015 billion dirhams, an 8 per cent growth versus the same period in 2018.
This was largely driven by a 17.5 per cent rise in income from financing and investing, reaching 8.1 billion dirhams from 6.894 billion dirhams for the nine months ending September 30 last year.
Impairment charges for the nine-month period surged 85.4 per cent to 1.056 billion dirhams. The bulk of these fell on Islamic financing and investing assets. The bank reported 960.1 million dirhams on these, compared to 659.4 million dirhams for the same period in 2018.
Non-performing financing ratio increased from 3.4 per cent in December 2018 to 3.6 per cent at September 30, according to figures in a statement from the bank.
Impaired financing ratio also went up, from 3.3 per cent to 3.6 per cent.
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DIB’s assets grew to 229.962 billion dirhams, a rise of 2.8 per cent from December 31.
On the liabilities side, customer deposits rose to 162.951 billion dirhams, up 4.69 per cent from 155.657 billion dirhams at the end of last year.
Dubai Islamic Bank is one of four UAE banks considered systemically important by the central bank. The others are First Abu Dhabi Bank, Emirates NBD, and Abu Dhabi Commercial Bank.
In July DIB outlined plans to acquire fellow Shariah-compliant Noor Bank, which would create an Islamic bank of around 275 billion dirhams in assets.
($1 = 3.6725 Emirati dirhams)
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