H1 profits up 38.7 pct year-on-year at Emirates Islamic, 12.8 pct at Dubai Islamic Bank
Emirates Islamic and Dubai Islamic Bank both reported increases in profits for the first half of 2019.
Emirates Islamic announced a net profit of 673 million dirhams ($183.3 million) for the six months ending June 30, up 38.7 percent from the same period in 2018.
The fully-owned subsidiary of Emirates NBD Group said the results were supported by “balance sheet growth, higher funded income, growth in foreign exchange income, a tighter control on cost and lower cost of risk.”
“Our performance is a result of core business growth, with both financing and customer deposits higher compared to end 2018,” said Emirates Islamic CEO Salah Mohammed Amin in a statement on Wednesday.
Dubai Islamic Bank’s H1 2019 net profit rose 12.8 percent year-on-year to reach 2.75 billion dirhams ($749.6 million).
DIB CEO Adnan Chilwan said in a statement on Wednesday that the results come from the “discipline” in managing costs and focusing on “efficiency building”.
“Our cost to income is now at a historical low of 27.8 percent,” said the CEO of UAE’s largest standalone Islamic bank.
Q2 YEAR-ON-YEAR PERFORMANCE
However, the two banks’ second quarter performance year-on-year was a different story.
Dubai Islamic Bank’s Q2 net profit soared 13.7 percent year-on-year to 1.4 billion dirhams, according to Salaam Gateway calculation.
Emirates Islamic’s dipped 5.3 percent to 262 million dirhams for the same three-month period ending June 30, 2019.
The bank was hit by a rise in net impairment of financial assets that rose to 135.9 million dirhams for Q1, from 41 million dirhams for the same period in 2018.
ASSETS
Emirates Islamic’s assets growth was higher than Dubai Islamic Bank's.
Emirates Islamic’s total assets grew by 4.7 percent to 61.1 billion dirhams in H1 compared to the end of 2018.
Dubai Islamic Bank’s total assets rose a lower 2 percent to 228.2 billion dirhams for the first half of this year.
Dubai Islamic held around 39 percent of Islamic banking assets and about 7.8 percent of total banking assets in UAE as at March 2019, according to Salaam Gateway calculations of data from the central bank.
It outlined plans in June to acquire the much-smaller Shariah-compliant Noor Bank. If the acquisition goes through, combined assets will reach nearly 275 billion dirhams.
Dubai Islamic Bank was last year designated by the UAE central bank as systematically important. It is the only standalone and full-fledged Islamic bank out of four financial institutions the regulator considers “too big to fail”.
UAE ISLAMIC BANKING LANDSCAPE
UAE currently has six standalone Islamic banks: Dubai Islamic Bank, Emirates Islamic, Noor Bank, Abu Dhabi Islamic Bank, Sharjah Islamic Bank, and Ajman Bank.
The country's standalone Shariah-compliant banks and Islamic windows of conventional banks have been steadily growing their market share, from 17.3 percent of total banking assets in 2013 to 18.9 percent in 2015 to 20.31 percent end-2018, according to central bank data.
This market share dipped to 19.6 percent in May this year, when Islamic assets stood at 571,985 million dirhams out of the total 2,912,904 million dirhams held by all banks in the country.
($1 = 3.6725 dirhams)
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