An increase in net profits to 853 million dirhams ... and a 7% annual growth in deposits
Dubai Islamic’s income of 2.8 billion dirhams during the first quarter
The bank continues to record strong operating performance as market instability persists.
From the source
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Dubai Islamic Bank achieved a total income of 2.8 billion dirhams during the first quarter of this year as the bank continued to demonstrate its strong resilience in light of the current economic conditions, while profits before accounting for impairment provisions increased to 1.6 billion dirhams, compared to 1.5 billion dirhams in the period. Same from last year.
The bank said in a statement, in which it announced its financial results for the first three months of 2021, that the group's net profit amounted to 853 million dirhams, while customer deposits rose to 214 billion dirhams, an annual increase of about 7%.
Income
In detail, Dubai Islamic Bank announced yesterday its financial results for the first quarter of this year, recording a total income of 2.847 billion dirhams, a decrease of 20%, compared to the same period last year, when it achieved 3.559 billion dirhams.
The bank stated in a statement that the net operating income during the first quarter of this year amounted to 2.226 billion dirhams, supported by the decrease in the cost of financing during that period.
Fees and profits
Fees and commissions continued to boost income, achieving a growth of 3% to reach 425 million dirhams in the first quarter of 2021. Earnings before accounting for net impairment provisions increased on an annual basis to 1.614 billion dirhams, compared to 1.592 billion dirhams in the first quarter of 2020. It reached The bank's net profit for the first quarter of this year to 853 million dirhams, down slightly, despite one-off gains of more than one billion dirhams in the same period last year.
Operating expenses
Operating expenses decreased during the first quarter of 2021, by 27% on an annual basis, to reach 612 million dirhams, compared to 839 million dirhams, as a result of the disciplined approach to costs.
The cost to income ratio improved by 190 basis points to reach 27.5% compared to 29.4% at the end of last year, making the bank the most efficient in this area.
Impairment losses decreased by a large margin, indicating the success of the risk management strategy as well as an improvement in market direction.
Deposits
Customer deposits rose to 214 billion dirhams compared to 206 billion dirhams, an increase of 4% since the beginning of this year until now, and 7% on an annual basis.
Low-cost deposits remained robust, with checking and savings accounts at 40%.
Strong liquidity was achieved with the financing to deposit ratio reaching 91.7%, and the liquidity coverage ratio at 127%, surpassing the regulatory requirements under the targeted economic support plan.
Quick response
The Director of the Court of His Highness the Ruler of Dubai and Chairman of the Board of Directors of Dubai Islamic Bank, Mohammed Ibrahim Al Shaibani, said that the International Monetary Fund provided a positive review of the economic outlook for the UAE based on the country's ability to respond in a quick and effective manner to the challenges that emerged in the epidemic period.
He added, "Thanks to the country's global leadership in expanding access to the vaccine early, it is expected that the economic recovery will accelerate consumer spending and business activities during the coming period."
Stronger performance
Al-Shaibani pointed out that the banking sector in the UAE has maintained its strong performance thanks to the presence of good balance sheets, noting that the Central Bank's expansion of the banks' implementation of the targeted economic support plan will benefit the sector, stressing that Dubai Islamic Bank will remain keen to provide all necessary support to the local economy. During this recovery period.
He continued: “With the continuing instability in the market, Dubai Islamic Bank continues to record strong operating performance, with total income reaching AED 2.8 billion during the first quarter of 2021,” noting that thanks to its strong foundations, Dubai Islamic Bank enjoys It is well positioned to keep pace with the huge economic programs that the country is witnessing, such as the World Expo, the Dubai Industrial Strategy 2030, and the Dubai Urban Plan, which will support the future growth of the Bank and the Emirate of Dubai in general.
Digitization
For his part, Board Member and Managing Director of Dubai Islamic Bank, Abdullah Ali Obaid Al Hamli, said that Dubai Islamic Bank’s efforts contributed to focusing on digitization and improving performance by strengthening the bank’s leading position in the sector. The bank’s customers today are experiencing better experiences within a rapidly evolving operating environment.
Al Hameli added, “The introduction of flexible working methods has contributed to improving efficiency and productivity, while digital training courses, virtual collaborative initiatives, continuous safety and health procedures across our branches, and measures aimed at streamlining commercial operations and enhancing business continuity in making the bank less vulnerable to disruption and maintaining a strong growth path. ».
Strength and flexibility
In turn, the CEO of Dubai Islamic Bank Group, Dr. Adnan Chilwan, said that the strong growth in the balance sheet of 6% on an annual basis is evidence of the bank's strength and flexibility in dealing with various difficult circumstances, and its ability to effectively implement its strategy and seize basic growth opportunities in Periods of economic uncertainty.
Chilwan stressed that the bank is in an ideal position to seize growth opportunities with the improvement of market conditions, thanks to the liquidity coverage ratio, which reached 127%, exceeding the minimum regulatory requirements.
Issuance of instruments
During the first quarter of this year, Dubai Islamic Bank succeeded in issuing first-tier permanent sukuk worth $ 500 million with no option to redeem them until five and a half years later, at a profit rate of 3.375% annually.
This deal came at the lowest price offered by any Gulf bank (traditional or Islamic) on additional dollar-denominated sukuk from the first tier at the global level.
127%
Liquidity Coverage Ratio greatly exceeds regulatory requirements.
Decrease in quarterly operating expenses by 27% to reach
To 612 million dirhams.
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