DUBAI: Dubai Islamic Bank (DIB), the United Arab Emirates’ largest Sharia’h-compliant lender, posted a 64.1 percent increase in fourth-quarter net profit yesterday, as it continued to benefit from a positive local economic picture.
It is the third Dubai-based bank to report strong fourth-quarter earnings, after Emirates NBD and Mashreq last week.
DIB made Dh850m ($231.4m) in the three months to December 31, up from Dh518m in the corresponding period of 2013.
The bank did not provide a breakdown of its fourth quarter earnings, so Reuters used its full-year results statement to calculate the figure — which was ahead of the Dh719.3m forecast by EFG Hermes.
The earnings outlook for Dubai banks has been bolstered by a dialling down in the losses many faced as a result of exposure to a local property market crash at the turn of the decade, as well as strong lending growth as Dubai’s economy rebounds from that turbulent period.
For the full-year, the bank said impairment losses dropped 15 percent to Dh703m.
DIB’s Islamic lending activity jumped 31.9 percent year on year to Dh73.98bn at the end of 2014. This was well ahead of the 10.2 percent figure for the whole UAE banking sector in November, the latest central bank data showed.
Net profit for 2014 was Dh2.80bn, DIB said in a statement, up 63.2 percent year on year.
Profits were lifted by a 49 percent jump in fees and commission to Dh1.2bn, which DIB attributed to growth in its corporate and consumer banking segments.
Many banks have sought to boost their balance sheets through higher fee income as a way to offset tighter net interest margins caused by record low interest rates.
The bank’s board proposed a 0.40 dirhams cash dividend for 2014, it said in a separate bourse statement. This is up from 0.25 dirhams in the year earlier period.
Reuters
