Dubai Islamic Bank posts 66.2pc jump in Q4 net profit

January 29, 2014 - 11:59:21 am

DUBAI: Dubai Islamic Bank (DIB), the largest sharia-compliant lender in the emirate, posted a 66.2 percent jump in fourth-quarter net profit, according to Reuters calculations, on the back of lower financing costs and impairment charges.

Beating analysts' forecasts, the bank made 518 million dirhams or $141 million in the three months to Dec. 31, up from 311.7 million dirhams in the same period the year before.

The average forecast of three analysts polled by Reuters was for a net profit of 412.3 million dirhams.

The calculation was based on previous financial statements. DIB said on Wednesday its net profit for the full year increased 42 percent, hitting 1.72 billion dirhams.

DIB also said in the bourse filing that it was proposing a cash dividend of 0.25 dirhams per share for 2013.

This is higher than the 0.15 dirhams per share paid for 2012.

In a rare interview, officials at the bank said last May they expected high-double digit percentage growth in net profit in 2013 after dealing with most of the bad loans which soared after the collapse of the local real estate market at the end of the last decade.

Impairment charges fell to 820 million dirhams during 2013 from 1.09 billion dirhams in 2012.

The bank reported big jumps in total assets and deposits in its first-quarter numbers  to 120.6 billion dirhams and 88.26 billion dirhams, respectively without elaborating on why.

However, both deposits and assets declined later in the year.

Customer deposits stood at 79.1 billion dirhams at the end of December, up 19 percent from the end of 2012, while total assets were 15 percent up year-on-year over the same timeframe at 113.2 billion dirhams.

The bank said it had written down some loans to the commercial real estate sector.

As a result, total loans and advances grew just 3 percent last year to 56.1 billion dirhams.

This contrasts with the UAE banking system as a whole, and in particular Dubai, which has enjoyed strong loan growth in 2013 as economic conditions following the real estate crisis.

Loan growth across UAE banks was 7.2 percent in the first nine months of 2013, according to the latest central bank data.

DIB said on Dec. 25 its board of directors had approved plans to increase the cap on foreign ownership of its shares to 25 percent from 15 percent.

The move was part of a wider trend of UAE and Qatari firms doing so ahead of their respective bourses' reclassification by index provider MSCI to emerging market status in May 2014. (Reuters)

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