Dubai Islamic Bank 1st Quarter 2022 Group Financial Results

Dubai Islamic Bank announced its results for the period ending March 31, 2022.

First Quarter 2022 Highlights:

  • Significant growth in Group Net Profit of 58% YoY to AED 1,345 million vs AED 853 million last year. The strong growth was driven by lower impairments as well as a stronger top line growth.
  • Net financing and sukuk investments grew by 3% to AED 235.1 billion compared to AED 228.5 billion in 2021.
  • Gross new financing of nearly AED 16 billion YTD driven by strong growth of wholesale bookings on the back of improved economic outlook.
  • Net Operating Revenues showed a robust growth of 11% YoY to AED 2,467 million vs AED 2,226 million in same period of last year.
  • Steady growth of 6% YoY led to total income of AED 3,016 million compared to AED 2,847 million in Q1 2021.
  • Net Operating Profit reached AED 1,770 million, a strong increase of 10% compared to AED 1,614 million in same period of last year.
  • Strong balance sheet growth of 3% YTD to reach AED 287.2 billion supported by significant volume growth and new underwriting against improved operating conditions and recovering economic environment.
  • Customer deposits remained steady at AED 204.5 billion with CASA increasing by 3.2% to AED 92 billion. CASA now forms 45% of the customer deposit base.
  • Significantly lower impairment losses of 44% YoY to AED 417 million against AED 751 million in previous year demonstrate the improving asset quality.
  • NPF ratio on a downward trend at 6.7% (-10bps YTD) compared to 6.8% in 2021, with absolute NPFs decreasing as well.
  • Cost income ratio at 28.3% a rise of 150bps YTD. Operating Expenses increased by of 14% YTD now reaching to AED 698 million.
  • Liquidity remains healthy with finance to deposit ratio of 93% and LCR of 123%.
  • Continued healthy improvements on ROA now at 1.9% (+35bps YTD) and ROTE at 16.2% (+320bps YTD).
  • Capitalization levels remain robust with CET1 at 12.8% (+40bps YTD) and CAR at 17.5% (+40bps YTD), both well above the minimum regulatory requirement. Total equity now stands at AED 40.8 billion.
His Excellency Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank

Living in a rapidly evolving world and amidst ongoing international headwinds with a slower growth outlook, the UAE remains resilient growing from strength to strength with a forecast of over 4% for the year as per IMF. The continuous growth is a reflection of the UAE’s economic diversity and competitiveness which remains steadfast and on track to double the size of the country’s economy by 2030. The banking sector continues to demonstrate steady growth YoY as DIB’s Q1 earnings return back to pre-pandemic levels.

Despite on-going unpredictable economic and international market conditions that are impeding progress, the bank’s total income of more than AED 3 billion reflects a 6% YoY growth and the balance sheet rising by 3% YTD reflecting its alignment towards the expansionary agenda of the UAE’s economy. DIB continues to transform into a more digital-focused and sustainable financial institution to future proof its business and unlock further growth opportunities in the market that will deliver stronger shareholder value in the years to come.

Dr. Adnan Chilwan, Group CEO, Dubai Islamic Bank

DIB’s strong set of first quarter results with net profit growing by 58% YoY to reach to AED 1.3 billion is a demonstration of the bank’s ability to navigate through economic headwinds. I am pleased to state that we have successfully redefined our priorities in the post covid world with the launch of our new 5-year strategy at the beginning of the year. Supported by stronger operating revenue growth of 11% YoY and significant decline in impairments of -44% YoY, the bank’s financial position clearly denotes the resilience of the franchise and its inherent capability of withstanding market challenges.

Our net financing and sukuk investments reflect a robust growth of 3% YTD to reach to AED 235 billion. This increase was supported by strong new underwriting and bookings during the quarter as part of the bank’s strategy to deliver balance sheet growth and target previously untapped customer segments. Our excess liquidity continues be utilized in building a high quality sukuk book earning a strong average return of around 4%.

Persistent efforts on proactively managing credit underwriting and  asset quality trends have led to NPF improving by 10bps YTD to  reach 6.7%. We will continue to grow coverage over the period in the coming quarters to align with our guidance for the year.

With a strong balance sheet and P&L growth during the period, our profitability ratios demonstrated healthy improvements with ROA now at 1.9% (+35bps YTD) and ROTE at 16.2% (+320bps YTD). The improving macro environment with higher oil prices coupled with rising rates will continue to benefit DIB where the majority of earning assets are in a floating rate book, aiding the bank in reaching its targeted margin guidance for the year.