Dubai Islamic Bank (DIB) net profit jumped by 34 per cent to Dh850 million for the first quarter of 2015 compared to same period last year, the bank announced on Wednesday.
The first quarter total revenue increased to Dh1.77 billion from Dh1.49 billion for the same period in 2014, showing an increase of 19 per cent.
The increase is due to consistent growth in core banking assets across all business segments. With continued positive customer sentiments and customer penetration drive as part of the strategy, both consumer and corporate banking assets have registered significant increase resulting in growth in funded income by 24 per cent over Q1 2014, according to the bank.
Mohammed Ibrahim Al Shaibani, director-general of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, commented: “The strong first quarter results demonstrate the bank’s strength and capability to continuously grow and expand its franchise despite the global market volatilities.”
DIB managing director, Abdulla Al Hamli, said: Our strong start to the year reflects DIB’s robust positioning as the bank looks to tap new sectors and segments. Our continued investments in technology and infrastructure backed by a renewed sales focus provides the bank with an unparalleled competitive edge in the market.”
DIB chief executive officer, Dr. Adnan Chilwan, said: “DIB has once again demonstrated a robust and solid performance marking a strong start to 2015. We have generated exceptionally strong organic growth for the bank and have already set plans in motion to support the same with an inorganic growth agenda looking beyond our traditional borders.”
Building on the momentum of last year, and aided by the strength of the balance sheet, the bank continue to capture greater market share in relentless bid to promote Islamic finance as a viable norm rather than an alternative, the chief executive said.
“Expanding our financing book at two to three times the market has been achieved through a multi-pronged approach combining product innovation, technology, renewed sales and service focus and optimization of balance sheet to create additional growth capacity,” he added.
Islamic finance assets in the UAE have crossed $100 billion mark with the sector now more than one-fifth of the total banking and finance business in the country. The segment is expected to grow by 2.5-3 times in the coming five years and DIB is well positioned to take advantage of and support this growth in its drive to help establish Dubai as the global capital of Islamic economy, according to Dr Chilwan.
Net revenue of the bank amounted to Dh1.563 million, an increase of 19.8 per cent compared with Dh1.30 billion in the same period of 2014.
The increase is attributed to growth in funded income and fees and commissions as well as improvement in deposit mix with a growing CASA component, thereby increasing net funded income margin to 3.73 per cent from 3.33 per cent compared to the same period last year.
The bank’s operating expenses increased by 22.7 per cent to Dh571 million for the period ended March 31, 2015, from Dh466 million in the same period in 2014. The increase is largely attributed to variable operating costs in line with increase in business volumes. As a result, cost to income ratio maintained at 36.6 per cent.
The bank said impairment losses declined to Dh136 million compared with Dh195 million for the same period in 2014. There has been significant improvement in credit quality during Q1 2015 compared with Q1 2014 resulting in lower impairment charges during this period.