Dubai Islamic Bank gets approval for capital increase

CAPITAL INCREASE: Dubai Islamic Bank gets green light to fund future expansion and protect lending position. (Getty Images)

Dubai Islamic Bank (DIB) has confirmed that approval has been given for a 3.75 billion dirhams ($1.02 billion) increase in capital over a 5-year period.

The conversion of a 3.75 billion dirhams deposit - granted to DIB by the Ministry of Finance - into Tier 2 capital, will be used for DIB’s expansion plan, aimed at protecting its lending position during the current economic crisis.

DIB reported full year net profit of 1.73 billion dirhams for 2008, against 1.88 billion dirhams in 2007. The distribution of a cash dividend of 25% and bonus shares of 5% for the year 2008 was approved at the bank’s AGM.

The bank says it will build upon its 2008 activities, including the launch of its legal subsidiary, Dar Al Sharia Legal & Financial Consultancy; as well as a new joint venture with Jordan Dubai Capital and Dubai International Capital, via a strategic investment in Industrial Development Bank, which is being converted into Jordan Dubai Islamic Bank.

The bank’s current growth strategy – with a renewed focus on its retail operations – will continue to deliver significant results, the company said in a statement.

By the end of this year, the bank expects to record a 15% increase in its customer base, reaching some 900,000 customers, while its retail assets business will grow by approximately 20%.

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