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Sun 14 Apr 2013 09:47 PM

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Dubai Islamic Bank Q1 net profit jumps 17% in Q1

Dubai's largest sharia-compliant lender reports $82.2 million profit

Dubai Islamic Bank Q1 net profit jumps 17% in Q1
Dubai Islamic Bank chairman Mohammed al-Shaibani

Dubai Islamic Bank (DIB), the largest sharia-compliant lender in the emirate, said on Sunday its first-quarter net profit climbed 17 percent, after the bank posted strong asset growth since December.

The bank made 301.7 million dirhams ($82.2 million) in the three months to March 31, up from 258.5 million dirhams in the corresponding period last year, it said in a statement

EFG Hermes had forecast the bank would make a profit of 261 million dirhams in the first quarter.

Total assets jumped 22 percent in the first quarter compared to the end of 2012, reaching 120.6 billion dirhams at the end of March, accompanied by a 32 percent increase in customer deposits over the same time period. A spokesman for the bank, contacted by telephone, declined to elaborate on the reasons for the surge in assets and deposits.

DIB is in the process of fully acquiring Tamweel through a share swap, with the sharia-compliant mortgage lender due to be delisted in June.

Tamweel, in which DIB already owned 58.2 percent, reported on April 10 a 13.3 percent rise in first-quarter net profit on the back of lower provisioning.

DIB became the second Gulf bank to issue a hybrid perpetual sukuk when it priced in March a $1 billion Islamic bond which enhanced its Tier 1 capital ratio. The bank's Tier 1 ratio rose to 17.7 percent at the end of March, compared to 13.9 percent as of Dec. 31, 2012, the statement said.

"With our long-term funding requirements secure, DIB is now clearly on a path of sustained growth," said Mohammed al-Shaibani, chairman of DIB.

Earlier this month, DIB repaid 3.8 billion dirhams of capital placed with the bank by the United Arab Emirates government at the height of the global financial crisis, becoming the latest local lender to do so as the value of the capital-boosting bonds diminished.

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