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Mon 24 Oct 2016 11:57 AM

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Dubai Islamic Bank Q3 net profit falls 9.9%

DIB is third major Dubai-based lender to report weaker earnings growth this quarter after Emirates NBD and Mashreq

Dubai Islamic Bank Q3 net profit falls 9.9%

Dubai Islamic Bank (DIB), the UAE’s largest sharia-compliant lender, on Monday posted a 9.9 percent drop in third-quarter net profit, in line with analysts' forecasts.

The bank made 876.3 million dirhams ($238.6 million) in the three months to Sept. 30, it said in a statement. This compares with a profit of 972.1 million dirhams in the corresponding period of 2015.

DIB's earnings growth had generally outperformed most of its local rivals in recent quarters, even as operating conditions across the UAE banking sector hardened because of rising credit costs and sluggish loan growth. But the latest results has brought that trend to a halt, at least for now.

It is the third major Dubai-based lender to report weaker earnings growth this quarter after Emirates NBD and Mashreq.

The average forecast of three analysts polled by Reuters was for DIB to make a quarterly profit of 946.9 million dirhams.

Earnings were dented by a 74.8 percent rise in impairment charges to 113.5 million dirhams, as well as a 1.5 percent rise in total operating expenses to 564.5 million dirhams.

The 14.8 percent climb in income from Islamic financing and investing transactions to 1.64 billion dirhams was tempered by a 4.8 percent dip in commissions, fees and foreign exchange income to 329.7 million dirhams.

In a bid to maintain future growth, the bank in June completed a 3.2 billion dirhams rights issue aimed at bolstering its capital.

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