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Thu 24 Jul 2014 01:29 PM

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Dubai Islamic Bank says Q2 net profit up 59.6%

UAE's largest sharia-compliant lender says performance aided by higher fee and investment income

Dubai Islamic Bank says Q2 net profit up 59.6%
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Dubai Islamic Bank (DIB), the United Arab Emirates' largest sharia-compliant lender, posted a 59.6 percent jump in second-quarter net profit on Thursday, aided by higher fee and investment income.

Beating analysts' forecasts, the bank made 667.5 million dirhams ($181.8 million) in the three months to June 30, it said in a bourse filing, up from 418.2 million dirhams in the corresponding period of 2013.

The average forecast of four analysts polled by Reuters was for a net profit of 627.3 million dirhams.

The result continues a positive earnings reporting season for banks in the UAE, whose profits have jumped in recent quarters because of a growing domestic economy and improved asset quality. At the end of last decade, corporate debt problems and a real estate market crash slashed banks' profits.

Fellow Dubai lender Emirates NBD posted a 34.8 percent increase in its second-quarter net profit on Thursday, while the majority of banks in Abu Dhabi recorded double-digit profit growth for the three months to June 30.

DIB's earnings were boosted by a 34.5 percent increase in income from commissions, fees and foreign exchange, as well as hikes in revenue generated from property and other investments.

The lender, which completed the purchase of a 24.9 percent stake in Indonesian lender Bank Panin Syariah in June, was also aided by a 13.3 percent year-on-year reduction in loan impairments, which dropped to 160.3 million dirhams in the second quarter.

Customer deposits stood at 94.8 billion dirhams at the end of June, up 20 percent on the end of 2013, while total loans were 18 percent higher over the same timeframe at 66.1 billion dirhams.

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