DIB’s full-year profit surges to Dhs7bn on higher interest income

Dubai Islamic Bank (DIB), the UAE’s biggest Islamic bank by assets, reported a 26 per cent jump in full-year net profit, boosted by higher interest income.

The Shariah-compliant bank’s net profit came in at about $2bn (Dhs7bn), up 26 per cent year-on-year (YoY) from Dhs5.5bn a year earlier. Its total income reached Dhs20.1bn, a 43 per cent increase YoY compared to Dhs14.1bn.

“2023 has been an exceptional year for DIB as the bank delivered its highest profitability in history,” said Mohammed Ibrahim Al Shaibani, director-general of H.H. The Ruler’s Court of Dubai and chairman of DIB.

Banks in the GCC region have benefited from higher interest rates in the wake of the US Federal Reserve’s moves to increase borrowing costs to combat inflation. Moody’s projected in its global outlook that GCC banks’ profitability will remain strong, supported by low provisioning requirements and high margins.

The banking group’s net operating revenues rose by 11 per cent YoY to reach Dhs11.7bn while operating profit stood at Dhs8.5bn, a solid 10 per cent YoY increase compared to Dhs7.7bn in 2022.

Dr Adnan Chilwan, DIB’s group CEO said the bank’s profitability is supported by significant asset growth, stable costs, and strong margins, solid recoveries thus reflecting healthy economic conditions

“Banks’ credit has grown reflecting ample opportunity and liquidity aligned with the buoyant economic activities across all industries,” Chilwan added.

DIB’s balance sheet expanded by a robust 9 per cent YoY to Dhs314bn while customer deposits settled at Dhs222bn with CASA comprising 37 per cent of the Shariah-compliant’s deposit base.

The bank’s net financing and Sukuk investments stood at Dhs268bn, up 12 per cent from Dhs238bn in 2022. Its net financing assets rose by 7 per cent year-to-date (YTD) while the Sukuk investments portfolio, another key focus of the bank, expanded by nearly 30.5 per cent to reach Dhs68bn.

DIB expands its digital footprint

Meanwhile, DIB acquired a 20 per cent stake in Türkiye’s TOM Group of Companies in September, marking the Shariah-compliant bank’s entry into the country’s banking sector.

The group includes TOM Katılım Bankası – Türkiye’s first licensed digital retail bank; TOM Pay Elektronik Para ve Ödeme Hizmetleri – a licensed e-money company; and TOM Finansman – a licenced financing company specialised in developing innovative digital products.

The investment gives the banking group a significant minority shareholding in TOM Group. The bank has an option to increase its shareholding to 25 per cent within 12 months.

Driven by its continuous quest for digital excellence and in line with its ambitious transformation strategy, the bank unveiled DIB alt – a full-fledged digital brand that houses the Islamic bank’s digital offerings and capabilities under one roof.

The platform integrates DIB’s extensive range of digital offerings and capabilities into one platform, providing customers with a seamless and hassle-free banking experience. It brings together more than 135 digital services via the DIB Mobile App, Online Banking, WhatsApp, and ATMs.

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