Dubai Islamic Bank Q1 Net Up 17%

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

The bank made Dhs301.7 million ($82.2 million) in the three months to March 31, up from Dhs258.5 million in the corresponding period last year, it said in a statement.

EFG Hermes had forecast the bank would make a profit of Dhs261 million in the first quarter.

Total assets jumped 22 per cent in the first quarter compared to the end of 2012, reaching Dhs120.6 billion at the end of March, accompanied by a 32 per cent 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 per cent, reported on April 10 a 13.3 per cent 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 per cent at the end of March, compared to 13.9 per cent as of December 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 Dhs3.8 billion 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.