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Dubai Islamic Bank Net Profit Declines 31 Per Cent in 2009

DUBAI — Dubai Islamic Bank’s (DIB) net profit fell by 31 per cent for the year 2009 due to enhanced provisioning for impairment, the bank said on Thursday.

The Shariah-compliant bank reported a net profit of Dh1.2 billion for 2009, compared to Dh1.73 billion in 2008, down by 30.63 per cent.

This decline is primarily due to the conservative and prudent approach adopted by the bank in continuing with the policy of enhancing provision for impairment from Dh520 million in 2008 to Dh818 million in 2009, the Dubai-based bank said.

“As the global economy emerges from a phase of severe disruption and unprecedented volatility into a period of recovery, Dubai Islamic Bank is now uniquely positioned to further contribute to the continued economic growth and diversification of the UAE and wider region,” said Mohammed Ibrahim Al Shaibani, Chairman of the bank.

Listed on the Dubai Financial Market, the stocks made an intra-day high of Dh2.60 and closed over 5 per cent up at Dh2.44 on Thursday.

The board of directors of the bank proposed a cash dividend of 20 per cent. Customer deposits soared to Dh64.2 billion by the end of 2009, compared to Dh62.6 billion at the end of 2008.

“Dubai Islamic Bank has prudently managed its operations over the past 12 months, as reflected in the bank’s positive financial results and continued expansion of products and services,” Al Shaibani said.

Despite the challenging environment, the bank’s top line revenue remained stable at Dh5.1 billion in 2009 versus 5.2 billion in 2008, showing significant resilience to current economic environment.

DIB also announced that its total assets as of December 31, 2009, stood at Dh84.3 billion, slightly lower than Dh84.6 billion at the end of the same period in 2008. The bank’s total financing assets reached Dh49.9 billion as of December 31, 2009, a slight decline compared to Dh52.7 billion in 2008, due to the bank’s conservative policy of managing the financing portfolio in these time.

DIB maintained financing-to-deposit ratio of 78 per cent as of December 31, 2009, providing an indication of the bank’s healthy liquidity position despite challenging market conditions. The bank also reported a Basel II capital adequacy ratio of 17.5 per cent, as of December 31, 2009.

Last year, the bank focused on the expansion of its domestic retail banking business, including 11 new branches and express centres opening in the UAE in 2009 alone, contributing significantly to its annual balance sheet growth and accounting for 46 per cent of the bank’s revenue last year.

DIB’s customer base increased by 15 per cent last year, reaching approximately 900,000 customers as of December 31, 2009. DIB continues to focus on the opening of both traditional bricks-and-mortar branches while also enhancing its network through Al Islami Express Banking Centres as well as state-of-the-art technological channels.

Overseas, the bank’s Jordanian associate, Jordan Dubai Islamic Bank, recently launched operations at its first and main branch in Amman, the Jordanian capital, which will be followed by an aggressive expansion of JDIB’s operations across the Kingdom, including the planned opening of a total of 10 branches by the end of this year.

abdulbasit@khaleejtimes.com