Lender's net profit reached $232mln in first quarter of 2021
Dubai Islamic Bank (DIB), the largest Islamic lender in the UAE, will continue to run its business with extreme prudence this year, as the “headwinds” of the pandemic remain, its top official said.
The bank, which has recently completed the integration with Noor Bank, reported on Wednesday a net profit of 853 million dirhams ($232 million) for the first quarter of the year, lower than in the same period in 2020 but a rebound from the previous quarter.
“As significant headwinds remain in the current environment, we continue to approach the year with extreme prudence, with focus on low-risk sectors and those showing consistent signs of recovery as the market improves,” said Adnan Chilwan, chief executive officer of DIB.
Chilwan maintained that liquidity remains strong and that business momentum is still positive. However, he said efficiency build up is critical to attaining stability and profitability in light of the challenging conditions. “A focused and disciplined approach to managing OPEX has led to a cost income ratio of 27.5 percent, the lowest in the market,” he said.
“Liquidity remains a strong suit with robust growth in customer deposits of seven percent year on year and four percent year to date, to reach 214 billion dirhams,” he added.
Also, with a liquidity coverage ratio (LCR) of 127 percent, which is well above the minimum regulatory requirements, Chilwan said the lender is “ideally positioned to capture growth opportunities” as conditions improve.
The International Monetary Fund (IMF) has recently forecast that the UAE’s economy will grow 3.1 percent this year, up from the previous estimate of 1.2 percent.
“IMF has revised positively the economic outlook on the UAE, on account of the country’s robust and quick response to the challenges faced in times of the pandemic. Being a global leader in the vaccination race, the economic recovery is expected to accelerate consumer spending and business activities in the coming periods,” said Mohammed Ibrahim Al Shaibani, chairman of DIB.
“The UAE banking sector continues to remain robust with healthy and well capitalised balance sheets. The further extension of the UAE [central bank’s} TESS programme will benefit and support the sector,” he added.
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