Dubai Islamic Bank (DIB) group today announced its financial results for the year ended December 31, 2012, showing healthy growth across the bank’s operations.
For the 12 months ended December 31, 2012, DIB group reported a net profit of AED 1.19 billion, compared to AED 1.05 billion in 2011, an increase of 13 per cent. DIB’s Board of Directors also recommended the distribution of a cash dividend of 15%, subject to regulatory and general assembly approvals.
DIB’s total assets as of December 31, 2012, stood at AED 95.4 billion, compared to AED 90.6 billion at the end of the same period in 2011, an increase of 5.3 per cent.
The bank’s customer base grew steadily in 2012, with customer deposits reaching AED 66.8 billion as of December 31, 2012, a year-on-year increase of 2.9 per cent. DIB continued to maintain a strong finance-to-deposit ratio of 83 per cent as of December 31, 2012, compared to 79 per cent on the same date in 2011.
DIB continued to proactively manage credit quality and impaired financing assets. Consequently, as of December 31, 2012, the impaired ratio stood at 9.8 per cent, compared to 12.1 per cent as of December 31, 2011. The bank has continued its prudent provisioning policy with impairment charge during the year ended December 31, 2012 amounting to AED 1.04 billion, compared to AED 1.09 billion for the same period in 2011.
As at December 31, 2012, DIB reported a capital adequacy ratio of 17.5 per cent, and a Tier I Capital ratio of 14 per cent. While capital adequacy ratio decreased due to the commencement of the capital amortisation of the Ministry of Finance Medium Term Wakala Finance, Tier 1 capital increased by 0.5 per cent in 2012.
DIB successfully returned to the International Capital Markets in 2012. In March, the bank repaid in full a USD 750 million five-year Sukuk from its own sources, demonstrating the bank’s financial strength and comfortable liquidity position. This was followed in May with the launch of a highly successful USD 500 million five-year Sukuk, which was oversubscribed more than four times, a notable achievement in light of volatile market conditions. DIB’s healthy financial position was recognised by Fitch Ratings recently, which affirmed the bank’s Long-term Issuer Default Rating at 'A' with a stable outlook.
“2012 was a very strong year for the UAE economy and for Dubai Islamic Bank,” said His Excellency Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank. “The bank saw healthy growth across a number of key areas, from our asset and deposit bases through to our net profit. With our position as the UAE’s leading Islamic bank secure, the focus for DIB now is to capitalise on the momentum that we have built up over the last few years.”
Over the past year, DIB has been involved in several benchmark Sukuk transactions including Jebel Ali Free Zone’s US$650 million 7 year Islamic bond, Government of Dubai’s US$1.25 billion Dual Tranche 5 year and 10 year Sukuk, Majid Al Futtaim’s US$400 million 5 year debut Sukuk issuance and Emaar’s US$500 million 7 year Sukuk.
Alternative banking channels were a particular focus area for DIB in 2012. In January, the bank introduced Al Islami Business Online, a portal enabling companies to access more than 75 services at the click of a button. This was followed in April with the launch of the Arabic interface of DIB’s internet-based banking service, allowing customers to conduct over 70 banking transactions in either Arabic or English.
The bank also pressed ahead with its UAE-wide expansion strategy in 2012. Nine new branches were opened during the year, bringing the bank’s UAE-wide network to a total of 82 branches. In addition to expanding its physical reach, this strategy has served to further diversify the bank’s deposit base.
“In our drive to be the most dynamic and forward-looking Islamic financial institution in the world, DIB has invested heavily across all its distribution channels, making it easier for people to manage their finances and for companies to run their businesses,” said Abdulla Al Hamli, Chief Executive Officer of DIB. “Our investment in innovation continues to reap benefits and was an important factor in our strong 2012 performance. Leading from the front, DIB will keep on developing products and services that represent the future of the Islamic Finance industry.”
2012 was another award winning year for DIB with the bank taking home numerous local and international accolades, including the awards for “Best Distance Banking Service” and “Best Structured Product” at the Banker Middle East Product Awards 2012; “Best Sukuk Arranger” and “Best Private Bank” at the Islamic Business & Finance Awards 2012; “Best Islamic Bank in the UAE” at Asiamoney's Islamic Awards; and being named among The Banker’s “Deals of the Year for 2012” in the “Structured Finance” category for its role as the Islamic arranger of a US$800 million Wakala Syndicated Financing for Salik One.