Dubai Islamic Bank (DFM: DIB), the first Islamic bank in the world and the largest Islamic bank in the UAE by total assets, today announced its results for the year ended December 31, 2018.
Full Year 2018 Results Highlights:
Growth momentum with profitability focus continues
- · Group Net Profit increased to AED 5,004 million, up 11% compared to AED 4,504 million for 2017.
- · Total Income increase to AED 11,730 million, up by 15% compared to AED 10,199 million for 2017.
- · Net Operating Revenue grew to AED 8,202 million, up 7% compared to AED 7,687 million for 2017.
- · Operating expenses reduced to AED 2,322 million compared to AED 2,336 million for 2017.
- · Net operating income before impairment charges grew by 10% YoY to AED 5,880 million.
- · Cost to income ratio for the year ended 2018 is at 28.3% compared to 30.4% at the end of 2017.
Core business remains the underlying driver for balance sheet growth
- · Net Financing & Sukuk investments rose to AED 175.9 billion up by 11.8%, compared to AED 157.4 billion at the end of 2017.
- · Total Assets stood at AED 223.7 billion, up by 7.9%, versus AED 207.3 billion at the end of 2017.
Asset quality indicators remain solid
- · NPF ratio steady at 3.4%. Provision coverage ratio is at 112%.
- · Overall coverage, including collateral at discounted value, stands at 150%.
Liquidity and funding continues to remain stable
- · Customer deposits up by 5.8% to reach to AED 155.7 billion from AED 147.2 billion in end of 2017.
- · CASA deposit rose to AED 54 billion as of full year 2018 despite a rising rate environment.
- · Financing to deposit ratio stood at 93%.
Capitalization well above the regulatory requirements, providing adequate cushion for growth
- · Capital adequacy ratio is at 17.5%, as against 12.75% minimum required.
- · CET 1 is at 12.4%, as against minimum required of 9.25%, providing significant room for growth under the new Basel III regime.
- · ROA at 2.32% and ROE at 18.1%, in line with guidance.
- · DIB Board of Directors recommends the distribution of a cash dividend of 35%, as per UAE Central Bank directives, subject to AGM approval.
Management’s comments for the year ending December 31, 2018:
His Excellency Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said:
- · Shariah-compliant banking is on the rise in markets around the world, and DIB, being amongst the top two Shariah-compliant banks in the world, is playing a key role here. We will continue our progress in spreading the popularity of Islamic banking, educating the market on its benefits, and shattering the myth that Shariah-compliant banking is limited to Muslims.
- · Our commitment to grow the Islamic capital markets has seen DIB participate and lead nearly USD 23 billion of sukuk and syndication transactions with our book of Sukuk investments growing to AED 31 billion this year.
- · Today, UAE is on track towards maintaining sustainable growth, following the new reforms and governmental initiatives to diversify sources of revenue while increasing spending in key sectors. In the face of the unprecedented global challenges, the country has remained steady and resilient in creating new opportunities for growth in a wide variety of sectors including infrastructure, finance and business, healthcare, hospitality and tourism, aviation and transportation and scientific research.
- · The growth of the UAE’s economy and its ability to attract global investors and entrepreneurs continues to spur us on the path of success as we progress the bank and the Islamic finance sector to even greater heights in the coming years. We remain confident that the bank will benefit from new reforms and increased government spending, besides development of key sectors.
Dubai Islamic Bank Managing Director, Abdulla Al Hamli, said:
- · From promoting positivity and happiness amongst our employees, to encouraging individuals and businesses to be more effective, our strategic partnerships with the UAE government have deepened the connection DIB enjoys with the nation and its people, and we are proud of our contribution to the success of the local economy.
- · The year saw us active in the capital markets as well. Early in 2018, we successfully priced US$ 1 Billion Sukuk issued with a 5 year tenor that reopened the regional FI and corporate Debt Capital Markets. Around the 2nd quarter, the rights issuance by the bank, which was aimed to boost the CET1, was massively oversubscribed generating nearly three times the required subscription. Both deals clearly highlighted the continued existence of the strong demand for DIB paper as well as the confidence which global investors have in the UAE’s largest Islamic bank.
Dubai Islamic Bank Group Chief Executive Officer, Dr. Adnan Chilwan, said:
- · 2018 proved to be another outstanding year of growth for Dubai Islamic Bank. From earning industry recognition through prestigious awards, to continuously delivering on our promises to customers, we have once again exceeded market expectations, and we remain determined to continue making our mark both locally and globally. It makes us all extremely proud to note that the market now views DIB as a performance benchmark for the entire banking sector, not just for Islamic Finance.
- · 2018 Net Profit crossing AED 5 bln is a clear indication of the success of our sustained and continued execution of our proven strategy. Focus on profitability remains the core driver in our growth agenda, clearly evidenced by the strong net profit margin (NPM) of 3.14%, which remains at the higher end of the market. Our ability to innovate around the dynamic market conditions gives us confidence that we will continue to outperform and take market share which has now moved to double digits at around 10%.
- · Dubai has strongly positioned itself as a powerful advocate for the Islamic Finance industry as the nation seeks to secure its role as the global capital for the Islamic economy. The implementation of new economic and banking regulations, such as Basel III, IFRS 9 as well as VAT has benefitted the market financial metrics, and strengthened the economy across the UAE.
- · We remain focused on returns with strong ROA (2.32%) and ROE (18.1%), both very much in line with our guidance for the year. Our growth in the coming years will be driven by digitalization as the market continues to transform. Having anticipated this revolution, we had initiated the change in our processes and systems a few years ago and 2019 promises to be an incredible year for the bank and the customers in this area. Customer experience and convenience, cost optimization and revenue enhancement remain the key pillars driving DIB as the Digitally Intelligent Bank.