Business

At Dh853m for Q1-2021, Dubai Islamic Bank's net profit is definitely in recovery mode

At Dh853m for Q1-2021, Dubai Islamic Bank's net profit is definitely in recovery mode

Dubai: Dubai Islamic Bank will take a lot of strength from its first quarter 2021 numbers, with net profit up a whopping 2,337 per cent compared to what it was in the final three months of 2020. That’s Dh853 million between January to end March against Dh35 million in the fourth quarter of last year.

Just as important, impairment related losses were brought down to Dh751 million, from Dh1.9 billion, which is a 60 per cent decline. Net profit margin was more or less unchanged at 2.5 per cent.

DIB’s financials continue a trend where leading local banks have shown a strong recovery from the worst of the COVID-19 created disruptions in the second-half of last year. “The UAE banking sector continues to remain robust with healthy and well capitalized balance-sheets,” said Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank.

“The further extension of the UAE Central Bank’s TESS programme will benefit and support the sector and DIB remains aligned to providing support to the domestic economy throughout this recovery period.” (TESS stands for Targetted Economic Support Scheme, which the Central Bank came up with to help businesses and individuals cope with the COVID-19 created hit.)

Year-on-year needs working on

The bank’s total income in the first quarter was Dh2.84 billion compared to Dh3.55 billion same period last year, "reflecting softer operating environment and muted domestic retail activity, in relation to the pre-COVID-19 quarter last year".

"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 Dr. Adnan Chilwan, Group CEO. "The bank has continued to build provisions during the quarter amounting to nearly twice the value for the same period last year on a normalized basis.

"Business momentum remains positive with profit before impairments increasing by 1 per cent."

Gains for Commercial Bank of Dubai
Commercial Bank of Dubai delivered net profits of Dh325 million for the first quarter, up 3.1 per cent from a year ago. Decreased expected credit losses coupled with lower operating expenses propelled the increase in net profit while low inter-bank interest rates led net interest income to drop 1.8 per cent.

"The recovery from the COVID-19 pandemic is varied across business segments,” said Dr. Bernd van Linder, CEO. “Against this backdrop, CBD has reached a record Dh102 billion in assets driven by solid growth in loans, which have increased 12% versus Q1-2020."