|01-25-2015, 01:48 PM||#1|
Dubai Islamic Bank notches a 64% increase in 2014 profit
Dubai Islamic Bank (DIB), the largest Sharia-compliant bank in the United Arab Emirates, reported on Sunday a massive 64.1% increase in net profit in the fourth quarter and the same growth in full-year 2014.
2014 full profit came at AED2.80 billion ($760 million), DIB stated, compared with a net profit of AED1.72 billion in 2013.
“We started 2014 with a well-defined growth agenda marking the end of the consolidation phase running from 2009 to 2013. The successful execution of this consolidation phase resulted in a robust platform allowing the bank to seamlessly switch gears,” said Adnan Chilwan, DIB’s chief executive.
The bank did not give a breakdown for fourth-quarter earnings, but according to the full-year profit number, Reuters calculated fourth-quarter earnings.
Net profit for the three-month period to December 31 came at AED850 million ($231.4 million), compared with AED518 million in the same quarter of 2013.
Analysts by EFG Hermes expected profit of AED719.3 million in the fourth quarter.
A separate statement showed DIB’s board of executives proposed a cash dividend of AED0.4 per share for 2014, up from AED0.25 in 2013.
The bank’s Islamic lending activity increased 31.9% in 2014, well beyond the 10.2% growth of Islamic lending activity in the whole UAE banking sector.
The bank’s fees and commission revenue jumped 49% to AED1.2 billion, a massive boost to profits as the bank saw strong growth in corporate and consumer banking.
Record-low interest rates have prompted most banks to boost their ledgers using higher transaction and fee income, as lower interest rates entail lower net interest margin.
Even so, the bank made a separate statement on Sunday that showed the bank is expecting loan growth of 15-20% in 2015. Chilwan said the bank`s net interest margin would remain at 3.6% in 2015, the same level as it was the year before.
Therefore, the profitability of DIB`s lending activity is expected to remain around the same levels in 2015 as it were in 2014.
DIB’s shares were up 0.86% on the Dubai Financial Market on mid-session on Sunday.
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