Dubai Islamic Bank (DIB), the UAE’s largest sharia-compliant lender, posted a 62.8 per cent increase in fourth-quarter net profit on Wednesday, according to Reuters calculations.
The bank made Dh1.15 billion in the three months to December 31, Reuters calculated based on its full-year earnings statement as it did not provide a quarterly breakdown.
This compares with a profit of Dh706.3 million in the corresponding period of 2014 and the forecast by an analyst at HSBC for the quarter of Dh915m.
The bank said in a bourse filing its 2015 net profit rose to Dh3.84bn, up 37 per cent from the previous year.
The bank’s board proposed a 0.45 dirhams cash dividend for 2015, subject to central bank approval, it added. This is up from 0.4 dirhams for the previous year.
“Their loan to deposit ratio is low and they have lots of cash to lend,” said Nabil Farhat, an Abu Dhabi-based partner at Al Fajr Securities. “Their loan portfolio experienced higher growth than an average bank in UAE and also lower loan loss provisions.”
Banks in the UAE are bracing for a decline in government spending, slower economic growth and falling asset quality as oil is posed to remain lower for longer. Still, Dubai Islamic’s non-performing loan ratio dropped to 5 per cent at the end of last year, compared to 8 per cent in 2014.
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