(MENAFN - Khaleej Times) Dubai Islamic Bank, or DIB, on Tuesday reported a 27 per cent increase in its second-quarter net profit compared to the earnings in the first quarter of the year, topping most of analysts' forecasts.
The Shariah-compliant bank declared a net profit of Dh310 million for the April-June quarter, compared to Dh245 million the bank earned in the January-March period.
The second-quarter profit beat most views. Cairo-based EFG Hermes had projected a Dh246 million net profit, while Deutsche Bank expected it at Dh267 million, according to Zawya Dow Jones. Two analysts polled by Reuters forecast net profit of Dh246 million and Dh267 million.
"DIB has been able to achieve sustained profitability while continuing to strengthen its balance sheet," Mohammed Ibrahim Al Shaibani, Director-General of Dubai Ruler's Court and Chairman of DIB, said in a statement.
"Assisted by a prudent strategy of diversifying our funding sources, DIB remains highly liquid and superbly placed to support the financing needs of the UAE, its economy and its people. Moreover, our recent sukuk, which was four times oversubscribed, served to underscore investor confidence in the DIB business model," Al Shaibani added.
DIB's net profit for the first six months of the year slightly increased to Dh555 million from Dh552 million it reported last year for the January-to-June period.
Net revenue for the first half of 2012 increased to Dh1.83 billion from Dh1.80 million in the same period of 2011, an increase of 1.4 per cent. For the three months ending June 30, 2012, DIB reported net revenue of Dh923 million, compared to Dh903 million in the first quarter in 2012, an increase of two per cent.
As of June 30, 2012, the bank's total assets stood at Dh93.9 billion, compared to Dh90.6 billion at the end of 2011, an increase of four per cent. As of June 30, 2012, customer deposits stood at Dh68.3 billion, compared to Dh64.8 billion as of December 31, 2011, an increase of five per cent.
"Alongside our strong financial performance, the first half of 2012 has been notable for our continued drive to provide customers with the best possible Islamic Banking experience and products," said Abdulla Al Hamli, CEO of DIB.
"With four new branches opened already in 2012, our on-going expansion strategy has brought us even closer to our customers. Yet, it is through alternative banking channels where we have made the most significant advancement," Al Hamli said. As of June 30, 2012, DIB maintained a healthy financing-to-deposit ratio of 78 per cent and robust capital adequacy ratio of 18.4 per cent.
The first half of 2012 also witnessed DIB continue its conservative approach to provisioning with Dh539 million set aside for impairments, compared with Dh500 million in the first half of 2011, further improving the bank's provision coverage ratio.
For the second quarter of 2012, DIB set aside Dh241 million for impairments, compared to Dh299 million in the first quarter of the year. The bank also further diversified its funding base in May when it successfully returned to the international capital markets with the issue of a 500 million five-year sukuk.