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Islamic Banks Prove Resilient in Face of Economic Downturn

30/03/2016 0 79 views

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Dubai – “ASWAQ”

Islamic banks in the UAE have proven that they are much better than their conventional peers in dealing with a difficult operating environment, with all leading institutions showing strong growth in assets, profits and asset quality in 2015.

Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE by total assets, reported a group net profit of Dh3.83 billion, up 37 per cent against Dh2.8 billion the previous year. Its total income increased to Dh7.54 billion, up 21 per cent as compared to Dh6.23 billion in 2014, while net revenue reported increase to Dh6.48 billion, up 19 per cent compared with Dh5.43 billion in 2014.

DIB’s net financing assets grew 31 per cent to Dh97.2 billion in 2015 against the previous year’s Dh73.9 billion, while its customer deposits for 2015 increased by 19 per cent to Dh110 billion from Dh92.3 billion recorded in 2014. Of the total deposits, current and savings accounts continues to be a significant portion at 41 per cent, contributing to the low cost of funds.

Overall, the bank reported strong growth in asset quality in 2015, with impairment losses decreasing 42 per cent to Dh410 million, against Dh703 million the previous year, while non-performing assets consistently declining with the non-performing loans (NPL) ratio improving to 5 per cent in 2015, against 8 per cent the previous year. The bank’s coverage ratio, including collaterals, at discounted values stood at 147.6 per cent as at end of 2015.

DIB’s group chief executive officer, Dr Adnan Chilwan said, “The full-year 2015 results demonstrated the strength of and commitment to our strategic growth agenda built around a transformed and new-look DIB. We have managed another record-breaking year and a historic landmark as the bank joins the billion dollar profit club in the UAE.”

Another leading Islamic bank, Abu Dhabi Islamic Bank (ADIB) reported a net profit of Dh1.93 billion in 2015, up 10.5 per cent from the year before. Its total assets grew 5.8 per cent to Dh118.4 billion in the same period, while customer deposits rose 12 per cent to Dh94.9 billion, and net customer financing increased 7.4 per cent to Dh78.4 billion. Non-performing accounts as a percentage of gross customer financing declined to 3.9 per cent in 2015 from 4.4 per cent in the previous year. Credit provisions and impairments for 2015 increased by 8.2 per cent year-on-year to Dh820 million.

ADIB’s chief executive officer, Tirad Al Mahmoud said, “Despite a more challenging operating environment in the UAE, we have seen continued growth in our customer numbers, and the strength of our balance sheet and our liquidity position will enable us to continue investing in our product capabilities and support the financial needs of our clients.”

Emirates Islamic Bank, a member of the Emirates NBD Group, reported net profit of Dh641 million in 2015, up 76 per cent against the previous year’s figure. The bank’s total net income (net of customers’ share of profit) during the period increased to Dh2.43 billion, up 25 per cent compared to Dh1.95 billion in 2014. Financing and investing receivables grew by 31 per cent to Dh34 billion, while deposits rose 25 per cent to Dh39.3 billion.

Emirates Islamic’s CEO, Jamal Bin Galaita said, “Our strong performance was achieved on the back of robust growth and high customer acquisition across our three core segments, namely corporate, individual and SME, resulting in a 26 per cent increase in our customer base, a key testament to our winning offering.”

Sharjah Islamic Bank (SIB) recorded net profit of Dh409.9 million in 2015, up 9 per cent against Dh377.2 million in 2014. Total assets rose 14.9 per cent to Dh29.9 billion in 2015 as compared to Dh26 billion in 2014. The bank’s financing facilities increased 13 per cent to Dh16.4 billion against Dh14.5 billion in 2014, while customer deposits reached Dh17 billion in 2015, up 16.2 per cent from the previous year.

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