Dubai Islamic Bank Q3 net profit down 9.9 per cent

Dubai Islamic Bank, the United Arab Emirates’ largest Sharia-compliant lender, on Monday posted a 9.9 per cent drop in third-quarter net profit, in line with analysts’ forecasts.

The bank made Dh876.3 million in the three months to September 30, it said in a statement. This compares with a profit of Dh972.1m in the corresponding period of 2015.

DIB’s earnings growth had generally outperformed most of its local rivals in recent quarters, even as operating conditions across the UAE banking sector hardened because of rising credit costs and sluggish loan growth. But the latest results has brought that trend to a halt, at least for now.

It is the third major Dubai-based lender to report weaker earnings growth this quarter after Emirates NBD and Mashreq.

The average forecast of three analysts polled by Reuters was for DIB to make a quarterly profit of 946.9m.

Earnings were dented by a 74.8 per cent rise in impairment charges to Dh113.5m, as well as a 1.5 per cent rise in total operating expenses to Dh564.5m.

The 14.8 per cent climb in income from Islamic financing and investing transactions to Dh1.64 billion was tempered by a 4.8 per cent dip in commissions, fees and foreign exchange income to Dh329.7m.

In a bid to maintain future growth, the bank in June completed a Dh3.2bn rights issue aimed at bolstering its capital.

* Reuters

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