Dubai Islamic Bank, the largest Islamic bank in the UAE, has reported a remarkable 26 percent increase in its net profit for the year 2023, reaching a record Dh7.01 billion. This significant rise in earnings, up from Dh5.55 billion the previous year, has been primarily driven by a surge in non-funded income and a substantial decrease in impairment charges.
The bank’s impressive financial performance has led to the proposal of an increased dividend payout to its shareholders. It is set to raise the dividend from 30 percent to 45 percent of the value of stock held, marking a notable increase in shareholder returns.
One of the key factors contributing to Dubai Islamic Bank’s profitability was the reduction in impairment charges, which fell by 34 percent to Dh1.396 billion in 2023, down from Dh2.103 billion in 2022. This decrease in charges reflects the bank’s efficient risk management and favorable economic conditions.
Another significant aspect of the bank’s financial health was the increase in customer deposits, which climbed by 12 percent to Dh222 billion. This growth indicates the bank’s strong market position and the trust it commands among its customers.
Mohammed Ibrahim Al Shaibani, Director-General of The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, expressed his satisfaction with the bank’s performance. He stated, “2023 has been an exceptional year for DIB as the bank delivered its highest profitability in history. DIB’s profitability hit record high during FY 2023, supported by significant asset growth, stable costs, and strong margins, solid recoveries thus reflecting healthy economic conditions.”
In addition to its robust profitability, the bank also reported healthy liquidity levels, with a Liquidity Coverage Ratio (LCR) of 188.7 percent. Furthermore, the Non-Performing Financing (NPF) ratio saw a substantial decrease, falling well below the 6 percent mark to reach 5.4 percent, compared to 6.5 percent at the end of 2022.
This financial milestone for Dubai Islamic Bank not only highlights its resilience and strategic growth but also indicates the overall strength of the UAE’s banking sector. The bank’s ability to deliver record profits and increase dividends in a challenging global economic environment is a testament to its strong management, prudent risk assessment, and commitment to delivering value to its shareholders and customers.
