Dubai Islamic Bank, the largest Islamic bank in the UAE, announced a 23% decrease in its net profits for the first quarter of 2021, reaching 853 million dirhams, compared to 1.1 billion dirhams in profits recorded in the first quarter of 2020, which included one-time gains exceeding one billion dirhams in the same period last year (the dollar equals 3.67 dirhams). According to the bank's results announced today, profits before provisions for impairment rose to 1.6 billion dirhams, compared to 1.59 billion dirhams in the same period last year.
Provisions Doubled
Dr. Adnan Chilwan, CEO of Dubai Islamic Bank, stated in the bank's announcement today that the bank continued to enhance provisions during the first quarter of this year, with an amount nearly double that allocated for the same period last year, based on usual principles. Total provisions against financing assets reached 8.8 billion dirhams, with provisions coverage including guarantees at 102% as of March 2021. The standard risk cost was 101 basis points during this period, and the ratio of non-performing financing was 6.2% with defaulted financing amounting to 12.9 billion dirhams compared to 12 billion dirhams at the end of 2020.
Chilwan added, "With ongoing headwinds in the current climate, the bank continues on its cautious path this year, focusing on low-risk sectors that show continuous recovery indicators amid improving market performance." The bank's total income reached 2.8 billion dirhams in Q1 2021, compared to 3.5 billion dirhams in the same period last year, reflecting a 20% decline, which mirrors the downturn in the operational environment and local economic activity compared to the last quarter before the outbreak of COVID-19 last year.
Operating expenses decreased by 27% year-on-year, reaching 612 million dirhams in Q1 2021, compared to 839 million dirhams, due to a disciplined cost approach and significant benefits from synergies in the merger process.
Founded in 1975, Dubai Islamic Bank is the largest Islamic bank in the UAE in terms of assets and the second largest Islamic bank globally. It is listed on the Dubai Financial Market and has assets exceeding $80 billion, employing over 10,000 staff through approximately 500 branches within a global network extending across the Middle East, Asia, and Africa.
