Dubai Islamic Bank’s stellar FY23 performance

Category: Fintech Forex GCC

Dubai Islamic Bank (DIB), the largest Sharia-compliant lender in the UAE, has announced a remarkable 24.1 percent increase in its net profit for the fiscal year 2023. This significant growth, which resulted in a net profit of Dh6.79 billion ($1.9 billion), is primarily attributed to an increase in non-funded income and a decrease in impairment charges.

The bank’s income from Islamic financing and investing transactions saw a substantial surge of nearly 46.7 percent, amounting to Dh17.2 billion. Furthermore, the income from properties held for development and sales rose to Dh237.2 million, marking a significant increase from Dh137.8 million in 2022. Commissions, fees, and foreign exchange income also saw a 12 percent annual increase, reaching Dh1.79 billion.

Robust financial health and future prospects

The bank’s financial health remained robust throughout the year, with net financing and sukuk investments reaching Dh268 billion, marking a 12 percent annual increase. The balance sheet also expanded by 9 percent, reaching Dh314 billion. The net operating profit saw a 10 percent annual surge, amounting to more than Dh8.5 billion, compared to Dh7.7 billion in the 2022 financial year.

Customer deposits at DIB increased to Dh222 billion, a 12% increase, with current and saving accounts comprising 37% of the total deposit base. The bank’s impairment charges decreased by 34 percent, amounting to Dh1.3 billion last year.

The UAE’s Islamic finance sector is on a strong growth trajectory, with the Islamic banking sector accounting for 23 percent of total banking assets within the UAE in 2022, equivalent to Dh845 billion.

Assets held by Islamic banks totalled Dh631 billion, while Islamic windows – Islamic outlets in conventional banks – held Dh214 billion, growing at 8 percent and 49 percent, respectively, from 2018. Islamic windows now account for 25 percent of total Islamic banking assets in the Emirates.

CEO comment

DIB’s group chief executive, Adnan Chilwan, (photo above), stated that the bank’s profitability in 2023 was supported by “significant asset growth, stable costs, and strong margins,” reflecting the healthy economic conditions. He added that over the year 2023, Dubai’s economy propelled at an exceptional rate due to structural and cyclical factors as well as deleveraging. This growth in the economy was reflected in the banks’ credit growth, indicating ample opportunity and liquidity aligned with the buoyant economic activities across all industries.

In conclusion, DIB’s stellar performance in 2023, marked by significant profit growth, reflects the bank’s strong position in the market and the overall growth trajectory of the UAE’s Islamic finance sector. The bank’s future prospects look promising, given the healthy economic conditions and the growth opportunities in the market.

Dubai’s dynamic economy

Dubai’s economy, once heavily reliant on oil, has successfully diversified into various sectors, with oil now contributing less than 1 percent to its GDP. Trade is central to its economy, with the city boasting two of the world’s largest ports and a bustling international air cargo hub. The Jebel Ali free-trade zone, established in the 1980s, has attracted significant industrial investment.

As of 2022, Dubai’s per capita GDP was US$46,665, and the UAE’s non-oil trade over the past decade totalled $4.4 trillion. Looking ahead, Dubai continues to focus on tourism and is developing as a hub for service industries such as IT and finance, with the government establishing industry-specific free zones throughout the city. In conclusion, Dubai’s robust growth and strategic investment across various sectors have positioned it as a global business hub.


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