Dubai Islamic Bank said its first quarter profit rose 34 per cent as the biggest Islamic bank in the UAE by assets shrugged off a sharp drop in the price of oil and continued to gain market share in Sharia-compliant financial services.
Net income rose to Dh850 million in the first three months of 2015 from Dh637m in the same period last year, the bank said. Revenue increased 20 per cent to Dh1.56 billion from Dh1.3bn in the same time frame.
“Building on the momentum of last year and aided by the strength of our balance sheet, we continue to capture greater market share in our relentless bid to promote Islamic finance as a viable norm rather than an alternative,” said the chief executive Adnan Chilwan.
“Expanding our financing book at two to three times the market has been achieved through a multi-pronged approach combining product innovation, technology, renewed sales and service focus and optimisation of balance sheet to create additional growth capacity.”
Islamic finance assets have exceeded $100bn and the sector now comprises more than one-fifth of the total financing market in the UAE, he said.
Last year, the UAE economy is estimated to have grown more than 4 per cent, even after the price of oil fell more than 50 per cent during the course of 2014. As a result of the crude price drop, many economists, including those at HSBC and Standard Chartered, have lowered their 2015 growth forecasts for Gulf countries.
That slump in oil, the lifeblood of regional economies, has made it more urgent for banks to entice individuals to take on debt as many corporations that rely on hydrocarbons to fuel their business will suffer a slowdown this year.
Mr Chilwan said in a conference call with analysts after the results were released that it expects 15 to 20 per cent growth in loans this year, the same target he gave at the beginning of the year.
The lender’s ambitious target, more than double the average nationwide figure in recent years, comes despite the steepest plunge in oil prices in six years.
He said this year that loan growth would continue to come from corporations and individuals because the government is expected to continue spending on infrastructure projects even after the price of oil, upon which the federal government funds 60 per cent of its spending.
At the same time, Mr Chilwan said DIB is forging ahead with expansion into Indonesia as well as opening up shop in Kenya, where it will seek to tap East African growth.
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