Dubai Islamic Bank (DIB) Q1 2025 earnings summary

Executive summary

• Achieved record pre-tax profit of AED 2.1 billion for Q1 2025, up 14% year-on-year, with group net profit rising to AED 1.8 billion despite higher tax rates.

• Total assets grew over 3% year-to-date to AED 355.3 billion, driven by expansion in consumer and wholesale financing.

• Asset quality improved, with NPF ratio declining to 3.7% and total coverage at 139%.

• Strategic focus on digital transformation and sustainability, including new ESG frameworks and publications.

• Reviewed interim financials for Q1 2025, prepared in accordance with IAS 34 and reviewed by KPMG, with no material misstatements identified.

Financial highlights

• Net operating revenues grew 5% year-on-year to AED 3.2 billion, with net profit after tax up 8% to AED 1.8 billion.

• Customer deposits increased 7% year-to-date to AED 265 billion.

• Non-funded income increased 13% to AED 962 million.

• Impairment charges dropped 45% year-on-year to AED 163 million, reflecting improved asset quality.

• Basic and diluted EPS increased to AED 0.23 from AED 0.21 year-over-year.

Outlook and guidance

• On track to meet or exceed full-year guidance for loan growth, asset quality, and profitability.

• Net profit margin guidance remains at 2.8%-3%, with expectations to manage margin pressure from anticipated rate cuts.

• Normalized cost of risk guided at 60-70 basis points, with actuals currently well below due to strong recoveries.

• FY 2025 guidance includes net financing & sukuk growth of 15%, NPF ratio target of 3.5%, and cost-to-income ratio of 26%.

• The group is subject to new UAE corporate tax and Pillar Two global minimum tax rules from 2025, with an effective tax rate of 14.7% for Q1 2025.