Dubai Islamic Bank (DIB) Q2 2024 earnings summary

Executive summary

• Net profit (pre-tax) for H1 2024 reached AED 3.72 billion, up 18.1% year-on-year, with ROTE at 20.2% and strong balance sheet growth to AED 323 billion, driven by core business expansion and digital transformation.

• Gross new underwriting and sukuk reached AED 43 billion, with net portfolio growth of 3.8% year-to-date.

• Asset quality improved, with NPF ratio down to 4.99% and provision coverage at 95% following the NMC settlement.

• Digital banking user base and transaction volumes continued to rise, supporting operational efficiency.

• The review report found no material misstatements and confirmed compliance with IAS 34.

Financial highlights

• Total income for H1 2024 was AED 11.3 billion, up 21.3% year-on-year; net operating revenue rose 8.6% to AED 6.1 billion.

• Net profit (pre-tax) for H1 2024 was AED 3.72 billion, up 18.1% year-on-year; Q2 net profit at AED 1.9 billion, up 14.5%.

• Assets grew 2.7% year-to-date to AED 323 billion; deposits increased 5.4% year-to-date.

• Impairments down 32% year-on-year to AED 652 million; cost of risk at 40 bps.

• Cost-to-income ratio at 27.8%, among the best in the sector.

Outlook and guidance

• Strong pipeline for gross underwriting expected to drive growth in H2 2024; guidance likely to be revised upwards after Q3.

• Net interest margin expected to improve in H2 2024 due to better CASA mix and lower funding costs.

• FY 2024 guidance targets 5% net financing & sukuk growth (3.8% achieved YTD), NPF at 5% (actual 4.99%), and net profit margin at 3.0%.

• Return on assets and tangible equity remain robust at 2.2% and 20.2%, respectively.

• Management is assessing the impact of new IFRS standards effective in future periods.