Dubai Islamic Bank (DIB) Q3 2024 earnings summary

Executive summary

• Achieved robust growth in core businesses, with gross underwriting of AED 69 billion year-to-date and balance sheet growth of 4.7% to AED 329 billion, surpassing guidance.

• Net profit for the first nine months reached AED 6 billion, up 23% year-on-year, with post-tax net profit at AED 5.45 billion.

• Asset quality improved, with NPF ratio down to 4.27% and total coverage at 132%, aided by settlement of large corporate accounts.

• Continued investment in digital transformation and ESG initiatives, with significant upgrades in external ESG ratings.

• Long-term issuer rating reaffirmed at 'A', with Viability Rating upgraded by Fitch.

Financial highlights

• Total income increased 16.8% year-on-year to AED 17 billion; net operating revenue up 6.3% to AED 9.1 billion.

• Net profit margin at 3%, in line with guidance; return on tangible equity at 22% and RoA at 2.3% pre-tax.

• Cost-to-income ratio at 28.1%, up 160 basis points year-on-year, but remains among the best in the sector.

• Impairments dropped 62% year-on-year to AED 530 million; net income from Islamic financing for nine months was AED 14.3 billion.

• Customer deposits rose to AED 236.9 billion, with CASA deposits at AED 90-91 billion, up 11% year-to-date.

Outlook and guidance

• Year-end guidance for financing and Sukuk growth revised upward to 10% or more, from previous 5%.

• Cost-to-income ratio expected to close the year near 27%.

• Normalized cost of risk for 2025 anticipated at 70-80 basis points, excluding recoveries and settlements.

• Margins for 2025 expected to increase, with more precise guidance to be provided in January.

• No material impact anticipated from new and revised IFRS standards not yet effective.