Dubai Islamic Bank reports 31 per cent fall in profit

25 October 2009

Provisions for bad loans hit profit in third quarter

Profits at Dubai Islamic Bank (DIB) fell 31 per cent during the third quarter of 2009, dropping to AED296.8m ($80.8m), from AED430m in the same period of 2008.

The bank made provisions of AED164m during the three months to the end of September, bringing total provisions for the year to date to AED403m.

Total assets fell from AED87.8bn at the end of the second quarter, to AED82.9bn. The bank said it does not have any exposure to Suadi Arabia’s Saad Group and Ahmad Hamad al-Gosaibi & Brothers, which are both in default on their debt obligations.

Customer deposits were AED66.1bn and financing activities, the equivalent of loans and advances in Islamic banking, stood at AED50.3bn. This gives the bank a loan to deposit ration of 76 per cent.

The bank’s chairman, Mohammed al Shaibani, who is also director-general of the Dubai Rulers’ Court, said that despite the fall in profit he was optimistic that the worst of the financial crisis had passed. “We are now clearly emerging from that period of instability and moving into a new phase of recovery, evidenced by the more positive growth projections worldwide,” he said.

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