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Dubai Islamic Profit Almost Triples on Deyaar Gains - ASHARQ AL-AWSAT English Archive
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DUBAI, (Reuters) – Dubai Islamic Bank, the Gulf’s third-largest Islamic lender by market value, posted a near tripling of second-quarter profit as it booked gains from a property unit that went public during the period.

The lender’s profit after depositors’ share in the three months to June 30 soared 190 percent to 1.08 billion dirhams

($294.1 million), compared with 372.3 million dirhams in the year-earlier period.

Dubai Islamic, which did not provide quarterly data, said in a statement income included “exceptional profits amounting to 617 million dirhams from a bank subsidiary”.

The lender, which offers services complying with sharia, or Islamic law, sold a 55 percent stake in its subsidiary property firm Deyaar in an initial public offering in May to raise 3.18 billion dirhams.

Excluding the one-off gain, the quarterly profit was 463 million dirhams, according to Reuters calculations, which would be at the upper end of forecasts compiled by Reuters last month that ranged from 407 million dirhams and 473.4 million dirhams.

“This success is due to the high growth of our core banking services across all business units, such as retail, corporate, real estate and investment banking,” Dubai Islamic Chairman Mohammed Khalfan bin Kharbash said in the statement.

Profit from financing activities in the six months to June 30 rose 62.3 percent to 45.37 billion dirhams. Customer deposits also grew 57 percent to 59.7 billion dirhams at the end of June, Dubai Islamic said.

The Islamic finance industry, worth about $500 billion in assets, has been growing at about 10 percent a year for the last decade, Standard & Poor’s ratings company said in April.

Sharia rules ban the charging of interest, equating it with usury, and prohibits investment in businesses that trade in alcohol, pornography or gambling.

Dubai Islamic said in June it planned to add 14 branches to its network in the UAE, taking the total to 53.

It also expects to arrange up to $5 billion in loans and Islamic bonds this year for Gulf Arab firms looking to finance acquisitions and infrastructure projects, another driver of profit growth, a bank official said in February.

First-half net profit after depositors’ share reached 1.5 billion dirhams, up from 707 million a year earlier, Dubai Islamic said in the statement. Reuters calculated the second quarter based on previous financial data.

The lender earned 372.3 million dirhams after depositors’ share in the second quarter of last year and 424.5 million dirhams in the first quarter of this year.

Total assets grew 51 percent to 75.5 billion on June 30 from a year earlier. Shares of Dubai Islamic have surged more than 32 percent this year.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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