DUBAI, (Reuters) – Dubai Islamic Bank DISB.DU (DIB), the largest Islamic lender in the United Arab Emirates, reported an 11 percent gain in first quarter net profit, missing analysts’ forecasts.
The bank, also Dubai’s third-largest by market value, said in a statement on Saturday that net profit rose to 222 million dirhams for the three months ending March 31, compared to a profit of 200 million dirhams in the same quarter of 2010.
EFG Hermes had estimated an average quarterly net profit of 310 million dirhams.
DIB reported a full-year profit of 806 million dirhams for 2010 in March. Fourth quarter profit slipped 62 percent but still beat analysts’ forecats.
“These positive results — including growth in net profits, assets and customer deposits — reflect the resilience of Dubai Islamic Bank during this period of increasing domestic economic expansion,” DIB’s chairman Ibrahim al-Shaibani, who also serves as director of Dubai’s ruler’s court, said in a statement.
Banks in the United Arab Emirates were forced to take on record provisions for bad loans in the wake of the global financial crisis, which hurt profits and constrained lending.
The lender is thought to have suffered from heavy exposure to investments in Dubai’s battered real estate sector.
Government-controlled DIB became the majority shareholder of troubled Islamic mortgage provider Tamweel TAML.DU in September last year after it raised its stake in the firm to 57.33 percent.
The bank’s assets stood at 100.4 billion dirhams, an 11 percent increase from the previous quarter, the statement said.