Dubai Islamic Bank Group 9 Month Financial Results For The Period Ended September 30, 2017

Transcription

1.     Press Release: Dubai Islamic Bank Group 9 Month Financial Results For the period ended September 30, 2017 DIB Net Profit reaches AED 3.301 billion as balance sheet crosses AED 200 billion  Group net profits up by 10% YoY to reach to AED 3.301 billion  Financing assets grew by 14% YTD to AED 131.3 billion  Deposits increased by 17% YTD to AED 143.5 billion Dubai, October 11, 2017 Dubai Islamic Bank (DFM: DIB), the first Islamic bank in the world and the largest Islamic bank in the UAE by total assets, today announced its results for the period ended September 30, 2017. 9M 2017 Results Highlights: Sustained profitability and growth on the back of robust Net Income Margin (NIMs) and low operating expenses  Group Net Profit increased to AED 3,301 million, up 10% compared with AED 3,011 million for the same period in 2016.  Total income increased to AED 7,510 million, up 17% compared with AED 6,410 million for the same period in 2016.  Net Operating Revenue increased to AED 5,681 million, up 13% compared with AED 5,048 million for the same period in 2016.  Efficient and proactive cost management led to operating expenses remaining nearly flat at AED 1,741 million compared to AED 1,716 million for the same period in 2016.  Net operating income before impairment charges grew by 18% to AED 3,940 million compared to AED 3,332 million for the same period in 2016.  Cost of credit risk reduced to 63 bps compared to 81 bps for the same period in 2016.  Cost to income ratio reduced to 30.7% compared with 34.0% at the end of 2016. 1   
2.     Asset growth remains robust across all core businesses  Net financing assets rose to AED 131.3 billion, up by 14%, compared to AED 115.0 billion at the end of 2016.  Sukuk investments increased to AED 25.2 billion, a growth of 8%, compared to AED 23.4 billion at the end of 2016.  Total Assets stood at AED 201.2 billion, an increase of 15%, compared to AED 175.0 billion at the end of 2016. Asset quality trends remain positive, a direct consequence of robust underwriting and solid risk management practices  NPA ratio continues its downward trajectory improving to 3.4%, compared to 3.9% at the end of 2016.  Provision coverage ratio improved to 121%, compared to 117% at the end of 2016.  Overall coverage including collateral at discounted value now stands at 162%, compared to 158% at the end of 2016. Strong liquidity continues to support asset growth  Customer deposits stood at AED 143.5 billion compared to AED 122.4 billion at the end of 2016, up by 17%.  CASA deposits increased by nearly 7% to AED 50.9 billion from AED 47.4 billion as at end of 2016 leading to a robust 35% constitution of the total deposit base.  Financing to deposit ratio stood at 92%, indicating a push towards efficiency and margin protection.  Focus on diversification and securing long term funding saw another successful senior sukuk issuance of USD 1 billion during Q1 2017. Robust Capitalization  Capital adequacy ratio remained strong at 16.9%, as against 12% minimum required.  Tier 1 CAR stood at 16.3% under Basel II, against minimum requirement of 8%. Shareholders’ return remains robust – in line with guidance for the year  Earnings per share stood at AED 0.55 as at Q3 2017.  Return on equity stood at 18.6% as at Q3 2017.  Return on assets steady at 2.34% as at Q3 2017. 2   
3.     Management’s comments on the financial performance for period ended September 30, 2017 His Excellency Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank, said:    The recovery of international oil prices and the stability witnessed in the recent past will be a major source of support in the area of funding and liquidity for the banking sector. With the solidity and resilience displayed by UAE’s financial market, credit growth is expected to more than double to 5% in 2018, spurred by the government’s unabated progress on infrastructure development in line with its economic aspirations. DIB continues to remain at the forefront of the industry with solid earnings growth as net profit increased by 10% YoY, primarily driven by the bank’s persistent efforts in maximizing its share of wallet across a diverse array of sectors and segments. Dubai Islamic Bank Managing Director, Abdulla Al Hamli, said:    The bank has given another remarkable performance this quarter with total income growing by 17% YoY as DIB continues to outpace the sector growth. The progress we have made in implementing our growth aspirations has led to the bank strengthening its market share with both the financing book and the deposit base growing by mid to high double digits in the first nine months of 2017. With the rapidly changing digital space, we will continue to expand on our technological capabilities to ensure that we remain at the forefront of the FINTECH revolution, and our customers get the best and most convenient product and services at all times. Dubai Islamic Bank Group Chief Executive Officer, Dr. Adnan Chilwan, said:      Crossing the landmark of AED 200 bln in total assets is another momentous milestone in our incredible growth journey over the last four years. This market beating performance clearly demonstrates the strength of the franchise and the potential the organization has to continue to defy the trend despite the challenges thrown by the global economic environment. The recent move by the rating agencies with positive impacts on long term as well as standalone ratings is a clear affirmation of the fact that the 14% growth in the financing assets so far this year and the tremendous performance in preceding years has not come at the expense of asset quality or underwriting standards. A testament to the tight and stringent risk management practices in DIB, these announcements by the two international rating agencies should provide a strong sense of comfort to our growing global investor community. With a sector share of around 8%, DIB today, has the required scale, positioning and the financial strength to continue to deliver above-market performance. Bolstering the international presence will see us engage actively in the existing core markets as we expand our focus geographies to now include South East Asia, East Africa and Far East Asia. The progress so far has been backed by a thorough and solid strategic agenda built on a model of preemptive capacity creation. With ample liquidity and robust capitalization serving as the backbone to DIB’s growth objectives, the bank is in a strong position to accelerate its plans to expand its franchise locally and internationally and ensure that we continue to deliver even more comprehensive, creative and complete solutions to all our customers in the markets we operate. 3   
4.     Financial Review Income Statement highlights: AED million Sep 2017 Sep 2016 Change (%) 7,510 6,410 17% (1,829) (1,362) 34% 5,681 5,048 13% (1,741) (1,716) 1% Profit before impairment losses and income tax 3,940 3,332 18% Impairment losses (619) (304) 103% (20) (17) 17% 3,301 3,011 10% Total Income Depositors’/sukuk holders share of profit Net revenue Operating expenses Income tax Net profit for the period Key ratios: Sep 2017 Sep 2016 Change Net Funding Income Margin % 3.13% 3.20% (7 bps) Cost to income ratio % 30.7% 34.0% (330 bps) Return on average assets % 2.34% 2.44% (10 bps) Return on average equity % 18.6% 17.4% 120 bps 0.55 0.49 - EPS (AED per share) Total Income Profitability remained strong with total income for the period ended September 30, 2017 increasing to AED 7,510 million from AED 6,410 million for the same period in 2016. The 17% rise is driven primarily by sustained growth in all core businesses with income from Islamic financing and investing assets increasing by 19% to AED 5,722 million compared to AED 4,813 million for the same period in 2016. Net revenue Net revenue for the period ended September 30, 2017 amounted to AED 5,681 million, an increase of 13% compared with AED 5,048 million in the same period of 2016. The increase is attributed to strong growth in the financing book as the bank continues to enhance its share of wallet across all key economic sectors. 4   
5.     Operating expenses Operating expenses were held nearly flat to AED 1,741 million for the period ended September 30, 2017 compared to AED 1,716 million in the same period in 2016, primarily due to efficient cost management. This led to cost to income ratio improving to 30.7% compared to 34.0% at the end of 2016. Cost to Income Ratio (%) 34.3% 34.0% 30.7% Dec 2015 Dec 2016 Sep 2017 Profit for the period Net profit for the period ended September 30, 2017, rose to AED 3,301 million from AED 3,011 million in the same period in 2016, an increase by 10% emanating from a combination of robust core business growth and effective and efficient cost management. Robust & Growing Profitability (AED million) 6,761  6,489  5,681 5,048  3,839  4,050  3,011  Dec 2015 Dec 2016 Sep 2016 Net Operating Revenue 3,301 Sep 2017 Net Profit 5   
6.     Statement of financial position highlights: AED Million Sep 2017 Dec 2016 Change (%) 131,284 114,968 14% Sukuk investments 25,170 23,409 8% Interbank placement & CDs 18,161 9,547 90% 8,653 8,158 6% Total Earning Assets 183,268 156,082 17% Cash & Other assets 17,894 18,889 (5%) Total assets 201,162 174,971 15% Customers' deposits 143,528 122,377 17% 8,663 7,695 13% 173,218 147,701 17% 17,706 17,155 3% Tier 1 Sukuk 7,346 7,346 - Non-Controlling Interest 2,892 2,769 4% 27,944 27,270 2% 201,162 174,971 15% Net Finance to customer deposit 91.5% 93.9% (240 bps) Tier 1 ratio 16.3% 17.8% (150 bps) CAR 16.9% 18.1% (120 bps) NPA ratios 3.4% 3.9% (50 bps) Coverage ratio 121% 117% 400bps Net Financing assets Equities & Properties Investments Sukuk Issued Total liabilities Shareholder Equity & Reserve Total Equity Total liabilities and equity Key ratios: Financing portfolio Net financing assets grew to AED 131.3 billion for the period ended September 30, 2017 from AED 114.9 billion as of end of 2016, an increase of 14% driven primarily by the continued growth of core businesses. Corporate banking financing assets grew by 21% to AED 87 billion whilst consumer business grew by 6   
7.     4% to AED 40 billion. Commercial real estate concentration contained at around 18% and in line with targeted guidance numbers. Deployment by Segment (AED bn) 2015 2016 Sep 2017 87 72 56 37 38 40 25 20 23 10 11 10 Corporate Consumer Real estate 18 7 10 Sukuk investment 8 8 9 Interbank Investment in placements & equities and CDs properties Asset Quality Non-performing assets have shown a consistent decline with NPA ratio improving to 3.4% for the period ended September 30, 2017, compared with 3.9% at the end of 2016. Impaired financing ratio stood at 3.2% for the period ended September 30, 2017 from 3.6% at the end of 2016. Consequently, as buildup of provision continuous driven primarily by collective provisioning, cash coverage stood at 121% for the period ended September 30, 2017 compared with 117% at the end of 2016. Overall coverage ratio including collateral at discounted value stood at 162% compared to 158% at the end of 2016. Non-Performing Assets (“NPA”) NPA Ratio Impaired Financing Ratio 5.0% 4.1% Dec 2015 3.9% 3.6% Dec 2016 3.4% 3.2% Sep 2017 7   
8.     Sukuk Investments Sukuk investments increased by 8% to AED 25.2 billion for the period ended September 30, 2017 from AED 23.4 billion at the end of 2016. This high yielding portfolio, primarily listed and based out of UAE, consists of sovereigns and other top tier names many of which are rated. Sukuk Investments (AED million) 25,170 23,409 20,066 Dec 2015 Dec 2016 Sep 2017 Sukuk Investments Customer Deposits Early capacity creation, with liquidity mobilization continues to spur growth. Customer deposits for the period ended September 30, 2017 increased by 17% to AED 143.5 billion from AED 122.4 billion as at end of 2016. CASA component stood at AED 50.9 billion as of September 30, 2017 compared with AED 47.4 billion as at end of 2016 showing consistent rise in low cost deposits. Financing to deposit ratio of 92% as of September 30, 2017 indicates one of the strongest liquidity position. Customer Deposits (AED million) Customer Deposits Net Financing to Deposit Ratio 96% 94% 94% 92% 90% 88% 110 92% 122 144 88% 86% 84% 82% Dec 2015 Dec 2016 Sep 2017 8   
9.     Capital Adequacy Capital adequacy ratio remained robust at 16.9% as of September 30, 2017, whilst T1 ratio stood at 16.3%; both ratios are well above regulatory requirement in the current Basel II regime. Capital Ratios* 18.2% 18.1% 16.9% 18.2% 17.8% 15.7% 14.9% 16.3% 15.5% 14.7% 2013 2014 2015 CAR 2016 Sep‐17 Tier 1 Ratio * Regulatory Capital Requirements CAR at 12% and Tier 1 at 8% Ratings: Long Term Rating Outlook Date Moody’s Investor Service A3 Stable August 2017 Fitch Ratings A Stable July 2017 Islamic International Rating Agency (IIRA) A/A1 Stable November 2016  Aug 2017 – Moody’s upgrades DIBs long-term issuer ratings to ‘A3’ from Bass1; outlook ‘Stable’.  Jul 2017 - Fitch has upgraded the bank’s standalone VR to ‘bb+’' from ‘bb’ citing robust and continuous improvement across the major key metrics including profitability and asset quality.  The moves clearly point towards not just the financial strength of the existing franchise but the confidence the stakeholders have in its ability to sustain robust profitability in the foreseeable future. 9   
10.     Key business highlights for the 3rd quarter of 2017:  Moody’s Investors Service has upgraded Dubai Islamic Bank’s (DIB) local and foreign currency longterm issuer ratings to ‘A3’ from ‘Baa1’ and also upgraded is baseline credit assessment (BCA) and adjusted BCA to ‘ba2’ from ‘ba3’. This upgrade reflects the bank’s significantly improved asset quality and provisioning coverage; solid and improving profitability and sound capitalization and liquidity.  Fitch Ratings also upgraded the viability (standalone) rating of the bank citing a stronger positioning across all key metrics.  Corporate Banking has launched its "ICCS-Corporates" Image Cheque Clearing System. The online, smart system allows the instant scanning of customers' cheques and direct deposit of funds into customers' accounts the same day. The service, fully supported by the UAE Central Bank, is aimed at improving the customer experience by providing quicker access to funds and real-time account & cheque status updates.  Year to Date key deals SUKUK Issuer Type Coupon (%) Amount Issued (USD mn) Maturity Islamic Development Bank  Supranational  2.261  1,250  26 Sep 2022  Meraas Holding (Tap on existing May 2022) Corporate  5.112  200  31 May 2022  Sultanate of Oman Sovereign  4.397  2,000  01 Jun 2024  Financial Institution  7.875  400  Perpetual  Meraas Holding Corporate  5.112  400  31 May 2022  Dar Al-Arkan Corporate  6.875  500  10 Apr 2022  Republic of Turkey Sovereign  5.004  1,250  06 Apr 2023  Dubai Islamic Bank Financial Institution  3.664  1,000  14 Feb 2022  Quasi‐Sovereign  5.000  1,000  01 Feb 2027  Issuer / Obligor Name Al Baraka Banking Group Investment Corporation of Dubai CLUB/SYNDICATED TRANSACTIONS Obligor Type / Sector  Total Amount (USD or USD eqv. in mn) Signing Date Corporate  692  Sep 2017  ME Investments LLC Private Sector  681  Jul 2017  Emirates Healthcare Company – Saudi German Hospitals Private Sector  101  Jun 2017  Financial Institution  235  May 2017  Jumeirah Group Public Sector  1,450  May 2017  Dubai Airports (FINCO) Public Sector  3,000  May 2017  Financial Institution  213  Apr 2017  Obligor Name International Air Finance Corporation Ziraat Participation Bank Al Baraka Turk  10   
11.     Year to Date 2017 Awards Date Sept 2017  Aug 2017  May 2017  May 2017  May 2017  May 2017  May 2017  April 2017  March 2017  February 2017  February 2017  February 2017  February 2017 February 2017 February 2017 February 2017 February 2017 February 2017 February 2017 February 2017 February 2017 January 2017  January 2017 January 2017 January 2017 January 2017 Award Giving Body Award Received Dubai Service Excellence Scheme Best Service Performing Outlet ‐ Banking  Services business category  Yallacompare  Islamic Home Finance provider of the year   BME Industry Awards 2017 Best Islamic Bank  BME Industry Awards 2017 Best Islamic Retail bank  BME Industry Awards 2017 Best Islamic Corporate Bank BME Industry Awards 2017 Best Sukuk Arranger  BME Industry Awards 2017 CEO Award – Excellence in Islamic Banking  awarded to Dr. Adnan Chilwan  Dubai  Chamber  of  Commerce  and  Industry  in  Mohammed Bin Rashid Al Maktoum Business  cooperation with the UAE Ministry of Economy  Innovation Award Dar al Sharia  EMEA Finance Middle East Banking Awards 2016 Best Sukuk House  Islamic Finance News Best Bank Polls 2016 Best Overall Bank  Islamic Finance News Best Bank Polls 2016 Best Islamic Bank in the UAE Islamic Finance News Best Bank Polls 2016 Most Innovative Islamic Bank Islamic Finance News Best Bank Polls 2016 Best Retail Islamic Bank  Islamic Finance News Best Bank Polls 2016 Deal of the Year  Islamic Finance News Best Bank Polls 2016 UAE Deal of the Year  Islamic Finance News Best Bank Polls 2016 Hybrid deal of the Year  Islamic Finance News Best Bank Polls 2016 Pakistan Deal of the Year  Islamic Finance News Best Bank Polls 2016 Syndicated Deal of the Year Islamic Finance News Best Bank Polls 2016 Real Estate Deal of the Year Islamic Finance News Best Bank Polls 2016 Indonesia Deal of the Year Islamic Finance News Best Bank Polls 2016 Kuwait Deal of the Year  CFO Middle East Awards  Best Bank of the Year  Gulf Customer Experience Award Financial Services – Banking and Investment  category  2016 Service Olympian Awards Most Improved Call Centre 2016 Service Olympian Awards Best Customer Experience Improvement  Program – Call Center  2016 Service Olympian Awards Best Customer Experience Strategy About Dubai Islamic Bank: Established in 1975, Dubai Islamic Bank is the largest Islamic bank in the UAE by assets and a public joint stock company listed on the Dubai Financial Market. Spearheading the evolution of the global Islamic finance industry, DIB is also the world’s first full service Islamic bank and the fourth largest Islamic bank in the world. The Bank currently operates 90 branches across the UAE, is present in seven markets worldwide and is expanding its global footprint to further grow and develop the industry. Serving close to 1.7 million customers, DIB offers its growing consumer base an increasing range of innovative Sharia compliant products and services. In addition to being the first and largest Islamic bank in the UAE, DIB has a significant international presence as a torchbearer in promoting Shari’ah-compliant financial services across a number of markets worldwide. The bank has established DIB Pakistan Limited, a wholly owned subsidiary which is the first Islamic bank in Pakistan to offer Priority & Platinum Banking, as well as the most extensive and innovative portfolio of Alternate Distribution Channels. The launch of Panin Dubai Syariah Bank in Indonesia early in 2017 marks DIB’s first foray in the Far East, the bank owns a nearly 40% stake in the Indonesian bank. Additionally, in May 2017, Dubai Islamic Bank PJSC was given the license by the Central Bank of Kenya (CBK) to operate its subsidiary, DIB Kenya Ltd. 11   
12.     The Bank’s ultimate goal is to make Islamic finance the norm, rather than an alternative to conventional banking worldwide. DIB has won a range of accolades that are testament to these efforts across diversified areas, including retail, corporate and investment banking, as well as CSR and consultancy services. A clear indication of the bank’s leadership position in the Islamic finance sector, DIB named the Best Islamic Bank in the various prestigious ceremonies. In 2017, DIB won the coveted Global Islamic Business Award in its first edition in the region and was presented to the bank during the 23rd edition of the Business Excellence Awards Ceremony. For more information, please visit us at www.dib.ae. Please follow us on DIB’s social channels: https://www.facebook.com/dib.uae/ https://www.youtube.com/user/DubaiIslamicBank https://twitter.com/DIBtoday https://www.linkedin.com/company/dubai-islamic-bank https://www.instagram.com/dubai_islamic_bank/ For more PR information, please contact: Dubai Islamic Bank Nicole Hayde Head of Strategic Communication Direct: +971 4 207 5251 Email: jawaher.alshamsi@dib.ae Weber Shandwick David Ross Senior Account Director Direct: +971 4 445 4254 Email: DRoss@webershandwick.com 12