Dubai Islamic Bank (DIB) Q3 2024 earnings summary

Executive summary

• Net profit for the nine months ended 30 September 2024 rose 23% year-on-year to AED 6 billion, with Q3 net profit up 32% year-on-year, driven by robust core business growth and improved asset quality.

• Balance sheet expanded by 4.7% year-to-date to AED 329 billion, with net financing and Sukuk investments up 7% year-to-date, surpassing initial guidance.

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

• Fitch viability rating upgraded to BBB- and significant ESG rating improvements across multiple agencies, reflecting enhanced sustainability and risk management.

• Financial statements reviewed by Deloitte, with no material misstatements identified.

Financial highlights

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

• Cost-to-income ratio increased to 28.1% (up 160 bps year-on-year), still among the best in the sector.

• Impairments fell 62% year-on-year to AED 530 million, with cost of risk dropping to 26 bps from 57 bps.

• Customer deposits rose to AED 236.9 billion from AED 222.1 billion at year-end 2023.

• Net income from Islamic financing and investing transactions for the nine months was AED 14.3 billion, up from AED 12.5 billion year-over-year.

Outlook and guidance

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

• Normalized cost of risk for 2025 expected at 70-80 bps, excluding recoveries and settlements.

• Margins for 2025 anticipated to rise, with detailed guidance to be provided in January.

• The group anticipates no material impact from new and revised IFRS standards not yet effective.