DIB eyes acquisitions in Asian markets



REUTERS

Published — Friday 3 May 2013

Last update 3 May 2013 3:53 am

| نسخة PDF Print News | A A

DUBAI: Dubai Islamic Bank (DIB) has dealt with much of its balance sheet weakness and should see profits for 2013 grow in the high double digits, allowing it to eye acquisitions in new markets in Asia, officials said.
Leaders at the world’s oldest sharia-compliant lender told Reuters it had put aside around AED 5 billion ($ 1.36 billion) against the sort of soured property loans and transactions which drew into question Dubai’s future as a financial hub in 2009.
In his first media interview since taking over to deal with the fallout of the 2008 global crisis, Chief Executive Abdulla Al-Hamli said the bank was now anxious to expand but was being held back in part by the unrest dominating the Middle East.
His deputy Adnan Chilwan said the bank expects to see close to 17 percent growth in net profit this year after spending the last five years cleaning its books and strengthening its core banking operations.
“I can confidently say that Dubai Islamic Bank has nothing to hide. We are very strong, clean and ready for the next growth phase,” Al-Hamli said.
“2013 has started positively, with first quarter results up by 17 percent compared to last year,” Chilwan said.
“We anticipate similar growth for the remaining part of the year.”
DIB shares are up 43 percent so far this year to 2.88 dirhams, giving it a market capitalization of about AED 10.9 billion. Investment firm Arqaam Capital recently raised its target price for the bank to AED 3 from AED 2.6.
The 38-year-old bank needed government support after the global credit crisis burst the emirate’s property bubble, reducing real estate prices by more than 60 percent over three years after 2008.
Chilwan said the bank had cut real estate investment to 27 percent of its portfolio from 45 percent in 2008 and that it would be happy to trim that exposure further.

“The crisis has made us more aware of our key strengths and focus areas,” he said.
“The bank’s portfolio has changed and will continue to shift away from being real estate specific toward more consumer and wholesale banking.”
DIB’s non performing loans peaked at 14.5 percent after the crisis and dropped to 12 percent by the end of 2012. It hopes to reduce that figure to 10 percent this year.
“Geographically, expansion into Asia makes a lot of sense from where we are placed. One would want to look at Malaysia, Indonesia and maybe India,” Chilwan said.
The bank is also interested in the European markets but won’t be active before the dust settles in the euro zone, he said.
DIB expects to finalize its buyout of Tamweel through a share swap by mid May, Chilwan said, with the sharia-compliant mortgage lender due to be delisted right afterwards.
The bank does not plan to issue more sukuk this year. It was the second Gulf bank to issue a hybrid perpetual sukuk when it priced a $ 1 billion Islamic bond to enhance its Tier 1 capital ratio in March. Its Tier 1 ratio rose to 17.7 percent at the end of March, compared to 13.9 percent as of Dec. 31, 2012.

What's happening around Saudi Arabia

MADINAH/JEDDAH: Pilgrims and visitors performing tawaf (circumambulation) of the Holy Kaaba or praying around it may look forward to relief from the blazing sun, as a proposal to shade the Mataf area is being studied.According to local media, the mat...
JEDDAH: Users of WhatsApp were a joyous lot on Saturday as the call facility finally became available on the popular messaging service in the Kingdom.The facility, which is for free now, through WhatsApp was earlier banned in Saudi Arabia and only me...
RIYADH: A Border Guard soldier died on Saturday in a missile attack from across the Yemeni border in Dhahran Al-Jonoub in Asir.The man, identified as Pvt. Abdulilah Abdullah Hamoud Al-Shahrani, was patrolling the border in the area when the attack to...
RIYADH: Custodian of Two Holy Mosques King Salman takes pride in his religion and his country, according to Prince Sultan bin Salman, Saudi Commission for Tourism and National Heritage (SCTH) chairman.“King Salman lives his life in a confident and re...
RIYADH: Justice Minister Walid Al-Samaani and Khaled Al-Muhaisin, the president of the National Anti-Corruption Commission (Nazaha), are scheduled to meet soon to clear resolve differences between Nazaha and Supreme Judicial Council (SJC). According...
JEDDAH: Starbucks has clarified that the ban on women’s entry at one of its Riyadh stores is only temporary and that the coffee shop will be opened to them soon after a separation wall is erected.Starbucks reportedly said that members of the Committe...
RIYADH: The Saudi government is strongly supporting the development of organic farming and institutional capacity building as part of an ambitious plan to expand the Kingdom’s shift toward organic agriculture, which will be good for the country’s nut...
RIYADH: An attempt to smuggle in 2.4 million amphetamine pills was foiled along the coast of Tabuk.An Interior Ministry spokesman said the traffickers fled from the coast after they were chased by Border Guard patrols.The spokesman said a suspect boa...
RIYADH: King Saud University (KSU) closed the booths of five companies which participated in the recently concluded five-day Career Week because of lack of interest in employing applicants.Career Week, held under the auspices of Custodian of Two Holy...
RIYADH: The Kingdom has been developing Oroug Bani Maradh as a protected area for eco-tourism in the heart of the Empty Quarter.Aside from a number of live flora and fauna, there’s are non-domesticated animal species in the wildlife sanctuary located...
JEDDAH: Two women and three children, including an infant, lost their lives in separate fire incidents on Friday.A woman and two children died when their tent caught fire at Al-Issawi, 35 km into the desert, on Friday. The operations room of Civil De...
RIYADH: Arrangements are being made at the Ministry of Health to open a new portal for the Zika virus on its website.Faisal Al-Zahrani, the ministry spokesman, said that the new portal will give adequate details and updates about the virus which has...
ARAR: A Saudi father has urged his two sons to immediately surrender, after their names recently appeared on the list of suspects who participated in the terror attack on the Special Emergency Forces Mosque in Asir in August last year.Salem Yaslam Al...
JEDDAH: The Ministry of Education has called on schools to implement a national anti-drug plan and given a four-month period to implement the plan and report the results.Educational directorates, according to a recent circular, have issued a directiv...
NAJRAN: School of Dentistry students at Najran University expressed disappointment with group failure of 13 students, accusing the faculty members of being unfair with their examinations.The university spokesman, Dr. Zuhair Al-Omari, said the eighth...

Stay Connected

Facebook