The lender, Dubai’s third-largest bank by market value, made a profit of 301 million dirhams in the three months to June 30, down from 450.29 million dirhams in the same period last year, it said in a statement on Dubai’s bourse.

EFG Hermes had estimated a second quarter profit of 109 million dirhams in a Reuters poll.

Customer deposits rose to 64.8 billion dirhams from 64.2 billion at the end of December.

“Despite conservative financing and provisioning policy, the retail and corporate banking division has registered positive growth, reflecting the strength and robustness of our business strategy during the current economic scenario,” chairman Mohammed Ibrahim Al-Shaibani said in the statement.

Al-Shaibani said the earnings showed DIB remains on a “growth trajectory during a period of ongoing challenges for the financial services sector worldwide.”

DIB made provisions of 145 million dirhams in the second quarter taking the total provisions in the first six months of the year to 320 million, it said.

Banks in the United Arab Emirates have suffered from substantial exposure to bad loans, particularly from the region-wide real estate slump which hit cities likes Dubai hard.

DIB is one of three banks on a coordinating committee negotiating a multi-billion dollar debt restructuring with Dubai property developer Nakheel.

Shares in DIB were trading flat at 0656 GMT outperforming Dubai’s index which eased 0.3 percent.

DIB said in June it was considering raising its one-fifth stake in mortgage lender Tamweel.

In May, the bank said it expected to reach one million customers and open 10 new branches by the end of 2010.