DUBAI: Dubai Islamic Bank (DIB), the largest Shariah-compliant lender in the emirate, said yesterday its second-quarter net profit surged 27 percent as provisions dropped, surpassing analysts forecasts.

The bank had profit of 310 million dirhams ($84.4 million) in the three months to June 30, up from 245 million dirhams in the prior-year period, it said in a bourse statement.

Two analysts polled by Reuters forecast net profit of 246 million dirhams and 267 million dirhams.

DIB's profit for the first half of the year increased marginally, hitting 555 million dirhams against 552 million dirhams recorded for the first six months of 2011.

A 19.4-percent drop in impairments in the second quarter boosted the bank's top line. Provisions stood at 241 million dirhams, down from 299 million dirhams last year.

"DIB has been able to achieve sustained profitability while continuing to strengthen its balance sheet," Mohammed Ibrahim Al-Shaibani, chairman of DIB, said in the statement.

Customer deposits stood at 68.3 billion dirhams at the end of June, up 5 percent from the 64.8 billion dirhams figure at December 31 2011.

DIB priced a five-year, $500 million Islamic bond, or sukuk, in May, the first time the bank tapped debt capital markets since 2007.

Ahead of the results, the bank's shares rose 1.1 percent on the Dubai bourse yesterday.