April 11, 2017 / 7:32 AM / 7 months ago

Dubai Islamic Bank first-quarter net profit up 4 percent

DUBAI, April 11 (Reuters) - Dubai Islamic Bank (DIB), the United Arab Emirates’ largest sharia-compliant lender, reported a 4 percent increase in first-quarter net profit on Tuesday.

The bank made 1.04 billion dirhams ($283.18 million) in the three months to March 31, it said in a statement. This compares with a profit of 1 billion dirhams in the corresponding period of 2016.

SICO Bahrain had forecast the bank would make a net profit of 908.1 million dirhams, while Arqaam Capital estimated a net profit of 968.0 million dirhams.

Earnings were lifted by a 13 percent increase in total income to 2.38 billion dirhams.

DIB’s earnings growth had been powering ahead of most of its local rivals in recent quarters, with the exception of the third quarter of last year when earnings were dented by a rise in costs.

The bank is targeting loan expansion in 2017 of between 10 to 15 percent, DIB Chief Executive Adnan Chilwan said in January, compared with actual 2016 loan growth of 18 percent.

In Tuesday’s statement, Chilwan said although pressure on cost of funding may continue, it was expected to be relatively muted in 2017.

During the quarter, impairment losses rose to 169 million dirhams, compared with 118 million dirhams in the same period of 2016. ($1 = 3.6726 UAE dirham) (Reporting by Tom Arnold, editing by Louise Heavens)

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