DUBAI, April 30 (Reuters) - Dubai Islamic Bank said first-quarter profit fell 18% as it took 1.48 billion dirhams ($403 million) in impairments to cover the impact of the coronavirus pandemic, weak oil prices and lower interest rates.
Net profit was 1.11 billion dirhams, down from 1.355 billion a year earlier, it said in a statement to the bourse.
EFG Hermes had projected a figure of 903 million dirhams and FAB Securities 1.1 billion.
DIB’s quarterly impairment losses were up 92% to 665 million dirhams, and it also booked 818 million dirhams in extraordinary charges.
“The Covid-19 pandemic is destined to create significant headwinds and force a rethinking and recalibration of our strategies,” said its CEO Adnan Chilwan in a statement.
DIB follows other banks in the region, including Dubai’s largest bank Emirates NBD, in increasing provisions in anticipation of the epidemic’s impact on the credit market.
Chilwan said extraordinary gains and recurring profits allowed provisions to cushion the bank against expected impacts emanating from the outbreak as well as oil price volatility and the low interest rate environment.
The results also had consolidated figures from Noor Bank, which DIB bought this year. The gain of 1 billion dirhams on the purchase was offset by the impairments, DIB said.
$1 = 3.6730 UAE dirham Reporting by Saeed Azhar; editing by John Stonestreet