Sharia compliant banks deliver strong investor turns
Islamic banks in the UAE delivered strong shareholder returns last year as they reported strong earnings and better asset quality.
Dubai Islamic Bank's (DIB) earnings per share increased to Dh0.81 in 2015 from Dh0.61 in 2014, return on assets increased by 40 basis points to 2.80 per cent in 2015 from 2.4 per cent in 2014. Return on equity increased by 190 basis points to 19.8 per cent in 2015 from 17.9 per cent in 2014. For the year, the DIB board has recommended distribution of a cash dividend of 45 per cent.
The bank continued to maintain strong capital position with capital adequacy ratio of 15.7 per cent for the year ended 2015, and Tier 1 capital ratio at 15.5 per cent.
Keeping with the strong results, Abu Dhabi Islamic Bank's (ADIB) board of directors has recommended dividend distribution of the equivalent of 39.8 per cent of full year net profits. The dividend is proposed to be in the form of cash dividends equal to 24.27 per cent of the par value of issued shares.
ADIB maintained strong liquidity position while simultaneously continuing to manage its cost of funding. The group ended the year with a steady customer financing-todeposits ratio of 82.6 per cent and an advances- to- stable funds ratio of 84.6 per cent, which remains significantly better than the regulatory threshold of 100 per cent.