Sharia com­pli­ant banks de­liver strong in­vestor turns

The Pak Banker - - COMPANIES/BOSS -

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.

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