Kenya's Dubai Islamic Bank posts first profit since 2017
By Barack Oduor |
The bank announced that decreased impairment charges, increased non-funded income, and growing core revenues were the main drivers of the growth.
The DIB Bank Kenya, a subsidiary of Dubai Islamic Bank has recorded an operational milestone after successfully posting its first gross profit since it began its operations in Kenya.
The bank that opened its doors in the country in 2017 has in the three months ended March 31, 2024, had the lender's profit before tax improve to Sh6.3 million, representing a 105 per cent jump from a similar period in 2023.
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The financial institution that is a Shariah-compliant bank posted a loss of Sh125 million during a comparable period last year.
The bank announced that decreased impairment charges, increased non-funded income, and growing core revenues were the main drivers of the growth.
Further, the balance sheet of its books expanded by 49 per cent year-on-year (YoY) to Sh28.2 billion compared to Sh18.8 billion, supported by growth in customers who made deposits during that review period.
For instance, customer deposits across all segments expanded by 49 per cent to hit Sh21.6 billion.
"Despite a challenging economic environment, DIB Kenya has demonstrated resilience and achieved growth across all the key parameters. This strong performance is a testament to DIB UAE's long-term commitment to the Kenyan market and the acceptance of its emerging position as an important banking player in Kenya," DIB Bank Board Member Steve Mainda said.
"We have been investing steadily for long-term returns by focusing on our people, systems, and delivery channels and will continue to do so as required by our long-term objectives in Kenya."
The bank's liquidity remained above board at 36 per cent, compared to the statutory requirement of 20 per cent.
"The future looks positive with a projected full-year profitability for 2024. This outlook is anchored on a strong balance sheet, stable capitalization and liquidity levels, a sustained focus on managing asset quality, and the continuous implementation of efficient business models," he said.
Islamic banking has gained popularity in Kenya in the last few years. The First Community Bank and Gulf African Bank (GAB) are two of the country's other fully operational Islamic banks.
Other leading commercial banks in Kenya have also introduced services tailored to the Islamic faith to attract a growing client base.
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