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Dubai Islamic Bank hit hard by impairment chargesMENA

Dubai Islamic Bank hit hard by impairment charges

DIB reported a 34% fall in net profit last year due to high impairment charges and rising operating expenses. The largest Sharia-compliant lender in the UAE recorded an attributable net profit of AED 3.29b (around $895m) in 2020, with impairment charges of AED 4.5b.

The bank claims it took a “prudent approach” to any future scenarios, hence the high impairments.

Its chairman, Mohammed Al Shaibani, claimed that DIB was “capable of weathering changes and possesses the ability to come out as a winner.”

PS- Just last year, the lender bought rival Noor Bank and created a super-bank with over AED 275b in assets.

why it matters
DIB’s net profit drop is very much in line with reports from banks around the world. Both Emirates NBD and First Abu Dhabi Bank recently recorded losses and high impairment charges, which are just some of the effects of the pandemic on global trade.