Dubai Islamic Bank earnings review
- ​​Group net income marginally misses our expectations (-2.5%) on slightly lower than expected revenues (-3.3%), but bottom line lower on higher share of minority interest.
- Asset quality remains intact with continued improvement in NPL and coverage ratios, whilst FY 16e CoR guidance maintained at 75-80bps, in line with YtD levels. Credit costs continue to be driven by precautionary provisioning (collective charges and not specific) on consumer book taken in light of headwinds seen in the coming months/quarters.
- No change in guidance for this year with company comfortable with its full year targets, including margin of 3.25-3.50% for FY 16e compared with YtD margin of 3.20%.
- No surprises in Q3 with strong loan growth (DIB let go of deposit as it is now comfortable with net LtD of 90-95% in order to manage its balance sheet growth efficiently) and good asset quality, while margin declines as expected (9M 16A NIM at 3.20% versus 3.64% for 9M 15A).
Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa.
Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research.
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