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Dubai Islamic Bank Kenya losses widen to Sh666m on higher costs

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Dubai Islamic Bank (DIB) managing director Peter Makau (left), head of retail and business banking Dan Omoro (centre) and Sharia manager Jaafar Mohamed Aman during the launch of a new DIB Mobile Banking platform at the bank’s head office in Nairobi May 11, 2018. FILE PHOTO | NMG 

Dubai Islamic Bank (DIB) Kenya has posted a Sh665.8 million loss in the first nine months of trading, being 18.6 per cent higher than the loss reported in a similar period last year.

The bank, which offers Shariah products, was weighed down by a rise in expenses in the period ended September 2018 despite higher income.

Operating expenses surged from Sh568 million to Sh745.8 million.

The bank, fully owned by the United Arab Emirates’ Dubai Islamic Bank, was licensed by the Central Bank of Kenya (CBK) in April last year as the third fully Shariah compliant bank in Kenya after Gulf African Bank Limited in 2007 and First Community Bank Limited in 2008.

It managed to grow its financial arrangements with customers to Sh1.45 billion, up from Sh20.6 million in September last year. This drove up income from financing activities to Sh79 million from Sh108,000 in the previous period.

Its profit income, an equivalent of interest income for conventional banks, hit Sh114.6 million, a growth from Sh1.7 million posted in previous similar period. At the same time, it grew customer deposits by about five times from Sh512.9 million to Sh2.49 billion, boosting its ability to lend. This however resulted in a profit expense of Sh79.9 million, up from Sh570,000 reflecting higher interest paid for trading with customers’ money.

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