Dubai Islamic Bank narrows losses ahead of expansion

Companies

Dubai Islamic Bank narrows losses ahead of expansion

Tuesday, September 3, 2019 23:27

By OTIATO GUGUYU

Dubai Islamic Bank (DIB) has narrowed its half-year losses by 11 percent to Sh403 million loss in the first six months of this year.

Increase in revenues was outpaced by rise in costs to meet expenses in staff and provision for bad loans even as the lender prepares to expand its branch network to catch more business.

DIB will open a branch in Nairobi and another in Mombasa within the next two months.

“The bank has intentions to open more branches in the new year and will also leverage on digital solutions to provide customers a better experience,” said Peter Makau, DIB Bank’s chief executive.

The fully fledged Islamic bank increased lending from Sh42 million to Sh148 million.

Despite the rise fees and commissions declined from Sh26 million to Sh18 million.

Without an option to lend money to the government which currently has no Islamic bonds, the lenders options are limited.

Mr Makau said that despite prevailing difficult market conditions, the bank continued to provide much needed support to its customers as reflected by the substantial growth in financing to customers, majority of whom are in the SME segment.

"Our commitment to offering our customers great value in financial services continues to facilitate the growth of our customer’s business and by extension our Bank is growing," Makau said.

DIB increased deposits from Sh2.3 billion to Sh4.9 billion, which doubled interest expenses from Sh45 million to Sh94 million. Staff costs went up fromSh216 million to Sh232 million while its Sh47 million bad loan book cost the lender Sh19 million in provisioning.