DUBAI: Dubai Islamic Bank plans to expand its operations into Indonesia, Kenya and other African countries as it emerges from a period of consolidation, the bank’s chief executive said.
The emirate’s largest shariah-compliant lender, which currently makes some 95 percent of its revenue within the United Arab Emirates, says it is entering a growth phase domestically and internationally.
“We are exploring opportunities in Indonesia, Kenya and surrounding countries in Africa, the Indian subcontinent and the GCC (Gulf Cooperation Council),” Adnan Chilwan said. “We could acquire, set up a JV, establish a finance company or start a greenfield operation as long as we keep management control and operate under our brand.”
Like many other banks in the UAE, the shariah-compliant lender saw its profits nosedive after Dubai’s financial crisis erupted in 2009 and it was forced to set aside hundreds of millions of dollars to cover bad loans.
The bank focused over the last few years on strengthening its balance sheet and reducing costs, and says it has now dealt with most of its bad loans. Last year DIB completed the takeover of Dubai-based mortgage lender Tamweel, in which it already held a majority stake, through a share swap.
DIB posted a 66 percent jump in fourth-quarter net profit to Dh518m, beating analysts’ forecasts, on the back of lower financing costs and impairment charges. Net profit for the full year increased 42 percent to Dh1.72bn.
Chilwan, who was promoted to CEO in July last year, described Africa as virgin territory for Islamic finance. In Kenya, most estimates put the number of Muslims at only about 15 percent of the population of 40 million, but the financial regulator is preparing a ten-year capital markets development strategy that includes Islamic finance.
“Both consumer and wholesale opportunities are there, especially in the countries we are targeting and while the initial investments are not too intensive, the returns are extremely decent and more than acceptable in our line of work,” Chilwan said, without giving details of his plans.Reuters
