Abu Dhabi // Dubai Islamic Bank unveiled a 40 per cent decline in second-quarter net profit Saturday, joining a growing list of banks reporting weaker earnings as more loans go sour amid sliding property prices and the global economic crisis but beating analysts' forecasts.
Dubai Islamic Bank (DIB), the nation's sixth-largest bank by assets, said net profits in the second quarter totalled Dh450 million (US$122.7m), a 40 per cent drop from the second quarter of 2008.
Profits for the first half were Dh820m, 37 per cent lower than in the same period last year, according to the bank's previous disclosures. It did not publish a financial statement for the first half to accompany its release.
DIB's chairman, Mohammed al Shaibani, said in a statement: "The past few months have been challenging for the banking and finance industry in the region and globally. As we begin to see gradual stabilisation of the markets in the past quarter, DIB is optimistic of the recovery of regional markets."
Mr al Shaibani is also director general of the Ruler's Court of Dubai and sits on the board of Dubai's Supreme Fiscal Committee.
Most banks are still seeing growth in their overall business compared with last year. But with half of the country's top 10 banks having reported first-half results, only one, the Abu Dhabi-based First Gulf Bank has managed to squeeze out higher profits.
Others have seen profits fall from 11 per cent, in the case of the Commercial Bank of Dubai, to 44 per cent, at the Abu Dhabi Commercial Bank (ADCB). The nation's two largest banks, Emirates NBD in Dubai and the National Bank of Abu Dhabi, have yet to report first-half results.
Results for the second quarter have been even more downbeat, with declines ranging 4 per cent at First Gulf Bank to a 51 per cent drop at ADCB.
The decline in earnings comes as banks set aside an increasing amount of their earnings to compensate for loan defaults.
DIB said it had set aside an additional Dh135m in the second quarter against bad loans, bringing its total provisions to Dh239m. ADCB nearly tripled its bad-loan provisions, to Dh890m. Without such provisioning, ADCB's first-half profits would have risen 5 per cent, the bank said.
Data released earlier this month by the Central Bank showed banks had set aside a total of Dh23.9 billion against non-performing loans, or NPLs, a 21 per cent rise since the end of the year. Provisioning against NPLs has climbed 30 per cent since August last year
Analysts and economists said the growth in provisions was a positive step by the banks to protect themselves from growing defaults.
"If you didn't see provisions rising, it would be troubling," said Simon Williams, the chief economist at HSBC in Dubai. "That's what happens when the credit cycle turns."
Earlier this month, the credit ratings agency Standard & Poor's cut its rating for Emirates NBD, DIB and Mashreqbank, the nation's fifth-largest, blaming their exposure to the weakening property market. Residential property prices in Dubai fell by at least a third in the first quarter from their peak last September.
"The risks to Dubai's economy have, in our view, increased," S&P said at the time. "The economic slowdown, stock market decline and dropping real estate prices are raising significant hurdles for these Dubai-based banks. We expect these factors to significantly slow business growth and lead to a deterioration in asset quality and profitability."
The central bank figures indicate that only a tiny fraction - about 2 per cent - of all loans have been classified as non-performing. Analysts worry that banks may be under-reporting the number of loans whose borrowers have stopped paying as they negotiate with them to restructure or reschedule.
Mardig Haladjian, who heads GCC bank coverage at the ratings agency Moody's Investors Service, told The National earlier this month: "Almost every single bank we talk to in the UAE is seeing an increased occurrence of renegotiating and restructuring loans, often with family-owned businesses."
Of particular concern are banks' exposure to two family-run Saudi conglomerates, Saad and Al Gosaibi, which have defaulted on their debts. Last week Standard & Poor's said that banks from Saudi Arabia and the UAE accounted for roughly two thirds of the loans to the two troubled companies, but the potential for losses remained manageable as the banks were cushioned by collateral, loan-loss provisions and adequate levels of capital.
First Gulf Bank and ADCB, which is believed to have roughly $500m in loans to Saad and Al Gosaibi, have said their provisions take into account their exposure to the two groups. Union National Bank has reported having exposure only to Al Gosaibi, while Commercial Bank of Dubai said it had no exposure to either. DIB made no mention of the Saudi groups in its statement yesterday.
Despite concerns about the banks' health, analysts say measures of their ability to withstand such shocks remain strong. The Central Bank has said that the average capital adequacy ratios are at 16.2 per cent, well above its requirement of 11 per cent.
Lending by banks continues to grow, moreover, even though several banks remain in violation of Central Bank regulations against having loans in excess of deposits and available cash.
Banks have been struggling to boost deposits through higher interest rates amid the crisis in order to free more cash for lending. Property industry executives say restrictions on mortgage lending have eased somewhat, but credit remains tight for companies.
Tight credit and falling land values have forced Dubai to come to the rescue of its own government-linked property developers, borrowing $10bn from the Central Bank. Last week, Dubai said it would borrow another $10bn and set up a new financial support fund to direct the cash to those having trouble raising money from private bankers and investors.
@Email:warnold@thenational.ae
RACE CARD
5pm: Handicap (PA) Dh70,000 1,400m
5.30pm: Handicap (TB) Dh70,000 1,000m
6pm: Maiden (PA) Dh70,000 2,000m
6.30pm: Handicap (PA) Dh70,000 2,000m
7pm: Maiden (PA) Dh70,000 1,600m
7.30pm: Al Ain Mile Group 3 (PA) Dh350,000 1,600m
8pm: Handicap (PA) Dh70,000 1,600m
Amith's selections:
5pm: AF Sail
5.30pm: Dahawi
6pm: Taajer
6.30pm: Pharitz Oubai
7pm: Winked
7.30pm: Shahm
8pm: Raniah
F1 drivers' standings
1. Lewis Hamilton, Mercedes 281
2. Sebastian Vettel, Ferrari 247
3. Valtteri Bottas, Mercedes 222
4. Daniel Ricciardo, Red Bull 177
5. Kimi Raikkonen, Ferrari 138
6. Max Verstappen, Red Bull 93
7. Sergio Perez, Force India 86
8. Esteban Ocon, Force India 56
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
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Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
Squads
Sri Lanka Tharanga (c), Mathews, Dickwella (wk), Gunathilaka, Mendis, Kapugedera, Siriwardana, Pushpakumara, Dananjaya, Sandakan, Perera, Hasaranga, Malinga, Chameera, Fernando.
India Kohli (c), Dhawan, Rohit, Rahul, Pandey, Rahane, Jadhav, Dhoni (wk), Pandya, Axar, Kuldeep, Chahal, Bumrah, Bhuvneshwar, Thakur.
Secret Nation: The Hidden Armenians of Turkey
Avedis Hadjian, (IB Tauris)
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
If you go
The flights
Emirates flies from Dubai to Seattle from Dh5,555 return, including taxes. Portland is a 260 km drive from Seattle and Emirates offers codeshare flights to Portland with its partner Alaska Airlines.
The car
Hertz (www.hertz.ae) offers compact car rental from about $300 per week, including taxes. Emirates Skywards members can earn points on their car hire through Hertz.
Parks and accommodation
For information on Crater Lake National Park, visit www.nps.gov/crla/index.htm . Because of the altitude, large parts of the park are closed in winter due to snow. While the park’s summer season is May 22-October 31, typically, the full loop of the Rim Drive is only possible from late July until the end of October. Entry costs $25 per car for a day. For accommodation, see www.travelcraterlake.com. For information on Umpqua Hot Springs, see www.fs.usda.gov and https://soakoregon.com/umpqua-hot-springs/. For Bend, see https://www.visitbend.com/.
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RACE CARD
6.30pm: Baniyas Group 2 (PA) Dh 97,500 (Dirt) 1,400m.
7.05pm Maiden (TB) Dh 82,500 (D) 1,200m
7.40pm Maiden (TB) Dh 82,500 (D) 1,400m
8.15pm Handicap (TB) Dh 82,500 (D) 1,400m
8.50pm Rated Conditions (TB) Dh 120,000 (D) 1,600m
9.25pm Handicap (TB) Dh 95,000 (D) 1,200m
10pm Handicap (TB) Dh 85,000 (D) 2,000m
What is type-1 diabetes
Type 1 diabetes is a genetic and unavoidable condition, rather than the lifestyle-related type 2 diabetes.
It occurs mostly in people under 40 and a result of the pancreas failing to produce enough insulin to regulate blood sugars.
Too much or too little blood sugar can result in an attack where sufferers lose consciousness in serious cases.
Being overweight or obese increases the chances of developing the more common type 2 diabetes.
How to donate
Text the following numbers:
2289 - Dh10
6025 - Dh 20
2252 - Dh 50
2208 - Dh 100
6020 - Dh 200
*numbers work for both Etisalat and du
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
THE SPECS
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The specs
Engine: Four electric motors, one at each wheel
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Transmission: Single-speed automatic
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The specs: 2019 Mercedes-Benz C200 Coupe
Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Shubh Mangal Saavdhan
Directed by: RS Prasanna
Starring: Ayushmann Khurrana, Bhumi Pednekar
RESULT
Huddersfield Town 1 Manchester City 2
Huddersfield: Otamendi (45' 1 og), van La Parra (red card 90' 6)
Man City: Agüero (47' pen), Sterling (84')
Man of the match: Christopher Schindler (Huddersfield Town)
hall of shame
SUNDERLAND 2002-03
No one has ended a Premier League season quite like Sunderland. They lost each of their final 15 games, taking no points after January. They ended up with 19 in total, sacking managers Peter Reid and Howard Wilkinson and losing 3-1 to Charlton when they scored three own goals in eight minutes.
SUNDERLAND 2005-06
Until Derby came along, Sunderland’s total of 15 points was the Premier League’s record low. They made it until May and their final home game before winning at the Stadium of Light while they lost a joint record 29 of their 38 league games.
HUDDERSFIELD 2018-19
Joined Derby as the only team to be relegated in March. No striker scored until January, while only two players got more assists than goalkeeper Jonas Lossl. The mid-season appointment Jan Siewert was to end his time as Huddersfield manager with a 5.3 per cent win rate.
ASTON VILLA 2015-16
Perhaps the most inexplicably bad season, considering they signed Idrissa Gueye and Adama Traore and still only got 17 points. Villa won their first league game, but none of the next 19. They ended an abominable campaign by taking one point from the last 39 available.
FULHAM 2018-19
Terrible in different ways. Fulham’s total of 26 points is not among the lowest ever but they contrived to get relegated after spending over £100 million (Dh457m) in the transfer market. Much of it went on defenders but they only kept two clean sheets in their first 33 games.
LA LIGA: Sporting Gijon, 13 points in 1997-98.
BUNDESLIGA: Tasmania Berlin, 10 points in 1965-66
Squad
Ali Kasheif, Salim Rashid, Khalifa Al Hammadi, Khalfan Mubarak, Ali Mabkhout, Omar Abdulrahman, Mohammed Al Attas, Abdullah Ramadan, Zayed Al Ameri (Al Jazira), Mohammed Al Shamsi, Hamdan Al Kamali, Mohammed Barghash, Khalil Al Hammadi (Al Wahda), Khalid Essa, Mohammed Shaker, Ahmed Barman, Bandar Al Ahbabi (Al Ain), Al Hassan Saleh, Majid Suroor (Sharjah) Walid Abbas, Ahmed Khalil (Shabab Al Ahli), Tariq Ahmed, Jasim Yaqoub (Al Nasr), Ali Saleh, Ali Salmeen (Al Wasl), Hassan Al Muharami (Baniyas)
GULF MEN'S LEAGUE
Pool A Dubai Hurricanes, Bahrain, Dubai Exiles, Dubai Tigers 2
Pool B Abu Dhabi Harlequins, Jebel Ali Dragons, Dubai Knights Eagles, Dubai Tigers
Opening fixtures
Thursday, December 5
6.40pm, Pitch 8, Abu Dhabi Harlequins v Dubai Knights Eagles
7pm, Pitch 2, Jebel Ali Dragons v Dubai Tigers
7pm, Pitch 4, Dubai Hurricanes v Dubai Exiles
7pm, Pitch 5, Bahrain v Dubai Eagles 2
Recent winners
2018 Dubai Hurricanes
2017 Dubai Exiles
2016 Abu Dhabi Harlequins
2015 Abu Dhabi Harlequins
2014 Abu Dhabi Harlequins
Mica
Director: Ismael Ferroukhi
Stars: Zakaria Inan, Sabrina Ouazani
3 stars
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The biog
Name: Ayisha Abdulrahman Gareb
Age: 57
From: Kalba
Occupation: Mukrema, though she washes bodies without charge
Favourite things to do: Visiting patients at the hospital and give them the support they need.
Role model: Sheikha Fatima bint Mubarak, Chairwoman of the General Women's Union, Supreme Chairwoman of the Family Development Foundation and President of the Supreme Council for Motherhood and Childhood.
Dr Amal Khalid Alias revealed a recent case of a woman with daughters, who specifically wanted a boy.
A semen analysis of the father showed abnormal sperm so the couple required IVF.
Out of 21 eggs collected, six were unused leaving 15 suitable for IVF.
A specific procedure was used, called intracytoplasmic sperm injection where a single sperm cell is inserted into the egg.
On day three of the process, 14 embryos were biopsied for gender selection.
The next day, a pre-implantation genetic report revealed four normal male embryos, three female and seven abnormal samples.
Day five of the treatment saw two male embryos transferred to the patient.
The woman recorded a positive pregnancy test two weeks later.
