Fitch Ratings has today affirmed Dubai Islamic Bank's ('DIB') Support rating at '1'.
This reflects the extremely high probability that it would be supported by the UAE authorities, should the need arise, given the government of Dubai's 30% ownership of DIB, the UAE authorities' strong history of providing support to local banks, and the importance of Islamic banking in the UAE.
Profitability is satisfactory; operating profits rose a substantial 49% in 2006. This was driven by significant growth in Islamic financing (2006: 48%), healthy growth in fees and commissions as well as rising income from real estate activities. The bank has significant exposure to the regional real estate sector, through its lending and proprietary investment activities. DIB appears to be more exposed to a potential correction in the property market than many of its peers, although the local property market remains buoyant with demand outstripping supply.
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