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Dubai Islamic Bank P.J.S.C.

(DIB) - Financial and Strategic SWOT


Analysis Review

Reference Code: GDFS28938FSA Publication Date: APR 2011

PO Box 1080 Phone +971 4 2953000 Revenue (2009) 5,133 (million AED)
Dubai, Dubai Fax +971 4 2954111 Net Profit (2009) 1,207.49 (million AED)
Website www.dib.ae Employees 6,894
United Arab Emirates Exchange DIB [Dubai Stock Exchange] Industry Financial Services

Company Overview
Dubai Islamic Bank P.J.S.C. (DIB or bank) offers banking services which is based on the Islamic Sharia. The bank offers retail
and corporate services to its retail and institutional customers. The retail banking products and services of the bank include
current, savings and investment accounts; home and personal finance; credit cards; and safe deposit boxes. The wholesale
banking products and services offered by the bank include letters of credit, letters of guarantee, Murabaha, Sukuk, Istisna, Ijara,
Musharika and Mudaraba. The bank also provides direct equity investment, international investment and treasury services. In
addition, DIB provides real estate services like property management, community services and real estate financing. DIB is
headquartered at Dubai, the UAE.

Key Executives SWOT Analysis


Name Title Dubai Islamic Bank P.J.S.C., SWOT Analysis
H.E. Mohammad Ibrahim Chairman Strengths Weaknesses
Abdulrahman Alshaibani
Leading Islamic Bank Asset Quality
H.E. Sheikh Khaled Bin Zayed Vice Chairman
Al Nehayan
Financial Stability Exposure to Real Estate
Ahmad Mohammad Saeed Bin Director
Humaidan
Saeed Mubarak Abdulla Director
Mohammed Al Muhairi Opportunities Threats

Abdulrahman Hareb Rashed Director


Expansion of Distribution Intense Competition
Alhareb
Channel
Source: Annual Report, Company Website, Primary and Secondary Research,
GlobalData Regulatory Changes
Launch of Products
Share Data
Dubai Islamic Bank P.J.S.C.
Share Price (AED) as on 31-Mar-2011 2.22 Source: Annual Report, Company Website, Primary and Secondary
Research, GlobalData
EPS (AED) 0.32

Market Cap (million AED) 8,429

Enterprise Value (million AED) 7,450

Shares Outstanding (million) 3,797


Source: Annual Report, Company Website, Primary and Secondary Research,
GlobalData

Financial Performance Key Developments


Feb 24, 2010 Dubai Islamic Bank Introduces New
Sharia-compliant Investment Plan
Feb 08, 2010 DED Signs Agreement With Dubai
Islamic Bank To Offer e-Payment
Services
Jan 11, 2010 Dubai Islamic Bank Expands In UAE
Jan 02, 2010 Dubai Islamic Bank Launches Accidental
Death, Disability Insurance Plan
Source: Annual Report, Company Website, Primary and Secondary
Research, GlobalData
Source: Annual Report, Company Website, Primary and Secondary Research

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Table of Contents
Table of Contents ..................................................................................................................................................................................................... 2
List of Tables ............................................................................................................................................................................................................ 4
List of Figures ........................................................................................................................................................................................................... 4
Section 1 - About the Company ................................................................................................................................................................................ 5
Dubai Islamic Bank P.J.S.C. - Key Facts .................................................................................................................................................................. 5
Dubai Islamic Bank P.J.S.C. - Key Employees ......................................................................................................................................................... 6
Dubai Islamic Bank P.J.S.C. - Key Employee Biographies........................................................................................................................................ 7
Dubai Islamic Bank P.J.S.C. - Major Products and Services ..................................................................................................................................... 8
Dubai Islamic Bank P.J.S.C. - History ....................................................................................................................................................................... 9
Dubai Islamic Bank P.J.S.C. - Company Statement .................................................................................................................................................11
Dubai Islamic Bank P.J.S.C. - Locations And Subsidiaries ......................................................................................................................................12
Head Office .......................................................................................................................................................................................................12
Other Locations & Subsidiaries .........................................................................................................................................................................12
Section 2 – Company Analysis ................................................................................................................................................................................14
Dubai Islamic Bank P.J.S.C. - Business Description ................................................................................................................................................14
Dubai Islamic Bank P.J.S.C. - Corporate Strategy ...................................................................................................................................................16
Dubai Islamic Bank P.J.S.C. - SWOT Analysis ........................................................................................................................................................17
SWOT Analysis - Overview ...............................................................................................................................................................................17
Dubai Islamic Bank P.J.S.C. - Strengths ...........................................................................................................................................................17
Strength - Leading Islamic Bank .................................................................................................................................................................17
Strength - Financial Stability .......................................................................................................................................................................17
Strength - Funding Profile ...........................................................................................................................................................................17
Dubai Islamic Bank P.J.S.C. - Weaknesses ......................................................................................................................................................18
Weakness - Asset Quality ...........................................................................................................................................................................18
Weakness - Exposure to Real Estate ..........................................................................................................................................................18
Weakness - Reliance on the Domestic Economy ........................................................................................................................................18
Dubai Islamic Bank P.J.S.C. - Opportunities......................................................................................................................................................18
Opportunity - Expansion of Distribution Channel .........................................................................................................................................18
Opportunity - Launch of Products ................................................................................................................................................................18
Opportunity - Growing Global Islamic Finance Market.................................................................................................................................19
Dubai Islamic Bank P.J.S.C. - Threats...............................................................................................................................................................19
Threat - Intense Competition.......................................................................................................................................................................19
Threat - Regulatory Changes ......................................................................................................................................................................19
Threat - Fluctuations in Interest Rates ........................................................................................................................................................19
Dubai Islamic Bank P.J.S.C. - Key Competitors .......................................................................................................................................................20
Section 3 – Company Financial Ratios ....................................................................................................................................................................21
Financial Ratios - Capital Market Ratios ............................................................................................................................................................21
Financial Ratios - Annual Ratios .......................................................................................................................................................................21
Performance Chart ............................................................................................................................................................................................23
Financial Performance ......................................................................................................................................................................................23
Financial Ratios - Interim Ratios ........................................................................................................................................................................24
Financial Ratios - Ratio Charts ..........................................................................................................................................................................25
Section 4 – Company‟s Key Developments .............................................................................................................................................................26
Feb 24, 2010: Dubai Islamic Bank Introduces New Sharia-compliant Investment Plan................................................................................26
Feb 08, 2010: DED Signs Agreement With Dubai Islamic Bank To Offer e-Payment Services ....................................................................26
Jan 11, 2010: Dubai Islamic Bank Expands In UAE ....................................................................................................................................26

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Jan 02, 2010: Dubai Islamic Bank Launches Accidental Death, Disability Insurance Plan ...........................................................................27
Section 5 – Appendix...............................................................................................................................................................................................28
Methodology .....................................................................................................................................................................................................28
Ratio Definitions ................................................................................................................................................................................................28
About GlobalData ..............................................................................................................................................................................................32
Contact Us ........................................................................................................................................................................................................32
Disclaimer .........................................................................................................................................................................................................32

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List of Tables
Dubai Islamic Bank P.J.S.C., Key Facts .................................................................................................................................................................. 5

Dubai Islamic Bank P.J.S.C., Key Employees .......................................................................................................................................................... 6

Dubai Islamic Bank P.J.S.C., Key Employee Biographies ........................................................................................................................................ 7

Dubai Islamic Bank P.J.S.C., Major Products and Services ..................................................................................................................................... 8

Dubai Islamic Bank P.J.S.C., History ....................................................................................................................................................................... 9

Dubai Islamic Bank P.J.S.C., Other Locations ........................................................................................................................................................12

Dubai Islamic Bank P.J.S.C., Subsidiaries ..............................................................................................................................................................12

Dubai Islamic Bank P.J.S.C., Key Competitors .......................................................................................................................................................20

Dubai Islamic Bank P.J.S.C., Ratios based on current share price .........................................................................................................................21

Dubai Islamic Bank P.J.S.C., Annual Ratios ...........................................................................................................................................................21

Dubai Islamic Bank P.J.S.C., Interim Ratios ...........................................................................................................................................................24

Currency Codes .....................................................................................................................................................................................................28

Capital Market Ratios .............................................................................................................................................................................................28

Equity Ratios ..........................................................................................................................................................................................................29

Profitability Ratios ...................................................................................................................................................................................................29

Cost Ratios .............................................................................................................................................................................................................30

Liquidity Ratios .......................................................................................................................................................................................................30

Leverage Ratios .....................................................................................................................................................................................................31

Efficiency Ratios .....................................................................................................................................................................................................31

List of Figures
Dubai Islamic Bank P.J.S.C., Performance Chart (2005 - 2009) .............................................................................................................................23

Dubai Islamic Bank P.J.S.C., Ratio Charts..............................................................................................................................................................25

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Section 1 - About the Company

Dubai Islamic Bank P.J.S.C. - Key Facts


Dubai Islamic Bank P.J.S.C., Key Facts
Corporate Address PO Box 1080, Dubai, Dubai, Ticker Symbol, Exchange DIB [Dubai Stock Exchange]
United Arab Emirates
Telephone +971 4 2953000 No. of Employees 6,894
Fax +971 4 2954111 Fiscal Year End December
URL www.dib.ae Revenue (in USD Million) 1,398.6 (2009)
Industry Financial Services Revenue (in AED Million) 5,132.9 (2009)
Locations Egypt, Pakistan, Turkey, United Arab Emirates
Source: Annual Report, Company Website, Primary and Secondary Research
GlobalData

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Dubai Islamic Bank P.J.S.C. - Key Employees

Dubai Islamic Bank P.J.S.C., Key Employees


Name Job Title Board Level Since Age
H.E. Mohammad Ibrahim Chairman Non Executive Board
Abdulrahman Alshaibani
H.E. Sheikh Khaled Bin Zayed Vice Chairman Non Executive Board
Al Nehayan
Ahmad Mohammad Saeed Bin Director Non Executive Board
Humaidan
Saeed Mubarak Abdulla Director Non Executive Board
Mohammed Al Muhairi
Abdulrahman Hareb Rashed Director Non Executive Board
Alhareb
Tariq Humaid Matar Director Non Executive Board
Mohammed Al Tayer
led Mohammad Ali Alkamda Director Non Executive Board
h Saeed Ahmad Lootah Director Non Executive Board
Abdulla Ali Al Hamli Chief Executive Officer Senior Management
Ahmed Fathy Al-Gebali Chief Financial Officer Senior Management 2011
Source: Annual Report, Company Website, Primary and Secondary Research
GlobalData

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Dubai Islamic Bank P.J.S.C. - Key Employee Biographies

Dubai Islamic Bank P.J.S.C., Key Employee Biographies

Ahmed Fathy Al-Gebali Mr. Ahmed Fathy Al-Gebali has been the Chief Financial Officer of DIB
Job Title: Chief Financial Officer since 2011. Prior to this, he served as the Chief Financial Officer of
Boubyan Bank. He also served in various senior positions in Gulf
Board Level: Senior Management
Investment House, Global Investment House, Kuwait Financial Center and
Since: 2011 International Financial Advisors.

Source: Annual Report, Company Website, Primary and Secondary Research


GlobalData

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Dubai Islamic Bank P.J.S.C. - Major Products and Services
Dubai Islamic Bank P.J.S.C. is a financial services company based in United Arab Emirates. The bank's key services
include:

Dubai Islamic Bank P.J.S.C., Major Products and Services

Services:

Retail Banking

Private Banking

Johara Banking

Business Banking

Corporate Banking

Investment Banking

Mobile banking

Phone banking

Online banking

Real Estate finance

Contracting finance

Sharia Board services

Structure Trade Finance

Treasury & Investment

Asset Management

Syndication services

Project Financing
Source: Annual Report, Company Website, Primary and Secondary Research
GlobalData

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Dubai Islamic Bank P.J.S.C. - History

Dubai Islamic Bank P.J.S.C., History


2010 New Products/Services DIB launched Real Estate Investment Trust.

2010 New Products/Services The bank launched new product, Al Islami Salam Finance, which offers
liquidity through personal financing.

2010 Corporate Awards DIB named as the Best Islamic Bank by Global Finance magazine.

2010 Corporate Awards The bank named as the Best Islamic Bank in the UAE by Asiamoney
magazine.

2010 New Products/Services DIB launched new accidental death and disability insurance plan, Al Islami
Takaful Riayati.

2010 Corporate Changes/Expansions The bank opened a branch in Al Nahda.

2010 Regulatory Approval DIB received the ISO accreditation for quality management.

2010 Corporate Changes/Expansions The bank's subsidiary Jordan Dubai Islamic Bank, opened a new branch
in Amman.

2010 New Products/Services DIB launched Al Islami Muthmir, an investment plan that offers a built-in
family takaful cover.

2009 New Product Approvals Launch of Wajaha which is a distinguished Wealth Management service
for ultra high net worth individuals

2009 Corporate Changes/Expansions Dubai Islamic Bank opened three new branches in the UAE.

2008 Acquisitions/Mergers/Takeovers Dubai Islamic Bank entered into a strategic alliance with Nakheel

2008 Corporate Changes/Expansions Dubai Islamic Bank introduced a new subsidiary.

2008 Acquisitions/Mergers/Takeovers Dubai Islamic Bank, Jordan Dubai Capital and Dubai International Capital
LLC acquired certail interest in International Development Bank.

2008 Corporate Awards The bank was named as world‟s Best Islamic Retail Bank by Global
Finance.

2008 Corporate Awards DIB won „Best Islamic Bank at Banker' in Middle East Awards.

2008 Contracts/Agreements The bank signed an AED 266 million Islamic financing agreement with
Parkway International Contracting.

2007 Corporate Awards DIB won Euromoney 'Best Islamic Bank in the Middle East' award.

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2007 Corporate Awards DIB won Real Estate 'Best Investment Management' Bank Award.

2006 Acquisitions/Mergers/Takeovers Deyaar acquired Omega Engineering Co.

2006 Corporate Awards DIB won Euromoney‟s Best Islamic Bank in Middle East and Best Global
Sukuk House Awards.

2006 Corporate Awards DIB won Golden Trophy in UAE Web Awards Ceremony.

2005 Acquisitions/Mergers/Takeovers DIB acquired Al Khartoum Bank SA privatized by Sudan.

2005 Corporate Awards DIB received JPMorgan Chase 2004 Elite Quality Recognition Award.

2005 Corporate Awards DIB won the Best Consumer Internet Bank Award by Global Finance.

2004 Corporate Awards DIB won J. P. Morgan Chase Quality Recognition Award.

2001 Acquisitions/Mergers/Takeovers DIB acquired Arab Islamic Insurance Company.

1975 Incorporation/Establishment DIB was incorporated in 1975.

Source: Annual Report, Company Website, Primary and Secondary Research


GlobalData

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Dubai Islamic Bank P.J.S.C. - Company Statement

A statement from the Dubai Islamic Bank P.J.S.C‟s mission and vision is given below. The statement has been taken
from the company‟s website:

Vision
To be the leading provider of innovative financial services in accordance with the legislation of Allah.

Mission
We are proud to be the first Islamic Bank worldwide that has translated true Islamic economic principles into practice,
out of firm belief in the need of mankind for an economic system based on the final Revelation. By partnering with our
customers in halal earnings, employing best business practices, the latest financial services technologies and placing
our trust in Allah, we are confident of our success.

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Dubai Islamic Bank P.J.S.C. - Locations And Subsidiaries
Head Office
Dubai Islamic Bank P.J.S.C.
PO Box 1080
Dubai
Dubai
United Arab Emirates
Tel: +971 4 2953000
Fax: +971 4 2954111

Other Locations & Subsidiaries

Dubai Islamic Bank P.J.S.C., Other Locations

AL Ain Mall Sharjah


AL Ain Sharjah
United Arab Emirates United Arab Emirates
Tel: +971 03 7515155 Tel: +971 06 5726444

Fax: +971 03 7516060 Fax: +971 06 5727555

Kalba Ras Al Khaimah


Kalba Ras Al Khaimah
United Arab Emirates United Arab Emirates
Tel: +971 09 2772338 Tel: +971 07 2284888
Fax: +971 09 2775799 Fax: +971 07 2284788

Fujairah
Fujairah
United Arab Emirates
Tel: +971 09 2221550
Fax: +971 09 2229249

Source: Annual Report, Company Website, Primary and Secondary Research


GlobalData

Dubai Islamic Bank P.J.S.C., Subsidiaries

Deyaar Development PJSC Millennium Finance Corporation Ltd.


P O Box 30833 Level 2, The Gate
Dubai PO Box 121299
United Arab Emirates Dubai

Tel: +971 4 2955844 United Arab Emirates

Fax: +971 4 2954029 Tel: +971 4 2075224

Url: www.deyaar.ae Fax: +971 4 2950633

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DIB Lease One Ltd. Zone One Real Estate Management Co.
Bahamas Cayman Islands

Al Islami Real Estate Investments Ltd. Rhein Logistics Gmbh


United Arab Emirates Germany

DIB Capital Ltd. Dubai Islamic Bank Pakistan Ltd.


DIFC, The Gate 2nd floor, Hassan Chambers
East Wing DC-7 Block# 7
Dubai Karachi
Dubai Pakistan
United Arab Emirates Tel: +92 21 5368527
Tel: +971 4 3634100 Url: www.dibpak.com
Fax: +971 4 3620548
Url: www.dibcapital.com

Petra Limited Jef Holdings BV


Cayman Islands Netherlands

Source: Annual Report, Company Website, Primary and Secondary Research


GlobalData

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Section 2 – Company Analysis

Dubai Islamic Bank P.J.S.C. - Business Description


Dubai Islamic Bank P.J.S.C. is a financial service provider based in UAE. The bank offers retail banking, wealth
management, business banking, wholesale banking, private banking, Johara banking, investment banking, real estate
finance, and contracting finance services. The bank operates in Bahamas, Cayman Islands, Ireland, Pakistan, Sudan
and UAE. The bank also has business operations in Bosnia, Bahrain, Lebanon, Turkey, Cayman Islands, Sudan, the
UK and Yemen. In the UAE, the bank jointly operates with Al Bustan Center Company L.L.C., Waqf Trust Services
L.L.C., Gulf Tankers L.L.C. and Al Rimal Development. As of December 31, 2010, the bank operated through a
network of 66 branch.

The bank also provides specialist banking services for women customers namely, Johara services. The bank service
includes a wide range of banking facilities which offers shopping discounts and health and educational benefits.
Johara offers exclusive health privileges in the UAE at renowned hospitals and health clubs. The shopping discounts
are offered at selected stores for perfumes, clothing and accessories, books, etc. The bank offers Johara services in
10 branches throughout the UAE.

The bank‟s operates its business under four reportable segments namely, Retail and Business Banking; Wholesale
and Investment Banking; and Real Estate and Others.

The bank through its Retail and Business Banking segment manages deposits of small and medium businesses and
individual customers. The segment products include current, savings and investment accounts, home and personal
finance, and credit cards. It provides consumer and commercial murabahats, ijarah, credit card and funds transfer
facilities, and trade finance facilities. The bank has a wide network of branches and ATM‟s in the UAE. The bank‟s
services are integrated with its complete range of electronic solutions such as Internet, mobile phone and telephone
banking. The bank offers business banking solutions including short-term loans; ease cash-flow management;
financing property, import and export shipping, mergers and acquisitions, and the other requirements related to
business environment. During the fiscal year ended 2010, the segment generated a net operating revenues of
AED1,615.12m, representing 49.3% of the company‟s total net revenues.

The bank's Wholesale and Investment Banking segment manages financing and offers other credit facilities and
deposit and current accounts to corporate and institutional customers as well as investment banking services. The
bank provides these services to large corporate, public sector and middle markets. The segment provides services
including advice on corporate strategy and structure, capital-raising in equity and Islamic funding markets and risk
management. During the fiscal year ended 2010, the segment generated a net operating revenues of AED1,076.99m,
representing 32.9% of the company‟s total net revenues.

Through Real Estate segment the bank provide services including property development and other real estate
investments activities. The bank has strong footstep in Commercial Real Estate Finance in UAE regions. The bank
also supports real estate development. It includes construction of commercial property, multi-storey buildings and
residential estates. The Real Estate Finance team offers advisory services, project funding and new product
development services.

The Treasury segment of the company manages liquidity and market risk of the company. The bank provides
treasury services to its customers. I also manage its own Islamic sukuk portfolios and financial instrument book.
During the fiscal year ended 2010, the segment generated a net operating revenues of AED360.22m, representing
11.0% of the company‟s total net revenues.

The Others segment of DIB includes functions other than core business. During the fiscal year ended 2010, the
segment generated a net operating revenues of AED435.66m, representing 13.3% of the company‟s total net
revenues.

The bank also offers private banking and contracting finance services to its customers. The bank also offers services
such as online banking, mobile banking, phone banking and e-statement to its customers. The bank operates its
business through its 44 subsidiaries and 25 associate companies in different geographic locations.

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Geographically, the bank operates in two major regions, namely, Domestic, and International. In 2010, the Domestic
region accounted for 88.4%, followed by International 11.6% of the bank‟s total gross income.

In March 2011, the bank received the HR Development Award in Banking and Financial category at the Sharjah
National Career Exhibition. In February 2011, the bank received the „A‟ rating in the Fitch Ratings, a global ratings
agency headquartered in London. In November 2010, the bank entered into a joint venture to launch Real Estate
Investment Trust (REIT).

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Dubai Islamic Bank P.J.S.C. - Corporate Strategy

Dubai Islamic Bank P.J.S.C. is one of the largest Islamic banks in the UAE offering full range of products and services
in compliance with Sharia. DIB, the first full-service Islamic bank, provides retail banking, wealth management
service, business banking, corporate banking, investment banking, real estate finance and contracting finance
services. The bank is focused on building its retail banking services which already serves more than 1 billion
customers. DIB‟s strategic focus is on diversification and managed organic growth, including expansion of branch
network and growth in its overall customer base. The bank also takes part in various government initiatives for the
overall development of the economy of the UAE.

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Dubai Islamic Bank P.J.S.C. - SWOT Analysis

SWOT Analysis - Overview

Dubai Islamic Bank P.J.S.C. is a UAE-based Islamic banking institution offering a wide range of products and
services to its clients. The bank‟s market position as a leading Islamic bank, its financial stability, and funding profile
are its major strengths, even as asset quality and exposure to real estate remain areas of concern. Going forward,
regulatory changes and stiff competition may impact the bank‟s performance. However, expansion of distribution
channel and growing global Islamic finance market could present growth opportunities for the bank.

Dubai Islamic Bank P.J.S.C. - Strengths

Strength - Leading Islamic Bank


Incorporated in 1975, DIB is the oldest full-service Islamic bank in the world. DIB is one of the largest Islamic Banks in
the UAE, complying with Sharia. As of December 31, 2010, the bank reported total assets of AED90.14 billion in
2010, as compared to AED84.3 billion in 2009, representing an increase of 6.9%. DIB provides a broad range of
financial products and services that comply with Islamic Sharia as alternatives to conventional banking products and
services. The bank provides retail banking; wajah banking, wealth management service; johara banking, banking
services for women; business banking; corporate banking; investment banking; real estate finance; and contracting
finance services to more than 1.2 billion customers. The leading market position of the bank enables it to attract
deposits and increase its lending portfolio. In 2010, DIB recorded total financing assets of AED57.1 billion, as
compared to AED49.9 billion in 2009, representing an increase of 14.4%. DIB‟s leadership position in the growing
Islamic finance sector was reaffirmed by various industry recognition and awards. DIB was named as the „Best Local
Investment Bank‟, for third consecutive year, at emeafinance magazine‟s annual Middle East Banking Awards in
November 2010. Dar Al Sharia, the Sharia consultancy and Sharia advisory subsidiary of DIB, was recognized as the
„Best Sharia Advisory Firm‟ and „Best Islamic Consultancy Firm‟ by the Islamic Finance News (IFN) Awards Best
Service Providers Poll in October 2010. Earlier in 2010, DIB was named as the „Best Islamic Bank‟ by Asiamoney
Magazine.
Strength - Financial Stability
DIB has strong financial stability and strong capitalization, which enhance operational flexibility and reduces business
risk related to its operations. DIB‟s strong capital base of AED10.53 billion as of December 2010, 17.2% higher than
previous year, ensures capital adequacy to support its organic and inorganic growth with the secured and unsecured
nature of its lending. The bank reported total regulatory capital ratio (Basel II) of 17.8% in 2010, as compared to
17.5% in 2009 and Tier 1 capital ratio (Basel II) of 12.7% in 2010, as compared to 12.1% in 2009. The increase in
such ratios was due to a significant AED264.7m or 254.5% increase in retained earnings 2010 and also due to an
issue of bonus shares worth AED 179.55m during. The bank‟s ownership structure, and strategic importance in retail
lending in the UAE lend further long-term stability. DIB‟s largest shareholder with 29.8% share holding, Investment
Corporation of Dubai, is the investment arm of the Dubai government. Other major shareholder of the bank with 7.2%
share holding, the Lootah family, is the founding shareholder and a prominent Dubai based business family. The
strong capital adequacy of DIB and support from the government strengthens its risk profile.
Strength - Funding Profile
The bank leverages on its branch network and market position to attract a large deposit base which forms a major
part of its funding mix. DIB reported total deposits of AED63.45 billion in 2010, as compared to AED64.2 billion in
2009, representing a slight decline of approximately 1%. However, the bank maintained a healthy financing to loan
ratio of 90% in 2010. DIB sources a large proportion of such deposits from the retail sector which ensures a low cost
stable deposit base. The current accounts and savings accounts, combined, formed 39.6% and 37.2% of the total
customer deposit base in 2010 and 2009, respectively. The strong customer deposit base of DIB ensures a healthy
liquidity position for the bank and the low cost of such funds improves its core earnings.

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Dubai Islamic Bank P.J.S.C. - Weaknesses

Weakness - Asset Quality


The bank‟s lending portfolio was troubled with asset quality concerns resulting in high impairment charges. DIB‟s core
pre-provisioning earnings was troubled by continuous increase in impairment charges. The bank‟s Retail and
Business Banking segment reported provision for impairment of AED178.14m in 2010, as compared to AED134.04m
in 2009, representing an increase of 32.9%. DIB‟s Wholesale Banking segment reported from the provision for
impairment of AED677.29m in 2010, as compared to AED671.89m in 2009, representing an increase of 0.8%.
Problems in the private sector corporate and commercial real estate related issues led to the increase in such
impairment charges. The rise in impairment charges led to a decline in net income of DIB which was partially affected
by low investment returns. The bank might continue to incur such impairment charges in the future, although at a
slower growth rate.
Weakness - Exposure to Real Estate
Historical focus on the real estate sector and asset based lending in Islamic finances exposes DIB to fluctuations in
the real estate sector. In 2010, the Real Estate Segment of the bank reported net loss of AED1.15 billion, as
compared to AED354.09m in 2009. DIB held a large portfolio of property investments which added to its exposure to
the real estate segment. The bank holds a 45% stake in Deyaar Development PJSC, an associate company, which is
one of the major real estate developers based in Dubai. In November 2010, DIB increased its stake in DIB increased
its stake in Tamweel, the UAE‟s key mortgage entity, to 57.33%. The decision was part of a Dubai government led
rescue effort to save Tamweel, after the Dubai real estate collapse. DIB could report future losses from its real estate
portfolio due to the weak real-estate market in the UAE.
Weakness - Reliance on the Domestic Economy
The bank limits its revenue generation opportunities by having its operations confined to a geographical region. DIB
gets directly linked to the social, political and economical conditions prevailing in its country of operations. The
financial services sector going global has seen many companies expanding their foreign operations to enhance
revenue generation. Many foreign companies have also entered the Middle East market, which has shown high
growth potential in the recent past. In 2010, the bank generated almost all its revenues from the UAE. The bank could
look forward to expand its operations geographically to mitigate the current concentration risk.

Dubai Islamic Bank P.J.S.C. - Opportunities

Opportunity - Expansion of Distribution Channel


The focus on distribution network expansion could provide new growth opportunities to the bank. During 2010, the
bank introduced six new branches taking the total number of branches to 66 as of December 31, 2010. Two of the six
new branches were opened in November 2010, one in Abu Dhabi and two in Dubai. DIB aims to strengthen its UAE-
wide branch network by 10 more branches in 2011. DIB opened 44 ATMs during 2010 taking the total of ATMs to
over 450 as of December 31, 2010. The bank added 100,000 new customers in 2010. DIB also expanded services
offered through other alternative delivery channels such as online banking and mobile banking, offering enhanced
services to its customers. In 2010, DIB launched a new booking payment method for flydubai for its customers. The
bank also introduced its Al Islami Mobile Banking service which provides a wide range of secure and convenient
banking services through a customized mobile-based website. The bank having presence in Pakistan, Jordan and
Turkey could look forward to expand such businesses to mitigate its geographic concentration. The expansion of
bank‟s distribution network could deliver strong revenue growth and also strengthen its market position.
Opportunity - Launch of Products
The new products and services launched by the bank would help it sustain in the highly competitive financial services
market. In November 2010, DIB entered into a joint venture with Eiffel Management, a France-based company, to
launch Dubai‟s first Real Estate Investment Trust (REIT), Emirates REIT. In June 2010, the bank launched three new
account options; Al Islami 2-in-1 Account, Al Islami Current Account Plus and Al Islami E-Savings Account, to meet
the needs of different customer segments. The bank launched a two-year Islamic Certificate linked to the RBS
Crescent Dynamic Middle East 2 Strategy. This US dollar-denominated certificate issued by the Royal Bank of
Scotland Group and distributed by DIB‟s Wealth Management division offers a unique investment solution. DIB also
introduces a new Sharia-compliant product, Al Islami Salam, which offers liquidity through personal financing. The
introduction of these products and services would facilitate the bank to earn more revenues and strengthen its market
position.

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Opportunity - Growing Global Islamic Finance Market
Through its geographical presence, DIB is well positioned to benefit from the growing global Islamic finance market.
Islamic banking and Islamic insurance products and services have registered strong growth around the world;
especially in Asian countries such as Malaysia, and the Middle East. According to the Malaysia International Islamic
Financial Centre, in 2010, the global Shariah-complaint market comprising 628 players with presence across 48
countries was valued at $1 trillion, of which Islamic banking accounted for 83% , followed by sukuk with 12%, Islamic
funds with 4%, and takaful with 1%. The global Islamic finance market is forecast to increase at a CAGR of 15% per
annum until 2015, with Islamic banking (comprising of retail, commercial and sukuk) driving growth. As of 2015,
Shariah-complaint assets are expected to account for 2.5% of the global banking assets.

The demand drivers of Islamic finance market are MENA/GCC and East Asian countries with strong economic
growth, high Muslim concentration, abundant liquidity and strong government and regulatory support. In addition,
emerging market such Egypt, Turkey, Pakistan, Bangladesh, Indonesia, and the UAE are expected to drive growth in
retail, SME, commercial, and wealth, equity and fund management markets. While global financial centers such as
London, New York, Hong Kong, Frankfurt, Sydney, Singapore, Tokyo, and Seoul are expected to drive growth in
sukuk, corporate, commercial, and treasury and private equity markets. Participating in such demanding markets
could offer ample growth opportunities to the bank.

Dubai Islamic Bank P.J.S.C. - Threats

Threat - Intense Competition


DIB operates in a highly competitive financial services market. The bank competes with various conventional and
Islamic banks. As of February 2011, the UAE had 23 local and 28 foreign banks offering banking and financial
services. A few of DIB‟s key competitors include First Gulf Bank PJSC, Emirates NBD PJSC, Mashreqbank psc, Abu
Dhabi Commercial Bank P.J.S.C., Abu Dhabi Islamic Bank, and Commercial Bank of Dubai. Intense competition from
established players and consolidation of their financial products could have a negative impact on the bank‟s
operations. This highly competitive market could adversely affect DIB‟s profitability, if it fails to retain and attract
clients and customers. The bank should come up with innovative ways of serving its customers so as to remain
profitable in the highly competitive financial services market.
Threat - Regulatory Changes
DIB‟s operations are subject to regulation and supervision in each of the jurisdictions where it is domiciled and
licensed to conduct business. It has been supervised and administrate by regulators for issues such as licenses,
standards of solvency, capital adequacy, policy forms, investments, security deposits, and methods of accounting.
Due to the recent economic crisis, the regulatory agencies around the world are expected to adopt stricter norms for
the banking sector. Implementation of new global regulatory standards such as BASEL III may impact the capital
adequacy and liquidity position of banks. In February 2011, the UAE Central Bank issued a statement detailing new
borrowing limits and caps on fees charged by banks in the UAE, which might bring changes in operations for many
banks. New regulations, which are outside the bank‟s control, may increase its compliance cost and cost of capital.
Threat - Fluctuations in Interest Rates
The fluctuation in interest rates could have a material adverse effect on the book value of the bank. DIB‟s investment
portfolio contains interest rate sensitive-investments, such as municipal and corporate bonds. The increase in market
interest rates would decrease unrealized capital gains on fixed income securities of investment portfolio. However,
the decline in market interest rates could have an adverse impact on the bank‟s investment income. The bank could
witness pressure on interest rate margins if the domestic interest rate increased in future. A large proportion of
Islamic financing is on fixed rates and such a scenario could aggressively impact interest earnings of the bank if
interest rate were to significantly change. DIB‟s earnings from investments, especially Sukuk and inter-bank
placements could also be affected due to change in interest rates. Interest rates are highly sensitive to governmental
monetary policies, domestic and international economic and political conditions and other factors beyond the bank‟s
control.

NOTE:
* Sector average represents top companies within the specified sector
The above strategic analysis is based on in-house research and reflects the publishers opinion only

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Dubai Islamic Bank P.J.S.C. - Key Competitors
Dubai Islamic Bank P.J.S.C., Key Competitors
Name Headquarters Revenue (US$ m)
Abu Dhabi Islamic Bank United Arab Emirates 1,122

Abu Dhabi Commercial Bank P.J.S.C. United Arab Emirates 2,010

First Gulf Bank PJSC United Arab Emirates 1,793

Al Salam Bank BSC Bahrain 111

Emirates NBD Bank PJSC. United Arab Emirates 2,943

Mashreqbank psc United Arab Emirates 1,176


Source: Annual Report, Company Website, Primary and Secondary Research
GlobalData

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Section 3 – Company Financial Ratios
Financial Ratios - Capital Market Ratios

Dubai Islamic Bank P.J.S.C., Ratios based on current share price


Key Ratios 31-Mar-2011
P/E (Price/Earnings) Ratio 6.98

EV/EBITDA (Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortization) 6.11

Enterprise Value/Sales 1.45

Enterprise Value/Operating Profit 2.20

Enterprise Value/Total Assets 0.09

Dividend Yield 0.06


Note: Above ratios are based on share price as of 31-Mar-2011, the above ratios are absolute numbers
Source: Annual Report, Company Website, Primary and Secondary Research
GlobalData

Financial Ratios - Annual Ratios

Dubai Islamic Bank P.J.S.C., Annual Ratios


Key Ratios Unit/Currency 2005 2006 2007 2008 2009
Equity Ratios
EPS (Earnings per Share) AED 0.30 0.56 0.50 0.41 0.32

Dividend per Share AED 0.28 0.26 0.36 0.23 0.14

Dividend Cover Absolute 1.08 2.17 1.37 1.80 2.23

Book Value per Share AED 1.04 2.40 2.74 2.30 2.36
Profitability Ratios
Gross Margin % 63.23 58.95 58.54 64.38

Operating Margin % 39.55 34.61 30.93 31.17

Net Profit Margin % 39.36 34.09 41.10 29.49 23.52

Profit Markup % 185.63 153.50 148.70 190.27

PBT Margin (Profit Before Tax) % 39.55 34.61 30.93 29.45 23.75

Return on Equity % 28.54 18.27 24.01 17.77 13.45

Return on Assets % 2.47 2.42 2.96 1.83 1.43

Return on Fixed Assets % 4.13 4.37 4.37 4.12 4.03


Growth Ratios
EBITDA Growth % 48.54 18.78 -17.50 -21.46

Net Income Growth % 47.03 60.27 -37.84 -22.31

EPS Growth % 88.11 -11.20 -17.61 -22.22


Cost Ratios
Operating Costs (% of Sales) % 34.06 38.41 39.37 33.73 33.88
Leverage Ratios
Debt to Equity Ratio % 110.27 54.47 47.97 69.56 84.86

Net Debt to Equity % 110.27 54.47 47.97 69.56 84.86

Debt to Capital Ratio % 9.53 7.22 5.92 7.18 9.03


Efficiency Ratios
Asset Turnover Absolute 0.06 0.07 0.07 0.06 0.06

Capital Employed Turnover Absolute 0.73 0.54 0.58 0.60 0.57

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Net Income per Employee AED 175,151

Capex to Sales % 2.63 2.71 5.42 7.84 2.87

Efficiency Ratio Absolute 0.26 0.27 0.30 0.37 0.42


Source: Annual Report, Company Website, Primary and Secondary Research
GlobalData

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Performance Chart

Dubai Islamic Bank P.J.S.C., Performance Chart (2005 - 2009)

Source: Annual Report, Company Website, Primary and Secondary Research


GlobalData

Financial Performance

The bank reported interest income of (Untd. Arab Dirham) AED 5,132.92 million during the fiscal year ended December 2009, a
decrease of 2.61% from 2008. The net interest income after loan loss provision of the bank was AED 3,393.72 million during the
fiscal year 2009, a decrease of 2.83% from 2008. The net profit of the bank was AED 1,207.49 million during the fiscal year 2009,
a decrease of 22.31% from 2008.

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Financial Ratios - Interim Ratios

Dubai Islamic Bank P.J.S.C., Interim Ratios


Key Ratios Unit/Currency Dec-2009 Mar-2010 Jun-2010 Sep-2010
Interim EPS (Earnings per Share) AED 0.02 0.05 0.13 0.07

Dividend per Share AED 0.14

Book Value per Share AED 2.36 2.29 2.33 2.43

Net Profit Margin % 6.71 18.55 22.81 25.05

PBT Margin (Profit Before Tax) % 6.90 18.70 22.99 25.13

Operating Costs (% of Sales) % 32.46 34.02 32.45 31.40

Debt to Equity Ratio % 84.86 85.59 81.87 87.96

Net Debt to Equity % 84.86 85.59 81.87 87.96

Debt to Capital Ratio % 9.03 8.78 8.65 9.91

Efficiency Ratio Absolute 0.61 0.47 0.45 0.43


Source: Annual Report, Company Website, Primary and Secondary Research
GlobalData

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Financial Ratios - Ratio Charts
Dubai Islamic Bank P.J.S.C., Ratio Charts

EPS Operating Margin

Return on Equity Return on Assets

Debt to Equity Ratio

Source: Annual Report, Company Website, Primary and Secondary Research


GlobalData

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Section 4 – Company’s Key Developments

Feb 24, 2010: Dubai Islamic Bank Introduces New Sharia-compliant Investment Plan

Dubai Islamic Bank (DIB) has launched a new Sharia-compliant investment plan Al Islami Muthmir to offer a built-in
family takaful cover.

Al Islami Muthmir is a medium- to long-term plan that offers investors an access to a range of top performing Sharia-
compliant funds. It is a single contribution investment plan with a minimum contribution and it is expected to be
suitable for high net worth individuals.

Based on the Wakalah principle of Islamic banking, the plan allows customers to invest in a selection of funds based
on their investment needs and can be partially or fully withdrawn at any time.

Through Al Islami Muthmir, customers may invest in a range of managed and specialist funds, switch without cost
between funds and choose automatic fund re-balancing to maintain fund allocation levels.

Adnan Chilwan, chief of retail and business banking at Dubai Islamic Bank, said: “The Al Islami Muthmir plan offers
customers a range of Sharia compliant investment options with a family takaful cover that protects the contributed
amount in the case of death.

"DIB's investment products have met with immense success over the years, and we are confident that our customers
will take advantage of the combined benefits of takaful and investment returns offered by the Al Islami Muthmir plan.”

Feb 08, 2010: DED Signs Agreement With Dubai Islamic Bank To Offer e-Payment Services

Dubai Department of Economic Development (DED) and Dubai Islamic Bank (DIB) have signed a co-operation
agreement to facilitate electronic payment of new trade licenses fees, as well as renewed and amended licenses
through DIB's branches in Dubai.

The initiative is part of DED and DIB efforts to enhance productivity and save time and efforts for investors. As per the
agreement, Dubai Islamic Bank will provide DED with electronic systems services to facilitate the review of banking
settlement and also present a weekly detailed report covering all transactions and procedures that took place during
the preceding week.

Sami Al Qamzi, director general of DED, said: “We are pleased to sign the agreement with Dubai Islamic Bank, which
will contribute in enhancing the level of services provided to customers and enable them to process their documents
electronically without having to visit DED offices.”

Abdulla Al Hamli, CEO of Dubai Islamic Bank, said: “Through our line of innovative electronic banking services, we
are pleased to offer a convenient payment solution to entrepreneurs and investors seeking to establish their
businesses here. We are confident that our electronic payment services will further add to the ease of doing business
in Dubai. We encourage investors and customers to benefit from this service.”

Jan 11, 2010: Dubai Islamic Bank Expands In UAE

Dubai Islamic Bank (DIB) has opened a new branch in Al Nahda, Dubai, bringing the bank's UAE network to a total of
62 branches, including three express banking locations, reported AME Info.

The expansion of the bank's network is in line with its retail strategy, which will contribute to its annual balance sheet
growth. The retail banking business is expected to account for approximately 47% of the bank's 2009 revenues.

Adnan Chilwan, chief of retail and business banking at DIB, said: "The opening of our latest branch in Al Nahda is in
response to the growing needs of our customers, and a clear indicator of the healthy growth in popularity of Dubai

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Islamic Bank in the UAE. In addition to the growth in number of customers, our retail deposits as well as financing
businesses are expected to show healthy growth as a result of deepening relationships with our existing customers."

Rashid Mahboob, head of branches management at DIB, said: "Research conducted prior to opening in Al Nahda
showed a strong demand for a branch in the area. As a result, we are confident we are making banking with DIB
easier and more convenient for customers who live and work in this area. We welcome all our customers in the Al
Nahda area to the new branch and look forward to opening more branches across the UAE in the months to come."

Jan 02, 2010: Dubai Islamic Bank Launches Accidental Death, Disability Insurance Plan

Provides benefits in the unfortunate event of accidental death or disability

Dubai Islamic Bank (DIB) has launched Al Islami Takaful Riayati, accidental death and disability insurance plan. This
Sharia-compliant product is underwritten by Salama-Islamic Arab Insurance Company, and complements the bank‟s
existing portfolio of diverse products and services.

The company claims that its new product, Al Islami Takaful Riayati, provides benefits in the unfortunate event of
accidental death or disability. With annual contributions payable at just AED250 for an individual, and AED400 for a
plan holder plus spouse.

Dubai Islamic Bank said that its new product covers family benefit of AED100,000 in the event of accidental death, or
permanent total or partial disability caused by an accident.

In addition, plan holders are eligible for weekly benefits in the unfortunate event of temporary total disability due to an
accident, and the reimbursement of medical expenses, including hospital stays and repatriation/transportation of the
body.

Adnan Chilwan, chief of retail and business banking at Dubai Islamic Bank, said: “We are very pleased that the Al
Islami Takaful Riayati product provides just that - peace of mind at a price that is easily affordable. Al Islami Takaful
Riayati has been designed keeping everyone in mind. Therefore, it is not only affordable, but also extremely simple
and convenient.”

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Section 5 – Appendix

The data and analysis within this report is driven by GlobalData.


GlobalData gives you key information to drive sales, investment and deal making activity in your business.
Our coverage includes 165,000 + reports on 150,000+ companies (including 100,000+ private) across 200+ countries
and 29 industries. The key industries include Alternative Energy, Oil & Gas, Clean Technology, Technology and
Telecommunication, Pharmaceutical and Healthcare, Power, Financial Services, Chemical and Metal & Mining.

Methodology
GlobalData company reports are based on a core set of research techniques which ensure the best possible level of
quality and accuracy of data. The key sources used include:
Company Websites
Company Annual Reports
SEC Filings
Press Releases
Proprietary Databases

Currency Codes
Currency Code Currency
AED Untd. Arab Dirham
GlobalData

Ratio Definitions

Capital Market Ratios

Capital Market Ratios measure investor response to owning a company's stock and also the cost of issuing stock.
Price/Earnings Ratio Price/Earnings (P/E) ratio is a measure of the price paid for a share relative to the annual income
(P/E) earned per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors
are paying more for each unit of income, so the stock is more expensive compared to one with
lower P/E ratio. A high P/E suggests that investors are expecting higher earnings growth in the
future compared to companies with a lower P/E. Price per share is as of previous business close,
and EPS is from latest annual report.
Calculation: Price per Share / Earnings per Share
Enterprise Enterprise Value/EBITDA (EV/EBITDA) is a valuation multiple that is often used in parallel with, or
Value/Earnings as an alternative to, the P/E ratio. The main advantage of EV/EBITDA over the PE ratio is that it is
before Interest, Tax, unaffected by a company's capital structure. It compares the value of a business, free of debt, to
Depreciation & earnings before interest. Price per share is as of previous business close, and shares outstanding
Amortization last reported. Other items are from latest annual report.
(EV/EBITDA)
Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / (Net Income +
Interest + Tax + Depreciation + Amortization)
Enterprise Enterprise Value/Sales (EV/Sales) is a ratio that provides an idea of how much it costs to buy the
Value/Sales company's sales. EV/Sales is seen as more accurate than Price/Sales because market
capitalization does not take into account the amount of debt a company has, which needs to be
paid back at some point. Price per share is as of previous business close, and shares outstanding
last reported. Other items are from latest annual report.
Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Sales
Enterprise Enterprise Value/Operating Profit measures the company's enterprise value to the operating profit.
Value/Operating Price per share is as of previous business close, and shares outstanding last reported. Other items
Profit are from latest annual report.
Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Operating Income

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Enterprise Enterprise Value/Total Assets measures the company's enterprise value to the total assets. Price
Value/Total Assets per share is as of previous business close, and shares outstanding last reported. Other items are
from latest annual report.
Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Total Assets
Dividend Yield Dividend Yield shows how much a company pays out in dividends each year relative to its share
price. In the absence of any capital gains, the dividend yield is the return on investment for a stock.
Calculation: Annual Dividend per Share / Price per Share
GlobalData

Equity Ratios

These ratios are based on per share value.


Earnings per Share Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share
(EPS) of common stock. EPS serves as an indicator of a company's profitability.
Calculation: Net Income / Weighted Average Shares
Dividend per Share Dividend is the distribution of a portion of a company's earnings, decided by the board of directors,
to a class of its shareholders.
Dividend Cover Dividend cover is the ratio of company's earnings (net income) over the dividend paid to
shareholders.
Calculation: Earnings per share / Dividend per share
Book Value per Share Book Value per Share measure used by owners of common shares in a firm to determine the level
of safety associated with each individual share after all debts are paid accordingly.
Calculation: (Shareholders Equity - Preferred Equity) / Outstanding Shares
Cash Value per Share Cash Value per Share is a measure of a company's cash (cash & equivalents on the balance
sheet) that is determined by dividing cash & equivalents by the total shares outstanding.
Calculation: Cash & equivalents / Outstanding Shares
GlobalData

Profitability Ratios

Profitability Ratios are used to assess a company's ability to generate earnings, based on revenues generated or resources
used. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period
is indicative that the company is doing well.
Gross Margin Gross margin is the amount of contribution to the business enterprise, after paying for direct-fixed
and direct-variable unit costs.
Calculation: {(Revenue-Cost of revenue) / Revenue}*100
Operating Margin Operating Margin is a ratio used to measure a company's pricing strategy and operating efficiency.
Calculation: (Operating Income / Revenues) *100
Net Profit Margin Net Profit Margin is the ratio of net profits to revenues for a company or business segment - that
shows how much of each dollar earned by the company is translated into profits.
Calculation: (Net Profit / Revenues) *100
Profit Markup Profit Markup measures the company's gross profitability, as compared to the cost of revenue.
Calculation: Gross Income / Cost of Revenue
PBIT Margin (Profit Profit Before Interest & Tax Margin shows the profitability of the company before interest expense
Before Interest & Tax) & taxation.
Calculation: {(Net Profit+Interest+Tax) / Revenue} *100
PBT Margin (Profit Profit Before Tax Margin measures the pre-tax income over revenues.
Before Tax)
Calculation: {Income Before Tax / Revenues} *100

Return on Equity Return on Equity measures the rate of return on the ownership interest (shareholders' equity) of the
common stock owners.
Calculation: (Net Income / Shareholders Equity)*100

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Return on Capital Return on Capital Employed is a ratio that indicates the efficiency and profitability of a company's
Employed capital investments. ROCE should always be higher than the rate at which the company borrows;
otherwise any increase in borrowing will reduce shareholders' earnings.
Calculation: EBIT / (Total Assets – Current Liabilities)*100
Return on Assets Return on Assets is an indicator of how profitable a company is relative to its total assets, the ratio
measures how efficient management is at using its assets to generate earnings.
Calculation: (Net Income / Total Assets)*100
Return on Fixed Return on Fixed Assets measures the company's profitability to its fixed assets (property, plant &
Assets equipment).
Calculation: (Net Income / Fixed Assets) *100
Return on Working Return on Working Capital measures the company's profitability to its working capital.
Capital
Calculation: (Net Income / Working Capital) *100

GlobalData

Cost Ratios

Cost ratios help to understand the costs the company is incurring as a percentage of sales.
Operating costs (% of Operating costs as percentage of total revenues measures the operating costs that a company
Sales) incurs compared to the revenues.
Calculation: (Operating Expenses / Revenues) *100
Administration costs Administration costs as percentage of total revenue measures the selling, general and
(% of Sales) administrative expenses that a company incurs compared to the revenues.
Calculation: (Administrative Expenses / Revenues) *100
Interest costs (% of Interest costs as percentage of total revenues measures the interest expense that a company
Sales) incurs compared to the revenues.
Calculation: (Interest Expenses / Revenues) *100
GlobalData

Liquidity Ratios

Liquidity ratios are used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher
the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. A company's
ability to turn short-term assets into cash to cover debts is of the utmost importance when creditors are seeking payment.
Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to determine whether a company will be able
to continue as a going concern.
Current Ratio Current Ratio measures a company's ability to pay its short-term obligations. The ratio gives an
idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-
term assets (cash, inventory, receivables). The higher the current ratio, the more capable the
company is of paying its obligations. A ratio under 1 suggests that the company would be unable to
pay off its obligations if they came due at that point.
Calculation: Current Assets / Current Liabilities
Quick Ratio Quick ratio measures a company's ability to meet its short-term obligations with its most liquid
assets.
Calculation: (Current Assets - Inventories) / Current Liabilities
Cash Ratio Cash ratio is the most stringent and conservative of the three short-term liquidity ratio. It only looks
at the most liquid short-term assets of the company, which are those that can be most easily used
to pay off current obligations. It also ignores inventory and receivables, as there are no assurances
that these two accounts can be converted to cash in a timely matter to meet current liabilities.
Calculation: {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}
GlobalData

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Leverage Ratios

Leverage ratios are used to calculate the financial leverage of a company to get an idea of the company's methods of
financing or to measure its ability to meet financial obligations. There are several different ratios, but the main factors looked
at include debt, equity, assets and interest expenses.
Debt to Equity Ratio Debt to Equity Ratio is a measure of a company's financial leverage. The debt/equity ratio also
depends on the industry in which the company operates. For example, capital-intensive industries
tend to have a higher debt-equity ratio.
Calculation: Total Liabilities / Shareholders Equity
Debt to Capital Ratio Debt to capital ratio gives an idea of a company's financial structure, or how it is financing its
operations, along with some insight into its financial strength. The higher the debt-to-capital ratio,
the more debt the company has compared to its equity. This indicates to investors whether a
company is more prone to using debt financing or equity financing. A company with high debt-to-
capital ratios, compared to a general or industry average, may show weak financial strength
because the cost of these debts may weigh on the company and increase its default risk.
Calculation: {Total Debt / (Total assets - Current Liabilities)}
Interest Coverage Interest Coverage Ratio is used to determine how easily a company can pay interest on
Ratio outstanding debt, calculated as earnings before interest & tax by interest expense.
Calculation: EBIT / Interest Expense
GlobalData

Efficiency Ratios

Efficiency ratios measure a company's effectiveness in various areas of its operations, essentially looking at maximizing its
use of resources.
Fixed Asset Turnover Fixed Asset Turnover ratio indicates how well the business is using its fixed assets to generate
sales. A higher ratio indicates the business has less money tied up in fixed assets for each
currency unit of sales revenue. A declining ratio may indicate that the business is over-invested in
plant, equipment, or other fixed assets.
Calculation: Net Sales / Fixed Assets
Asset Turnover Asset turnover ratio measures the efficiency of a company's use of its assets in generating sales
revenue to the company. A higher asset turnover ratio shows that the company has been more
effective in using its assets to generate revenues.
Calculation: Net Sales / Total Assets
Current Asset Current Asset Turnover indicates how efficiently the business uses its current assets to generate
Turnover sales.
Calculation: Net Sales / Current Assets
Inventory Turnover Inventory Turnover ratio shows how many times a company's inventory is sold and replaced over a
period. A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies
either strong sales or ineffective buying.
Calculation: Cost of Goods Sold / Inventory
Working Capital Working Capital Turnover is a measurement to compare the depletion of working capital to the
Turnover generation of sales. This provides some useful information as to how effectively a company is using
its working capital to generate sales.
Calculation: Net Sales / Working Capital
Capital Employed Capital employed turnover ratio measures the efficiency of a company's use of its equity in
Turnover generating sales revenue to the company.
Calculation: Net Sales / Shareholders Equity
Capex to sales Capex to Sales ratio measures the company's expenditure (investments) on fixed and related
assets' effectiveness when compared to the sales generated.
Calculation: (Capital Expenditure / Sales) *100
Net income per Net income per Employee looks at a company's net income in relation to the number of employees
Employee they have. Ideally, a company wants a higher profit per employee possible, as it denotes higher
productivity.
Calculation: Net Income / No. of Employees

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Revenue per Revenue per Employee measures the average revenue generated per employee of a company.
Employee This ratio is most useful when compared against other companies in the same industry. Generally,
a company seeks the highest revenue per employee.
Calculation: Revenue / No. of Employees
Efficiency Ratio Efficiency Ratio is used to calculate a bank's efficiency. An increase means the company is losing a
larger percentage of its income to expenses. If the efficiency ratio is getting lower, it is good for the
bank and its shareholders.
Calculation: Non-interest expense / Total Interest Income
GlobalData
Notes
Financial information of the company is taken from the most recently published annual reports or SEC filings
The financial and operational data reported for the company is as per the industry defined standards
Revenue converted to USD at average annual conversion rate as of fiscal year end
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Dubai Islamic Bank P.J.S.C. (DIB) - Financial and Strategic SWOT Analysis Reference Code: GDFS28938FSA
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