Dubai – Mubasher: MubasherTrade Research (MTRe) on Thursday released a new note on Dubai Islamic Bank (DIB), where it downgraded the stock to 'hold' from 'buy' and noted a price target (PT) of AED 6.9.
DIB reported a net profit of AED 1.04 billion in the fourth quarter of 2016, unchanged from the same figure in 2015, according to a statement released Wednesday.
The bank posted a consolidated net profit of AED 916.1 million in Q4-16, up 1% year-on-year and 5% quarter-on-quarter, and in line with MTRe's estimate of AED 903 million (+1%). The profits came "mainly on lower-than-expected loan loss provisions (-69% vs. MTRe), partially offset by lower total banking income (-7.2% vs. MTRe)," the note showed.
The results are also in line with market consensus of AED 896 million (+2%), the report added.
DIB's board proposed an increase to the bank's Tier 1 issued capital by $1 billion and to issue senior or subordinated sukuk (and/or other non-convertible instruments) for an amount not exceeding $5 billion.
"We believe that this issuance should also support the bank's lending activity, giving it room to fund future growth opportunities and may also be a catalyst for new acquisitions over the coming period," MTRe commented.
The board also proposed paying a dividend per share (DPS) of AED 0.45 for 2016, implying a dividend yield of 7.3%.
