DIB 2Q26 results & earnings call update

研报英文原文证据摘录

DIB 2Q26 results & earnings call update

July 15, 2026

it to broadly hold at current levels post the balance sheet rebalance.

●Strong cost control. 2Q26 operating costs were up only 5% Y-o-Y

and down 3% Q-o-Q. This kept the 2Q26 cost/income ratio at 31% ,

despite non-interest income being down 10% Y-o-Y. Notably, the ratio

of operating costs/ total assets improved to 0.92% from 0.95%.

●Lower for longer loan loss provisions. On our calculations, DIB’s

2Q26 cost of risk fell to 10bps from 62bps in 1Q26. But it should be

remembered that 1Q26 included management overlays of 28bps, so it

would have been 34bps in 1Q26. On the call, management indicated

that given the macro-economic outlook, it did not need to add to the

AED186m of ECL overlays that it took in 1Q26. With 2Q26 absolute

NPLs flat Q-o-Q and the 2Q26 NPL ratio improving to 2.45% from 2.53%

in 1Q26, management guided for an even lower NPL ratio over the

2H26, as the loan book continues to grow and absolute NPLs decline

on recoveries. On deferrals, management noted that only 0.61% of its

gross loan book benefited from central bank forbearance, which had

been extended to the end of 3Q26.

●Capital ratios improved. DIB’s 2Q26 CET1 ratio improved to 13%

from 12.6% in 1Q26 and 12.3% in 4Q25. Encouragingly, 2Q26 RWA

growth (9% Y-o-Y) was slower than total asset growth (13% Y-o-Y)

and therefore risk concentration improved to 73% from 76% in 2Q25.

Importantly, DIB was able to reduce its level of market risks over the

1H26 by reducing its exposure to sukuk investments.

For a detailed breakdown of DIB's quarterly financials, please do not

hesitate to reach out.

Summary

These numbers and more importantly, the reaffirmation of their FY26

guidance should support the shares and force consensus to rethink their

FY26 outlook.