In 1975, history was created when Dubai Islamic Bank (DIB) became the first modern commercial Islamic bank in the world. Before this, customers had no choice but to use conventional banks for all their financial requirements. By incorporating Sharia principles into all its operations, DIB became the pioneer in offering the world an alternative based on fairness and transparency.

Nearly 40 years later, Islamic banks compete on equal terms with the world’s largest conventional banks, and their products and services are utilised by Muslims and non-Muslims alike.

Leading from the front, DIB has established itself as the undisputed leader in its field, setting the standards for others to follow as the concept of Islamic banking gathered momentum in the Arab world and internationally. Indeed, Islamic banking is today the fastest-growing sector of the global banking industry.

A true pioneer
DIB enjoys a reputation as a leader and innovator in developing high-quality, flexible and accessible Sharia-compliant products and services. Islamic banking is far more than recreating conventional banking products and labelling them as Sharia-compliant. In its position as the first fully-fledged Islamic bank, DIB realised it had to create original banking products that were not only Sharia-compliant, but competitive with conventional products offered by other banks.

The bank treats the creation of Sharia-compliant products with the utmost seriousness. Its Sharia Supervisory Board is made up of scholars with extensive backgrounds in Sharia law, banking and finance. This has enabled DIB to create financial tools that are recognised and respected the world over, making DIB a pioneer in the creation of new Islamic banking products and the certification of existing ones.

DIB’s Sharia-compliant products answer the many needs of its clients looking for an acceptable Islamic alternative to conventional banking products. Al Islami Home Finance, for example, offers unique home finance solutions for under-construction properties as well as completed ones through “Ijarah” and “Forward Ijarah” products. Customers also have the flexibility to determine their finance limit without first choosing a property through an advance eligibility process. These products give individuals the ability to not only finance their dream home at an affordable rate, but also to do so in an acceptable Islamic manner.

Perhaps the second largest purchase in an individual’s life, after the purchase of a home, is the purchase of a car. DIB offers Islamic financing through its Al Islami Auto Finance programme. Al Islami Auto Finance is also available for commercial vehicles like buses and trucks for business customers.

Islamic banking is not only for the common needs of the average individual, but also for high-net-worth individuals and institutions. Private banking is no stranger to Sharia-compliant banking, nor is corporate or investment banking. Islamic banking allows for a bank to replicate conventional banking vehicles, and tailor them in such a way as to make them not only Sharia-compliant, but attractive in and of themselves. DIB has worked to create products that are not merely an Islamic alternative to a conventional bank, but innovative products that are Sharia-compliant. Considering the growth of DIB over the past 36 years, the effort has been quite successful.

Heavyweight deal maker
DIB has shown its outstanding capabilities by arranging two of the world’s largest-ever sukuk. The bank was appointed to provide specialist financial solutions for the Dubai Ports, Customs and Free Zone Corporation’s $3.5bn sukuk, and the Dubai Department of Civil Aviation’s $1bn Islamic bond issue for the second phase of the expansion of Dubai International Airport. The bank also launched Emirates REIT, Dubai’s first real estate investment trust, and was an arranger in the first fully UAE Islamic bank aircraft financing deal for the purchase of an A340-500 by Emirates Airline.

Time and again, DIB has shown itself to be a bank of firsts. Through a focus on innovation and excellence, DIB has gone from pioneer of Islamic finance to attaining the status of the UAE’s largest Islamic bank with a 70-strong branch network. The bank’s domestic expansion accelerated in 2000 when DIB became a public joint stock company with its shares listed on the Dubai Financial Market. The bank has also witnessed significant growth on an international level: an expansion strategy based on partnerships and alliances started with the establishment of DIB Pakistan Limited, a wholly owned subsidiary of DIB, which has a network of 64 branches across 26 major cities in Pakistan. It has also started operations in Jordan, with the establishment of Jordan Dubai Islamic Bank.

DIB’s upward trajectory was not curtailed significantly by the financial crisis. Since Sharia does not allow trading in debt, Islamic banks were not invested in the subprime mortgages, derivatives or CDOs that caused the crisis. While the rate of issuance of new sukuk slowed, the Sharia-compliant financial services space as a whole continued to experience sustained growth. Appropriately managing risk lies at the heart of Islamic finance, and this overriding principle, which has served DIB so well over the past four decades, did so again during the recent economic downturn.

Responsible banking
The bank traces its roots to the vision of His Highness Sheikh Rashid bin Saeed Al Maktoum, and throughout the years DIB has been characterised by strong leadership and a commitment to corporate social responsibility. From Haj Saeed bin Ahmed Al Lootah, one of the bank’s founders, through to His Excellency Mohammed Ibrahim Al Shaibani, the bank’s current chairman, DIB has been guided and led by outstanding individuals who understand that DIB has a wider role to play in society than simply offering banking services.
The bank supports the communities in which it operates through the DIB Foundation, a non-profit social, humanitarian and charitable organisation which distributes millions of Dirhams to good causes at home and abroad each year.

For its contribution to both the banking industry and the wider community, DIB has earned the respect of its peers around the world. The bank’s leading position has been reaffirmed by the more than 140 local, regional and international accolades that it has won since 2004. DIB has won awards across diversified areas, including retail, corporate and investment banking, as well as CSR and consultancy services. The bank’s most recent awards include being named Best Islamic Bank in UAE for the fifth consecutive year by Islamic Finance News, Best Islamic Bank in the UAE for 2010 by Global Finance magazine, Best Islamic Bank in the UAE by Asiamoney magazine, and winning the first-ever Pan-Arab EMEA Finance award for corporate social responsibility.

Focused on growth
While DIB is an institution that is deeply proud of its achievements, its success has always been built on looking towards the future. The consensus among most industry experts is that the global Islamic finance industry will expand significantly over the coming years. As such, DIB is perfectly positioned to benefit from the increasing demand for the products and services that it pioneered.

The retail segment will likely continue to drive much of that expansion, while the rise of takaful (Islamic insurance) will also make a lasting contribution. Along with sukuk, Islamic mortgages represent yet another growth area. As the majority shareholder in Tamweel, the UAE-based Islamic home finance provider, DIB continues to play a full and active role in the country’s real estate sector.

Since 1975 the landscape of the UAE has changed nearly beyond recognition. New roads and bridges have sprung up everywhere, as have awe-inspiring hotels, shopping malls and real estate developments, including, of course, the world’s tallest tower. One of the few constants amid this sea of change has been Dubai Islamic Bank.

Nearly four decades after its creation, DIB can rightly take credit for pioneering the concepts of Islamic banking and finance. Moreover, by successfully combining traditional Islamic values with the technology and innovation that characterise the best of modern banking, DIB today proudly competes on an equal basis with the world’s largest conventional banks.

For further information: www.dib.ae