Hello everyone, and welcome to the Dubai Islamic Bank Second Quarter 2024 Financial Results Earnings Call. Please note, to all those who are listening to us via the webcast link, kindly refresh your browser in case you experience any intermittent audio issues. As a reminder, please ask your questions by submitting them via email to webcast@dib.ai. I will now hand over to your host, Janany Vamadeva from Arqaam Capital. Please go ahead.
Thank you, sir. Good morning, good afternoon everyone, and thank you for joining us today. This is Janany Vamadeva, and on behalf of Arqaam Capital, I'm pleased to welcome you to Dubai Islamic Bank's Q2 2024 Earnings Conference Call. I have with me here today from DIB Management, Dr. Adnan Chilwan, the Group Chief Executive Officer, John Macedo, the Chief Financial Officer, and Mr. Kashif Moosa, the Head of Investor Relations and Strategic Communication. Without any further delay, I'll now turn the call over to the Head of Investor Relations, Mr. Kashif Moosa. Kashif, over to you.
Thank you, Janany, and welcome everyone to the first half of 2024 webcast of Dubai Islamic Bank. The session is led by our Group CEO, Dr. Adnan Chilwan, accompanied by John Macedo, the Chief Financial Officer, and myself. I request everyone to keep the questions coming through the email provided, webcast@dib.ai, and they will then be addressed at the end of the presentation. So with that, let's start. We move on to slide 4. As you can see, the economic data has been revealing a mixed picture with signs of easing inflation, ongoing concerns about growth, and finally, central banks sort of grappling with diverging paths in relation to rate policy cuts. Brent oil, on the other hand, has been volatile over the first six months of the year on the back of geopolitical tension, extension of oil production cuts by OPEC+, and energy transition activities.
Nevertheless, prices have held up and closed at around $85 per barrel. The IMF upgraded its outlook for global growth in 2024 to an expansion of 3.2%, up 10 basis points compared to the previous forecast released in January. The IMF raised the U.A.E's GDP growth forecast for 2024 from 3.5%- 4.4%, primarily due to rising investments in the U.A.E and the U.A.E's efforts to boost the non-oil economy, given that the economic growth in the U.A.E is broad-based and is led by activity in tourism, construction, manufacturing, and financial services. Moving on to slide five. During 2023, the U.A.E's economy grew by about 3.6% thanks to the non-oil sector, which grew by 6.2%, a faster-than-expected rate, while the oil and gas sector contracted by 3.1%. Financial services was the fastest-growing sector in 2023, expanding by 14.3% year-on-year after the 6.6% growth in 2022.
This was followed by transport and logistics, which were up 11.5% year-on-year. The tourism sector, the contribution of the tourism sector to the U.A.E's national economy, is expected to rise to about AED 236 billion in 2024, allowing the country to achieve its growth of boosting tourism's GDP share to AED 450 billion by 2031. Currently, tourism contributes a decent 11.7% to the U.A.E's GDP. Similarly, in Quarter One of 2024, Dubai recorded an 11% increase in the number of tourists to 5.18 million international visitors, primarily coming from the Western Europe region, which was Dubai's biggest source of market, Dubai's biggest source market, followed by South Asia.
On the transport side, Dubai's Metro service is set to expand by providing most stations for commuters, and some of the key goals include increasing the share of public transport to 45%, reducing carbon emissions to 16 tons per capita, improving the quality of public spaces to encourage walking, and increasing shaded areas. With that, now I will hand over to Dr. Adnan Chilwan, Group Chief Executive, to take you through the first quarter financial results. Dr. Adnan, please.
Thank you, Kashif. A very warm and humid good afternoon to everyone, pun intended. As always, I will do a page turn to the presentation, shedding highlights on the key performance of the bank in the first half of 2024. This will be followed by a Q&A session, and finally, I will use the last five minutes of the hour to summarize today's call. Before I begin, I would like to spend a few minutes talking to you about what is happening in and around us. We have been working very hard to ensure our vision of providing continuous and sustained growth remains constant. That said, our strategic intent has been and will always be to enrich our banking ecosystems so as to ensure that the bank provides solutions and services that are second to none.
We have recently achieved a significant milestone with the migration of our core banking system to the latest and most updating version. This transformation is the culmination of over 25 months of effort by more than 2,000 individuals in the bank. Now, mammoth projects of such magnitude come with their own set of issues, and it was no different for us during this migration. While there were challenges, we have now entered a phase of stabilization where we focus on addressing teething issues . The focus of the team will obviously remain on minimizing the impact of customers and stakeholders. What we all are especially happy about is that looking ahead, the new core ecosystem will integrate a wide range of specialized upgrades, giving us access to new product features and creating a much-needed pathway for a more efficient customer experience.
Core platform delivers simplicity, cost efficiency, speed, flexibility, security, and future readiness by leveraging capabilities of the cloud and accelerating digital transformation. With that said, I would now like to dive into our performance in the second quarter and also look at how that has panned out for the first six months of 2024. DIB has delivered a stable, resilient set of results during the first half of the year, around both profitability and balance sheet metrics. The bank's focus orbited mainly around quality and structural sourcing. Having said that, you can see balance sheet continued to expand by 2.7% on a year-to-date basis, driven by DIB's core business with financing and sukuk investments, which were up by 3.8% year-to-date.
Our gross new underwriting and sukuk during the quarter, or rather the first half of 2024, equated to nearly AED 43 billion, of which new consumer banking bookings registered around AED 12.2 billion, while corporate banking was at AED 17 billion of new gross underwriting, and sukuk were close to around AED 14 billion. Total routine repayments came in at a steady pace, which was circa AED 20 billion, but the early settlements to the tune of AED 8.13 billion from predominantly government-related entities led to a flat performance when compared to where the loan book was at the same period in 2023. Again, this was due also to the timing of certain deal closures, which have culminated post-June and hence will be captured in the next set of results. Overall, the portfolio has added nearly 2% year-on-year net growth, amounting to AED 10.5 billion.
Zooming into the P&L, I'm again pleased to announce we have delivered net profit, which is pre-tax of about AED 3.72 billion, up 18.1% year-on-year, and accordingly, the resulting return on tangible equity is at 20.2%, and the resulting ROA is close to around 2.2%. Another continued achievement from Quarter One is an improvement in our asset quality metrics. The non-performing financing ratio has improved to 4.99%, which has been down by 41 basis points on a year-to-date basis, and the coverage ratios continue to be on the rise. Overall, once again, we've delivered a stable set of results in Quarter Two and, more importantly, in the first half of 2024. On slide 8, a look at the financial performance, and this is balance sheet. Digging deeper into the performance, we delivered balance sheet growth of 2.7% year-to-date to reach AED 323 billion.
While the bank's financing portfolio, as I said, is flat on a year-to-date basis, impacted mainly by early settlements of around AED 12.8 billion. As I mentioned in my opening remarks, the pipeline remains strong, and we are well poised for the rest of the year with some anticipated transactions already concluded in July, and the remaining half of the third quarter also seems to be very strong. The sukuk portfolio has increased by 15% year-to-date to reach AED 79 billion, and on the funding side, deposits have also increased by 5.4% year-to-date, supported by both corporate and consumer liabilities. Both our return ratios, return on assets and return on tangible equity, have outperformed our year-end guidance, and hence, we remain securely positioned vis-à-vis our commitment to our shareholders.
Other vital metrics like asset quality and CASA contributions within the overall liability mix have improved tremendously, which will be explained in greater detail in the latter section of this presentation. On slide nine, again, the financial performance, and here we are looking at the income statement, a resilient story once again from a P&L perspective. Total income witnessed a 21% increase year-on-year and stands at around AED 5.6 billion. The bank's net operating revenue is also up, and it's up by 8.6% year-on-year over the period, and it has reached AED 6.1 billion. Despite the persistent higher rate environment, we've delivered a stable net profit margin, which stands at 3%, and that is in line with our overall guidance. OPEX has been up 14% year-on-year as we are ensuring optimal spends while looking to grow and strengthen the group over the next few years.
The cost-to-income ratio, as a result, is up 140 basis points to 27.8%, but it's still among the best. Impairments were significantly down by 32% year-on-year. They stand at around AED 652 million, and this is on the back of strengthening the macroeconomic environment within the U.A.E. Similarly, on a quarter-on-quarter basis, Q2 impairments are down by 24% year-on-year, and they stood at around AED 354 million. Our cost of risk translates to around 40 basis points in the first half of 2024, which obviously takes into account the recoveries given the improving asset quality. On slide 10, we look at a very quick look at our profitability and cost structure. In this slide, I would like to highlight the main contributors to our net operating revenue.
The net funded income came in flat, impacted by the pressure of the bank's cost of funding, yet non-funded income recorded a healthy increase of 44% year-on-year. Now, this rise is attributed to higher income from investment properties, associate income, as well as some other income lines in there. OPEX, like I mentioned before, has been up by 14% year-on-year, and this is in line with the bank's strategic investment plan for customer-centric technology upgrades as well as talent acquisition. Cost-to-income ratio accordingly registered 27.8%, and that was up by 140 basis points year-on-year and close to 60 basis points quarter-on-quarter. This is in spite of key transformation mandates like core migration, enterprise GL, NPSS, and other technological platforms that we are trying to implement within the organization.
All of the above has led to a solid 22% year-over-year rise in net profit, and that's pre-tax, obviously, within the first half of 2024, and that profit stands at AED 3.7 billion. For Q2 2024, it was at AED 1.9 billion, circa AED 1.9 billion, which is up by 14.5% year-over-year. Slide 11 looks at deployment of our funds. Our assets have grown by 2.7% year-to-date, and they stand at around AED 322 billion, with consumer banking and our sukuk portfolios compensating for the large early repayments within the corporate bank. Now, of course, I will delve into greater details on subsequent slides, and I start on slide 12 with our consumer banking business. This portfolio is up by 7% year-to-date, stands at around AED 60 billion, and constitutes 30% of the bank's total financing.
Now, this higher pickup has been led by auto financing on the back of rising non-resident population and higher demand for cars, as well as some targeted electric vehicle campaigns that we've been running in the first quarter as well as pre-summer. Credit cards also witnessed a significant pickup over the year-to-date period, supported by the bank's campaigns and product mix variants. Across all products within the consumer bank, we booked gross new business of around AED 12.3 billion during the first half of 2024 versus AED 10.2 billion in the first half of 2023. Now, of course, despite routine repayments of AED 3.6 billion, the consumer portfolio exhibited positive growth for the period of almost AED 4 billion year-on-year. Yields within the consumer bank have expanded by 45 basis points year-on-year to stand at 7%, underpinning healthy profitability.
On a year-to-date basis, you can see that the total consumer deposits increased by 4% to AED 92 billion, while CASA deposits on the consumer side were also up by 3%. Slide 13 looks at our corporate banking business, and the portfolio within the corporate bank stood at AED 139 billion during the first half of 2024. Like I mentioned before, our gross new corporate financing during the first half of 2024, which was at around AED 17.3 billion, was more than offset by early settlements during that period. That said, the revenue trends continue to be on an upward trajectory, with revenues from the corporate business up by almost 10% year-on-year. Yields, on the other hand, have expanded by 47 basis points year-on-year, and they stand at 6.7%. Corporate deposits overall were up by 40% year-to-date.
Now, corporate CASA balance growth has been strong as well by 19% on a year-to-date basis, as the bank continues to attract strategic operating accounts. On slide 14, we look at another important business for the bank, which is our treasury business. The treasury portfolio primarily fixed income book expanded to stand at AED 79 billion, up from AED 68 billion at the end of 2023. Now, that's a growth of nearly 15% year-to-date or around 28% year-on-year. This is a part of a deliberate strategy to book long-term assets in the current high-rate environment. Nearly 3/4 of the sukuk portfolio is sovereign in nature, while 90% of the remaining investment-grade or above underpinning very high quality.
Within treasury, yields have expanded by 17% year-on-year, and they stand at around 4.8% due to incremental sukuk investments carrying higher coupon given the high interest rate environment over the last 12 months, and revenues over the year picked up by 29% to reach AED 1.3 billion. Slide 15 looks at our asset quality, and non-performing ratio, like I've mentioned before, has improved by around 41 basis points. It stands at 4.99% on a year-to-date basis, and this is also supported by the resolution of the long-dated New Medical Center case, which was settled in the first quarter of 2024. Cash provisions coverage has accordingly increased to 95%, and that is up by a solid 5% or 500 basis points from the forecast date or the closed 2023 number.
Impairment charges for the first half of 2024 have declined by 32%, and they stand at AED 653 million, and that's obviously a result of improving asset quality, a strong macro environment, as well as that which led to strong recoveries for the bank, and hence, on a cost-of-risk basis, we continue to see a downward trend falling by at least half to 40 basis points from 60 basis points in 2023. But I've always alluded to a normalized cost of risk, which is between 70 to 80 basis points. Slide 16 looks at asset quality by stages. Post the settlement of NMC, our stage three financing has dropped by 7.8% year-to-date, and it stands at around AED 10.6 billion. In absolute terms, it stood steady when compared to Q1 of 2024.
As a result of this, our stage three coverage has increased by around 520 basis points, and it stands at around 73.5%. Stage one and stage two financing remains stable along with their respective coverage rates. Our slide 17 looks at funding sources and some liquidity ratios.
To start, liquidity of the bank continued to remain intact with LCR at 146%. CASA in absolute terms now stands at AED 98 billion, up by 19% year-to-date, and in terms of percentages, that comprises 42% of the total liability mix, and that is up by around 5% when compared to year-end, which was 37% at the end of 2023. Slide 18 looks at our capitalization overview, and the levels remain robust with CET1 at 13.7%. This is up by around 90 basis points, and CAR is around 18.1%, which is up by around 80 basis points, both well above the minimum regulatory requirement.
Total equity of the bank, as you can see from those bar graphs, stands at around AED 46 billion. Slide 19, a look at our digital strategy, and that digital strategy that we embarked upon way back in 2019, 2020, continues to support our growth. Overall, our digital push continues as users and volumes remain on the rise. I've mentioned this on the call that during the quarter, we've conducted a major upgrade to our core banking system towards a more enhanced platform. Once we exit the stabilization period, we are very confident that this will provide the customers an even better and safer banking experience. You can see some bar graphs there. Noteworthy of attention is our WhatsApp digital subscribers channel, and the subscribers continue to see strong growth, increasing nearly by around 35% year-to-date. We've reached around 166,000 subscribers to date.
Slide 20 is the last slide before I open the floor for questions and answers. A very quick look at our sustainability and ESG initiatives. The bank has made good progress towards delivering the country's sustainable ambitions and SDGs, and this has been ongoing, and we will continue to do so as we progress forward. The quarter saw DIB establishing more partnerships within this area, as well as collaborations and entering into MOUs to support our key priorities such as diversity and inclusion, corporate social responsibility, as well as propelling sustainable finance. Our persistent efforts to integrate sustainability within our bank-wide operations is now being recognized by industry, following several industry awards that we've received during the period, and I won't go through them. It's right in front of you on slide 20. But a little attention towards our products that we have launched within our consumer bank.
One of them was the first and foremost, the electric vehicle product that we launched sometime a couple of years ago, and even in 2024, we see great traction of that. For example, our pre-summer campaign has seen us underwrite 400 electric vehicles, and that generated over AED 70 million of new financing. As an example, this portfolio stands at around AED 800 million, with AED 210 million of financing done in the first quarter of 2024. So that's roughly around 12% of the overall auto finance sourcing business. So clearly, sustainability is within the strategic theme of the bank, and we will continue to drive this agenda forward and continue to give you updates within this very important area for us because it's a part of our overall vision. That said, I'm going to pause here, and I'm going to open the floor for questions and answers.
Once we use a large part of that hour, of the remaining hour, I will use the last five minutes or so to kind of summarize today's call. So we are going to be on mute for some time until we skim through a few questions, and we'll come back to you in a minute.
Thank you, Doctor. Ladies and gentlemen, please keep sending your questions through, and we'll answer them as they come in. Please note that if there are repeated questions, we will not go through them again.
Thank you. As a reminder, if you wish to ask a question, please send these via webcast@dib.ai. Thank you for holding until we have our first question.
So we start with some immediate questions from Rahul from Citi. The first one is around the, can we expect the early repayments in corporate segment to continue?
The second is about the investment property gain in second quarter, and the third is on the run rate for provisioning. Is that the new norm for DIB?
Thank you, Rahul, for your questions. Clearly, we cannot anticipate early repayments, and that's why they're called early repayments. But we would want to believe that we will not see the same level of early repayments that we've seen in the first half of 2024. As I've mentioned before, that amounted to close to around AED 12.8 billion. So hopefully, we are not going to see some extrapolation in this. Difficult to plan for early repayments, but clearly, one thing that I can tell you is that our pipeline for gross underwriting remains very strong.
So even if we face a few more early settlements, we are very confident that we will be able to meet our guidance, our growth guidance, and in fact, surpass our growth guidance at the end of the year. So we are very confident. The one thing in our control is our pipeline, and we are very confident that our pipeline continues to remain strong, and we will continue to focus on all our three core areas: our corporate bank, FI and investment business, our retail bank, or our consumer business, and obviously, our fixed income book also. So gross underwriting will continue to remain very strong. Your question around investment property gain in quarter two, is there a plan to liquidate more properties and take advantage of peak property prices?
Our plan has always been to de-risk our balance sheet and exit some of the legacy property portfolios that we hold. This is, like you mentioned, an opportune time for us to exit. This has been sitting on the bank's balance sheet for some time, and you can witness that this has steadily started to come down in the last 18 months or so. Of course, given that the property market is very strong, we are taking advantage of that, and we anticipate that it will remain strong for the remaining part of 2024. We've got a pipeline of properties that we will be exiting. So definitely, we'll try and make some more gains from the very buoyant property market at this stage. Your last question is around the run rate for provisioning in the first half.
We've seen that at record low levels of around 40 basis points is the cost of risk, and is that a normal level? If you look at the level of provisioning that we are doing on a gross level, it's roughly the levels that we have seen in the last 12 to 24 months. Quarter-on-quarter, we make the same level of provisioning. But obviously, on a net basis, given the recoveries that we have witnessed from some legacy cases and legacy accounts, that has brought the cost of risk down on a net basis to 40 basis points. But just on this call also and on previous calls, I've mentioned that the normalized level is around 70, 80 basis points given the size of the balance sheet. So I wouldn't say that this is the new normal.
I think one should always be guided towards at least minimum 70 basis points of cost of risk. All right. So we've got some questions from Janany and from Arqaam . The first question is on the loan book and the movement in it right now, which seems to be flattish. And then also, the second question is on the margin compression and what's the view on that. And the third one is on the color and some color on the system-related outage that we've seen and any impacts. And the last one is on the impact of the implementation of the new credit risk standards in U.A.E. Thank you, Janany. Our loan book, obviously, on a net basis, looks flat year-to-date. But as I've mentioned, I think it's important to also understand how the engine is kicking.
The core banking engine of the bank, when you look at all core businesses, the gross underwriting has been to the extent of around AED 43.3 billion if you add up all the businesses together. That is at similar levels to year-to-date 2023. Now, if you then see how our pipeline for the remaining two quarters of the year is, we are very strong. Of course, on a net basis, the growth remains flat. Hence, for that very reason, we are not revising our guidance upwards. We feel that in Q3, should there be no extraordinary early repayments, our portfolio would have shown that we have surpassed the guidance. That's when we probably will give you a revised number for the remaining part of 2024. I anticipate that we will be revising our guidance upwards.
I can do that right now also on this call, but I don't want to get ahead of myself. We've seen very strong pipeline translate into our numbers in the first two weeks of this quarter. So we just want to make sure that that trend continues. And probably in the next webcast, we should be giving you guidance on where we are anticipating the full year growth to be. But I can tell you one thing that we will look at an upward revision because that's where everything is heading. Margin compression has eased. And how should we look at the remaining half of 2024? Of course, the compression has eased because as you recollect, this is something that I alluded to on my first call.
I also articulated the way we are going to go towards this: better enhancement in our CASA mix, running off some expensive long-term deposits that we have, and also enhancing our asset business composition by bringing in better quality assets at better prices. This is exactly what we've done. Hence, the margin compression has eased. Even though the net interest margins remain flat, we are confident that in the remaining half of 2024, the net interest margin should go upwards slightly from where we are at this stage. I've already given some color on the system outage. I wouldn't say I wouldn't refer to this as a system outage because the system was not down. We've done a cutover migration. A program of this size comes with teething issues.
If you are referring to the system outage that happened globally with Microsoft and CrowdStrike, we were not impacted by that. But if you are referring to our core banking migration, then I can tell you there was no system outage as such. Planned activities over a five-day weekend successfully completed. Now we have migrated to the new core, and we are operating in the new core 100%. Of course, some teething issues that impact customer experience more than revenues and costs. But I think we have salvaged the situation. We've connected with all our customers. We have communicated to the market at large and thanked people for their patience and loyalty and their support in this planned cutover, which I must say was necessitated for us to make the bank more robust, more stronger, and more progressive.
Thoughts on the impact of implementation of new credit risk standards in the U.A.E this year? Again, this is still not finalized. The U.A.E Banks Federation is working with the regulator. It's in the consultation phase. And I think we don't want to get ahead of ourselves in telling you what the impact would be because it's not final yet. Just hold on for a bit because we're going through questions. Some of them are repeated. Thank you. So a couple of questions from Rakesh from Franklin Templeton. Rakesh, the first one's already been answered. So we just go to the second one, which is on the real estate concentration guidance, which has seemingly been removed from 18.5% on one of the slides and now shows as 21.5% in the loan book of corporate banking. Thank you.
Rahul, like Kashif mentioned, your first question is answered, but very quickly, are we seeing exceptionally large repayments? I wouldn't say exceptionally large repayments. We had anticipated our gross underwriting to be at a certain level, which we have achieved. We did not anticipate some of these repayments that happened. Mind you, these were not paid across the industry. Some of this has moved to competition because of pricing-related challenges. We thought that it was fine for us to lose this particular business because it was at a very thin price. Having said that, we'll make up for more than this within our gross underwriting. So I'm not seeing this as a trend as such. But the outlook for the rest of the year looks strong from a net growth perspective, which is what I alluded to.
I was also mentioning to Janany from Arqaam that you can expect us to revise our guidance upwards in the next call when we look at quarter three results. I could have done that today, but I just want to probably just see how my pipeline is translating in the remaining part of this quarter three. But I'm very, very confident that we will probably revise this guidance upwards because clearly, we are going to meet the year-end guidance when we post our Q3 results. Your second question on real estate concentration guidance of 18.5% has been removed this quarter on slide 22. Yes. We used to report real estate as a part of the total loan book. And when I say total loan book, that is the total denominator of the bank, the total financing assets of the bank.
That included a corporate bank. It included a consumer bank, and so on. Now, what we've done is because predominantly this real estate concentration was commercial in nature, we have moved that within the corporate loan book. And that real estate concentration within the corporate loan book is at 21.5%. So in the past, if you would have seen real estate within the corporate loan book, it would still be 21.5%. But on an overall basis, we used to show a pie chart that used to be 18.5%. If analysts want to see that, we can always bring that back. It doesn't hurt us in showing that the real estate concentration overall remains at the same level. So we have not moved that. It's just a way of presenting. I'm happy to relook at that. And the team is taking notes, and we can always bring that pie chart back.
So a few questions from Shabbir from EFG Hermes. What have been the key challenges preventing you from growing your financing book at a higher pace? And the second one is, do you think that in terms of NIMs, DIVs, and overdraft levels, and if the rates start coming down, it will lead to an improvement? And the last one is that on certain reports of an IPO of NMC Health, do you have visibility in timing and potential recoveries from that? Thank you, Shabbir. So first question, key challenges preventing us from growing our financing book at a higher pace. Now, I've partly mentioned that on the call where I've said that the biggest challenge for us to grow our net book has been the early settlement. Because if you look at gross underwriting, we are at similar levels when compared to the first half of 2023, right?
So it's not like we can't generate new business or we are finding difficulty in underwriting new business. I think that has been at record levels. And we anticipate the remaining half of 2024 also to see similar trends. In fact, we've already seen that in the first two-three weeks of July. So we are very confident that at the end of Q3, we would have met year-end target for growth. And that's when, like I mentioned to Janany also, that we will be revising our guidance upwards. But the key challenge has been early settlements that, of course, we did not anticipate at the beginning of the year or beginning of the quarter. But this is something that we take within our stride every quarter, every year.
And we don't lose a lot of sleep over it because we have the ability to underwrite new business and generate new business, which is what we've done very well in the first half of 2024. And despite the kind of underwriting, the kind of early settlements that we've seen, we've still grown our book by about 3.8%, close to around 4%, right? So we are very close to year-end guidance. And we will be revising that guidance upwards. In terms of NIMs, DIB is near levels. And if rates start coming down, will we see an improvement? Now, even before rates start coming down, we want to see an improvement in our NIMs.
The way we plan to do that is if you recollect on the first call during this year, as well as some of the physical meetings that we've had with the investor base in the U.S. and in London, we mentioned that we've realized that our cost of funding is high. There are ways within our strategy we can bring our cost of funding down. Our liquidity levels remain very robust. Hence, we worked on a plan to make sure two things. One is run down certain very high-cost deposits, fixed deposits. Second is enhance our CASA by bringing in new-to-bank customers, running some campaigns. I think we've done a combination of both the things. Because of that, our CASA mix has improved.
Now, you might not see that impact of those very large fixed deposits going out of the bank or the CASA improving because that started to kick in in the third week of May, in the beginning of June. And since then, we have continued to see that trend. So that has not completely baked into our P&L. So you will see that enhancement probably in Q3 towards the end of the year as well. So we are confident that even if rates remain where they are, assuming they remain where they are or we see some one cut as late as maybe the last quarter of 2024, we should see some uptick in our NIMs because of the strategy that I articulated on our first call. Your last question on IPO of NMC. Yes, this has been in the works for some time. We've heard some narrative around this.
We don't have exact visibility of the timing or potential recoveries from the account. As you know, we've completely settled NMC in our books. And we hold a HoldCo equity note, which we have put in our book on face value. So whenever there is an IPO, depending on the valuation and depending on our exit, we anticipate that to give us rich dividends. But we've not factored that within our P&L. So just like you, we are also eagerly waiting for this IPO to happen. All right. We're still running through some questions. I think Sanil and Olga have sent a couple of questions around the new credit risk standards. So as Dr. Adnan Chilwan has already answered in relation to those. And as we have more color on them, we'll come back to you guys with greater detail. Thank you.
So a couple of questions again from Amreen from Arqaam Capital. The first one, Amreen, as you know, has already been answered just a little while ago. On the second one, which is we are aware that Dubai government's cash position has improved a lot over the last few years, and they have been retained. Can we say the same about other Emirates?
Amreen, thank you for your question. Yeah, like Kashif mentioned, first question answered. But in summary, yes, we will take advantage of the property market. We've done that in the first two quarters. We've also done that in 2023. So we will be very opportunistic, and we will see that we offload some of the legacy property portfolio that we have and take advantage of the very strong and robust property market, at least anticipated to remain the same until the end of the year.
Your second question is around Dubai government's cash position, which has improved a lot over the past few years, and they have been repaying. Can we say the same about Sharjah? I think two parts to your question. Part one is, obviously, we need to also acknowledge why the cash position is improving. And then based on that, why have they repaid? So for example, all these reforms that have happened within the U.A.E, specifically within Dubai, have attracted a lot of households and a lot of businesses to set up shop here. That also results in increased economic activity that translates to better revenues. Obviously, there is also on a federal level, there are taxes that have been implemented. So that also enhances the revenues of any government, for that matter, not just Dubai. Dubai specifically has floated some of its companies, have made them public.
That has resulted in very, very successful IPOs, ending up with a lot of liquidity. And then the higher interest rate environment within the region, as well as within the U.A.E, entices corporates as well as sovereigns to come forward and prepay their very high-cost borrowings, which is what Dubai has done. And can we say the same about Sharjah, Ras Al Khaimah, and other Emirates? If you look at the overall GDP of the country, that continues to grow. The macroeconomic outlook of the U.A.E, whether you look at it from any rating agency or look at it from even the IMF, has been revised upwards. So overall, I think the general trend is looking at a northbound trajectory. And not just Dubai, but all the Emirates' balance sheets are looking quite strong.
So yeah, in a way, you can say that everybody's position has been improved given the macroeconomic environment and the policies that have been run by the federal government. So given that we're coming to the last five minutes, we'll take the last question from Alok from GIB Capital. Can you provide us with some color on which sectors would likely be driving a healthy loan growth pipeline in the second half of 2024? Alok, thank you. I think it's a very important question that will then lead me to summarizing the call. But I think before we go to the second half of 2024, you look at what has happened in the first half of 2024. And if you look at all the key businesses that have contributed on the gross underwriting level, right? So on a gross financing basis, everybody has been growing.
So for example, if I very quickly throw color on our consumer business, right? Our personal finance lending is on record high levels. Our auto finance, because of the campaigns that we are running, is record high. Our home finance business, because of where the property market is and a lot of activity there, it has record high levels. As well as our card business has now, on a portfolio level, started to contribute. So that's our consumer business, very quick. Needless to say, within our consumer business, we also account for our small and medium enterprise business, right? And that is also showing some very rich activity. So all in all, our consumer business has been up by around 7%, increased by about AED 4 billion net growth on a year-to-date portfolio basis. So that's strong. And in our corporate business, gross underwriting has been very strong.
So we've seen sectors such as hospitality, sectors such as healthcare, sectors such as manufacturing, sectors such as retail contribute in the first half. And in the second half, I anticipate both in consumer as well as in corporate, we'll see these sectors. But predominantly, we have done, as you must probably have picked it up from the media, we've done very large transactions within the educational sector. We are also anticipating a large transaction within the retail sector. And then some of the other sectors that we've seen in the first half of 2024 will also continue in the second half of 2024. So overall, from a vantage point, if you look at our pie within our consumer book, very well diversified. If you see a pie within our wholesale book, very colorful and very well diversified.
We anticipate that in the second half of 2024, like I've mentioned, we will continue to see traction within each of these sectors. That will help us to make sure that our gross underwriting is strong. Hopefully, with very little early settlements in 2024, which we can't plan, we will see our net growth or net portfolio increase. Now, this brings me to the last five minutes of the call where I summarize. While we have key highlights on slide 22, important to understand is that the first half of 2024 has seen some very, very good business momentum across all our businesses. That's why I said that Alok's question just brings me into a summary for this call, where our gross underwriting across all our businesses has been strong.
We've seen a total of about AED 43 billion, which is roughly at the same levels of the first six months of 2023. Now, this we expect to continue across all our businesses, across all our sectors, because our pipeline is strong. And we have seen that in the first few weeks of this third quarter, or first few weeks of July. And we know that ending Q3, we would have met our year-end guidance for growth. And that's why I mentioned to Janany and I mentioned to Shabbir that we would be revising our guidance upwards for the remaining part of 2024 when we meet on the next call. Importantly, we've seen very, very strong asset quality. You have seen that the absolute numbers do not increase quarter on quarter. You have seen that the overall percentages have come down.
We've continued to grow, increase our coverage, cash coverage ratio, as well as our overall security coverage ratio. We've seen no new NPL formation. So that asset quality is robust. Our key focus, and whilst I talk about asset quality, we also touched upon cost of risk. While the cost of risk on a half-year basis is 40 basis points, that takes into account recoveries and settlements that we've seen in the first quarter of 2024, as well as no new NPL formation. So on an overall basis, normalized cost of risk remains tuned to that robust asset quality. And we should normalize it at around 70 basis points. So then the key focus of the bank in the remaining part of 2024 would be to continue growing our asset book and continue to mobilize low-cost liabilities and bringing our overall cost of funding down.
Because we feel that if we manage to do what we've done so far, and we've seen some trends emerge within the latter part of Q2, if we manage to do what we've been doing in the remaining part of 2024 within our liability mix, we will be able to bring our cost of funding down. And that will only help us to enhance our P&L as well as enhance our net interest margins. So with that, I come to the end of my hour. I think we've covered the very strong performance of the bank in the first half of 2024. We've also touched upon the very needed migration that we were working on for the last two years. That has culminated well for us. We have entered a stabilization phase.
By the time we come within our next call to discuss our Q3 results, we should have stabilized our core platforms and made sure that our customer experience is top-notch. It is not impacted. With that, we would probably look at better results, continue looking at better results, and probably revise guidance for our growth as well as our ROEs and ROAs upwards, as well as our NIMs upwards. With that, thank you for listening in. Hopefully, we will get an opportunity to meet some of you face-to-face on our upcoming roadshows. But if not, we will probably have a webcast sometime in October to discuss our Q3 results. At least I would start that call by saying that it's not as warm and humid as it is in Dubai today. Thank you, ladies and gentlemen.
Thank you, Doctor. Thank you, ladies and gentlemen. That's the end of the webcast. We look forward to welcoming you again on the next one. Thank you. Goodbye. This concludes today's call. Thank you all for your participation.