Ladies and gentlemen, welcome to the Dubai Islamic Bank Full Year 2023 Financial Results Earnings Call. Please note to all those who are listening to us via the webcast link to kindly refresh your browser if you experience any intermittent audio issues. Another reminder, please ask your questions today by submitting them via email to webcast@dib.ae. I will now hand over to your host, Janany Vamadeva from Arqaam Capital to begin. So, Janany, please go ahead when you are ready.
Thank you, Adam. Good evening, 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 Q4 Full Year 2023 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 Nisar, the Head of Investor Relations and Strategic Communications. Without any further delay, I'll now turn the call over to the Head of Investor Relations, Kashif Nisar. Kashif, over to you.
Thank you, Janany, and welcome everyone to the 2023 full year results webcast of the Dubai Islamic Bank. The session is led by our Group CEO, Dr. Adnan Chilwan, accompanied by John Macedo, the Chief Financial Officer, and myself. Request everyone to keep the questions coming to the email provided, and they will be then addressed at the end of the presentation. So with that, let's start. We now move on to slide four. Here, as you can see, the Brent oil price has witnessed severe volatility during the course of the year, impacted by demand concerns, geopolitical risks, and OPEC production supply cuts. But ended the year at almost $80 a barrel, creating a healthy resistance level for the region.
U.S. Fed, on the other hand, paused its rate hike for the third time in December 2023 to, primarily due to the softening of inflation, yet ending the year again between 5%-5.5%, the highest levels seen in 16 years. In addition, the Fed changed its tone from hawkish to dovish, potentially indicating rate cuts in 2024. World Bank is expecting lower global growth in 2024, forecasting 2.4% from 2.6% in 2023, signaling sluggish global trade and tight financial conditions. That said, on the other hand, in the MENA region, the picture is a lot brighter.
The World Bank expects an improvement in activity from 2%-3.5%, from less than 2% in 2023, primarily on the back of resumption in oil production. Moving on to slide five, and closer to home, the UAE's economy has grown at an extraordinary rate across the major indicators. Non-oil GDP recorded strong growth of 5.9% year-on-year in nine months of 2023, driven by expansion across real estate, financial services, and wholesale and retail sector. PMI data also points to an acceleration in activity in quarter four of 2023, crossing the 57-point level, a steady level to sort of spill over into 2024.
Turning our attention to Dubai and the most recent nine month 2023 GDP is up by 3.3% year-on-year, to just over AED 831.8 billion. Primarily driven by the highest growth from accommodation and food sector. And this is in sync with the tourism sector, which continued its recovery, exceeding the 2019's pre-pandemic levels during the nine months of 2023, receiving 12.5 million visitors. And that's up 23% year-on-year and exceeds the previous record registered in 2019 of 12.1 million visitors. Simultaneously, hotels and restaurants recorded real growth of 14% year-on-year, a testament to UAE's National Tourism Strategy of 2031, which aims to place the country among the top global tourism destinations.
To further emphasize the city's focus on the development, this month, Dubai launched AED 32 trillion economic plan, aiming to boost trade and investments over the next decade under the overarching objective of doubling the size of the Emirates economy. And finally, COP 28 concluded in Dubai in December with agreement to call on nations to transition away from fossil fuels and energy systems, in a just sort of orderly and equitable manner, in order to achieve the net zero emissions by 2050, the goal of net zero emissions.
Other agreements included setting up a Loss and Damage Fund for developing countries that are vulnerable to adverse impacts of climate change, and the UAE banking sector committing AED 1 trillion in sustainable finance and related activities by 2030, to name a few. With that preamble, I will now hand over to Dr. Adnan Chilwan, the Group Chief Executive, to take you through the full year financial results. Dr. Adnan, please.
Thank you, Kashif. As always, I'll do a page turn highlighting our key achievements on each slide. After which, I'll open the call for questions, trying to address and answer as many as possible. Finally, wrap up the call, using the last five minutes to summarize certain key messages. On slide seven, you can see that DIB has delivered remarkably buoyant set of results during the full year 2023, around profitability and particularly balance sheet metrics. Our focus on service excellence led to our financial position expanding further to AED 314 billion, which is also an outcome of executing our expansion strategy through new product and service offerings. DIB's core business, mainly financing and sukuk investments, were up by a sturdy 12% year-on-year, massively surpassing our full year guidance and contributing to solid total assets growth of around 9%.
Our gross new underwriting and sukuks during the year equated to nearly AED 88 billion, up by 40% year-on-year. Despite repayments of around AED 44 billion and early settlements of around AED 15 billion, the net movement yielded a positive AED 29 billion in the portfolio, up threefold from AED 10 billion last year. Obviously, that has had a major positive impact on profitability, which you can see has jumped to 26.3% year-on-year and ended at around AED 7 billion, marking the highest net profit in the history of the bank. As a result, return on equity has improved by 300 basis points year-on-year to end at 20%, underpinning the bank's commitment to enhancing shareholder value. Overall, a sturdy set of results with all KPIs surpassing year-end guidance. On slide eight, a look at our resilient balance sheet.
Digging deeper into the performance, we have delivered balance sheet growth of 9% year-on-year to reach AED 314 billion. The bank's financing portfolio has grown by 7% year-on-year, ending at AED 199 billion, and the sukuk portfolio has advanced by 31% year-on-year to reach AED 68 billion. On the funding side, our deposits have increased by 12% year-on-year, equally supported by consumer as well as corporate accounts. Return ratios, which is return on assets and return on tangible equity, have outperformed our year-end guidance, remaining securely positioned vis-à-vis our commitment to shareholders. Other vital metric, like asset quality, has improved tremendously, which will be explained in greater detail in the latter section of the presentation. On slide nine, and I've mentioned that we've recorded the highest profitability in the history of the bank, a very positive story vis-à-vis the P&L.
Total income has witnessed a 43% year-on-year increase and ended at around AED 20 billion. The bank's net operating revenue is up by 10% year-on-year, and over the period has ended at around AED 8.5 billion. Net profit margin has registered 3.1%, exceeding our full year guidance, up 10%, 10 basis points compared to full year 2022. However, on a quarter-on-quarter basis, the net profit margin is flat, as the high rate environment has impacted the cost of deposits. Despite a focus on quality risk-weighted assets to minimize capital consumption and improve asset quality, which would be visible later in the presentation, we have shown steady margin expansion by also deploying liquidity in our growing sukuk portfolio, locking in lucrative rates over the next five years. Slide 10 looks at our profitability and cost structure.
In this slide, I would like to highlight the main contributors to our net operating revenue advancement. First, the net funded income has increased 8% year-on-year, while non-funded income came in even higher at a 23% increase. This rise is attributed to higher fees and commissions from corporate arrangement fees, certain gain on sale of properties, and finally, other income, which comprises of a few one-off gains. Overall, the fourth quarter of 2023, non-funded income was up by 48% year-on-year. OpEx has also seen some increase, up 11% year-on-year, in line with the bank's strategic growth plan, including system upgrades, digitization, as well as investing in the support functions of the bank. Nevertheless, cost-to-income ratio is what we keep an eye on. That has remained well within our guidance at 27.1%.
All of the above has led to a solid 26% year-on-year net profit growth in 2023, and it has ended at AED 7 billion and AED 2 billion in quarter four, up by around 47%. Turning the page, slide 11 looks at our deployment of funds. As assets have expanded by 9% year-on-year to reach AED 314 billion, gross disbursement in our financing portfolio grew by AED 67 billion, while sukuks have increased by AED 21 billion. This is the AED 88 billion gross disbursements that I alluded to at the beginning of the presentation. When you look at the pie below, the real estate concentration has remained intact at 18%, and this is in line with our guidance. Moving on, a little deeper look at our individual businesses. We start with consumer banking on slide 12.
The portfolio is up by 8% year-over-year, to end at AED 56 billion, and that constitutes around 27% of the total financing of the bank. This has been. This growth has been led by higher deployment within our auto finance business, our personal finance business, as well as our small and medium enterprise business. Across all products, we have booked gross new business of around AED 22 billion within the consumer bank, versus AED 18 billion in 2022. Despite routine repayments of around AED 17 billion, the consumer portfolio has exhibited positive growth for the year of almost AED 4.5 billion. Revenues in the consumer bank have been up by around 9% year-over-year, and yields have expanded by around 82 basis points to reach 6.7%, underpinning healthy profitability.
On a year-on-year basis, the consumer deposits have increased by 11%, and that has been contributed by our CASA, which on the consumer side, has remained predominantly sticky, seemingly agnostic to the current rate environment. Slide 13 looks at our corporate banking business. The portfolio has increased by 7% year-on-year to reach AED 143 billion and remains very well diversified. On a year-on-year basis, the growth in financing is primarily driven by industries such as services, utilities, automobiles, certain increase within the financial institution sector as well. And you can see in the middle of the chart, in the middle of the slide, that our pie graph is very colorful in nature, just demonstrating the diversification that we have within our corporate banking book.
I would also like to highlight that the bank has been consciously focusing on capital-efficient transactions in various industries, resulting in overall lower capital consumption, as mentioned earlier. DIB will also continue to expand its reach by seeking to capitalize on opportunities within the GCC region to grow its portfolio. Within the corporate bank, our gross new corporate financing in 2023 was bolstered to around AED 45 billion, deployed across various regional clients and private sector, while repayments and early settlements registered AED 37 billion. Now, that has led to close to around AED 9 billion growth in the overall corporate banking portfolio. Revenue trends continue to be on an upward trajectory, with revenues from the corporate business registering almost AED 3 billion, up by 1% year-on-year.
Yields, on the other hand, have expanded by around 263 basis points or 2.63% year-on-year, and that has ended at around 6.48%. The stellar yield expansion is attributed to increasing share of financing into industries, fueling the UAE's economic growth. If you look at corporate deposits, overall, they were up by 12% year-on-year, while corporate CASA balances fell by 11% as these were rotated and migrated into Wakalah or investment deposits. Slide 14 looks at our treasury business. Our treasury portfolio, and this is primarily, fixed income book, has expanded to AED 68 billion from AED 52 billion at the end of 2022, and that's a growth of nearly 31% year-on-year. Nearly three-quarters of that sukuk portfolio is sovereign, while 90% of the remaining is investment grade or above, underpinning high quality of this book.
Yields in in the fixed income book has expanded by around 58 basis points year-on-year to end at around 4.6% due to the incremental sukuk investments carrying higher coupons over the last 12 months. That's just a reflection of the high interest rate environment and the issuances that are being done within the market. Revenues over the year have picked up by around 34% to end at around AED 2 billion. Slide 15 is a very important slide, and that looks at asset quality. Our non-performing financing ratio has improved by around 110 basis points, and we've ended the year at 5.4%. This reflects healthy economic conditions in the UAE.
As you can see from the chart, from the NPF chart, the non-performing financing was lingering around 6% level for quite some time, so that's a great achievement. We brought it down from 6.5% at the beginning of the year to around 5.4% at the end of 2023. Cash provisions have increased accordingly, and they've ended at around 90%, starting the year at from 78%. So that's up by around 12%, on a year-to-date basis. Full year, impairment charges have declined, and they've declined by around 34%. In fact, Q4 witnessed some reversals and recovery. As a result, our cost of risk for the full year has been trending downwards, and we've ended the year with a cost of risk of around 60 basis points from 85 basis points in 2022.
This is obviously a reflection of improving asset quality, as well as recoveries and certain reversals that we have seen. The downward trend, ending the year at around 60 basis points, is something that we are really proud of. Slide 16, we look at asset quality in greater detail. Here, I would like to highlight the main reason behind the improvement in asset quality, and this emanates from core non-performing loans or non-performing financing of DIB, and that has improved from 5.4% and ended at 4.5%.
As you know, the pie within the pie graph that you see on the right of the slide, we try and show you our core non-performing financing of DIB and also throw some light on a particular account, NMC, as well as we throw some light on the Noor Bank portfolio transaction that we had done. So you can see that DIB's core non-performing financing ratio stands at 4.5%, and overall, we have trended downwards from 6.5%- 5.4% on overall basis. Recoveries from NMC and Noor Bank portfolio are ongoing, which have resulted in a decline of around 14% in their non-performing financing accounts.
Accordingly, NMC's coverage ratio stands at around 80%, and that continues to increase as we progress. Slide 17, we look at asset quality in stages. Our quality growth agenda has resulted in the average risk rating improvement across the bank's portfolio, and as you can see in the above charts, that is also reflected in the various stages. Stage two financing has decreased to AED 14 billion, and that's a very positive outcome for us. That's down by around 8% year-on-year. A combination of an improvement in average risk rates, coupled with a number of large accounts moving back to Stage one after they have completed their curing period. This has led to an improvement in Stage two exposure. Stage two coverage accordingly has improved from 7.4% - 9.1%.
Slide 18 looks at our funding sources, and liquidity of the bank continues to remain strong, with an LCR of close to around 189%, allowing the bank to meet its short-term obligations. CASA stands at AED 82 billion, accounting for 37% of overall deposits, and that has been stable quarter-on-quarter. The consistent elevated rate environment continued to see migration of CASA deposits into Wakalah deposits. Slide 19 looks at capitalization position. Our capitalization levels remain robust, with CET1 at around 12.8% and capital adequacy ratio at around 17.3%, both well above the minimum regulatory requirements. The capital ratios reflect the proposed dividend as well as the risk-weighted asset growth.
We are proposing a dividend of 45% dividend per share, and that is obviously subject to shareholder approval during the annual general assembly. Slide 20 looks at our digitalization efforts, and our digital drive saw another significant year with the launch of various new enhancements and new propositions. The year we saw the launch of alt, a full-service digital banking service from DIB, where customers can get value-added services such as open bank accounts in minutes, get personal finance or credit cards within quick time. And this new proposition, customers have access to close to around 135 digital banking services. DIB's key digital metrics continue to grow, as you can see in the bar charts, where areas such as mobile banking, internet banking penetration continue to demonstrate strong growth levels.
Slide 21 looks at our sustainability, and the bank's sustainable asset register has shown remarkable progress in the past year as a result of our growing innovative suite of sustainable products. To name a few, we've launched Nest, Evolve, DIB alt, that I have already referred to. We have also established ourselves as market leaders in facilitating sustainable sukuks, with over AED 12.9 billion in transactions, and are committed to deliver value to our stakeholders while contributing to the sustainability agenda. Our participation in COP 28 as an associate pathway partner demonstrated our resolve towards sustainability and climate action evident through the signing of UAE Climate- Responsible Companies Pledge.
Our financial literacy program to empower the youth in the field of finance, providing them with valuable information and resources, has reached over 50 schools within the country, and touched 4,000 students since the very inception. This year, we also held a Youth Financial Empowerment Forum in recognition of schools that joined the financial literacy campaign, recognizing their contribution to a prosperous and sustainable future. As a part of our commitment to promote climate action and environmental consciousness, we have embarked on a green initiative to plant a tree for every new customer who opens an account with us, an initiative which has already seen 51 trees to life, and we are not stopping there. The bank has also committed to more than AED 549 million towards community well-being and humanitarian causes, which has benefited around 90,000 beneficiaries.
Slide 22 is our sustainable finance slide. We are strongly committed toward mobilizing sustainable finance in line with the UAE's 2030 ambitions. Following COP28, we, together with the UAE Banking Federation, have committed to mobilize around AED 1 trillion over the coming years to drive global sustainable finance and facilitate global climate finance solutions. The bank has proactively embarked its journey earlier on this front with the publication of our Sustainable Finance Framework in the summer of 2022. Then we followed that by two issuances of sustainable sukuks, one in November 2022, and the next one in February 2023, both totaling to around $1.75 billion. The outstanding sustainable sukuk proceeds have been 100% fully allocated toward eligible green and social assets.
On the bottom left, pie chart, you will see a breakdown of this allocation, wherein social assets are around 53%, and that is represented by the burgundy color. Access to essential services, affordable housing, and employment generation are, some of the, you know, items that can be included within, that portfolio. On slide 24, we looked at certain summary highlights, and you can see that it has been a stellar year for the bank, with, new financing and sukuk underwriting to the tune of AED 88 billion. When you strip out the early settlements and normal repayments from that, we are left with a portfolio growth of close to around AED 29 billion, and that's up 12% year-on-year.
That is important because as interest rates would start to fall within 2024, a larger book would allow us to make better income, and that's been always the strategy that we have articulated. Our commitment to this growth is also depicted through our balance sheet, which has expanded by around 9%. Our asset quality has improved from the beginning of the year, and we've gone down from 6.5% and ended the year with 5.4%. Our coverage ratio, cash coverage, on the other hand, has increased from 78% and ended at around 92%, and our total coverage has also increased from 113%- 121%.
So all in all, if you look at our target metrics and the eight metrics that we measure ourselves with throughout the year, quarter-on-quarter, our full year guidance has been surpassed across all these eight metrics. Our financing and sukuk growth or our total growth, we had started the year with a guidance of 5%. We enhanced that guidance and changed it at the middle of the year to 7.5%. Happy to say that we've ended the year at around 12%. Our non-performing financing guidance was for the year to end at around 6.25%, and we've ended the year at around 5.4%. Our real estate concentration guidance was to be at 20%, and we have ended the year at around 18%.
Net profit margins, we've bettered our our year-end guidance and again, taken advantage of higher interest rate environment. We could have done better on our cost of funding side, but you know, our CASA accounts have rotated and migrated into Wakalah deposits. Nevertheless, our net profit margin has ended at 3.1%. Total coverage, not just cash coverage of movement from 78%- 90%, but our total coverage has moved from 113%- 121%. We've kept a very close eye on cost-to-income ratio. We are well within guidance and ended the year at 27.1%. As a result, our return on tangible equity has seen a bumper 20%, and our year-end guidance was 17%.
Of course, the denominator has also increased, and it takes into account the profit retention that we are going to do after we pay a dividend of 45%, which is subject to shareholder approval. Slide 25, again, as customary, I always talk about, you know, some target metrics, and we set those for the full year. The strategic theme for the year will remain as DRIVE, and if you recollect, that's the strategic theme that is driving the institution over the next five years. We started this in 2022. So we are in the third year of our five-year plan, and it's DRIVE. So that continues to be digital transformation, robust foundation, increased value, versatile operation, and engaging experience.
Then we are also setting the guidance for the eight key metrics that we do in the beginning of every year. So for 2024, you'll see that our growth projections on a bigger balance sheet are set at around 5%, and we'll see how that pans out quarter-over-quarter. And if required, we'll try and revisit this in the first half of 2024, just like we did in 2023. Our non-performing financing, we've ended 2023 at 5.4%, so we'll try and end the year at 5%. That's going to be a function of numerator as well as denominator. We anticipate that we will close within this range, and in fact, we'll try and better this. Real estate concentration, again, 18% is what we want to maintain this at.
Return on assets and return on tangible equity is being set at 2% and 18%, respectively. Now, one might argue that, you know, with 2.4% return on assets and 20% return on equity, why are we trending down? Clearly, it's going to be a reflection of net profit, and as you know, the corporate income tax is being introduced for 2024, effective January 1, so that will have an impact on earnings. But obviously, if we look at the net profit before corporate income tax, I can say that, you know, we are going to be making progress in the right direction, and we anticipate to have better net profit on a pre-corporate income tax basis.
But of course, the Return on Tangible Equity and Return on Assets, would be, you know, a result of the net profit after corporate income tax, and hence you can see, you know, certain contraction. Cost-to-Income Ratio, we want to be at the similar levels of 2023, despite the transformation that we are doing, despite the growth that the bank will see, we feel that we'll be able to deliver a Cost-to-Income Ratio of around, 27%. Total coverage will only improve from here. In terms of cash coverage, we'll try and, end with 100% cash coverage or more, and that would also reflect a total coverage moving from 121% to around, 130%.
Net profit margins, of course, this is factoring some interest rate reductions for the latter part of the year that would have an impact on yields on the asset side. Obviously, we'll benefit from better repricing of our Wakalah deposits on the liability side, but net-net, we feel that it will be only prudent to keep a net profit margin target of around 3%. That brings me to the end of my page turn.
I'm happy to open the call and the floor to take questions. We'll try and address as many as I can, but the last five minutes of the hour will be used by me to kind of you know bring your attention again to certain key messages and you know shed light on overall performance of the bank in a very summarized manner. I'll pause here, and we'll try and go through the questions, and we'll also, you know, group them and try to answer them together.
Thank you, Doctor. Ladies and gentlemen, just give us a few minutes to start browsing through the questions. Thank you.
We will now start the Q&A session. If you wish to ask a question today, please send them via email to webcast@dib.ae. That's webcast@dib.ae. Thank you for holding until we have our first question.
We've got a first set of questions from Janany from Arqaam. So the first question is around the 5% growth guidance for 2024, and so what's the rationale behind that? The second is around the rate cuts that you're factoring out. How many rate cuts are we factoring in, the margin compression that we've guided for? And then what sort of cost of risk are we expecting in 2024?
Thank you, Janany, for your questions. 5% growth guidance for 2024. Of course, you know, we saw pickup from Q3 2023. We went into Q4, and I think the results are in front of you. We've done a full year, you know, growth of around 12%. Now, mind you, 5% is on a bigger base, right? So that base has significantly increased, and it has increased by 12% year-on-year, so that's a bigger base. We want to start the year not getting ahead of ourselves. And again, in 2023, you know, you recollect that we gave a guidance of 5%, and, when we got the first opportunity to reset that guidance, we changed that in line with our Q1 and Q2 performance, and we revised that to 7.5%.
Then we ended the year at around 12%, and that was just a reflection of what we did in Q3 and Q4, which is something that we alluded to on all the calls that we were doing quarter on quarter. So we are starting the year with a 5% guidance, and if we meet that guidance sometime during Q1, Q2, we are always going to revise that guidance upwards. So this is not cast in stone, and we've already demonstrated that in numerous times in the last three or four years, where we've revised our guidance upwards. How many rate cuts are we factoring in this 10 basis points NIM compression? You know, when we were forecasting you know these compressions and when we were putting these guidances, this was pre-Davos, right?
And pre the comments coming from the Fed Governor Waller. So we had, at that time, factored a forward-looking EIBOR curves, which were anticipating five rate cuts for 2024. If it's going to be anything different than that, and let's say if it's going to be three or two cuts, then the net interest margins is only going to improve from here, right? Because we would take advantage of higher for longer. But for now, I think, you know, because these are approved by the board of directors, so no, you know, we have come and given this guidance to the market, but definitely this can change, when the interest rate environment continues to change. And this is a moving goalpost as we speak, right? So the narrative is now becoming more clearer.
You know, they are- they have contained inflation, and if that happens, the recent data points that have come out are all pointing towards lesser number of rate cuts. And if that happens, you know, we are going to take advantage of higher for longer. In terms of cost of risk, you know, 2023, we had a very good year in terms of asset quality. Our cost of risk ended at 60 basis points, but I also mentioned that that was on account of recoveries, certain reversals. But if we normalize our cost of risk, we would be guiding towards around, you know, 80 basis points, which is-- which is what has been consistent over the last three or four years.
As a reminder, that's webcast@dib.ae.
So we've got a few questions from Rahul from Citi. One is on the loan growth, and how is the outlook of UAE and loan growth are being aligned? And also the next one is on the provisions, which were minimal in quarter four. So what was the reason for that? And finally, what is the sensitivity to 2,500 basis points cut in NIMs on the DIB P&L?
Loan growth muted, and I think Janany also asked a similar question. You know, one has to look at the full year, right? Because there are transactions that might not pan out in a particular quarter, that will only go into the next quarter. So if you remember, we had a very strong Q1 2023, Q2 was a bit muted, Q3 was very strong, Q4 is muted. So, not all the quarters are going to be consistent. As long as, you know, year-on-year growth ambitions are met, one should be happy with the kind of growth that we have demonstrated. So Q4, yes, was muted from an absolute amount, but that's because there are transactions that did not materialize, are in the pipeline, and we will see them materialize in Q1 2024.
So I think one has to look at, at the entire loan growth guidance and see where are we vis-a-vis that. Q1 2024 is looking very strong. So we'll take quarter on quarter, and quarter by quarter. And like I mentioned to Janany also, if our 5% guidance is something that we will achieve sooner than later, then we are going to revise our guidance upwards. But right now we are in an upbeat mood. You know, macroeconomics is positive. You know, the GDP forecast of the country that is anticipated to be 4.7% for 2024. And I think we are going to make, you know, take advantage of that.
We are seeing some very good traction, and there's a very strong pipeline that we are seeing across our wholesale bank. And our consumer banking business is also seeing very good traction. So we are only going to kind of you know start from where we ended the year, which is on a very positive note. zero provisions in Q4, you're absolutely right. And I mentioned that that was on account of certain you know release of you know impairments that we had on certain accounts that were settled. And those recoveries then meant that you know the quarter-over-quarter provision was in fact negative.
You know, we had close to around 12 million dirhams of, you know, quarter on quarter, you would say, credits as opposed to debits. But that on account of that Q4 recoveries, if you look at the full year, we ended up with a cost of risk of around 60 basis points. NIM sensitivity, again, no different than what I mentioned in the past. A 100 basis points interest rate movement has a 150 million P&L, change, right? So if the interest rates move down by around 100 basis points, you know, a 150 basis points, 150 million of P&L impact will have to be factored in.
Having said that, I've also mentioned this on our previous call, that as the interest rate cycle, you know, moves downwards, given that our CASA mix is only 37% and our fixed deposit is 63%, when interest rates goes down or when interest rates start to move downwards, we will take advantage of that because a majority of our book will be repriced, right? Because, you know, the 63% of our fixed deposits, which have a very high rate in today's, you know, high rate environment, will be repriced. And we will take advantage of that. I think DIB is in a better position when compared to some of its peers, given that, you know, the CASA mix is 37% only, and the fixed deposit is 63%. We will take advantage of that as interest rates start to decline.
As a reminder, I would like to remind you, if you have any further questions, please send them via email to webcast@dib.ae.
Okay, so we have a couple of questions from Shabbir, from EFG. The first two questions, Shabbir, have already been answered around the recoveries and also the sensitivity. So we'll go into question three and four. The third question that you have looks at the credit quality trends in the real estate and mortgage portfolio. And also the last one looks at how—what kind of contribution we are looking to do towards sustainable finance going forward.
Shabbir, as always, thank you for your questions. As far as credit quality within real estate and mortgage portfolio is concerned, over the last 24 months or so, we have seen no deterioration in credit quality within real estate or our mortgage book, or for that matter, within our financing or sukuk book. And that can be validated by the fact that if you look at our core Non-Performing Financing, that ratio has not gone up. In fact, it has trended downwards because we have recovered from some of these very old real estate, you know, cases. And some of these recoveries that we have mentioned on this call are coming out of some of the real estate cases that long drawn real estate cases that now have seen closures.
So, that's why our non-performing financing have trended downwards. No, no deterioration of our credit quality, and we are not seeing no negative trends within our real estate or our mortgage portfolios or anything for that matter. In fact, if you look at our LTV, that continues to trend downwards within our mortgage book, and that's a sign that irrespective of where the real estate valuations are, our repayments continue to happen on time, and that's why the LTV of the mortgage portfolio continues to go down. It stands at around, close to around 65%, you know, today. Our expected contribution to the AED 1 trillion COP28 financing. Of course, we would be playing a major part in the contribution, just like, you know, our peer banks within the UBF.
In terms of our contribution, our 15, 15% of our financing book, in 2030 is going to be, sustainable in nature. So that's 15. 15% of our total financing, that will sit on our balance sheet in 2030, will be sustainable in nature, and that's how these numbers have been added up. All the banks have done that. They've added X percentage of their financing book in 2030, and that's how we've ended up with AED 1 trillion, by 2030.
Just another reminder, please send all emails, all questions via email to webcast@dib.ae.
All right, so we've got Waleed from Goldman with a few questions. The first one is the expected impact of corporate rate, corporate tax rate and the potential positive offset against the card charge. The second one is on the, again, on the corporate tax implementation, would we be able to maintain similar level of dividends? And the third one is on growth opportunity in Saudi.
Thank you, Waleed. As always, very good questions, very strategic in nature. As far as the corporate tax rate is concerned, of course, you know, we are in the same boat as everyone. Effective first of January 2024, we will be, you know, we will be, paying corporate tax. But, you know, will we have a positive offset against our Zakat charge? This is, you know, this is something that we are working towards, to be very honest with you, right? Because and, and again, we will be able to shed some color on this only when we have clarifications from the authorities.
But I can, I can tell you that that is something that is on our agenda because the bank pays Zakat and, you know, it should, the bank should get advantage of that. So this is something that once we have some insights on this, we will definitely, we will definitely, you know, make sure that the investor community understands that. And I can promise you, you will be the first one that we will get in touch with since you've raised this, this point. Given the corporate tax implementation in 2024, would we be able to maintain the current dividend in nominal terms? Well, well, that's the objective. That's the aspiration. You know, we are working hard to make sure that we can maintain, the current dividend.
But again, you know, models are being worked upon, and you know, too early in the year for us to even comment. But if you put me on a spot, yes, that's exactly what we are trying to do. We are trying to make sure that, you know, we can maintain the current dividend in nominal terms. But again, we've got to see how the year pans out, what will be the corporate income tax, whether we will get an offset or no, what will be the earnings of the bank, you know, how many interest rate cycles will we get advantage of all of that? So you know, it's all interlinked, right? But at this point in time, to answer your question, yes, that's our objective.
How does DIB management see potential in Saudi loan growth? We see tremendous potential. You know, does not mean necessarily that we have to operate on the ground in Saudi. We can still tap the Saudi business. We've done that within the UAE, and that reflects, and is reflected within our UAE balance sheet. So, you know, we will be looking at when we say we are looking at coverage in GCC, we are looking at Saudi business, and we'll continue to tap that market as and when opportunities exist for us.
A reminder, any further questions, please send them via email to webcast@dib.ae.
Okay, so again, we've got a number of questions coming through even now, but, as mentioned earlier by the CEO earlier, that, you know, we will take the five minutes for the end of the presentation, to wrap up. So we will take the last couple of questions now and then, obviously get in touch with the investor relations team later to have the others answered. So this question is now from Kareem from Epicure. Have you seen an impact on financing asset quality stemming from the retail or SME sectors?
No, no, Kareem. 2023 has been a good year for our consumer banking business. You've seen that we have grown by close to around AED 4.5 billion in absolute terms. You know, across all our key products, auto finance, personal finance, home finance, SME business, our card portfolios have also increased. So this is after gross underwriting that was to the tune of around AED 22 billion in the consumer bank, right? So, net, net, after all normal settlements, we have ended with a net increase of around AED 4.5 billion. And if we look at the asset quality within the consumer bank, across all these products, we have not seen any deterioration.
And, you know, the flows look very good, you know, in terms of, the asset, bookings. So, consumer business, I think, very well diversified, very good asset quality, no deterioration as far as asset quality is concerned, and also a high-yielding business for us. So overall, something that we will continue to invest in, and that is also supported by our digitalization strategy, because we continue to, enhance our digital efforts, and that also, adds up to our consumer banking, you know, acquisitions.
Yeah. So a question from Javier. In your segmental overview, your exposure to real estate stands at 24% of the total portfolio. You then quote 18% figure. Can you please explain the rationale behind the 18?
Absolutely. Javier, yeah, Javier, he's talking about 24%, within real estate, and that's on slide 13. That's within the segmental overview, Javier, that is corporate bank. 24% of our corporate banking, exposure is within real estate. The 18% is bank-wide. It includes, you know, the total book of the bank. It includes the total, loan book of the bank. So if you look at all our businesses put together, that's 18%. Thank you. I think the last five minutes, as I had, requested, the last five minutes of this call, will be used by me to, you know, summarize some key messages. I can see that there are so many questions that are there.
Some of them have been repeated, because, you know, some of your colleagues have already asked us, but they, there are a few, a few, unique ones. You know, my investor relations team will get in touch with you and try to answer them, you know, to the best of their abilities. But I'm going to use the last five minutes in order to summarize some key messages. 2023 has been a record year for us, and I want to summarize this in 4 or 5 points. I say a record year, not just because of net profit, and this has been, you know, the highest net profit in the history of the bank. But I don't say a record year because of that.
This stellar performance can be attributed to, one, the growth of the bank's earning assets. So a 12% year-on-year increase over a bigger balance sheet is significant in nature. So when you looked at gross underwriting of AED 88 billion pan- bank, and you stripped out the normal repayments of AED 44 billion, and then you stripped out extraordinary prepayments of around AED 14 billion, you are left with AED 29 billion of net growth. That's very significant. That 12% year-on-year is significant.
It's significant not just for 2023, but it's also going to become significant for 2024 because that base has increased significantly, and if the interest rate goes down, our base is higher for us to make, you know, the same amount of of interest income or profit income because we've come out, we've come up with a larger base. So that's one. If you then try and see where that growth is coming from, you will see each of our businesses are, you know, making a positive contribution. Our corporate business has gone up by around 7%. Our consumer business has gone up by around 4%-5%. Our sukuk book has gone up by around 31%. So all that put together, that's the 12% increase year-on-year.
So all our businesses are going, you know, are progressing in the right direction. So that's the second point that I wanted to make. The third point that I wanted to make is around asset quality. 2023, we've seen some legacy cases being closed that has allowed us to you know, bring our absolute amounts in non-performing financing down. And we've seen you know, the amounts have gone down by close to around AED 1.5 billion in absolute terms, and that translates from 6.4, 6.5%- 5.4%. We've also not you know, reverse provisions on certain accounts that were out.
Instead, what we've done is we've enhanced coverage on certain other accounts, and that would then mean that our cash coverage has gone up from 78% to around 90%, and our total coverage has also gone up from 113%- 121%. As a result of our strong 26% year-on-year net profit increase, which stands at around AED 7 billion, our return on tangible equity and our return on assets had seen, you know, substantial increases, better than guidance. That has ended return on assets at around 2.4% and return on tangible equity around 20, 20%, better than guidance of around 2% and around 17%, respectively.
We've also kept, you know, close control over costs, even though costs have gone up by 11%, year-on-year. That was something that we were expecting. You know, given that we are investing in our infrastructure, investing in our control functions, we have made sure that our cost to income ratio remains within our guidance of 28%, and we've ended the year at 27.1%. As a result of all of that, the board of directors has also recommended a dividend per share of around 45%, and that is subject to, you know, shareholder approval in the General Assembly.
So overall, 2023 has probably been one of the best years, you know, in the last 15 years of the bank's journey, or the last 10 years of the bank's growth agenda. And we are putting our best foot forward in 2024. We've given you guidance for 2024, and you know, similar to what we keep doing every quarter, we will you know, meet you on the next quarter within the financial earnings webcast, and we'll make sure that we will track ourselves with this guidance that we have given for 2024. With that, I come to the end of my hour.
Please feel free to get in touch with the team, and I'm sure that we would also, maybe, see each other face-to-face, you know, over the coming months and quarters when we have some deal/non-deal roadshows. Thank you.
Thank you, everybody, and please get in touch with us for anything we get you any other questions. We look forward to seeing you again on the next webcast. Thank you. Bye-bye.
Concludes today's conference call. Thank you for your participation. You may now disconnect your lines.