Dubai
Commercial Bank of Dubai (CBD) reported a net profit of Dh332.5 million for the first half of 2017, lower by 31.6 per cent compared to Dh485.8 million for the same period last year mainly due to higher provisions.
“Although net profit was impacted by higher impairment provisions as a result our prudent provisioning policy, the bank is well placed to continue growing in our target segments in the coming quarters,” said Dr Bernd van Linder, Chief Executive Officer.
The bank’s first-half operating income increased by 9.9 per cent to Dh1.31 billion, mainly due to a 7.1 per cent increase in net interest income to Dh885.2 million and a 16.3 per cent increase in non-interest income to Dh428.1 million compared to the first half of last year.
Factors such as an 18.3 per cent increase in fees and commission income, 81.6 per cent increase in investment income and a 3.7 per cent increase in other income also contributed to the operating income growth in the first half of this year.
CBD reported a 27.4 per cent decline in foreign exchange income mainly on revaluation of forward positions which partially offset the increase in non-interest income during the first half of 2017.
Operating expenses were 7 per cent higher at Dh449.3 million for the first half of 2017 compared to Dh420.1 million for the same period last year.
Total assets were higher at Dh67.9 billion as at June 30, 2017, an increase of 10.6 per cent over the Dh61.4 billion reported in the first half of 2016. CBD’s loans and advances increased 14.1 per cent year on year to Dh46.3 billion in the first half of this year and was up 10.4 per cent compared to Dh42 billion at year-end 2016.
“CBD’s first half results are underpinned by solid loan growth and higher operating profit. Liquidity continues to be robust,” said Dr van Linder.
The bank reported loan growth across all business segments with personal and business banking loans growing 8.9 per cent to Dh7.9 billion from Dh7.2 billion as at the year-end 2016. Corporate and commercial banking loans increased 10.7 per cent to Dh38.4 billion during the same period.
Customers’ deposits of Dh46.9 billion at the close of the first half of 2017, increased by 13.4 per cent compared to Dh41.3 billion in the first half of 2016. Current and Savings accounts (CASA) constitute 42.3 per cent of the total deposit base, while financing to deposits ratio stood at 98.8 per cent at the close of the first half of 2017.
Non-performing loans ratio continues its downward trend improving to 6.2 per cent from 6.9 per cent at year-end 2016 with overall loan loss coverage ratio at 91.5 per cent at the end of first half of 2017.
Additional net impairment provisions of Dh531.5 million were set aside during the first-half compared to Dh288.7 million for the same period previous year. This includes Dh55 million for general provisions, as a result of balance sheet growth.
The bank’s liquidity position continued to be comfortable with advance to stable resources ratio of 86.4 per cent as at June 30, 2017. Liquidity coverage ratio calculated as per Basel III guidelines was at 133.7 per cent in the same period. Capital adequacy and Tier 1 capital ratios were at 14.9 per cent and 13.8 per cent, respectively at the close of the first half 2017.
