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CBD reports 68.7% increase in net profit at Dhs561 million
By our business bureau July 13, 2018
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DUBAI: The Commercial Bank of Dubai (CBD) on Wednesday reported its financial results for the first half of 2018. According to results, bank’s first half net profit of Dhs561 million was 68.7 per cent higher on the back of a 1.1 per cent increase in operating income and a 5.6 per cent decline in operating expenses; impairment allowances meanwhile decreased by 35.5 per cent.

Operating income increased by 1.1 per cent to Dhs1,328 million, mainly owing to a 6 per cent increase in net interest income to Dhs938 million (H1-2017: Dhs885 million) while non-interest income decreased by 9 per cent to Dhs390 million (H1-2017: Dhs428 million). Fees & commission income increased by 2.8 per cent, foreign exchange income registered a 27.6 per cent increase and other income increased by 12.3 per cent over the first half of 2017, while investment income declined by 82.4 per cent due to a one-off dividend of Dhs55.7 million received in H1-2017.

Operating expenses were 5.6 per cent lower at Dhs424 million for the first half of 2018 compared to Dhs449 million for the same period last year. Cost to income ratio improved to 31.9 per cent (H1-2017: 34.2 per cent).

Total assets were at Dhs68.9 billion as at June 30, 2018, an increase of 1.5 per cent compared to the Dhs67.9 billion as at June 30, 2017.

Loans and Advances at Dhs47.2 billion registered an increase of 1.9 per cent when compared to Dhs46.3 billion as at end of same period last year. Personal Banking loans at Dhs6.7 billion decreased 1.2 per cent when compared to Dhs6.8 billion as at the end H1-2017. Corporate, Commercial and Business Banking loans were at Dhs44.4 billion, a 3.6 per cent increase when compared to Dhs42.8 billion as at end of same period last year.

Customers’ Deposits of Dhs48.1 billion as at June 30, 2018 increased by 2.6 per cent compared to Dhs46.9 billion of same period last year. Current and Savings accounts (CASA) constitute 43.2 per cent of the total deposit base, while the financing-to-deposits ratio stood at 98.1 per cent.

The non-performing loans ratio increased to 7.5 per cent from 6.2 per cent at the end of H1-2017, while the overall loan loss coverage ratio improved to 95.3 per cent (June 30, 2017: 91.5 per cent).

In line with the Bank’s prudent provisioning policy, additional gross credit impairment provisions of Dhs346 million were set aside during the first half compared to Dhs529 million for the same period previous year. As of June 30, 2018, total ECL allowances under Stage 1 and 2 amounted to Dhs1.1 billion or 2.0 per cent of credit RWA.

The Bank’s liquidity position continued to be comfortable with the advance to stable resources ratio of 91 per cent as at June 30, 2018 (June 30, 2017: 86.4 per cent), while the UAE Central Bank has set 100 per cent as the maximum limit.

CBD’s Capital Adequacy and Tier 1 capital ratios were at 15 per cent and 13.9 per cent, respectively, and were significantly above the regulatory thresholds of 12.375 per cent and 10.375 per cent mandated by the UAE Central Bank.

Commenting on the Bank’s performance, Dr. Bernd van Linder, Chief Executive Officer said, “CBD’s first half results were strong, underpinned by a higher operating and net profit, with continued expense discipline and increased provision coverage. We remain committed to growing the Bank by further developing our digital offering to enhance our customers’ experience using state of the art technology”.

He added, “With a strong balance sheet, healthy liquidity profile and capital adequacy, CBD is well-placed to support our customers’ requirements.”

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