CBI records Dh36.5 m net profit
dubai — Commercial Bank International, or CBI, has reported a net profit of Dh36.5 million for its Q1, 2016 period, supported by growth in wholesale bank lending and customer deposits.
Net loans and advances increased by Dh703 million, or six per cent to Dh12,209 versus Dh11,506 million in December 2015, well above reported market growth of 1.3 per cent. Earning loans and advances increased by Dh793 million from year end 2015.
Significant balance sheet restructuring and provisioning in 2015 led to a reported loss for 2015. In Q1, 2016, the bank reported continued improvements in asset quality with non-performing loans dropping by 12 per cent to Dh869 million from Dh983 million in December 2015.
As a result, CBI reported an improved non-performing loan ratio of 5.9 per cent from 7.0 per cent down 115 bps from December 2015; and an NPL coverage ratio of 89.2 per cent up 7.8 per cent from 81.4 per cent at year-end 2015. Capital adequacy remained
CBI is a bank focused on growth. We have the speed and agility of a small bank, with the stability and security of a big bank Mark T. Robinson, CEO of CBI
stable at 14.5 per cent, versus 14.8 per cent in December 2015, and above the minimum required. Liquidity also continues to be in excess of the regulatory requirements. Customer deposits increased by six per cent to Dh11,782 million from Dh11,106 million in December 2015, significantly ahead of the market which was flat for the period. Revenue for the quarter was Dh186.7 million, slightly down from Q1, 2015 mainly due to the one off revenues from the sales of non-core assets in Q1, 2015.
“This is a very positive start to the year for CBI, and a pivotal moment for the Bank. The Fitch rating is an endorsement of the strategy and our relationship with QNB and puts CBI in a strong positon at the start of a challenging year, and well placed to create sustainable returns for shareholders,” Mohammad Sultan Al Qadi, chairman of CBI, said. CBI’s expenses of Dh105.4 are 3.5 per cent above Q1 2015. Net specific provisions of Dh30.9 million were Dh23.0 million less than Q1, 2015 wherein general provisions of Dh14 million were Dh25.4 million less than Q1, 2015.
Mark T. Robinson, chief executive officer of CBI, said: “CBI is a bank focussed on growth. We have the speed and agility of a small bank, with the stability and security of a big bank. The rating from Fitch comes at an important time for CBI because it accelerates our growth strategy in several ways, including providing access to a bigger pool of potential investors and a reduced cost of funds.”
The bank’s return to profitability is underpinned by a long-term issuer default rating of ‘A-’ and a Viability Rating of ‘B+’ from Fitch Ratings. The high investment grade rating is supported by the strengthening of CBI’s balance sheet through the sale of non-core assets, reduction of NPLs and issuance of Alternative Tier 1 capital in Q4, 2015.