CBD posts Dh1.15b operating profit
dubai — Commercial Bank of Dubai (CBD) on Wednesday said its operating profit for the first nine months of 2016 grew marginally to Dh1.15 billion despite a challenging economic environment.
In a statement, the bank posted Dh701.5 million net profit for January-September 2016 period, reflecting a decline of 23.4 per cent compared to Dh915.3 million for the same period last year mainly due to prudent provisioning which resulted in loan loss coverage ratio of 100.2 per cent.
The bank’s operating income increased to Dh1.79 billion in nine months of 2016 compared to Dh1.76 million for the same period last year driven mainly by a 2.2 per cent increase in net interest income, 13.4 per cent increase in foreign exchange and 6.9 per cent in other income, while fees and commission declined by 5.2 per cent.
Peter Baltussen, chief executive officer of CBD, said the bank’s increasing operating profit in an environment that remains challenging reflect its prudent policies and pro-active steps to grow.
“The bank continues to invest in enhancing its distribution network including a new digital framework. It has also invested in a significant upgrade of its risk management function and systems. We have recalibrated our plans for the remainder of 2016 and the coming year and remain cautiously optimistic
The bank continues to invest in enhancing its distribution network including a new digital framework Peter Baltussen, about the challenges and the opportunities in the UAE.”
The bank continued to invest in enhancing its distribution network and upgrading its digital banking framework to support key strategic initiatives. These costs were offset by efficiencies achieved in other areas of the bank. Operating expenses were 2.2 per cent higher at Dh641.9 million for the period, compared to Dh627.9 million for the same period last year. Cost to income ratio for the first nine months of 2016 stood at 35.8 per cent.
The bank further said its nonperforming loans ratio was relatively stable at 7.1 per cent as at September 30, 2016 as against 6.9 per cent on December 31, 2015 with overall loan loss coverage ratio at 100.2 per cent.
Bank’s total assets were higher at Dh62.2 billion as at September 30, 2016, reflecting an increase of 7.5 per cent over the previous year end. The increase in assets is attributed primarily to increase in loans and advances, investments securities and customers’ acceptances.
Loans and Advances to customers were Dh41.3 billion, up 5.8 per cent over December 31, 2015. The bank’s loan book grew across all business segments. Personal and business banking net loans increased by 5.7 per cent to Dh7.1 billion while corporate and commercial banking net loans increased by 5.8 per cent to Dh34.2 billion.
Customer deposits also increased to Dh41.9 billion as at September 30 2016, up 3.7 per cent compared to year end with increase in deposits across all business segments. Current and savings account balances increased by Dh2 billion (11.7 per cent) to represent 45.9 per cent of total customer deposits as compared to 42.6 per cent in December 2015.
— business@khaleejtimes.com
Chief Executive Officer, CBD