Dubai: Commercial Bank of Dubai (CBD) reported a 2.2 per cent increase in its net profits to Dh821 million for the year ended on December 31, 2010, up from Dh803 million for 2009.
The fourth quarter net profit in 2010 was up by 7.7 per cent when compared to the same period in 2009. Total income for 2010 was Dh1,890 million a 6.9 per cent increase compared to Dh1,768 million last year. Mainly as a result of lower funding cost, the bank’s net interest income increased by 5.2 per cent to Dh1,385 million, while other operating income increased by 12 per cent to Dh505 million. Operating profits before specific and collective provisions grew 9.3 per cent to Dh1,347 million.
CBD reported total assets of Dh38.5 billion, a 4.7 per cent increase compared to last year end. Loans and advances stood at Dh27.2 billion by year end 2010, while customers’ deposits were up by 4.6 per cent compared to last year, reaching Dh29.2 billion by the end of 2010. Consequently, the bank’s liquidity position further strengthened, resulting in a strong advance to stable resources ratio of 83.9 per cent, well below the maximum of 100 per cent as stipulated by the regulator.
The results which are subject to the UAE Central Bank’s approval have been announced following a meeting of the Bank’s Board of Directors held today (Sunday, 30th January 2011). The Board has proposed a cash dividend of 20 per cent, subject to the agreement of the shareholders at the Annual General Meeting to be held on 16th March 2011.
Peter Baltussen, Chief Executive Officer said, “As a result of the Bank’s focus on family owned companies and affluent individuals, the quality of our credit portfolio remains strong. Our profitability ratios are among the highest in the UAE banking sector, while increased revenues combined with continued cost optimization have resulted in a healthy Cost to Income ratio of 28.7 per cent.”
He added, “The Bank’s comfortable liquidity position ensures that we are geared up for growth and able to benefit from the opportunities that the recovering UAE economy is offering. Moreover, the Bank is well capitalized with a high Capital Adequacy Ratio of 20.28 per cent and a TIER I Adequacy Ratio of 15.58%, well exceeding the UAE Central Bank and BASEL II regulations.”
The bank has continued to build up its provisions in line with its prudent credit policies and the regulatory provisioning requirements. The full year impairment charge for the loan portfolio was Dh555 Million, including Dh96 million for general provisions, which represent more than 1.4 per cent of the Bank’s credit risk weighted assets (CRWA) by the end of 2010. The non-performing loans are covered up to 89 per cent by provisions against potential losses and collateralized by cash and other tangible securities.
