Commercial Bank of Dubai profit up 2.3% for the first half of 2013

Dubai: The Commercial Bank of Dubai (CBD) yesterday announced a 2.3 per cent rise in the first six-month net profit due to growth in net interest and non-interest income. The net profit of Dh497 million was up from Dh486 million of the same period last year.

The bank’s operating profit increased by four per cent to Dh688 million for the first half of 2013 as compared to Dh622 million last year.

Net interest income climbed 3.2 per cent to Dh694 million compared to Dh673 million for the corresponding period last year. Non-interest income at Dh289 million was 8 per cent higher compared to Dh268 million for the same period

“CBD’s solid performance in the first half of 2013 is reflective of the current economic environment in the UAE,” said Peter Baltussen, the bank’s chief executive in a press statement.

“Sustained performance of core sectors like trade, tourism and services has been complemented by a stable oil price, resulting in increased investors’ confidence and an upturn in the real estate market and stock market indices in the country.”

The bank has taken Dh205 million impairment allowances for the loan portfolio during the first half of the year 2013, resulting in a non-performing loans coverage ratio of 79 per cent, up from 71.7 per cent as at last year end. Banks in the UAE continue to take similar measures as part of continued balance sheet de-risking.

CBD said its capital adequacy ratio stood at 20.6 per cent. The ratio is a key measure of the bank’s financial soundness. The bank’s total assets were Dh42.4 billion as at June 30, 2013, a 7.7 per cent increase over the Dh39.3 billion as at December 31, 2012. Customer loans and advances rose by 7.8 per cent to Dh29.3 billion at the end of June 30, 2013 when compared to Dh27.2 billion last year-end.

Customers’ deposits grew by 2.7 per cent to Dh 28.8 billion, compared to Dh28.1 billion as at last year-end.

“While the Bank’s loan portfolio increased by 7.8 per cent over December 2012, our liquidity and capital adequacy ratios remain strong,” Baltussen added.

“During the second quarter, the Bank successfully issued its first ever conventional bonds for $500 million. The issuance was extremely well received across the globe, evidenced by the fact that it was oversubscribed over five times. In the same period, the bank repaid Dh1.5 billion of Ministry of Finance deposits ahead of their maturity.”