Dubai: Commercial Bank of Dubai (CBD) on Thursday reported a net profit of Dh581.1 million for the first six months of 2014, an increase of 17 per cent compared to Dh496.8 million reported in the same period in 2013.
“CBD’s first half 2014 net profit of Dh581.1 million is the highest first half yearly profit ever achieved by the bank. We believe that the economic climate in the UAE will enable the bank to sustain the momentum seen in the first two quarters of 2014,” said Peter Baltussen, Chief Executive Officer of CBD.
CBD’s operating profit in the first half of this year increased by 4.3 per cent to Dh718 million, mainly due to a 6.8 per cent increase in net interest income to Dh741.2 million and a 7.5 per cent increase in non-interest income to Dh311.2 million.
The bank’s operating expenses increased by 13.4 per cent from Dh295.1 million in the first half of 2013 to Dh334.6 million in the first half of this year. The increase in expenses was driven by investments in digital banking and bank’s increased focus on personal banking. Cost to income ratio was at 31.8 per cent.
Loans and advances during the first of the year increased by 6.8 per cent to 31.3 billion and were up 3.4 per cent compared to Dh 29.3 billion as at June 30, 2013. On the liability side, the bank’s customer deposits were up 12.1 per cent in the first half of the year at Dh32.3 billion compared to Dh28.8 billion as at June 30,2013.
The bank booked Dh136 million in the first half of 2014 as impairment charges net of recoveries compared to Dh192 million in the first half of 2013. The provision charge improved CBD’s impaired loan coverage ratio from 84.9 per cent as at end of December 2013 to 89 per cent at the end of the first half of 2014.
The bank’s liquidity continued to be comfortable with advance to stable resources ratio of 81 per cent at the close of the first half of 2014. Liquidity coverage ratio calculated as per Basel III guidelines was at 102.8 per cent compared to the minimum stipulated ratio is 50 per cent.
CBD’s capital adequacy and tier 1 capital ratios were at 20 per cent and 18.6 per cent respectively at the close of the first half of this year. Return on average assets for the first half of 2014 improved to 2.6 per cent from 2.4 per cent for the same period last year. Return on average equity increased to 16.8 per cent for the first six months of 2014 when compared to 15.5 per cent for the first half of 2013.
