Commercial Bank of Dubai returns to profit in last quarter

Abu Dhabi: The Commercial Bank of Dubai (CBD) yesterday reported that its fourth quarter profits reached Dh46 million, compared with a Dh56 million loss a year earlier.

The fourth quarter numbers brought the bank's annual profits to Dh803 million, a 4 per cent increase over 2008. Despite the improvement in numbers, the results fell short of expectations. Analysts had underestimated the Dh294 million the bank would set aside in provisions against non-performing loans.

"It's good to take the provisioning so it's a clean book," said Janany Vam-adeva, banking analyst at HC Securities in Dubai. "[CBD] was mainly affected by its exposure to real estate and its targeting of high net-worth individuals, which were more affected by the downturn in the macro economy."

The quarterly and annual profit figures fell 80 per cent and 20 per cent short, respectively, of HC Securities' estimates due to provisioning which Vamadeva said surpassed her department's expectations of Dh60 million.

"The bank has shown strong results in 2009, especially given the challenging economic circumstances, which made us decide to further increase the Bank's general provisions," Peter Baltussen, CEO of CBD said.

Turning the tide