Dubai: Commercial Bank of Dubai (CBD) reported Dh160.1 million net profits for the first quarter of 2017, down 33.5 per cent compared to Dh240.8 million for the same quarter last year.
The bank attributed lower net profits to higher general provision as a result of loan growth. “Net profit was negatively impacted due to higher impairment losses as the bank, in line with its prudent policies set aside additional impairment allowances against potential credit losses. Resultant non-performing loans coverage ratio is 101 per cent,” Dr Bernd van Linder, Chief Executive Officer of CBD, said in a statement on Thursday.
CBD’s operating income increased by 9 per cent to Dh627.9 million, mainly due to a 5.7 per cent increase in net interest income to Dh430.1 million compared to Dh407 million and a 16.9 per cent increase in non-interest income to Dh197.9 million from Dh169.3 million in the same quarter last year. The bank’s fees and commission incomes were up 28.5 per cent and other income up 22.5 per cent respectively in the first quarter year on year.
“Our first quarter headline results, with operating profit rising a solid 9.5 per cent over 2016 were powered by strong top-line growth. Loans and advances as well as customers’ deposits rose by 4.9 per cent over December 2016,” said Dr van Linder.
Total assets were up 4.2 per cent at Dh66.8 billion at the close of the first quarter of this year compared to the same period last year. Loans and advances increased by 13.6 per cent to Dh44 billion from Dh38.8 billion at the close of the first quarter last year.
Personal and business banking gross loans at Dh8.2 billion registered an increase of 4.9 per cent as corporate and commercial banking gross loans were up 4.6 per cent at Dh39.8 billion at the close of the first quarter 2017 compared to year end 2016.
“Our core client segments, corporate and commercial returned a strong performance with a 4.6 per cent lending growth. Total revenues increased for all segments supported by higher fee income across most products,” said Dr van Linder.
Customers’ deposits increased by 11.7 per cent in the first quarter of this year to Dh45.9 billion compared to Dh41.1 billion at the close of the first quarter last year. Current and savings accounts [CASA] balances increased by Dh3.8 billion in the first quarter and represent 50 per cent of the total deposits, while loans to deposits ratio stood at 95.8 per cent at the end of the first quarter.
Overall asset quality remained stable during the quarter, in spite of volatile market conditions. Non-performing loans ratio was 7.1 per cent at the close of the first quarter of this year compared to 6.9 per cent at year end 2016. Loan coverage ratio remained stable at 101.2 per cent compared to 101.6 per cent at the year-end 2016.
Net impairment provisions of Dh242.8 million were set aside during the quarter compared to Dh127 million for the same quarter previous year. This includes Dh36 million for general provisions, as a result of balance sheet growth.
CBD’s liquidity position continued to be comfortable with advance to stable resources ratio of 84.8 per cent and liquidity coverage ratio at 129.1 per cent. Capital adequacy and Tier 1 capital ratios were at 15.2 per cent and 14.2 per cent respectively at the end of the first quarter 2017.