CBD’s first quarter net profit down 18.4 per cent to Dh241 million

Dubai: Commercial Bank of Dubai’s (CBD) net profit for the first quarter of 2016 was 18.4 per cent lower, at Dh241 million, than its Dh295 million net profit in the first quarter of 2015, the bank said in a statement.

The bank’s operating income was down by 0.8 per cent to Dh576 million in the first quarter of the year compared to Dh581 million for the same period last year, mainly due to a lower non-interest income on account of lower business volumes and drop in share of profit of associate companies.

Operating expenses increased by 8.5 per cent, from Dh192 million in the first quarter of 2015 to Dh208 million in the first quarter of this year. The increase is attributed to investment in distribution network and digital banking platform to support the bank’s strategic initiatives to grow the personal and business banking business segments. Cost to income ratio stood at 36.2 per cent.

“The bank will continue to focus on growth in selected sectors and boost its revenues by improving its share of wallet and cross sell to its customer base. The bank has launched initiatives aimed at further improving customer engagement and experience. This includes staff training, simplified processes and enhancement of mobile banking and digital banking platforms,” Peter Baltussen, Chief Executive Officer of CBD, said.

CBD set aside Dh127 million as net impairment allowances during the quarter; an increase of 35 per cent compared to the first quarter of 2015.

CBD’s total assets — worth Dh59.2 billion — at the end of the first quarter were 21.6 per cent higher compared to the Dh48.7 billion in the same period last year and 2.4 per cent higher compared to the Dh57.9 billion at the end of last year.

Loans and advances were up 15.9 per cent to Dh38.8 billion at the close of the first quarter compared to Dh33.4 billion in the same period last year, reporting growth across all segments of the loan book. Personal and business banking net loans were at Dh6.8 billion; registering an increase of 28 per cent compared to the Dh5.3 billion at the end of the first quarter of 2015. Corporate and Commercial banking net loans were at Dh31.9 billion as compared to Dh31.4 billion at end of the first quarter of 2015.

Customer deposits were 18.5 per cent higher year-on-year at Dh41.1 billion and marginally up by 1.6 per cent compared to year end 2015. Current and saving accounts (CASA) constituted nearly 46.4 per cent of total deposits as at end of March 2016 compared to 42.6 per cent as at end of December 2015, while loan to deposit ratio stood at 94.3 per cent.

The bank’s liquidity continued to be comfortable, with the advance to stable resources ratio at 81 per cent at the close of the quarter compared to 81.9 per cent at 2015 year end. Liquidity coverage ratio (LCR) calculated as per Basel III guidelines was at 141.2 per cent, compared to the minimum stipulated ratio of 70 per cent by CBUAE.

Capital adequacy and Tier 1 capital ratios were at 16.9 per cent and 15.7 per cent respectively. Leverage ratio as per Basel III guidelines was 12.05 per cent.