Dubai
Commercial Bank of Dubai (CBD) reported flat year-on-year earnings on Wednesday as higher income was offset by a spike in impairment charges.
The bank’s net profit for the year was unchanged at Dh1 billion. This brings net profit for the fourth quarter of 2017 alone at Dh337 million, up 12 per cent over the Dh302 million recorded in the fourth quarter of 2016.
The board of directors of CBD proposed a cash dividend of 20 per cent of the bank’s capital. “Growth and profitability in CBD’s core segments continued to be robust, with gross lending in corporate and commercial segments increasing by 13 per cent over 2016,” said Bernd van Linder, chief executive officer of CBD in a statement.
He added that with the UAE economy expected to perform strongly in 2018, he was confident that CBD will be able to capitalise on opportunities that such economic growth has to offer.
In 2017, the bank’s impairment charges jumped nearly 26 per cent to Dh740 million, as CBD said the increase was partially due to loan growth.
The bank gave loans and advances worth Dh47.3 billion, up 12.7 per cent year-on-year, with loan growth recorded across all business segments, CBD said. Personal banking loans went up around 11 per cent, as corporate, commercial, and business banking loans went up 13 per cent year-on-year.
Customer deposits were also higher, reaching Dh48.4 billion at the end of 2017, a 10.6 per cent increase, with current and savings accounts constituting 40 per cent of the total deposit base.
Meanwhile, the bank’s operating income went up 7.3 per cent year-on-year to Dh2.64 billion driven by higher net interest income and non-interest income. Net interest income rose 5.5 per cent to Dh1.82 billion, while non-interest income jumped 11.5 per cent to Dh821.7 million as fees and commission income grew.
Investment income also rose, mainly due to one-off dividend income received in June. The increase in non-interest income was partially offset by an 11 per cent decline in foreign exchange income.
