CBD profit hits Dh822m amid lower funding costs, rising fees

Dubai: Commercial Bank of Dubai (CBD) yesterday announced a net profit of Dh822 million for last year, marginally up on 2010's Dh820 million.

The bank said it bene-fited from lower funding costs and a 2.2 per cent increase in non-interest income including fees and commissions.

Non-interest income constituted 28 per cent of the bank's revenue for 2011, while foreign exchange income grew by 26 per cent last year.

The bank made Dh512 million in impairment allowances for the year to cover potential losses. Collective provisions represented 1.7 per cent of the bank's performing loan portfolio and 1.4 per cent of credit risk weighted assets (CRWA).

CBD reported total assets of Dh38.2 billion compared to Dh38.5 billion in 2010. While customers' loans and advances declined to Dh26.8 billion last year from Dh27.2 billion, deposits also declined to Dh28.4 billion from Dh29.2 billion.

The bank said its liquid assets represented 18 per cent of the total. While the bank reported a loans to deposits ratio of 94.3 per cent, its advances to stable resources ratio of 82.8 per cent is well below the prescribed maximum of 100 per cent stipulated by the regulator.

CBD's capital adequacy ratio strengthened further to 23.1 per cent with its Tier I capital at 16.6 per cent at the close of the year.

"We have continued to deliver solid and stable financial results despite the challenging operating environment," said CEO Peter Baltussen.

"Our strong capital position combined with pro-active management of the balance sheet has further strengthened the bank's liquidity and capital ratios."

Efficiency focus

The bank said it continued to invest in its staff, branches and systems while maintaining a strategic focus to enhance efficiency.

"The bank's efficiency in managing its expenses during the year led to a healthy cost to income ratio of 30.4 per cent," said Baltussen.

"We are geared up to grow our portfolio to ensure sustainable returns for our shareholders."

During the third quarter of last year, the bank renewed its medium term facility of $400 million (Dh1.5 million). The facility was oversubscribed and attracted commitments of $450 million, underlining investors' confidence in the bank's financial strength.

The board has proposed a cash dividend of 20 per cent subject to agreement by shareholders at the annual general meeting to be held on March 14.