Dubai: Commercial Bank of Dubai (CBD) posted a net profit of Dh701.5 million for the first nine months of 2016, 23.4 per cent lower compared to Dh915.3 million for the same period last year.
The bank attributed the decline in profit to prudent provisioning. Operating income for nine months of 2016 was 1.3 per cent higher at Dh1.79 billion as compared to Dh1.76 billion for nine months of 2015, mainly driven by increased net interest income.
Operating expenses were 2.2 per cent higher at Dh641.9 million for the period, compared to Dh627.9 million for period ending September 30, 2015. Operating profit for the period increased marginally to Dh1.15 billion as compared to Dh1.14 billion for same period last year. Cost to income ratio for the first nine months of 2016 stood at 35.8 per cent.
“CBD’s increasing operating profit in an environment that remains challenging reflect its prudent policies and proactive steps to grow. The bank continues to invest in enhancing its distribution network including a new digital framework,” said Peter Baltussen, Chief Executive Officer.
Total assets were higher at Dh62.2 billion as at the close of the third quart of 2016 up by 7.5 per cent over the previous year end. The increase in assets is attributed primarily to increase in loans and advances, investments securities and customers’ acceptances.
Loans and advances during the nine-month period were up 5.8 per cent to Dh41.3 billion from year-end 2015. The bank’s loan book grew across all business segments. On the liabilities front, customer deposits increased to Dh41.9 billion as at the close of the third quarter of 2016, up 3.7 per cent compared to year end 2015 with increase in deposits across all business segments. Current and savings account balances increased 11.7 per cent during the period to represent 45.9 per cent of total customer deposits.
The non-performing loans ratio was relatively stable at 7.1 per cent at the third-quarter’s end compared to 6.9 per cent at year end 2015, with overall loan loss coverage ratio at improving 100.2 per cent from 92 per cent at the end of 2015.
The bank continued to maintain adequate liquidity with its advances to stable resources ratio of 85 per cent as at September 30 compared to 84.6 per cent at year-end 2015. Liquidity coverage ratio as at the end of the third quarter of this year as per Basel III guidelines was at 118.7 per cent. CBD’s capital adequacy and Tier 1 capital ratios were at 16.5 per cent and 15.3 per cent respectively.
“We have recalibrated our plans for the remainder of 2016 and the coming year and remain cautiously optimistic about the challenges and the opportunities in the UAE,” said Baltussen.
The bank continued to invest in enhancing its distribution network and upgrading its digital banking framework to support key strategic initiatives. These costs were offset by efficiencies achieved in other areas, the bank said in a statement.
