The Commercial Bank of Dubai branch on Shaikh Zayed Road, Dubai. Image Credit: Clint Egbert/Gulf News

Dubai: Commercial Bank of Dubai (CBD) on Wednesday reported a net profit of Dh843 million for the first nine months of 2018, up 26.8 per cent compared to the same period last year.

For the third quarter of 2018, the bank reported a net profit of Dh282.29 million down 15 per cent compared to Dh332.20 million in the same quarter in 2017.

The bank’s operating income for the nine-month period amounted to Dh2.01 billion, up 1.5 per cent was largely driven by a 5.4 per cent increase in net interest income to Dh1.42 million compared to Dh1.35 billion in 2017.

While fees and commission income increased by 2 per cent, foreign exchange income registered a 13.4 per cent increase and other income increased by 14.3 per cent over the first nine months of 2017. Investment income declined by 78.4 per cent due to a one-off dividend of Dh55.7 million received in the same period last year.

“CBD’s operating performance for the first nine months of 2018 reflects the excellent progress the bank has made in delivering on the strategy. Results were strong, leading to a double-digit growth in net profit. Pleasingly, performance improvements were broad based across core segments of the bank,” said Dr Bernd van Linder, Chief Executive Officer of CBD.

The bank’s total assets were at Dh72.4 billion at the close of the third quarter of 2018 up 5 per cent compared to the Dh68.9 billion as at September 30, 2017.

Loans and advances at Dh49.8 billion registered a year on year growth to 4.9 per cent compared to Dh47.5 billion at the close of the third quarter last year.

Customers’ deposits grew 6.2 per cent year on year to Dh50.4 billion in the first nine months of this year from Dh47.5 billion reported during the same period last year. Current and Savings accounts (CASA) constitute 39.2 per cent of the total deposit base, while the financing-to-deposits ratio stood at 98.8 per cent at the close of the third quarter of 2018.

A disciplined approach to cost management saw operating expenses declining 5.3 per cent year on year to Dh634 million during the first nine months of 2018 compared to Dh670 million for the same period last year. The cost to income ratio improved to 31.4 per cent compared to 33.7 per cent for the same period last year.

The non-performing loans (NPL) ratio increased to 7.2 per cent at the close of the nine-month period this year compared to 6.4 per cent at the end of same period last year. Impairment provisions of Dh546 million were set aside during the first nine months compared to Dh679 million for the same period previous year.

“Our focus on enhancing risk management practices has led to improvements in our underlying asset quality. These improvements point to lower non-performing loans (NPL) in future reporting periods,” said Dr van Linder.

The bank’s liquidity position continued to be comfortable with the advance to stable resources ratio of 89.6 per cent at the close of the third quarter. Capital Adequacy and Tier 1 capital ratios were at 14.9 per cent and 13.7 per cent.