Dubai: Commercial Bank of Dubai (CBD) reported a net profit of Dh340 million for the first quarter of 2019, up 21.6 per cent compared to the same period last year.

“CBD posted a strong set of results for the first quarter of 2019 underpinned by higher income and lower cost,” said CEO Dr Bernd van Linder.

Operating income for the first quarter of 2019 amounted to Dh774 million, an increase of 17.6 per cent attributable to a 7.7 per cent increase in net interest income (NII) and a 40.4 per cent increase in other operating income.

The bank reported operating expenses of Dh206 million, down 3.7 per cent on the back of disciplined expense management through improved efficiency and the result of digital transformation.

The cost-to-income ratio for the quarter fell to 26.6 per cent, an improvement from the 32.5 per cent in the corresponding period last year.

Total assets at the end of the first quarter stood at Dh76.2 billion, 8.5 per cent higher than the Dh70.2 billion seen at the end of the first quarter last year.

Loans and advances grew to Dh51.8 billion, registering a 10.3 per cent year-on-year increase from Dh46.9 billion.

Customers’ deposits were up 13.3 per cent year on year to Dh54.6 billion in the period while low-cost current and savings accounts (CASA) constituted 42.9 per cent of the total deposit base. The financing-to-deposits ratio stood at 94.8 per cent for the period.

CBD’s non-performing loans (NPL) ratio decreased significantly year on year from 8.7 per cent to 6 per cent during the period under review, with both ratios calculated under International Financial Reporting Standard (IFRS) 9.

In line with the bank’s prudent provisioning policy, additional net impairment provisions of Dh228 million were set aside during the first quarter, compared to Dh165 million for the same period in the prior year. As at the end of March 2019, total impairment allowances amounted to Dh3.24 billion.

“The balance sheet remains solid with a further improvement in capital and liquidity, coupled with a significant improvement in non-performing loans, coverage and the cost-to-income ratio. We will continue to focus on supporting customers and creating long-term value for our shareholders,” said Dr van Linder

The bank’s liquidity position remained robust with the advance-to-stable resources ratio at 87.8 per cent at the close of the first quarter. Capital ratios strengthened with capital adequacy and Tier-1 capital ratios at 15 per cent and 13.85 per cent, respectively.