Dubai: Commercial Bank of Dubai (CBD) Wednesday reported a net profit of Dh1.05 billion for the nine months to September 30 2021, up 28.8 per cent year on year.
The strong operating performance was primarily from higher asset volumes, lower funding costs and solid other operating income. The improving external environment, receding pandemic impacts and strengthening business confidence point to moderately improving business conditions.
“CBD has delivered a solid performance with the bank’s net profit increasing by 29 per cent compared to the first nine months of 2020. Local business conditions continue to improve assisted by Expo 2020 which is set to provide an amazing opportunity for us all to unite in a spirit of hope and collaboration, working to create a better future,” said Dr. Bernd van Linder, Chief Executive Officer.
Operating income for the first nine months of 2021 amounted to Dh2.38 billion, an increase of 13.4 per cent, attributable to higher net interest income (NII) by 14.2 per cent as a result of higher volumes and lower funding costs, and an 11.8 per cent increase in other operating income (OOI) reflecting a rebound in economic activity.
Operating expenses were Dh624 million, up 5.5 per cent compared to the first nine months of 2020. The cost-to-income ratio remains market leading at 26.13 per cent.
Balance Sheet
CBD’s total assets were Dh107.8 billion as at September 30 2021, an increase of 16.2 per cent compared to Dh92.8 billion as at 30 September 2020.
Net loans and advances were Dh74.9 billion, registering an increase of 18.9 per cent compared to Dh63 billion as at September 30 2020.
“CBD continues to deliver on its strategy and is poised to end the year on a strong footing as loans reached a record of Dh79b. With business conditions and confidence recovering, we remain positive looking ahead to 2022,” said van Linder.
Customers’ deposits were Dh75.8 billion as at September 30 2021, representing an increase of 18.5 per cent compared to Dh64.0 billion as at 30 September 2020. Low cost current and savings accounts (CASA) constitute 45.3 per cent of the total deposit base, while the financing-to-deposits ratio stood at 98.8 per cent.
Asset quality
The non-performing loan (NPL) ratio increased to 6.93 per cent, up from 6.77 per cent at the end of 2020.
In accordance with IFRS9 accounting standards, the net impairment charge totaled Dh713 million for the first nine months of 2021. The headline coverage ratio was 64.14 per cent and 118.53 per cent inclusive of collateral for stage 3 loans up from 105.09 per cent at September 30 2020. As at September 30 2021, total allowances for impairments amounted to Dh4.01 billion.
Liquidity and capital
The bank’s liquidity position remained robust with the advances to stable resources ratio at 93.10 per cent as at September 30 compared to the UAE Central Bank maximum of 100.
CBD’s capital ratios remained strong with the capital adequacy ratio (CAR) at 16.16 per cent, tier 1 ratio at 15 per cent and common equity tier 1 (CET1) ratio 12.5 per cent. All capital ratios were significantly above the minimum regulatory thresholds mandated by the UAE Central Bank.
