Dubai: Commercial Bank of Dubai’s (CBD) 2018 first quarter net profit surged 74.7 per cent to Dh280 million compared to Dh160 million in the same quarter in 2017.
Profits were higher on the back of a solid 4.8 per cent increase in operating income and a 5.1 per cent decline in operating expenses and a 32.2 per cent decline in impairment allowances.
Bank’s operating income increased by 4.8 per cent to Dh658 million, mainly owing to a 6.4 per cent increase in net interest income to Dh458 million compared to Dh430 million in the first quarter last year.
Non-interest income registered a 1 per cent increase to Dh200 million compared to Dh198 million in first quarter 2017. Foreign exchange income registered a 14 per cent increase over the first quarter of 2017 and other income increased by 12 per cent while investment income and fees & commission income declined by 4 per cent and 2 per cent respectively.
Operating expenses were 5.1 per cent lower at Dh214 million for the first quarter of 2018 compared to Dh225 million for same period last year.
Total assets were at Dh70.2 billion up 5.1 per cent year on year in the first quarter of 2018, a decrease of 0.3 per cent compared to the Dh70.4 billion at year-end 2017.
Loans and Advances at Dh47 billion registered a drop of 0.7 per cent when compared to Dh47.3 billion as at last year end, however, loans were 6.7 per cent higher when compared to Dh44.0 billion as at the end of first quarter of 2017.
“CBD’s performance in the first quarter of 2018 was resilient and was underpinned by measured lending growth in our core segments, resulting in a strong increase in net interest income. Disciplined execution of our plans resulted in lower operating cost, however, at the same time further enhancements were rolled out to our well recognised cash management and digital offerings,” said Dr Bernd van Linder, Chief Executive Officer of CBD.
Non-performing loans
Customers’ deposits were down 0.4 per cent to Dh48.2 billion compared to Dh48.4 billion at the year-end 2017, but was 5 per cent year on year from first quarter end 2017. Current and Savings accounts (CASA) constitute 43 per cent of the total deposit base, while the financing-to-deposits ratio stood at 97.4 per cent.
At the close of the quarter, Non-performing loans ratio increased to 7.5 per cent from 6.5 per cent at the end of 2017, while overall loan loss coverage ratio improved to 91 per cent from 88.7 per cent at year-end 2017.
CBD’s position continued to be comfortable with the advance to stable resources ratio of 89.7 per cent at the close of first quarter March 2018 compared to 88.6 per cent at year-end 2017.
Bank’s capital adequacy and tier 1 capital ratios were at 14.9 per cent and 13.9 per cent, respectively at the close of first quarter 2018.
