CBD’s first quarter 2017 operating profit increases by 9.5 per cent

25/04/2017 16:30 AST

Commercial Bank of Dubai (CBD)’s net profit for Q1-17 of AED 160.1 million was 33.5 per cent lower compared to AED 240.8 million for the same quarter last year, mainly due to prudent provisioning and higher general provision as a result of loan growth.

The loan loss coverage ratio was stable at 101.2 per cent.

Operating income increased by nine per cent to AED 627.9 million, mainly due to a 5.7 per cent increase in net interest income to AED 430.1 million (Q1-16: AED 407 Million) and an 16.9 per cent increase in non-interest income to AED 197.9 million (Q1-16: AED 169.3 million) with a 28.5 per cent increase in fees and commission income and 22.5 per cent in other income. Operating expenses were eight per cent higher at AED 224.9 million for Q1-17 compared to AED 208.3 million for Q1-16. Cost to income ratio for the quarter has improved to 35.8 per cent (Q116: 36.1 per cent).



Balance Sheet

Total assets were higher at AED 66.8 billion as at 31 March 2017, an increase of 4.2 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 at AED 44 billion registered an increase of 13.6 per cent when compared to AED 38.8 billion as at 31st March 2016 and a 4.9 per cent increase compared to AED 42 billion last year end. Loan book growth was across all business segments. Personal and business banking gross loans at AED 8.2 billion registered an increase of 4.9 per cent when compared to the AED 7.8 billion as at the end of previous year. Corporate and Commercial banking gross loans were at AED 39.8 billion, a 4.6 per cent increase when compared to AED 38 billion as at 31 December 2016.

Customers’ Deposits of AED 45.9 billion as at 31 March 2017, increased by 11.7 per cent compared to AED 41.1 billion as at 31 March 2016 and 4.9 per cent compared to AED 43.8 billion at the previous year end. Current and Savings accounts balances increased by AED 3.8 billion, 19.7 per cent to represent 50 per cent of the total deposits, while loans to deposits ratio stood at 95.8 per cent.



Asset Quality

Overall asset quality remained stable, in spite of volatile market conditions. As at 31 March 2017, the non-performing loans ratio was 7.1 per cent (31st December 2016: 6.9 per cent) whilst loan loss coverage ratio was stable at 101.2 per cent (31st December 2016: 101.6 per cent).

In line with the Bank’s prudent provisioning policy, additional net impairment provisions of AED 242.8 million were set aside during the quarter compared to AED 127 million for the same quarter previous year. This includes AED 36 million for general provisions, as a result of balance sheet growth. General provisions represent 1.53 per cent of the Bank’s credit risk weighted assets as at the end of Q1-17.



Liquidity and Capital adequacy

The Bank’s liquidity position continued to be comfortable with advance to stable resources ratio of 84.8 per cent as at 31 March 2017 (31 December 2016: 83.7 per cent), while the UAE Central Bank has set 100 per cent as the maximum limit. Liquidity Coverage Ratio calculated as per Basel III guidelines was at 129.1 per cent, compared to the minimum stipulated ratio of 80 per cent (31 December 2016: 133.9 per cent). The Net Stable Funding Ratio was 107.9 per cent (31 December 2016: 109 per cent).

CBD’s capital adequacy and Tier 1 capital ratios were at 15.2 per cent and 14.2 per cent, respectively, and were significantly above the regulatory thresholds of 10.5 per cent and 8.5 per cent mandated by the UAE Central Bank.

CPI Financial