09/02/2018 05:14 AST
Commercial Bank of Dubai (CBD) has reported a 9.4 per cent increase in operating profit of Dh1,742 million ($474 million) for 2017,a media report said.
Figures showed that operating income increased by 7.3 per cent to Dh2,642.4 million, mainly owing to a 5.5 per cent increase in net interest income to Dh1,820.7 million (FY-16: Dh1,725.2 million) and a 11.5 per cent increase in non-interest income to Dh821.7 million (FY-16: Dh736.9 million), reported Emirates news agency Wam.
“The bank's 2017 net profit of Dh1,001.9 million was in line with the Dh1,003.1 million net profit for last year, mainly due to prudent provisioning including higher general provisions as a result of loan growth,'' said the bank in a statement.
Operating expenses were 3.5 per cent higher at Dh900.7 million for the FY-17 compared to Dh870.5 million for same period last year. Cost to income ratio has improved to 34.1 per cent (FY-16: 35.4 per cent).
According to financial results, total assets were higher at Dh70.4 billion as at 31st December 2017, an increase of 9.9 per cent over the Dh64.1 billion as at 31st December 2016. The increase in assets is attributed primarily to an increase in loans and advances and customers’ acceptances.
Loans and Advances at Dh47.3 billion registered an increase of 12.7 per cent when compared to Dh41.9 billion as at last year end. Loan book growth was recorded across all business segments. Personal Banking loans at Dh6.8 billion registered an increase of 10.9 per cent when compared to the Dh6.1 billion as at the end of previous year. Corporate, Commercial and Business Banking loans were at Dh40.5 billion, a 13 per cent increase when compared to Dh35.8 billion as at 31st December 2016.
Customers’ Deposits of Dh48.4 billion as at 31st December 2017, increased by 10.6 per cent compared to Dh43.8 billion at the previous year end. Current and Savings accounts (CASA) constitute 40 per cent of the total deposit base, while the financing to deposits ratio stood at 97.7 per cent.
The Bank’s liquidity position continued to be comfortable with the advance to stable resources ratio of 88.6 per cent as at 31st December 2017 (31st December 2016: 83.7 per cent), while the UAE Central Bank has set 100 per cent as the maximum limit.
CBD’s Capital Adequacy and Tier 1 capital ratios were at 15 per cent and 13.9 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.
Dr Bernd van Linder, chief executive officer said: "CBD’s 2017 performance was a story of two parts. On one hand, growth and profitability in CBD’s core segments continued to be robust with gross lending in Corporate and Commercial segments increasing by 13 per cent over 2016."
"On the other hand the Bank’s continued prudent approach towards its credit portfolio resulted in net impairment provisions increasing by Dh151 million over 2016 to over Dh700 million.
"Operating profit grew by 9.4 per cent on the back of a 7.3 per cent increase in revenues, while efficiency investments bore fruit with operating costs increasing marginally by 3.5 per cent. Resultant cost-income ratio declined from 35.4 per cent in 2016 to 34.1 per cent per cent as at the end of 2017,” he added.
"The UAE economy is expected to perform strongly in 2018 on the back of higher oil prices, fiscal reforms, recovery in global GDP and increased capital investments, particularly in Dubai as it prepares to host EXPO 2020. We are confident that, with comfortable liquidity and capital positions, the Bank will be in a position of strength to capitalize from the opportunities that the UAE economic growth has to offer,” he concluded.
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