CBD operating profits surge 9.1%

Dubai-based Commercial Bank of Dubai (CBD) on Wednesday announced an increase of 9.1 per cent in its operating profit for the period ending March 31, 2013, to Dh361 million compared with Dh331 million for the first quarter of 2012.

In a media statement, the bank said the increase in operating profits was supported by an 8.6 per cent increase in net interest income and 4 per cent increase in non-funds income.

Operating expenses at Dh140 million for the first three months of 2013 which is 2.6 per cent higher compared with the same period in 2012. Consequently, cost to income ratio improved to 28 per cent as opposed to 29.3 per cent for same quarter last year.

“CBD continues to pro-actively manage quality of the credit portfolio. Impairment allowance charge for the first three months of 2013 was Dh120 million,” it said in the statement.

The bank’s CEO, Peter Baltussen, attributed the performance to the general economic growth that the UAE is witnessing, as well as the various initiatives that the bank undertook during the past year. “CBD’s performance for the first quarter is underpinned by the positive business trends in the UAE,” he said.

“The bank continues to maintain robust capital and liquidity ratios. We have launched new initiatives to leverage our franchise and benefit from the increasingly optimistic sentiment with regards to the UAE economy. These include the establishment of a project finance and syndications unit to assist our customers in addressing their anticipated funding requirements in an efficient manner,” he noted.

CBD reported total assets of Dh39.1 billion as at March 31, 2013, marginally lower than Dh39.5 billion as at December 31, 2012. Customer loans and advances increased by 2.7 per cent from Dh27.3 billion as at last year-end to Dh28 billion as at March 31, 2013.

Customer deposits of Dh28.1bn were at the same level as at December 31, 2012. However, customer demand deposit increased by 11 per cent to Dh12.1 billion when compared to last year-end. The advances-to-stable resources ratio at 85.6 per cent continued to remain well below the maximum 100 per cent limit stipulated by the UAE Central Bank.

The bank’s liquidity position remained comfortable with 18.2 per cent of total assets being deployed in liquid assets. The bank is strongly capitalised with capital adequacy ratio of 22.6 per cent. Tier 1 capital ratio was 18.2 per cent, well above the UAE Central Bank requirement of eight per cent.