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29 March 2024

CBD profits up 2% in first half

CBD has proposed 25% cash dividend and 25% bonus shares for 2014. (File)

Published
By Staff

Commercial Bank of Dubai (CBD) said on Thursday its net profit in the first half rose two per cent to Dh523 million from Dh513m for the same period last year.

Net profit for the second quarter of 2011 increased by around two per cent to Dh260m compared to Dh255m for the same quarter last year. Total income in the second quarter of 2011 increased by 1.8 per cent to Dh471m as against Dh462m for the same quarter last year and the first quarter 2011.

Net interest income and income from Islamic financing of Dh339m for Q2 2011 was nearly two per cent up compared to Dh333m in the first quarter. The increase was mainly contributed to a further decrease of the bank's cost of funding. The net interest margin remains one of the highest in the industry at 4.08 per cent for the second quarter of 2011 compared to 3.91 per cent in Q1 2011. Fee income and other non-interest income for the first 6 months of 2011 reported a healthy growth of five per cent over the same period one year earlier, while the second quarter increased by 15.3 per cent when compared to Q2-2010.

Peter Baltussen, Chief Executive Officer, said: "Strong first half year results reflect our ability to deliver solid and consistent returns to our shareholders. The bank further improved its capital adequacy ratio to a very high 23.32 per cent as well as its liquidity ratios, which ensures that the bank is geared up to grow and support the recovering UAE economy."

The bank's operating expenses in the first half amounted to Dh277m, an increase of 3.5 per cent over the previous year, thereby maintaining a cost-to-income ratio of 29.7 per cent.

Total assets reached Dh38.1bn as at 30th June 2011, reflecting a 3.2 per cent growth over Dh36.9bn by end of June 2010. Loans and advances reduced slightly to Dh26.1bn; while customers' deposits marginally increased to Dh28.1bn.

The bank is very strongly capitalized with total capital resources of over Dh6bn and Capital Adequacy Ratio of 23.32 per cent. The Bank's TIER I Ratio was 16.85 per cent as against 15.93 per cent in Q1 2011.

Impairment charge during the first half dropped by 14 per cent to Dh153 million which reflects an improvement in the market conditions and the recovery of the UAE economy overall. Non-performing loans are covered up to 88.5 per cent by provisions against potential losses.