CBD plans dividend and bonus shares after profits rise

Commercial Bank of Dubai (CBD) yesterday announced 4.1 per cent increase in net profits for 2009 over the previous year and also proposed bonus shares and dividends.

The bank's net profit rose 4.1 per cent to Dh803 million in 2009 compared to Dh771m for the previous year.

The CBD board also proposed issuing 10 per cent bonus shares and 15 per cent cash dividend, subject to the approval by AGM to be held on February 24.

The bank's total income was Dh1.8 billion and operating profits before provisions grew 3.6 per cent to Dh1.2bn, while the net interest income rose 15 per cent to Dh1.3bn and fees and commission grew by 3.1 per cent. Assets reached Dh36.7bn at the end of 2009, up 2.9 per cent. Customers' deposits increased by 8.4 per cent to Dh27.9bn and loans and advances of registered a marginal drop of 0.7 per cent to Dh28.4bn.

In line with its prudent credit policies and the regulatory requirements, the bank increased its impairment charges for the loans portfolio with Dh411m, including a general and collective provision representing Dh232m. The total collective provisions now constitute 1.25 per cent of the total performing loan portfolio, while non-performing loans are covered up to 96 per cent by provisions against potential losses and collateralised by tangible securities.

Its capital adequacy ratio in 2009 increased to 19.01 per cent as against the minimum requirement of 11 per cent. The Tier I ratio was with 14.06 per cent well above the minimum required of seven per cent.

CBD Chief Executive Officer Peter Baltussen said: "The bank has shown strong results in 2009, especially given the challenging economic circumstances, which made us decide to further increase the bank's general provisions. Our very strong capital position, combined with effective balance sheet management has further strengthened the bank."

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.

Follow Emirates 24|7 on Google News.