CBD’s 2014 profit surges 19% to Dh1.2b

Operating income increased mainly due to a 9.3 per cent increase in net interest income to Dh1.583 billion (2013 – Dh1.448 billion) and a 12.5 per cent increase in non-interest income to Dh657.5 million (2013 – Dh584.2 million).

By Isaac John (associate Business Editor)

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Published: Thu 29 Jan 2015, 11:35 PM

Last updated: Thu 25 Jun 2015, 7:23 PM

Dubai — Commercial Bank of Dubai (CBD) announced on Wednesday that its full year 2014 net profit rose 19 per cent to Dh1.202 billion as compared to Dh1.01 billion for 2013.

The bank’s fourth quarter net profit of Dh312 million was 20.7 per cent higher as compared to Dh259 million for the fourth quarter of 2013, and was one per cent higher when compared to Dh309 million for the third quarter of 2014.CBD’s 2014 profit surges 19% to Dh1.2b

Operating income for the year ending December 31, 2014 was 10.2 per cent higher at Dh2.24 billion as compared to Dh2.033 billion for 2013, CBD said in a statement. The bank’s total assets grew 5.5 per cent to Dh46.9 billion from Dh44.5 billion as at the end of 2013.

 “A sixth consecutive year of growth in annual profit is testimony to the consistency of the bank’s performance and reaffirms the overall strategy in place, formulated under the guidance of its board of directors,” the CBD statement said.

Impairment provisions net of recoveries fell from Dh395 million booked during 2013 to Dh283.7 million as overall asset quality continued to strengthen, as evidenced by the non-performing loan ratio dropping from 10.1 per cent to 9.2 per cent, the bank said.

Operating income increased mainly due to a 9.3 per cent increase in net interest income to Dh1.583 billion (2013 – Dh1.448 billion) and a 12.5 per cent increase in non-interest income to Dh657.5 million (2013 – Dh584.2 million).

Peter Baltussen, chief executive officer, said that the record 2014 net profit was achieved on the back of a collaborative effort from all of our lines of business, which has further diversified the bank’s revenues. “In 2014 the bank has underwritten new loans in excess of Dh10 billion, with personal banking contributing almost 20 per cent, as the bank continued to benefit from an increasingly strong UAE economy,” he said. “Our personal banking strategy saw the launch of CBD’s next generation online banking platform, unveiling of the first of our planned digital kiosks at Dubai Men’s College targeting the young UAE population and a comprehensive re-alignment of our sales and distribution philosophy. At the same time, CBD has already commenced the process of re-aligning our corporate and commercial banking business, with the addition of value added services like corporate finance and debt capital markets advisory,” said Baltussen.

“I believe that with these initiatives, CBD is in a strong position to continue with the momentum seen in the last 12 months and is set to deliver robust results in the years to come,” he added.

The bank said its liquidity continued to be comfortable with advance to stable resources ratio of 82.6 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 109.1 per cent (Dec-13 - 116 per cent), compared to the minimum stipulated ratio of 50 per cent.  CBD’s capital adequacy and Tier 1 capital ratios were at 18.1 per cent and 16.8 per cent respectively, and were significantly above the regulatory thresholds of 12 per cent and eight per cent mandated by the UAE Central Bank.

 Leverage Ratio as per Basel III guidelines was 13.1 per cent against regulatory requirements of three per cent minimum. Return on average assets and return on average equity for the year ended December 2014 improved to 2.6 per cent and 16.7 per cent  respectively from 2.4 per cent and 15.1 per cent, the bank said.

Operating expenses increased by 20.2 per cent to Dh754.4 while loans and advances recorded an increase of 6.2 per cent to Dh32.2 billion. Gross lending to the corporate and commercial customers increased by 3.5 per cent to Dh30.1 billion. Customers’ deposits rose by 3.9 per cent to Dh32.2 billion with personal banking deposits increasing by 6.5 per cent the statement said.

issacjohn@khaleejtimes.com



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