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Commercial Bank Of Dubai Records 19 Percent Increase In Net Profit
(29 January 2015)

 

Commercial Bank of Dubai’s net profit for the year ended 31st December 2014 increased by 19% to AED1,202.3 million as compared to AED1,010.2 million for the year ended 31st December 2013.

Operating Income increased by 10.2% y-o-y from AED2,032.9 million to AED2,240.4 million, mainly due to a 9.3% increase in Net Interest Income to AED1,582.9 million (2013 ­ AED1,448.7 million) and a 12.5% increase in non-interest income to AED657.5 million (2013 ­ AED584.2 million), while, operating expenses increased by 20.2% from AED627.6 million for the year ended December 2013 to AED754.4 million for the year ended December 2014.

Loans and Advances of AED32.2 billion as at 31st December 2014 recorded an increase of 6.2% over the AED30.3billion as at 31December 2013. Gross lending to the corporate and commercial customers increased by 3.5% from AED29.1 billion as at end of December 2013 to AED30.1 billion as at the end of December 2014.

A significantly redesigned Personal Banking strategy with greater focus on sales and distribution resulted in gross loans increasing by 35% y-o-y from AED3.3 billion to AED4.5 billion as at the end of December 2014.

Customers’ Deposits of AED32.2billion as at 31st December 2014, increased by 3.9% compared to AED30.9 billion as at end of December 2013, with Personal Banking deposits increasing by 6.5%.

The bank’s liquidity continued to be comfortable with advance to stable resources ratio of 82.6% as at 31st December 2014 (Dec-13 - 80.9%), while the UAE Central Bank has set 100% as the maximum limit.

Liquidity Coverage Ratio calculated as per Basel III guidelines was at 109.1% (Dec-13 - 116%), compared to the minimum stipulated ratio of 50%. Uses to Stable Resources Ratio was 86.4% against a regulatory requirement of less than 100% (Dec-13 ­ 86.9%).

CBD’s capital adequacy and Tier 1 capital ratios were at 18.1% and 16.8% respectively, and were significantly above the regulatory thresholds of 12% and 8% mandated by the UAE Central Bank. Leverage Ratio as per Basel III guidelines was 13.1% against regulatory requirements of 3% minimum (Dec-13-13.3%). Return on average assets and return on average equity for the year ended December 2014 improved to 2.6% and 16.7% respectively from 2.4%and 15.1% for the year ended December 2013.

Impairment provisions net of recoveries fell from AED395 million booked during 2013 to AED283.7 million in 2014. Overall asset quality continued to strengthen, as evidenced by the Non-Performing Loan (NPL) ratio dropping from 10.1% as at end of Dec-13 to 9.2% as at end of Dec-14.

Meanwhile the impaired loan coverage ratio improved from 84.9% as at end of Dec-2013 to 93.7% as at 31 December 2014.

The results, which are subject to the UAE Central Bank’s approval, have been announced following a meeting of the Bank’s Board of Directors held yesterday. The Board has proposed a Cash Dividend of 25% and bonus shares of 25%, subject to the agreement of the shareholders at the Annual General Assembly Meeting to be held on 4th March.

Commenting on the Bank’s performance, Peter Baltussen, Chief Executive Officer said, "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 AED10 billion, with Personal Banking contributing almost 20%, as the bank continued to benefit from an increasingly strong UAE economy."
 

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