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Commercial Bank of Dubai (CBD) reported a 9.4 percent increase in operating profit of AED 1,742 million for 2017, according to its financial results for the year 2017.
The bank's 2017 net profit of AED1,001.9 million was in line with the AED 1,003.1 million net profit for last year, mainly due to prudent provisioning including higher general provisions as a result of loan growth,'' said the bank in a statement today.
Figures showed that operating income increased by 7.3 percent to AED 2,642.4 million, mainly owing to a 5.5 percent increase in net interest income to AED1,820.7 million (FY-16: AED 1,725.2 million) and a 11.5 percent increase in non-interest income to AED 821.7 million (FY-16: AED 736.9 million) Operating expenses were 3.5 percent higher at AED 900.7 million for the FY-17 compared to AED 870.5 million for same period last year. Cost to income ratio has improved to 34.1% (FY-16: 35.4 percent).
According to financial results, total assets were higher at AED70.4 billion as at 31st December 2017, an increase of 9.9 percent over the AED 64.1 billion as at 31st December 2016. The increase in assets is attributed primarily to an increase in loans and advances and customers’ acceptances.
Loans and Advances at AED 47.3 billion registered an increase of 12.7 percent when compared to AED41.9 billion as at last year end. Loan book growth was recorded across all business segments. Personal Banking loans at AED6.8 billion registered an increase of 10.9% when compared to the AED 6.1 billion as at the end of previous year. Corporate, Commercial and Business Banking loans were at AED 40.5 billion, a 13 percent increase when compared to AED 35.8 billion as at 31st December 2016.
Customers’ Deposits of AED48.4 billion as at 31st December 2017, increased by 10.6 percent compared to AED43.8 billion at the previous year end. Current and Savings accounts (CASA) constitute 40 percent of the total deposit base, while the financing to deposits ratio stood at 97.7 percent.
The Bank’s liquidity position continued to be comfortable with the advance to stable resources ratio of 88.6 percent as at 31st December 2017 (31st December 2016: 83.7 percent), while the UAE Central Bank has set 100 percent as the maximum limit.
CBD’s Capital Adequacy and Tier 1 capital ratios were at 15 percent and 13.9 percent, respectively, and were significantly above the regulatory thresholds of 10.5 percent and 8.5 percent mandated by the UAE Central Bank.
Commenting on the Bank’s performance, Dr. Bernd van Linder, Chief Executive Officer said, "CBD’s 2017 performance was a story of two parts. On one hand, growth and profitability in CBD’s core segments continued to be robust with gross lending in Corporate and Commercial segments increasing by 13 percent over 2016."
"On the other hand the Bank’s continued prudent approach towards its credit portfolio resulted in net impairment provisions increasing by AED 151 million over 2016 to over AED 700 million."
He added "Operating profit grew by 9.4 percent on the back of a 7.3 percent increase in revenues, while efficiency investments bore fruit with operating costs increasing marginally by 3.5%. Resultant cost-income ratio declined from 35.4 percent in 2016 to 34.1 percent percent as at the end of 2017."
In conclusion he said "The UAE economy is expected to perform strongly in 2018 on the back of higher oil prices, fiscal reforms, recovery in global GDP and increased capital investments, particularly in Dubai as it prepares to host EXPO 2020. We are confident that, with comfortable liquidity and capital positions, the Bank will be in a position of strength to capitalize from the opportunities that the UAE economic growth has to offer."
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