Hotel occupancy rates at 80% were the highest in the region
Commercial Bank of Dubai (CBD) delivered a net profit after tax result of Dh1.452 billion for the first half of 2024, up 30.2 per cent on a pre-tax basis (on a post-tax basis, the result is up 18.5 per cent) compared to the corresponding period in 2023, the bank announced on Wednesday.
Strong growth in loans during the first half of 2024 resulted in a solid net interest outcome, which was supported by non-funded income and lower cost of risk that more than offset higher expenses and the corporate tax charge. High global market interest rates continued to contribute to the solid net interest income outcome. UAE business activity, population growth and business confidence remained positive and are forecast to continue to remain supportive in the periods ahead. Public sector strategic intent, investment and broad-based economic growth is expected to offset any future headwinds from interest rate cuts.
Operating income was Dh2.71 billion, up 10.1 per cent driven by net interest income, fees and commissions. Operating expenses were Dh644 million, up by 11.0 per cent. Operating profit stood at Dh2,066 million, up by 9.8 per cent. Net impairment loss was Dh471 million, down by 28.2 per cent. The bank incurred a corporate tax expense of Dh143 million.
As at 30 June 2024, capital ratios remained strong with the capital adequacy ratio (CAR) at 16.05 per cent, Tier 1 ratio at 14.92 per cent and Common Equity Tier 1 (CET1) ratio at 12.83 per cent, well in excess of regulatory requirements.
Gross loans were Dh95.2 billion, an increase of 7.1 per cent compared to 31 December 2023. Advances to stable resources ratio (ASRR) stood at 83.63 per cent, lower by 362 bps compared to 31 December 2023
Total assets were Dh141.3 billion as at 30 June 2024, an increase of 9.5 per cent compared to Dh129.0 billion as at 31 December 2023.
Net loans and advances were Dh89.6 billion, registering an increase of 7.6 per cent compared to Dh83.3 billion as at 31 December 2023.
Customers’ deposits were Dh99.8 billion as at 30 June 2024, representing an increase of 13.1 per cent compared to Dh88.3 billion as at 31 December 2023. Low-cost CASA constituted 47.8 per cent of the total customer deposit base, while the loan-to-deposit ratio stood at 89.8 per cent.
Dr Bernd van Linder, chief executive officer, said: “CBD has delivered a commendable result attributable to strong loan growth with higher revenues at outstanding returns and improved overall asset quality. Our net profit after tax for H1 2024 was a record Dh1,452 million, above the prior comparative period by 30.2 per cent on a pre-tax basis, attributable to customer business activity and strong overall revenues. The bank remains steadfastly focused on the execution of the bank’s strategy and is well positioned to continue to deliver on our strategic objectives and high-quality performance for the remainder of 2024 and beyond.”
In Q2 2024, CBD selected du and HPE Greenlake to accelerate the bank’s hybrid cloud journey on improving customers’ experience and its employees. “The financial sector landscape is changing dramatically through technological innovation. With this in mind, CBD continues to digitally transform and innovate, ensuring we evolve to support the needs of our customers and employees, while optimising our operational efficiency and maintaining our market leading banking platforms,” van Linder said .
CBD continues to take strides in its commitment to achieving carbon neutrality in the bank’s operations’ greenhouse gas emissions by 2030. “The bank is committed to supporting the UAE Net Zero by 2050 strategic initiative to transition towards a climate-neutral economy and aims to become a key player in enabling the flow of sustainable finance. In June 2024, the $500 million Green Bond issuance by CBD was recognised with the prestigious EMEA Finance Achievement Awards 2023 as the “Best Financial Institution Green Bond in EMEA”, which demonstrates the enduring resolve of the Bank in this crucial area,” van Linder said.
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