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Commercial Bank of Dubai’s profit up 10pc in first quarter

The bank’s operating profit rose to Dh346 million from Dh289 million in the same 2009 period.

CBD’s net profit for the quarter rose 10.14 per cent to Dh 258 million from Dh234 million in the same quarter of last year, Chief Executive Officer Peter Baltussen said in a statement.

“The year 2010 has begun on a positive note for CBD with record operating profits driven primarily by the bank’s core franchise,” said Baltussen.

“Our efforts in 2009 to closely monitor balance sheet strength and maintain liquidity and capital adequacy has resulted in strong financial ratios while overall profitability has been sustained,” he claimed.

CBD’s capital ratios are “now substantially higher” than the UAE Central Bank’s and the Basel II guidelines, which gives it the possibility to sustain growth in the years to come, he said.

CBD is capitalised at 19.8 per cent, well above the minimum Basel II requirement of 11 per cent with a Tier 1 ratio of 14.86 per cent.

“As a result of our effective management of the cost base, the cost for the quarter was virtually flat which enabled the bank to successfully reduce the cost to income ratio to 27.9 per cent from 30.9 per cent in 2009 first quarter,” Baltussen added.

The growth in CBD’s profitability has been largely driven by improvement in interest margins as evident by increase in net interest income to Dh347 million, 7.5 per cent over the same period of last year. The bank took provisions totalling Dh95 million in the first quarter resulting in a provision coverage ratio of 99 per cent. The non-performing loans to total loans ratio increased to 2.9 per cent, he said.

CBD’s total assets grew 2.7 per cent to Dh 37.8 billion by the end of March from Dh36.8 billion last year end. Loans and advances have registered a marginal drop of 0.5 per cent from Dh28.4 billion. Deposits were up by 1.2 per cent to Dh28.3 billion.
—issacjohn@khaleejtimes.com