UAE - Commercial Bank of Dubai (CBD) has reported a 3.1 per cent increase to Dh325 million in first-quarter net profit year on year. The bank said a less than expected credit loss coupled with lower operating expenses had supported the net profit surge while low interbank interest rates resulted in bringing down net interest income by 1.8 per cent compared to the first quarter of 2020.
CEO Dr Bernd van Linder said CBD delivered an improved set of first quarter results with net profit increasing by 3.1 per cent compared to the first quarter of 2020. “Domestic business conditions and confidence continue to improve while recovery from the Covid-19 pandemic is varied across business segments.”
“Against this backdrop, CBD has reached a record Dh102 billion in assets driven by solid growth in loans, which have increased 12 per cent versus Q1 2020. CBD continues to deliver on its long-term strategy and is well positioned to further support businesses across the UAE,” said Dr van Linder.
The bank’s operating income in the quarter was Dh731 million, down 3.4 per cent compared to the prior comparative period, “primarily due to lower fee and commission income coupled with lower interest income,” CBD said in a statement.
Operating expenses were at Dh196 million, lower by 2.7 per cent while operating profit was Dh 535 million, down by 3.7 per cent. Net impairment allowances dropped 12.5 per cent to Dh210 million as on March 31, 2021, the bank said.
Capital ratios remained strong with the capital adequacy ratio at 16.25 per cent, Tier 1 ratio at 15.09 per cent and common equity Tier 1 ratio at 12.44 per cent. Gross loans rose 6.6 per cent to Dh73.6 billion quarter-on-quarter while advances to stable resources ratio stood at 92 per cent.
Total assets of the bank surged 5.2 per cent to Dh102.5 billion in the first quarter from Dh97.4 billion in the previous quarter. Net loans and advances increased 6.6 per cent to Dh 69.6 billion compared to Dh65.3 billion in the previous quarter.
Customers’ deposits rose 1.7 per cent to Dh70.9 billion while low cost current and savings accounts constituted 44.1 per cent of the total deposit base.
In accordance with IFRS9 accounting standards, the net impairment charge totaled Dh 210 million for the first quarter of 2021. Total allowances for impairments amounted to Dh4.021 billion.
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