(MENAFN- Khaleej Times) The bank's operating income for the quarter ended March 2015 was 9.7 per cent higher at Dh581.1million.
Dubai - Commercial Bank of Dubai (CBD) reported on Wednesday that its net profit for the first quarter of 2015 rose 3.6 per cent to Dh295 million from Dh285 million in the same 2014 period.
The bank said in a statement that its operating income for the quarter ended March 2015 was 9.7 per cent higher at Dh581.1million as compared to Dh529.7million for the same period last year.
The bank’s operating profit for the first quarter increased by 6.3 per cent to Dh389.2 million from Dh366 million in the same 2014 period. CBD said its total assets jumped 11.3 per cent to Dh48.7 billion compared to Dh43.7 billion in the first quarter of 2014 and 3.9 per cent higher when compared to the previous quarter.
Loans and advances were 13.1 per cent higher at Dh33.8 billion year on year. Customers’ deposits rose 13.7 per cent to Dh34.7 billion from Dh30.5 billion in the 2014 first quarter and 7.9 per cent higher than the Dh32.2 billion as at the end of last year.
The bank said its capital adequacy ratio continues to be robust at 18.2 per cent while return on average assets and average equity was 2.5 per cent and 16 per cent respectively.
Cost to income ratio stood at a healthy 33 per cent while coverage ratio for non-performing loans was at 97.5 per cent. Operating expenses rose 17.2 per cent to Dh191.9 million in first quarter from Dh163.7 million in first quarter of 2014.
“The bank focused on its strategic initiatives to grow its personal banking business expanded its sales force and distribution network and committed resources to its new digital banking platform. This resulted in increased variable costs to support higher business volumes. Cost to income ratio stood at 33 per cent” the statement said.
Peter Baltussen chief executive officer said CBD continued to report positive growth in profit on the back of collaborative efforts from all lines of its business “which further diversified our revenue. In the first quarter of 2015 CBD has underwritten new loans of Dh5 billion.”
“We are pleased to acquire a corporate loan portfolio from Royal Bank of Scotland in the UAE. The portfolio consists of large UAE-based corporates which are major contributors to the economy. The high quality corporate loan portfolio aligns well with our strategic direction and further expands our customer base of large corporate” he said.
“With an increasing contribution from personal banking to the bank’s bottom line backed by stable returns from the corporate and commercial segments the bank expects to continue its robust net profit growth in 2015 and beyond.”
The bank said its loan book growth was driven by personal banking and commercial banking business segments.
Personal banking gross loans surged 39 per cent to Dh4.8 billion from Dh3.4 billion in first quarter of 2014. Current and savings accounts comprised 52 per cent of total customer deposits.
The bank said its liquidity continued to be comfortable with advances to stable resources ratio of 82.5 per cent in the first quarter.
The bank’s capital adequacy and Tier 1 capital ratios were at 18.17 per cent and 16.96 per cent respectively significantly above the regulatory thresholds of 12 per cent and eight per cent mandated by the UAE Central Bank. Leverage Ratio as per Basel III guidelines was 12.96 per cent against regulatory requirement of minimum three per cent.
“Asset quality decline in non-performing loans (NPL) coupled with increase in loan book resulted in drop of NPL to gross loan ratio to 7.64 per cent in first quarter from 10.28 per cent in the same period 2014. Net impairment provisions were higher at Dh94 million for first quarter of 2015 compared to Dh81 million for same period last year” the bank said.
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