(MENAFN- Khaleej Times) Commercial Bank of Dubai, or CBD, reported operating profit of Dh982 million for the first nine months of 2012, showing an increase of 0.8 per cent compared to Dh974 million in the same period last year.
Operating income for the period Dh1.4 billion was marginally higher compared to that for the same period in 2011. This was mainly due to an increase in net interest income which rose by 1.2 per cent to Dh1 billion due to lower funding cost. Non-interest income decreased by 1.7 per cent to Dh381 million, primarily due to lower fees & commission income which fell by 5.4 per cent to Dh250 million. However, this drop in fees & commission income was partially off-set by 15.3 per cent increase in foreign exchange earnings.
The bank's operating expenses for the first nine months of 2012 amounted to Dh414 million, marginally lower than the previous year, thereby maintaining a steady cost to income ratio of 29.7 per cent.
The bank continues to pro-actively manage credit quality as a part of its efforts to strengthen its balance sheet. Additional impairment allowances of Dh296 million were booked against its loans and advances portfolio in the first nine months of 2012, 30 per cent higher than the charge for the same period last year. This resulted in a non-performing loans coverage ratio of 77 per cent. General provisions represent 1.46 per cent of the Bank's risk weighted assets. Accordingly the bank's net profit after provisions for non-performing loans amounted to Dh740 million for the first nine months of 2012 as compared to Dh777 million a year earlier. CBD's loans & advances of Dh26.8 billion as at September 30, 2012 were at the same level of 31st December 2011; however were 2 per cent higher when compared to end of September 2011. Customers' deposits of Dh27.9 billion were at the 30th September 2011 level. The bank's liquidity position is comfortable with advances to stable resources ratio of 82 per cent, which is well below the prescribed maximum of 100 per cent stipulated by the Central Bank. The bank is strongly capitalised with capital adequacy ratio of 24.5 per cent. Tier 1 ratio was 18.9 per cent, well above the UAE Central Bank requirement of 8 per cent.
Peter Baltussen, chief executive officer said: "The bank has continued its steady performance as it positions itself to capitalise on emerging opportunities. The UAE economy in general has displayed signs of a sustainable recovery and we remain optimistic with regards to the outlook for UAE as well as the broader region in which we operate."
He added: "During the year, the bank embarked on new strategic growth initiatives to broaden our revenue streams and we remain confident that these will further enhance our operating returns in the future."
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