(MENAFN - Khaleej Times) Commercial Bank of Dubai, or CBD, said on Wednesday that it recorded a four per cent rise in net profit to Dh853 million in 2012 as compared to the previous year.
The bank, posting its fourth successive increase in net profit since 2008, declared a cash dividend of 30 per cent to shareholders.
The results, which are subject to the UAE Central Bank's approval, have been announced following a meeting of the board of directors held on Wednesday. The 30 per cent cash dividend, which is up from 20 per cent cash dividend and five per cent bonus shares in 2011, is subject to the agreement of the shareholders at the Annual General Assembly Meeting to be held on March 13 2013, CBD said in a statement.
Chief executive officer Peter Baltussen said CBD had maintained its steady performance while positioning itself to capitalise on future opportunities. "Our robust capital base allows us the flexibility to pursue new strategic initiatives which will enable us to better serve our customers whilst providing our shareholders with consistent solid returns. We are grateful to our customers for their trust in us. I wish to thank the Board for its support and guidance and CBD staff for their dedicated efforts," he said in a statement.
The bank's is "robustly capitalised" at Dh6.8 billion, up from Dh6.3 billion. Its capital adequacy ratio increased to 23.2 per cent (up from 23.1 per cent) as at 31 December 2012 against regulatory requirement of 12 per cent. The bank said its Tier 1 capital ratio also improved to 17.6 per cent (up from 16.6 per cent). "The strong capital base ensures that the bank is well positioned to take advantage of business opportunities that may arise from a changing economic cycle whilst providing a buffer against shorter-term volatility," it said. Operating income at Dh1.852 billion was marginally lower than Dh1.863 billion for 2011.
"This was mainly due to marginal decrease in net interest income to Dh1.332 billion from Dh1.341 billion due to competitive market conditions though this was partially offset by lower funding costs. Non-interest income was virtually unchanged at Dh520 million with increases in foreign exchange income (11 per cent), investment income (28 per cent) and other operating income (21 per cent) compensating for the seven per cent drop in fees and commission. Operating expenses rose to Dh572 million from Dh570 million in 2011 as the costs were efficiently managed. The efficiency ratio for 2012 was maintained at healthy 30.9 per cent up from 30.6 per cent for 2011.
The bank said it had continued "its prudent provisioning policy" booking an incremental impairment charge for the year of Dh490 million (compared to Dh512 million). Collective impairment provision held at the year-end is at 1.5 per cent (up from 1.4 per cent) of the bank's credit risk weighted assets.
CBD's total assets rose to Dh39.5 from dh38.3 billion. Customers' loans and advances stood at Dh27 billion, one per cent higher when compared to Dh26.8 billion in 2011. Customers' deposits dropped one per cent to Dh28.1 billion. The bank's liquidity position continued to be at comfortable levels as liquid assets represent 18 per cent of total assets.