Commercial Bank of Dubai’s (CBD) net profit for the first three months of 2014 increased by 16% from Dhs245.5m for Q1-13 to Dhs284.8m, the highest first quarter profit ever achieved by the Bank.
Operating profit increased by 1.4% from Dhs361m to Dhs366m, on the back of a 4% increase in net interest income to Dhs373.3m (Q1-13: Dhs358.8m) and a 10% increase in non-interest income to Dhs156.5m (Q1-13: Dhs142.6m). Though operating expenses increased to Dhs163.7m, 16.6% higher than Q1-13 the cost to income ratio was steady at 30.9%.
Loans and advances of Dhs29.9bn as at 31 March 2014 registered an increase of 7.2% over the Dhs27.9bn as at 31 March 2013 and were 1.2% lower than Dhs30.3bn as at 31 December 2013.
Customers’ deposits of Dhs30.5bn as at 31 March 2014, increased by 8.8% compared to Dhs28.1bn as at 31 March 2013, and were 1.4% lower as compared to Dhs30.9bn as at the year end. The Bank’s liquidity continued to be comfortable with advances to stable resources ratio of 81.3% as at 31st March 2014 (31 Dec. 13: 80.9%), compared to the UAE Central Bank stipulated maximum of 100%. Liquidity coverage ratio calculated as per Basel III guidelines was at 111.6% (31 Dec. 2013: 116%), whilst the minimum stipulated ratio is 50%. Uses to stable resources ratio was 86.3% against a regulatory requirement of less 100% (31 Dec 2013: 86.9%).
CBD’s capital adequacy ratio and tier 1 capital ratio were at 19.8% and 18.4% respectively and were significantly above the regulatory thresholds of 12% and 8% mandated by the UAE Central Bank. Leverage ratio as per Basel III guidelines was 13.2% against regulatory 3% minimum requirement (31 Dec. 13: 13.3%). Return on average assets for the quarter ended 31 March 2014 improved to 2.6% from 2.5% for the first quarter 2013. Return on average equity increased to 16.8% for the quarter ended 31 March 2014 when compared to 15.5% for the first quarter of 2013.
In line with its policy to proactively manage credit quality and impaired loans, CBD charged an amount of Dhs81m as impairment charges net of recoveries against Dhs115m for the same period last year. The provision charge improved CBD’s impaired loan coverage ratio from 84.9% as at 31 December 2013 to 86.3% at 31 March 2014.
Commenting on the Bank’s performance, Peter Baltussen, Chief Executive Officer, said, “CBD’s first quarter 2014 performance is underpinned by our efforts to strengthen existing relationships even as we diversify our business. Gross loans to personal clients increased by 35% over March 2013, with particular emphasis on the affluent segment.” “During the quarter, CBD also launched its new online banking service, a platform with breakthrough features like the personal financial management tool, a virtual assistant and a host of other advances. The new platform, is a first of its kind for the region, and brings these revolutionary next generation features to our customers across the range of digital devices. We are pleased with the initial response received following its launch,” he added.
Events during the quarter:
•CBD unveiled its new public website which sets a new standard for online banking with a host of creative and innovative features some of which are the first-of-its kind in the region. These include “Budget and Track” which gives customers complete visibility of their spending income and budgets. The personal financial management tool gives customers the ability to monitor their spending habits and to set their life goals such as saving for a new car or planning a vacation. The interactive virtual assistant ‘Sara’ guides customers round the clock.
•The 3rd edition of the CBD Youth Athletics Competition 2014 was held at the Higher College of Technology – Dubai Men’s College stadium, Academic City. The inter-school athletic event, conceived sponsored by the Commercial Bank of Dubai in partnership with the Dubai Sports Council, with the vision to promote physical fitness and active lifestyle amongst the school students in the UAE. In the 2014 season, over 1,800 students from 82 schools participated in the qualifying rounds, out of which nearly 500 students from 60 schools qualified for finals, which were held on the 15th February.
•In February 2014 CBD received the Human Resources Development Award from the Emirates Institute for Banking and Financial Studies (EIBFS).
•CBD also won the “Editor’s Special Award” for the best product conducted by Prepaid Summit Middle East sponsored by VISA for its Community Development Authority & Western Union Co-branding Prepaid Product in March 2014.
For more information please contact:
Areej Al Yousuf
Snr. Team Leader, Advertising and E-media
Marketing & Corporate Communications