DUBAI: The Commercial Bank of Dubai (CBD) has reported 20.5% increase in net profit to AED 1.4 billion for the 2019 full year.
The result was delivered on the back of broad based business improvements aligned with the bank’s strategy. Impairment allowances increased by 6.2% as the bank prudently increased provisions for non-performing loans.
Operating income for 2019 amounted to AED 3,033 million, an increase of 11.3% attributable to a 2.8% increase in Net Interest Income (NII) and a 31.2% increase in Other Operating Income (OOI).
Fees and commission income increased by 21.3%, foreign exchange income registered a 37.7% increase, investment income increased by 179.4%, and other income increased by 53.3% compared to 2018.
Operating expenses were AED 885 million, up by 3.1%. The bank remained firmly focused on cost control with an increase in investment on digital capability to support business growth and improve customer experience. The cost to income ratio improved to 29.2% (2018: 31.5%).
Total assets were AED 88.1 billion as at the 31st of December 2019, an increase of 18.8% compared to AED 74.1 billion as at the 31st of December 2018.
Net Loans and Advances were AED 60.2 billion, registering an increase of 18.1% compared to AED 50.9 billion as at the end of 2018.
Customers’ Deposits were AED 63.3 billion as at the 31st of December 2019 representing an increase of 19.1% compared to AED 53.2 billion at the end of 2018. Low cost current and savings accounts (CASA) constitute 39.4% of the total deposit base, while the financing-to-deposits ratio stood at 95.0%.
The non-performing loan (NPL) ratio improved to 5.94% from 6.18% at the end of 2018. In line with the bank’s prudent provisioning policy, additional net impairment provisions of AED 748 million were set aside during the year resulting in the coverage ratio improving to 83.14% from 77.82%. As at the 31st of December 2019, total allowances for impairments amounted to AED 3,858 million.
Commenting on the bank’s performance, Dr. Bernd van Linder, Chief Executive Officer said, “CBD has delivered an excellent performance in 2019, achieving the bank’s best ever full year results. Net profit increased by 20.5% to AED 1.4 billion with strong asset growth and higher other operating income. The result has been achieved through the disciplined execution of our strategy and reflects continuous improvements across all aspects of our business. The bank’s capital base provides a strong foundation to embrace controlled growth in the coming year, with liquidity and eligible liquid asset ratios comfortably above the minimum levels prescribed by UAE Central Bank”.
He added, “We continue to invest in the future and to position ourselves as the ‘Bank of Tomorrow’, a high performing organization, prepared for growth, and digital by default that backs UAE businesses into their digital future”.
Edited by Nayyar Iqbal