BBN Report
Impairment allowances up 40.5 pc to AED1.05 bn
DUBAI/February 10-2021: Commercial Bank of Dubai (CBD) has reported a net profit of AED1.12 billion for the financial year 2020 (FY20) compared with AED1.40 billion the bank earned for the earlier year, representing a decline of 20 per cent year on year.
The operating income for the said period was AED2.98 billion, down by 1.8 per cent compared with the prior comparative period, primarily due to sharply lower interest rates.
Operating expenses were AED807 million, lower by 8.8 per cent, whereas the operating profit was AED 2.17 billion, which was up by 1.1 per cent during 2020.
Net impairment allowances were AED1.05 billion, up 40.5 per cent, attributable to specific credit provisions and forecast credit losses associated with the COVID-19 pandemic.
Capital ratios
Capital ratios remained strong with the capital adequacy ratio (CAR) at 16.65 per cent, with Tier 1 ratio being at 15.5 per cent and Common Equity Tier 1 (CET1) ratio at 12.71 per cent.
Gross loans were at AED69 billion, an increase of 7.8 per cent compared with that at December 31, 2019. Advances to stable resources ratio (ASRR) stood at 86.33 per cent as of December 31, 2020.
NPLs up
Non-performing loan (NPL) ratio increased by 83 bps to 6.77 per cent, compared with 5.94 per cent in December 2019
The COVID-19 pandemic has caused a contraction in business conditions and confidence, leading to historically low interbank interest rates and increased specific and forecast credit losses. Consequently, impairment allowances taken were AED1.05 billion for the full year of 2020, up by 40.5 per cent on the full year of 2019
Commenting on the bank’s performance, Dr Bernd van Linder (seen in the picture), Chief Executive Officer (CEO) said, “Global and domestic business conditions and confidence continue to be weak, the impact of the COVID-19 pandemic has been truly unprecedented and will be felt for quite some time to come.”
He said that throughout the pandemic period, CBD has maintained uninterrupted banking services offering a wide array of service delivery channels underpinning a high rate of digital adoption right across the bank.
Total assets were AED97.4 billion as of December 31, 2020, an increase of 10.6 per cent compared with AED88.1 billion as of December end, 2019.
Advances and deposits
Net loans and advances were AED65.3 billion, registering an increase of 8.5 per cent compared with AED60.2 billion in the earlier year.
Customers’ deposits were AED69.8 billion as of December 31, 2020, representing an increase of 10.1 per cent compared with AED63.3 billion a year ago.
