CBD 9 months profit falls 23.3 pc to AED816 mn

Total assets up 12.4 pc to AED92.8 billion

DUBAI/October 28-2020: The Dubai Financial Market (DFM)-listed Commercial Bank of Dubai (CBD) has recorded 23.3 per cent decline in its net profit to AED816 million for the first nine months ending September 30, 2020.

Sequentially, the net profit for three months ending September 30, 2020 was 32.6 per cent higher at AED285 million compared with AED215 million, the bank logged for the previous quarter ending June 30, 2020.

Operating profit

The operating income for the nine-month period was AED2.12 billion, down by 6 per cent, compared with the prior similar period, primarily due to sharply lower interest rates.

While operating expenses were AED591 million, lower by 9.4 per cent, the operating profit was AED1.52 billion, down by 4.7 per cent for the same period.

Net impairment allowances were AED699 million, up 32.9 per cent, attributable to specific credit provisions and forecast credit losses associated with the Covid-19 pandemic.

Capital ratios

Capital remained strong with the capital adequacy ratio (CAR) at 14.40 per cent and the common equity Tier 1 ratio (CET1) at 13.24 per cent as of September 30.

While the gross loans were AED66.5 billion, an increase of 3.8 per cent compared with that on December 31, 2019, the advances to stable resources ratio (ASRR) stood at 91.03 per cent.

NPLs up

Non-performing loan (NPL) ratio increased by 103 bps to 6.97 per cent, compared with 5.94 per cent in December 2019.

A bank statement noted that 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.

The decline in bottom line was attributable to lower net Interest income (NII) by 7 per cent as a result of significantly lower interest rates and a 0.58 per cent decrease in Other Operating Income (OOI) as business conditions deteriorated following the onset of the Covid 19 pandemic.

Balance Sheet

Total assets were AED92.8 billion as of September 30, 2020, an increase of 12.4 per cent compared with AED82.5 billion as at September 30, 2019.

Customers’ deposits were at AED64 billion as of September 30, 2020, representing an increase of 8.4 per cent compared with AED59.1 billion a year earlier.

Commenting on the bank’s performance, Dr Bernd van Linder (seen in the picture), Chief Executive Officer (CEO), said CBD has delivered a significantly improved quarter-on-quarter performance while navigating the challenging market environment.

He said despite the lower overall performance for the first 9 months of 2020 compared with 2019, CBD continues to deliver on its strategy and is poised to end the year on a strong footing. He added, “We have continued our proactive approach to support our customers, employees and the UAE economy during the pandemic.”

He also stressed that throughout this 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.

 

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