Commercial Bank of Dubai operating profits increase by 5.4% to Dhs289m in Q1 2009

Interest margins improved when compared to the first quarter last year and net interest income for the period was Dhs323m, showing a 31.4% increase over same period last year.

During the quarter, the market value of some of the Bank's strategic equity investments in locally listed companies declined and although the respective companies are performing well, the Bank has booked an impairment loss of Dhs34.8m in line with IFRS.

Following the Bank's conservative provisioning policy, additional provisions for its credit portfolio of Dhs29.5m were made during the quarter, resulting in an improvement of the provision coverage ratio for non-performing loans to more than 100%. In view of the above, the net profit for the first quarter amounted to Dhs234m as compared to Dhs267m a year earlier.

The results were announced following a meeting of the Board of Directors' held on Wednesday, April 22, 2009.

Commenting on the results of the Bank, Mr. Peter Baltussen, Chief Executive Officer said, "The Bank has sustained the growth of its core banking business in the first quarter of 2009. The quality of our loan portfolio has remained strong with non-performing loans at Dhs253m, representing 0.89% of total loans."

He added, "We have been actively managing our expenses, which as a result have only shown a slight increase compared to last year, while we maintained the efficiency ratio at a healthy 30.9%."

The total assets stood at Dhs38.2bn by the end of March '09, a 14.2% growth over March '08. Loans and advances grew to Dhs28.4bn, an increase of 23.4% compared with the same period last year and Customers' Deposits increased by 22.3% to Dhs28,2bn. The bank remains well capitalized with a Tier 1 capital adequacy ratio of 13.1%, comfortably above the required minimum levels as stipulated by the Central Bank.

Established in the UAE in 1969, Commercial Bank of Dubai PSC offers a wide range of commercial and consumer banking products and services through a network of 23 branches, 3 Islamic Branches, 2 Cash Offices and 149 ATMs in the UAE. The Bank is listed in DFM and fully owned by UAE Nationals, including 20% by the Government of Dubai.