Commercial Bank of Dubai net profits increase by 14% to Dhs268m in Q2-2009

Net profit for the first half of 2009 amounted to Dhs502m as compared to Dhs566m a year earlier. Net profit for the second quarter was Dhs268m, which represents a 14.4% increase compared to Dhs233m for the first quarter of this year. The Bank's net interest income of Dhs648m is 27% over the same period last year as a result of higher volumes combined with an increased interest margin.

As a result of the Bank's effective cost management programs, operating expenses increased by only 2.8% as compared to the first half of 2008, while the efficiency ratio remained at a healthy 30.6%, one of the lowest in the market. In line with its prudent lending policies, the Bank took additional provisions totaling Dhs75m in the first half of 2009. Consequently the coverage ratio reached 93%, while the non performing loans to total loans ratio stood at 1.1%. It should be noted that the Bank has no exposure to the Saudi Arabian Al-Gosaibi and Saad groups.

Peter Baltussen, Chief Executive Officer, CBD, said:

"In the present economic circumstances the Bank's operating results in the first 6 months have been solid, in spite of lower growth compared to previous years. Underlining our confidence in the UAE economy, we have opened 2 new branches and a number of new Al Dana Wealth Centers, while earlier this month we have inaugurated our fourth 'Attijari Al Islami' branch, which provides an extensive range of innovative Islamic Banking products and services."

He added, "This year we are also celebrating the 40th Anniversary of the Bank and we have launched several campaigns and activities to mark this important milestone, which reflects our rich heritage as one of the pillars of the UAE economy."

Total assets of Dhs36.5bn at the end of June reflects a 6.4% growth over Dhs34.3bn as at 30th June 2008. Loans and advances grew by 13.8% compared to last June to Dhs29bn and customers' deposits were up by 9.2% compared to last June to Dhs27.2bn. The Bank's capital adequacy ratio remains strong with a Tier I adequacy ratio of 13%, comfortably exceeding the UAE Central Bank's regulations. Also, the Bank is in the process of finalizing the formalities for the conversion of the Ministry of Finance Deposits into Tier II Capital, which will further improve the capital adequacy ratio.

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 24 conventional branches, 4 Islamic Branches, 2 Cash Offices and 148 ATMs in the UAE. The Bank is listed in DFM and fully owned by UAE Nationals, including 20% by the Government of Dubai.