Commercial Bank of Dubai’s (CBD) net profit for year ending 31 December 2013 increased by 18% to Dhs1,010m as compared to Dhs857m for the previous year. With this the Bank maintains its record of annual growth in its net profit over the last 5 years right through the economic downturn.
The record net profit was achieved on the back of a 9.4% growth in operating income which reached an all-time high of Dhs2.03bn. Net Interest Income increased by 8.7% to Dhs1.45bn in 2013 from Dhs1.33bn in 2012, while non-interest income increased by 11.1% from Dhs525.7m in 2012 to Dhs584.2m for the year ended 31 December 2013. Operating expenses increased by 9.7% from Dhs572.2m for the year ended 31 December 2012 to Dhs627.6m for the full year ended 2013 as the Bank made substantial investments in its resources and infrastructure. As a result operating profit increased by a solid 9.3% from Dhs1,286m to Dhs1,405m for the full year ended 31 December 2013. Efficiency ratio increased slightly from 30.8% for 2012 to 30.9 for the full year ended 31 December 2013, lower than local industry average.
Total assets as at 31 December 2013 stood at Dhs44.5bn, a 13.2% increase over the Dhs39.3bn as at 31 December 2012. Loans and advances increased by 11.3% from Dhs27.2bn as at 31 December 2012 to Dhs30.3bn as at 31 December 2013. The Bank continued to grow its corporate banking business where gross lending increased by 9.7% from Dhs26.9bn as at end of December 2012 to Dhs29.5bn as at 31December 2013. However the Bank’s increased focus on its Personal Banking offering resulted in a 35% increase in gross personal loans from Dhs2.4bn as at 31 December 2012 to Dhs3.3bn as at 31 December 2013.
Customers’ deposits as at 31 December 2013 stood at Dhs30.9bn, up by 10.3% over the Dhs28.1bn as at end of 2012. CBD’s liquidity position was comfortable with its advances to stable resources ratio at 80.9% as at 31 December 2013 against 81.8% as at 31 December 2012 compared to the regulatory maximum ratio of 100%. The liquidity coverage ratio as calculated per Basle-III guidelines was 116% as at 31 December 2013 whilst the minimum stipulated ratio is 50%. During the year, the Bank repaid Dhs1.8bn of its deposits received from the UAE Ministry of Finance ahead of its contractual maturity on 31 December 2016. Subsequently the Bank successfully issued $500m of conventional bonds as part of its Euro Medium Term Note programme. The Bank also prepaid its $450m club deal in October 2013 with a remaining maturity of 1 year and replaced it with a club deal of similar amount in December 2013 with a 3 year maturity.
The Bank is strongly capitalized with total capital resources of Dhs7.2bn as at 31 December 2013. The Bank’s capital adequacy ratio as per BASEL II was robust at 19% as at 31 December 2013 against regulatory requirement of 12%, while TIER 1 ratio was at 17.7% as at 31 December 2013 (Dec-12: 17.72%). CBD’s Leverage ratio calculated as per Basel-III guidelines was 13.3% as at 31st December 2013 compared with the minimum stipulated 3% ratio. Return on average assets for the year ended 31 December 2013 improved to 2.4% from 2.2% for the year ended 2012, which is substantially higher than its peer group average. Return on average equity increased to 15.1% for the year ended 31 December 2013 when compared to 13.4% for the year ended 31 December 2012.
The full year impairment charge for loan portfolio was Dhs419m, including Dhs33m for General Provisions, which represents 1.5% of the Bank’s credit risk weighted assets (CRWA) by end of 2013. The Non-Performing Loan (NPL) Ratio improved from 11.2% as at end of December 2012 to 10.1% as at end of December 2013 and the NPL coverage ratio improved to 84.9% (2012: 71.7%).
The results which are subject to the UAE Central Bank’s approval have been announced following a meeting of the Bank’s Board of Directors held on Wednesday January 29th 2014. The Board has proposed a cash dividend of 30% and bonus shares of 10%, subject to the agreement of the shareholders at the Annual General Assembly Meeting to be held on 5th March 2014.
Commenting on the Bank’s performance, Peter Baltussen, Chief Executive Officer said, “Our 2013 record net profit was a result of a strong performance across all our business lines. Our Personal Banking strategy with renewed focus on the affluent segment has enabled us to diversify our bottom line and increase our market share. At the same time we continue to stay close to our corporate and commercial clients particularly the family owned businesses to ensure that we are their preferred banking partner in the coming years. I believe CBD with its comfortable liquidity and robust capital adequacy is in a strong position to grow along with its clients.” He added, “2014 will see the Bank further consolidate its Personal Banking strategy with the launch of an innovative, virtual and personalized banking offering which will provide our customers with a unique experience.”
Key Achievements during the year:
-CBD successfully completed its debut issuance of $500m of conventional bonds under its EMTN programme. The programme was rated “A-” by Fitch and “Baa1” by Moody’s. The issue was oversubscribed over five times eliciting strong demand from investors in the Middle East, Asia and Europe.
-CBD has prepaid Dhs1.8bn of deposits received from the UAE Ministry of Finance ahead of the contractual maturity on 31 December 2016.
-Attijari Al Islami, Commercial Bank of Dubai’s Islamic Banking Unit received the ‘Islamic Bank of the Year Award for the UAE 2013′ from The Banker magazine, the world’s premium banking and finance magazine, published by the Financial Times.
-In recognition of CBD’s outstanding performance in payments processing and delivery of commercial and financial transfers, CBD was awarded the coveted STP (Straight Through Processing) Excellence Award by Commerzbank.
-CBD was the first Bank in the region to complete live deployment of TI plus Trade Finance system on the Software as a Service …
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