The Commercial Bank of Dubai (CBD) announced on Wednesday a net profit after tax of Dh2.231 billion for the first nine months of 2024, marking a 26.5% increase on a pre-tax basis (15.2% on a post-tax basis) compared to the same period in 2023. The robust growth in loans during this period contributed to a strong net interest income, bolstered by non-funded income and a lower cost of risk, which more than offset higher expenses and the corporate tax charge. The elevated global market interest rates during the first nine months of 2024 also played a significant role in the solid net interest income outcome.
The UAE's business environment, supported by economic incentives, population growth, and business confidence, remained positive and is expected to continue its upward trajectory. The strategic positioning of the public sector, along with strategic investments, economic diversification, and broad-based growth, particularly in non-oil sectors, is anticipated to sustain business performance. Operating income for the first nine months of 2024 stood at Dh4,164 million, a 12.1% increase, driven by a 7.3% rise in net interest income (NII) due to strong loan growth and high market interest rates, coupled with a 23.8% increase in Other Operating Income (OOI).
Operating expenses amounted to Dh1.018 billion, primarily influenced by inflation, investments in digitization, technology, business growth, governance, and regulatory compliance. The cost-to-income ratio remained robust at 24.44%. Total assets reached Dh140.2 billion as of 30 September 2024, reflecting an 8.7% increase from Dh129.0 billion as of 31 December 2023. Net loans and advances grew by 10.1% to Dh91.7 billion from Dh83.3 billion at the end of 2023. Customer deposits increased by 11.8% to Dh98.7 billion from Dh88.3 billion at the end of 2023, with low-cost current and savings accounts (Casa) accounting for 49% of the total deposit base, and the loan-to-deposit ratio at 93%.
The non-performing loan (NPL) ratio improved significantly to 4.96% from 6.46% at the end of 2023. The net impairment charge for the first nine months of 2024 was Dh697 million. The coverage ratio increased by 1,335 basis points to 96.61% (December 2023: 83.26%) and was 133.09% inclusive of collateral for stage 3 loans. Total allowances for impairment, covering loans and advances and unfunded exposures, amounted to Dh5,702 million as of 30 September 2024.
Dr. Bernd van Linder, CEO of CBD, highlighted that the bank's liquidity position remained strong, with the advances to stable resources ratio at 86.00% as of 30 September 2024 (December 2023: 87.25%), well below the UAE Central Bank's maximum of 100%. CBD's capital ratios were also robust, with the capital adequacy ratio (CAR) at 16.56%, Tier 1 ratio at 15.42%, and Common Equity Tier 1 (CET1) ratio at 13.37%, all comfortably above the minimum regulatory thresholds set by the UAE Central Bank.
Dr. van Linder added, "CBD has achieved an outstanding result, driven by strong loan growth and higher revenues, with significantly improved asset quality. In Q3 2024, CBD introduced dedicated accounts for virtual asset service providers (VASPs), aligning with our strategic vision to support the digital economy and foster a robust regulatory environment that promotes growth and stability. The bank remains committed to the disciplined execution of its strategy and is well-positioned to continue achieving its strategic objectives and high-quality performance in the future."
Somshankar Bandyopadhyay, a News Editor with nearly three decades of experience, currently manages the business section, ensuring that the top economic and business news of the day reaches its readers.
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