816 million dirhams, “Commercial Dubai” profits in 3 quarters – Economic...

816 million dirhams, “Commercial Dubai” profits in 3 quarters – Economic...
816 million dirhams, “Commercial Dubai” profits in 3 quarters – Economic...

Commercial Bank of recorded a net profit of 816 million dirhams for the first nine months, down 23.3% compared to the same period of the previous year.

As the (Corona 19) pandemic led to a sharp contraction in business conditions, which led to a historical decline in interbank interest rates and an increase in specific and expected credit losses, and accordingly provisions for impairment losses amounted to 699 million dirhams, up 32.9% compared to the first nine months of 2019.

Operating income decreased 6% for the first nine months of this year to 2,107 million dirhams, and this decrease came as a result of a decrease in net interest income of 8.7% as a result of the sharp decline in interest rates and a decrease in other operating income by 0.5%, as business conditions were severely affected, since The Corona pandemic has begun.

Operating expenses decreased by 9.4% to 591 million dirhams, as the bank made tangible progress in transformation processes in light of the increasing interest from customers in digital solutions, and the operating efficiency ratio (cost to income) improved to 28.1% compared to 29.2% in December 2019.

Balance sheet

Total assets reached 92.8 billion dirhams on 30 September 2020, up by 12.4%, compared to 82.5 billion dirhams on 30 September 2019.

Net loans and advances, which amounted to 63.0 billion dirhams, increased 11.7% compared to 56.4 billion on 30 September 2019. Customer deposits increased 8.4% to reach 64.0 billion dirhams on 30 September 2020 compared to 59.1 billion dirhams on 30 September 2019, and low-cost current and savings accounts constitute 43.4 percent. % Of total customer deposits, while the financing to deposit ratio is 98.4%.

In line with International Accounting Standard No. 9 for Financial Reporting, the bank raised credit losses associated with several specific credit events and the potential impacts of Coronavirus disease 19, and as a result impairment provisions were deducted.

A net additional amount of 699 million dirhams during the first nine months of 2020. The coverage ratio for non-performing loans decreased to 64.16% (105.09% including third-stage loan guarantees) compared to 83.14% at the end of 2019, with total impairment provisions amounting to 3.510 million dirhams On September 30, 2020.

Liquidity power

The bank continued to maintain strong levels of liquidity, with the ratio of advances to stable sources of funds reaching 91.0% as of September 30, 2020 (December 2019: 88.0%), compared to 100% according to the instructions of the UAE Central Bank.

Capital adequacy ratios remained at their strong levels, with the capital adequacy ratio and the first tier adequacy ratio of joint capital reaching 14.40%

And 13.24%, respectively, which is much higher than the minimum requirements of the Central Bank.

interest rates

Dr. Bernards Van Linder, Chief Executive Officer of the bank, said: “The bank achieved a remarkable improvement in terms of performance in the third quarter compared to the second quarter of this year despite the difficult market conditions. Despite the overall decline in performance for the first nine months of 2020 compared to the same period of 2019, the bank continued to implement its strategy and will end the year with distinguished results.

The net profit of 816 million dirhams decreased by 23.3% compared to the same period of the previous year on the back of lower interest rates, challenging business conditions and higher provisions for specific and expected impairment losses.

He added, “We have consistently and effectively taken proactive measures to support our customers, employees and the UAE economy during this pandemic. The bank continued to provide banking services without interruption throughout the period of the (Corona 19) pandemic by providing several channels for banking services, relying on a high percentage of the application of digital solutions throughout the bank.

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