CBI continues profitable growth in first-half 2017

Wednesday, July 19, 2017

H1 2017 Financial Highlights:

• H1 2017 net profit totalled AED 52 million.
• Net Profit at AED 32 million in Q2 2017, up 53% from Q1 2017 and flat versus Q2 2016.
• Net Interest Income increased by 10% to AED 263 million from AED 240 million in H1 2016.
• Operating Income increased by 2% to AED 405 million versus AED 397 million in H1 2016.
• Operating Profit increased by 3% to AED 183 million versus AED 178 million in H1 2016.
• Net Loans & Advances increased by 2% to AED 13,572 million from the end of 2016; up 6% y-o-y.
• Customer Deposits increased by 1% to AED 14,030 million from the end of 2016; up 19% y-o-y.
• Eligible Liquid Assets Ratio at 14% and Advances to Stable Resources ratio at 97%.
• Capital Adequacy Ratio stable at 14.6%.

Mohammad Sultan Al Qadi, Chairman of CBI commented on the Bank’s performance: “CBI’s financial position is strong, including robust liquidity as the Bank continues to reduce non-core assets and optimize its balance sheet. In addition, the Bank continues to grow in a nearly flat market, with core net interest income grew by 10% year-on-year thanks to the strong performance of the retail business. As a UAE-based bank, CBI uses its agility and stability, and its strong investment grade rating of A-, to grow core business segments and attract new customers in the UAE.”

Mark T. Robinson, CEO of CBI commented: “Over the first half of this year, CBI focused on further strengthening the customer experience for its local UAE customer base. The recent upgrade of our core banking platform has significantly modernized the bank’s operations and technology, streamlining services for customers and improving operational efficiencies. We are confident in our strategy to invest in our people and infrastructure, and continue to focus on providing simple, high-quality banking services for our wholesale and retail customers in the UAE.”

Financial summary

Operating Income grew by 2% to AED 405 million versus the same period last year. Income growth was principally driven by continued strong performance in the Retail business, partly offset by lower fees from syndicated loan transactions.

Significant investments in digital infrastructure, people, and processes have propelled the bank forward over the first six months of the year and generated healthy increases in loan growth and customer deposits. Our retail customer base has grown by over 8% year-to-date and the continued strengthening of our digital offering and online presence will continue to drive new customer growth.

Net Loans and Advances grew 6% year-on-year to AED 13,572; above the industry average growth of 4%. The year-on-year growth in Customer Deposits (up 19% to AED 14,030 million) is also above the industry average growth of 7%.

Net interest income increased 10% to AED 263 million when compared to H1 2016, due to retail asset growth and improvement in the net interest margin.

Expenses were tightly managed, increasing just 1% to AED 222 million, in H1 2017 compared to H1, 2016.

Q2 2017 Net Profit at AED 32 million was up 53% from Q1 2017 and flat versus Q2 ’16. First-half 2017 Net Profit dropped 24% to AED 52 million versus the first half of 2016 due to higher provisioning, necessitated by market conditions.

NPL ratio increased to 9.3% owing to local business pressures experienced across the UAE market. The ratio increase was driven by one exposure where the Bank is fully secured.

The Loan to Deposit ratio stood at a comfortable 96% level.

CBI has strong liquidity and capital, evident from the Bank’s high Eligible Liquid Assets Ratio (ELAR) at 14%, Advances to Stable Resources (ASSR) at 97% and Capital Adequacy Ratio well above the minimum regulatory requirement at 14.6%.

CBI maintains a strong investment grade rating of A-, from Fitch Ratings.