CBI net profit increases by 40 per cent in 2017 as turnaround continues
Commercial Bank International (CBI) today announced its FY 2017 financial results.
CBI’s net profit rose by 40 per cent in 2017 to AED 175 million compared to AED 125 million in the same period of 2016. This was due to a seven per cent rise in net operating profit (from AED 383 million in 2016 to AED 411 million last year) and an eight per cent fall in impairment charges, which dropped to AED 237 million in 2017 from AED 258 million in 2016. This was driven by significant recovery efforts as well as net income growth due to better control over expenses and resource allocation.
“CBI’s turnaround story continued in 2017 with our strategy producing further improvements in financial performance. Performance improvements have been driven by significant recovery efforts as well as revenue growth, expense control, and the better allocation of resources. We witnessed strong year-on-year growth in both our Wholesale and Retail Banking units, as well as cost efficiency gains through organisational redesign and changes to our size and structure,” said Mohammad Sultan Al Qadi, Chairman of CBI.
Financial highlights – 12-months ending 31 December 2017:
· Full year net profit increased by 40 per cent to AED 175 million from AED 125 million in 2016
· Net interest income AED 556 million, up 10 per cent year-on-year
· Impairment charges down eight per cent from previous year
· Non-performing loan ratio (NPL) 7.2 per cent versus 8.7 per cent in 2016
· Capital Adequacy Ratio (CAR) remained stable at 14.8 per cent versus 14.4 per cent at December 31, 2016
“CBI’s strong balance sheet is supported by lower non-performing loans, stable capital adequacy and strong liquidity. We have managed to increase our revenues, while decreasing our expenses, which drove our net operating profit improvement of seven per cent compared to the previous year. This, combined with lower net provisions, resulted in a 40 per cent increase in our net profit for 2017. These are strong results that position us very well for the future growth of our business,” said Mark T. Robinson, CEO of CBI.
Operating income rose by three per cent for FY 2017 to AED 866 million, driven by both our Wholesale Banking and Retail Banking businesses.
Net interest income rose by 10 per cent in FY 2017 to AED 556 million, up from AED 507 million in 2016.
FY 17 also witnessed a 22.7 per cent decrease in the amount of non-performing loans (NPLs), which brought CBI’s NPL ratio down to 7.2 per cent.
Capital adequacy under the new Basel III regime remained stable at 14.8 per cent and the Bank has strong liquidity with Eligible Liquid Assets Ratio (ELAR) of 14.7 per cent and Loan to Deposit Ratio (LDR) of 91 per cent.
There was a slight decline in operating expenses in FY 17 compared to FY 16 – down to AED 454 million from AED 456 million.
CBI’s cost income ratio also decreased to 52.5 per cent for the year, down 1.9 percentage points on 2016. The cost efficiency gains were driven through organisational redesign, branch rationalisation, and digital transformation.