Commercial Bank of Dubai reported a 5.9 per cent decline in annual profit as higher provisions for bad debt and an increase in operating expenses outweighed gains in net and non-net interest income.
The bank’s profit fell to Dh1.003 billion last year compared to Dh1.066bn in 2015. Money set aside to cover soured loans rose to Dh588.4 million compared to Dh427.2m, the bank said. Operating expenses increased 1.4 per cent to Dh870.5m in 2016 versus Dh858.8m, the lender said.
The bank said that gains in net interest income and non-net interest income helped boost operating income by 4.7 per cent to Dh2.46bn in 2016. The bank did not give a breakdown of fourth-quarter profit in its release.
“The operating environment in the UAE was challenging through most of the year, yet CBD’s operating profit increased,” said Bernd van Linder, the bank’s chief executive.
“Marginal decreases in the corporate and commercial segments’ revenues were offset by growth in the personal and business segments validating the bank’s diversification strategy.”
The weaker oil price has reduced demand for loans and increased the level of debt defaults among UAE banks, across the board.
mkassem@thenational.ae
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