Commercial Bank of Dubai reports lower profit on provisions for bad debt

Commercial Bank of Dubai says its first-quarter net profit declined 33.5 per cent as provisions for impairments rose.

Commercial Bank of Dubai says its first-quarter net profit declined 33.5 per cent as provisions for impairments rose. Steve Crisp / Reuters

Commercial Bank of Dubai said that its net profit dropped 33.5 per cent in the first quarter as a sharp rise in money set aside to cover bad debt outweighed gains in interest income

Net profit dropped to Dh160.1 million in the first three months of the year compared to Dh240.8m in the same period last year, the bank said. Impairment allowances on loans and advances and Islamic financing increased 78.5 per cent to Dh256.7m in the first three months of the year from Dh143.8m in the same period last year, it said.

Net interest income and net income from Islamic financing rose to Dh430m from Dh407m, the bank said.

The bank joins a number other smaller banks that have been weighed down by an increase in provisions over the past couple of years. Commercial Bank of Dubai did not give a breakdown of which segment had been stressed the most, but small- and medium-sized enterprises have given banks the biggest holes in balance sheets since the price of oil began its steep descent in the summer of 2014.

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