Commercial Bank of Dubai kicked off the third quarter bank earnings season with a sharp rise in profit as a booming economy and low interest rates continued to ease the flow of money out of the bank’s doors.
The bank said its quarterly profit jumped 21.2 per cent to Dh309 million from Dh255m in the same period the previous year. Loans and advances grew 3.5 per cent to Dh31.5 billion as of September 30 compared to Dh30.4bn in the same period last year.
“This is the seventh consecutive quarter in which the bank’s net profit has grown over the previous quarter,” said Peter Baltussen, the bank’s chief executive. “The improving macro-economic indicators in the UAE have resulted in a growing loan book, strong liquidity and capital adequacy metrics and improving quality ratios.”
Banks in the UAE can now be said to have fully recovered from the global financial crisis of 2008 and Dubai’s subsequent debt crisis.
A wave of government spending on infrastructure such as roads, airports and ports, coupled with low interest rates and a revival of trade and tourism spurred the nation’s economy to grow by more than 4 per cent last year.
Flush with cash, the banks have been vying with each other to lure corporate and individual customers, prompting some observers to voice concern that another boom and bust cycle is in store.
Still, industry executives contend that, despite the massive growth in loans banks have been reporting in the past couple of years, the growth in credit, at about 9 per cent last year, has not reached anywhere close to the 41 per cent credit advance in 2008.
CBD said its customer deposits increased 10.6 per cent to Dh31.8bn compared to Dh28.7bn a year earlier.
mkassem@thenational.ae
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