Soured loans hit Commercial Bank of Dubai profit

Commercial Bank of Dubai’s annual profit fell by 11.3 per cent last year after the lender took a bigger writedown on loans amid an economic slowdown in the UAE triggered by a collapse in oil prices. Net income fell to Dh1.06 billion last year compared with Dh1.2bn in 2014, the bank said in a statement […]

Commercial Bank of Dubai’s annual profit fell by 11.3 per cent last year after the lender took a bigger writedown on loans amid an economic slowdown in the UAE triggered by a collapse in oil prices.

Net income fell to Dh1.06 billion last year compared with Dh1.2bn in 2014, the bank said in a statement to the stock exchange.

Net impairment charges increased by just over 50 per cent to Dh427 million versus Dh284m in 2014, the bank said.

The bank did not give a breakdown of its earnings in the fourth quarter nor did it give any details on what kind of loans went sour.

No one at the bank was immediately available for comment.

Small and medium-sized businesses have faced the biggest difficulties in servicing loans over the past year, with many banks increasing money set aside to cover bad debt from this high-risk segment of borrowers.

As a result, many banks have pulled out of lending to SMEs or have made it more difficult for them to tap debt.

Abdul Aziz Al Ghurair, the chairman of the UAE Banking Federation, warned in November that a number of small business owners might have fled the country last year, leaving unsettled debts of about Dh5bn.

mkassem@thenational.ae

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Source: Business

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