Commercial Bank Of Dubai(psc) · DFM:CBD
Commercial Bank Of Dubai(psc) — Commercial Bank of Dubai — Q1 2020 Earnings Presentation
30 slides from Commercial Bank Of Dubai(psc)'s earnings presentation, April 2020
Slide 1: Investor Presentation – Highlights Q1 2020
Investor Presentation – Highlights Q1 2020 Dr Bernd van Linder Chief Executive Officer April 2020 Mr Darren Clarke Chief Financial Officer
Slide 2: Commercial Bank of Dubai Q1 2020 Overview
Commercial Bank of Dubai Q1 2020 Overview Net Profit Gross Lending Employees AED 315m 3.8% >1400 7.3% from Q1 19 UAE Loan Market Share Corporate Social Responsibility Credit Rating 15 Branches Sponsored Jebel Ali A- (Fitch) horse race for season 153 2019/2020 Baa1 (Moody’s) ATM/CDM Sponsored RAK Ha
Slide 3: Earnings Snapshot – results impacted by rate cuts, credit events
Earnings Snapshot – results impacted by rate cuts, credit events and challenging economic conditions AED m Change Change (%) Q1 20 Q1 20 - Q1 19 Q1 20 - Q1 19 Net profit 315.3 (24.7) (7.3%) Return on equity (RoE) 13.14% (188) bp (12.5%) Return on assets (RoA) 1.55% (24) bp (13.6%) Interest margin 2.
Slide 4: Financial Performance Snapshot – Q1 2020
Financial Performance Snapshot – Q1 2020 Revenues Net Profit Return on Equity Shareholder Value Creation AED 757m AED 315m 13.14% 2.3% from Q1 19 7.3% from Q1 19 188 bps from Q1 19 Assets Customer Deposits Gross Loans Focus on Growth AED 89.9bn AED 63.9bn AED 65.8bn 2.1% from FY 19 0.9% from FY
Slide 5: Performance Achievements Q1 2020
Performance Achievements Q1 2020 Supporting our customers during the economic uncertainty by enabling economic support measures, and extending credit across the economy Record low interbank interest rates adversely impacted net interest margins Underlying performance for Q1 2020 more subdued o
Slide 6: Strategic Execution in Q1 2020
Strategic Execution in Q1 2020 o Net profit down 7.3% compared to Q1 2019 Achieve o Record low interbank interest rates impacted net interest margins Financial Results o Increased provision for current/forecast credit losses impacting net profit o Recruiting, developing and retaining UAE national ta
Slide 7: Core Performance Trends – lower quarterly results on credit events, lower rates
Core Performance Trends – lower quarterly results on credit events, lower rates AED m Revenue Net profit OOI NII +7% 1,400 3,033 +18% 2,642 2,725 1,162 1,068 813 +11% 1,002 822 (35%) +20% (31%) (30%) -2% 774 757 -7% 1,821 1,911 1,966 281 272 340 315 (69%) (70%) (65%) (36%) (36%) 493 485 (64%) (64%)
Slide 8: Profitability and Returns – disciplined expense management, increased fee income
Profitability and Returns – disciplined expense management, increased fee income AED m Expenses Revenue and expense JAWS Revenue -1% Expenses 901 885 3,033 3,008 858 +3% 2,642 2,725 2,462 +3.3% +3.9% +7.8% +8.2% +8.2% -2% 206 201 871 901 858 885 805 2017 2018 2019 Q1 19 Q1 20 2016 2017 2018 2019 Q1
Slide 9: Strategic Financial KPI's
Strategic Financial KPI’s – lower returns, increased other operating income compared to expenses Return on Equity (ROE) Cost to Income Ratio -1% 14.61% 13.47% 13.14% -8% 31.50% -10% 29.18% 26.61% -9% 2018 2019 Q1 2020 2018 2019 Q1 2020 Return on Assets (ROA) Other Operating Income as % of Expenses 0
Slide 10: Net Profit Bridge on Prior Year
Net Profit Bridge on Prior Year – below prior year due to higher expected credit losses AED m Foreign exchange and fee Loss from investments NII decreased by 8m due to Net credit impairment Other income decreased by income increased by 15m increased 6m over Q1 2019 suspended interest on non increase
Slide 11: Asset Quality and Impairments
Asset Quality and Impairments – some migration to Stage 3 of secured exposures AED m Cost of Risk Impairment Charges and Recoveries Cost of Risk Impairment charges Recoveries Coverage (%) 102% 1.37% 1.43% 78% 83% 82% 1.26% 78% 1.26% 1.16% 67% 852 752 789 704 115 112 237 260 48 42 20 8 2016 2017 2018
Slide 12: Balance Sheet and Capital Strength
Balance Sheet and Capital Strength – capital ratios above regulatory minimums Capital Adequacy Ratio (CAR) Common Cost Equity Tier 1 (CET1) of Risk CAR Regulatory limit (Minimum) CET1 Regulatory limit (Minimum) -2% -14 bp -31 bp 13.39% 13.41% 12.85% 12.71% 14.51% 14.56% 14.17% 13.86% 9.50% 9.50% 8.8
Slide 13: Funding and Liquidity
Funding and Liquidity – diversified and stable funding supporting franchise loan growth AED m Customer Deposits Other Funding Sources TD CASA Acceptances and Others Due to Banks > 1year Equity +9% Due to Banks < 1year Notes and Medium Term Borrowing 63,334 63,900 6% 53,165 25,981 24,735 48,411 22,00
Slide 14: Balance Sheet Analysis – diversified investment portfolio
Balance Sheet Analysis – supporting customers with a diversified investment portfolio AED m Assets Mix Assets and Loans Net Loans and Advances Total Assets 6% 3% 12% +8% 6% 3% Cash and balances with CB Due from banks AED 90 billion Net loans and advances 89,881 Total Assets Investment securities 88,
Slide 15: Divisional Contributions
Divisional Contributions - specialist business lines supporting our customers AED m Divisional net profit movement Divisional RWA movement +18.1% -7.3% 122.9 (97.0) 0.9 0.4 76.3 5.3 340.1 (88.5) (1.0) 315.3 6.1 30.0 7.8 64.6 Q1 2019 Instit Corp Fin Inst Personal Trading Q1 2020 Q1 2019 Instit Corp F
Slide 16: CBD History – 1969 to 2019
CBD History – 1969 to 2019 Celebrating 5 decades 1969 1975 1979 Establishment of CBD with First Chairman First Annual Report published The First the first branch in Deira H.E. Hussain Khansaheb Decade appointed 1982 1987 1988 CBD became Inauguration of CBD Head Office in Bur Dubai First ATM The Seco
Slide 17: CBD History – 1969 to 2019
CBD History – 1969 to 2019 Celebrating 5 decades 2004 2004 2004 Inauguration of CBD Head Office in Deira Call Centre Launch Attijari Online Banking Launch 2005 2005 2005 CBD Financial Winner of the Mohammed H.H. Sheikh Mohammed visited The Fourth Services Launch Bin Rashid Al Maktoum CBD’s Head Offi
Slide 18: CBD History – 1969 to 2019
CBD History – 1969 to 2019 Celebrating 5 decades 2010 2011 2012 Winner of the Sheikh Khalifa Excellence Award Winner of First Mobile – Gold Category the Mohammed Bin Banking App Rashid Al Maktoum launched Business Award 2012 2014 2015 Winner of the Sharjah Economic Launched the first Facebook Launch
Slide 19: Board of Directors and Management Team
Board of Directors and Management Team Board of Directors Management Team Mr. Humaid Mohammad Dr. Bernd van Linder Al Qutami Chief Executive Officer Chairman Mr. Ahmad Abdulkarim Julfar Mr. Abdullah Salim Alturifi Mr. Darren Clarke Mr. Fahad Al Mheiri Vice-Chairman Director Chief Financial Officer G
Slide 20: Corporate Social Responsibility – fulfilling our social commitments
Corporate Social Responsibility – fulfilling our social commitments The elements of CBD’s CSR framework: Education Health Commercial Bank of Dubai targets the support Commercial Bank of Dubai serves to foster the and development of educational programmes health and wellbeing of people living in the
Slide 21: Q1 2020 CSR Activities
Corporate Social Responsibility – supporting the wider community Q1 2020 CSR Activities Jebel Ali Horse Race 2019/2020 RAK Half Marathon 2020 Commercial Bank of Dubai has partnered with the Under the patronage and attendances of HH Jebel Ali horse race course for more than 20 years. Sheikh Saud Al Q
Slide 22: Awards and Achievements
Awards and Achievements Joined the UAE Business Relief Package to Partnered with Dubai Economy to launch the Partnered with Noor Takaful to provide support the UAE Economy first KYC Consortium in the UAE comprehensive solutions Partnered with SWIFT to adopt the SWIFT CBD became the first bank in the
Slide 23: Covid-19 – The global challenge of our generation
Covid-19 – The global challenge of our generation Pandemic spread across the globe Supply chain disruption “The COVID-19 pandemic is inflicting high and rising human costs worldwide, and Borders are closed, there are significant restrictions on global travel which has necessary protection measures a
Slide 24: United Arab Emirates – stock market shocks due to Covid-19
United Arab Emirates – stock market shocks due to Covid-19 pandemic economic impacts UAE Stock market indices Fiscal Deficits to be posted Surplus / (Deficit) (AEDb) As % of GDP 5,500 DFM ADX 5,000 18.1 4,500 (44.2) (26.5) (19.7) (24.0) (42.7) (47.4) (41.9) (40.2) 4,000 3,500 3,735 1.2% 3,000 2,500
Slide 25: UAE Economic Update – uncertain short term outlook
UAE Economic Update – uncertain short term outlook with oil at multi-year lows UAE GDP and Inflation Trend Purchasing Managers Index Inflation GDP UAE KSA 56.7 55.0 5.1% 3.7% 2.9% 3.1% 3.1% 2.1% 1.7% 1.4% 45.2 0.5% 42.4 -1.4% 2015 2016 2017 2018 2019 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20
Slide 26: Dubai – well diversified economy, but all sectors impacted
Dubai – well diversified economy, but all sectors to be impacted to varying degrees by Covid-19 Growth in Economy Foreign Trade Real GDP (AED b) Real GDP Growth Rates (%) Exports & Re-Exports Imports AEDb 4.6% 574 545 536 4.1% 4.1% 502 514 518 3.0% 3.8% 471 479 3.5% 442 2.7% 2.8% 364 280 290 325 337
Slide 27: Dubai Economic Update – weak real estate prices
Dubai Economic Update – weak real estate prices, business conditions and confidence Dubai GDP growth Dubai hospitality Mar-19 AED -20.4% Mar-20 626 -42.9% 4.10% 528 498 2.70% 2.80% 2.10% 302 1.90% -28.2% 89 61 2015 2016 2017 2018 2019 Occupancy % Average daily rate Revenue per available room Source:
Slide 28: UAE Banking Sector – critical industry to support recovery
UAE Banking Sector – critical industry to support the UAE recovery post crisis Key industry indicators Average Loan Yield & Cost of Deposits vs 3M EIBOR 3M EIBOR Yield on Loans Cost of Deposits AEDb 2017 2018 2019 Feb 20 YTD 5.5% Total assets 2,694 2,869 3,086 3,095 0.3% 5.2% 5.1% 5.0% 5.0% 5.1% 5
Slide 29: UAE Banking Industry – CBD execution delivering above system growth
UAE Banking Industry – CBD execution delivering above system growth, EIBOR rates falling Gross loans and deposits Credit Growth in the UAE Banking Sector Gross loans Deposits -2.3% Domestic Credit Foreign Credit -0.8% AED Billion 15.9% 1,870 1,828 15.0% 1,756 1,759 1,746 1,580 1,627 1,656 12.6% 1,55
Slide 30: Disclaimer
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