Commercial Bank Of Dubai(psc) · DFM:CBD
Commercial Bank Of Dubai(psc) — Commercial Bank of Dubai — Q1 2024 Earnings Presentation
32 slides from Commercial Bank Of Dubai(psc)'s earnings presentation, Apr 24, 2024
Slide 1: Investor Presentation for the 3 months ended 31st March 2024
2024 Investor Presentation for the 3 months ended 31st March 2024 Dr Bernd van Linder Chief Executive Officer Mr Darren Clarke 24 April 2024 Chief Financial Officer
Slide 2: Executive Summary: Financial Highlights Q1 24
Executive Summary Financial Highlights Q1 24 ▪ Record net profit result Net Profit AED 770m p 33.9% from Q1 23 ▪ Outstanding return on equity supporting before tax future growth and the dividend payout AED 1,057m ▪ Strong balance sheet with all liquidity, Operating p 11.5% from Q1 23 funding and cap
Slide 3: Earnings Snapshot
Earnings Snapshot – Excellent financial result driven by loan and CASA growth, interest rates, Non- Funded Income (NFI) and disciplined expenses offset by cost of risk AED m Change Change (%) Q1 24 Q1 24 - Q1 23 Q1 24 - Q1 23 Net profit before tax 770.1 194.9 33.9% Net profit after tax 701.0 125.8 2
Slide 4: Financial Performance Snapshot – Q1 24
Financial Performance Snapshot – Q1 24 AED b Shareholder Solid Robust Solid Operating Value Creation Balance Sheet Core Ratios Performance Revenues Assets CET1 Ratio Operating Profit +10.9% +1.5% -13bps +11.5% 1.2 1.4 116.2 129.0 131.0 12.1% 12.4% 12.5% 12.4% 1.1 114.3 0.9 0.7 0.9 0.6 0.5 Q1 21 Q1 2
Slide 5: Progress against Strategic Execution Q1 24
Progress against Strategic Execution Q1 24 Achieve Become Customer Default Financial Results Employer of Choice Focus Digital Deepening customer Interest rate tailwinds Recruiting, relationships % of wholesale developing and 99% supported by growth through service transactions initiated in Loans and
Slide 6: Financial Guidance 2024 estimate
Financial Guidance 2024 estimate – Underlying business activity and momentum supports forward looking sustainable net profit growth Looking Ahead 2024e Financial Guidance • Loan growth well above system Loan growth mid-high single digit growth • Sharply improved asset quality with lower Non- Cost of
Slide 7: Net Profit Bridge on Prior Year
Net Profit Bridge on Prior Year – Excellent net profit with higher NII, lower impairment, higher fees offsetting the introduction of corporate tax AED m Other Impairment NII higher by 71m on NFI favourable by 64m Net Credit Other Operating Staff expenses charge lower on the market interest rates dri
Slide 8: Core Performance Trends
Core Performance Trends – Excellent loan and CASA growth delivering a strong revenue outcome supported by market interest rates and NFI AED m Net profit before tax Revenue NFI NII Net profit after tax is 701m 2,650 4,938 +35% +25% +34% 1,368 +11% 3,812 (28%) 1,825 1,372 770 3,183 1,136 1,237 1,451 (
Slide 9: Strategic Financial KPIs
Strategic Financial KPI’s – Strengthen customer relationships, increased interest income and non- funded income, uplifting return on equity and assets Return on Equity (ROE) before tax Cost to Income Ratio ROE after tax is 21.08% -5% 27.18% 26.14% 24.87% 22.96% +21% 23.16% 21.23% -8% 15.99% +9% 13.2
Slide 10: Profitability and Returns
Profitability and Returns – Revenue performance driving outstanding returns and positive jaws despite increase in expenses AED m Expenses Revenue and Expense JAWS Revenue Expenses +19% 1,228 1,372 4,938 997 3,812 865 +9% 3,183 +9% +6% 315 289 +5% 0% 1,228 315 865 997 2021 2022 2023 Q1 23 Q1 24 2021
Slide 11: Net Interest Margin
Strong NII benefitting from high market interest rates and CASA performance Net Interest Margin – notwithstanding pressure on customer margins Interest Income and Expense Net Interest Margin Interest Income Interest Expense AED m NIM YTD NIM QTD 885 916 959 880 889 3.39 3.27 3.18 3.19 3.16 3.39 1,84
Slide 12: Asset Quality and Impairments
Asset Quality and Impairments – Sharply improved asset quality with a lower non-performing loan ratio and higher coverage AED m Cost of Risk Credit Impairment Charges Cost of Risk and Recoveries Credit Impairment Coverage Recoveries Coverage inc collateral stage 3 1.24% 1.17% 1.03% 1.02% 119.53% 120
Slide 13: Balance Sheet and Capital Strength
Balance Sheet and Capital Strength – Capital ratios remain well above regulatory requirements Capital Adequacy Ratio (CAR) Common Cost Equity Tier 1 (CET1) of Risk CAR Regulatory limit (Minimum) CET1 Regulatory limit (Minimum) 0% 1% 15.82% 16.04% 15.95% 15.67% 12.13% 12.40% 12.54% 12.41% 13.00% 13.0
Slide 14: Funding and Liquidity
Funding and Liquidity – Diversified deposit base with increased franchise CASA AED b Customer Deposits Other Funding Sources Time CASA Acceptances and Others Notes and Medium Term Borrowing Equity Due to Banks < 1year Green Bond +3% 90.3 Due to Banks > 1year AT1 Capital 88.3 82.7 81.1 +9% 40.7 40.6
Slide 15: Balance Sheet Analysis
Balance Sheet Analysis – Backing customer ambitions across all market sectors of the UAE economy AED b Assets Mix Assets and Loans Net Loans and Advances Total Assets 5.7% 3.2% 9.1% +5% 2.8% 12.9% Cash and balances with CB Due from banks AED 131.0 billion Net loans and advances 131.0 129.0 Total Ass
Slide 16: Diversified business mix
Diversified business mix – Improving returns through ongoing economic cycles Revenue Revenue Asset Funding Diversification Segmentation Diversification Diversification 23% 29% 36% 20% Q1 24 Q1 24 Q1 24 Q1 24 70% 29% 34% 33% Revenue Revenue Assets 14% Funding 37% 6% 4% 19% 11% 23% 12% 70% 30% 52% 48%
Slide 17: Divisional Contributions
Broad based performance across all business lines with excellent Divisional Contributions – diversification and increased market share AED m Divisional operating profit movement Divisional revenue movement +11% +11% 88.5 1,057.1 118.6 1,372.2 948.1 27.2 40.4 19.1 -2.0 1,237.4 -43.3 -4.7 Q1 23 Instit
Slide 18: Innovating in Digital – CBD Digital App and Investr
Investing in award winning and industry recognized digital customer Innovating in Digital – experience CBD Digital App and Features CBD Investr • App rated 4.8 on App store and • Instant Account opening • Best Innovation in Investment 4.6 on Google Play • Tailored Offerings - Credit Cards Banking an
Slide 19: Innovating in Digital – CBD iBusiness
Investing in award winning and industry recognized digital customer Innovating in Digital – experience CBD iBusiness App and Features CBD iBusiness • Best Mobile Banking Service • Transaction Approvals – Unique • CBD’s Next Generation online Implementation – MEA Finance QR code feature banking with
Slide 20: ESG Framework – Five key pillars
ESG Framework – Five key pillars of the ESG framework Environment People Financial Inclusion Governance Community We hold ourselves We promote We are default We protect our We are a local to account while Emiratization digital, all- stakeholders by bank, backing supporting our and a healthy, inclusi
Slide 21: Our commitment – Progress across all 5 pillars
Our commitment – Further progress across all 5 pillars of our ESG Framework during Q1 2024 Environment People Financial Inclusion Governance Community Signed agreement Upgraded Head 97% digital Elected new Board Hosted Suhoor with United For Office working registration of with female gathering for W
Slide 22: Awards and Achievements
Awards and Achievements “In the Top 10 UAE Banks” “Best Use Case of AI Solutions ” – Forbes 30 Most Valuable Banks in – Middle East Banking AI & Analytics Summit 2024 Middle East 2024 “Number One Bank in the UAE” “Best Digital Wallet Award” – MENA Banking Excellence Awards 2023 # 1 – Forbes World’s
Slide 23: Concluding remarks
Concluding remarks Record net profit result Excellent loan and CASA growth increasing market share Targeted investment in end-to-end digital solutions Delivering outstanding shareholder returns with momentum to continue throughout 2024 and beyond CBD is well positioned to successfully execute our on
Slide 24: Board of Directors and Executive Committee
Board of Directors and Executive Committee Board of Directors Executive Committee H.E. Ahmad Abdulkarim Julfar Dr. Bernd van Linder Chairman Chief Executive Officer H.E. Ahmad Abdulla Binbyat Mr. Buti Saeed Al Ghandi Mr. Darren Clarke Mr. Fahad Al Muhairi Vice-Chairman Director Chief Financial Offic
Slide 25: Global Economic Update
Global Economic Update – Stubborn inflation and high central bank interest rates US Dollar Index Central Bank Overnight Rates 120.0 SOFR (USD) SONIA (GBP) STR (EURO) 6.00 115.0 5.3 5.00 5.2 110.0 4.00 3.9 105.0 3.00 100.0 104.5 2.00 95.0 1.00 90.0 0.00 85.0 -1.00 Jan-20 Jul-20 Jan-20 Jul-20Jan-21 Ja
Slide 26: UAE Economic Update
UAE Economic Update – Broad based business performance with population growth driving economic activity and confidence UAE GDP and Inflation Growth Purchasing Managers Index Inflation GDP UAE KSA 57.0 7.85% 56.9 4.83% 3.10% 3.80% 3.40% 3.52% 2.40% 3.10% 1.97% 1.70% 2.50% 2.10% 1.61% 1.20% 1.62% (1.9
Slide 27: UAE Economic Update – Sound fiscal measures
UAE Economic Update – Sound fiscal measures boosting economic growth UAE Stock Market Indices UAE Fiscal Position DFM ADX Surplus / (Deficit) (AEDb) As % of GDP 11,500 250 10.40% 10% 10,500 9,228.1 6.90% 200 193.7 5.20% 9,500 4.70% 5% 8,500 150 1.90% 127.7 7,500 100.8 95.0 0% 100 0.59% -1.68% 0.33%
Slide 28: Dubai Economic Update – Business confidence
Dubai Economic Update – Business confidence remains strong notwithstanding high global market interest rates Business Confidence Index SME Index Trend China Dubai USA UK India Germany 180 Dubai’s BCI ranks highest at 131.5 180 170 170 160 160 150 150 140 140 130 130 131.5 120 120 122.8 110 110 100 1
Slide 29: Dubai Economic Update – Strong economic activity
Dubai Economic Update – Strong economic activity and business confidence Dubai GDP growth Dubai hospitality Feb-23 Feb-24 AED 7.60% +9.3% 6.20% 887 +13.1% 3.30% 812 2.70% 2.80% 805 1.90% 2.20% 712 +3.4% 88 91 -3.50% 2016 2017 2018 2019 2020 2021 2022 9M 2023 Occupancy % Average daily rate Revenue pe
Slide 30: UAE Banking Sector
UAE Banking Sector – Key part of the UAE economy, supporting business ambition Key industry indicators Average Loan Yield & Cost of Deposits vs 3M EIBOR AEDb 2021 2022 2023 Jan-24 YTD 3M EIBOR Yield on Loans Cost of Deposits 6.80% Total assets 3,322 3,669 4,075 4,109 p 0.8% 6.00% 5.50% 5.33% Custome
Slide 31: UAE Banking Industry – Credit growth moderating
UAE Banking Industry – Credit growth moderating with high market interest rates System-wide Gross loans and deposits Credit Growth in the UAE Banking Sector Gross loans Deposits Domestic Credit Foreign Credit 31.18% AED Billion 2,522 2,540 2,222 1,997 1,992 1,996 1,870 1,885 1,881 1,759 1,779 1,794
Slide 32: Disclaimer
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