Commercial Bank Of Dubai(psc) · DFM:CBD
Commercial Bank Of Dubai(psc) — Commercial Bank of Dubai — H1 2023 Earnings Presentation
33 slides from Commercial Bank Of Dubai(psc)'s earnings presentation, Jul 12, 2023
Slide 1: Investor Presentation for the 6 months ended 30th June 2023
2023 Investor Presentation for the 6 months ended 30th June 2023 Dr Bernd van Linder Chief Executive Officer Mr Darren Clarke 12th July 2023 Chief Financial Officer
Slide 2: Executive Summary
Executive Summary Financial Highlights H1 23 ▪ Record net profit result with strong AED 1,225m growth in revenue and operating profit p 41.5% from H1 22 Net Profit ▪ Excellent return on equity generating internal capital for growth Operating AED 1,882m p 49.5% from H1 22 ▪ Solid balance sheet with a
Slide 3: Earnings Snapshot – Income
Earnings Snapshot – Aincome record financial result on increased market interest rates, strong non-funded and loan growth, partially offset by higher expenses and cost of risk AED m Change Change (%) H123 H123 - H122 H123 - H122 Net profit 1,225.5 359.1 41.5% Return on equity (RoE) 20.84% 515 bp 32.
Slide 4: Financial Performance Snapshot – H1 23
Financial Performance Snapshot – H1 23 AED b Shareholder Solid Robust Solid Operating Value Creation Balance Sheet Core Ratios Performance Revenues Assets Capital Adequacy Ratio Operating Profit +41.9% +6.1% +39bps +49.5% 2.5 114.2 116.1 123.1 16.7% 15.8% 16.0% 16.4% 1.9 1.7 97.4 1.4 1.6 1.2 1.3 1.0
Slide 5: Progress against Strategic Execution H1 2023
Progress against Strategic Execution H1 2023 Achieve Become Customer Default Financial Results Employer of Choice Focus Digital Interest rate tailwinds Recruiting, Deepening % of wholesale developing and customers 98% supported by rise in transactions initiated CASA retaining UAE relationships digit
Slide 6: Financial Guidance 2023 estimate
Financial Guidance 2023 estimate – Underlying business activity and momentum supports continued forward looking net profit growth Looking Ahead 2023e Financial Guidance • Above System loan growth with continued Loan growth mid-high single digit growth diversification • Cost of Risk expected to moder
Slide 7: Core Performance Trends
Core Performance Trends – strong revenue performance supported by higher interest rates, non-funded income and robust loan growth AED m Net profit Revenue OOI NII 1,825 +13% +28% 3,812 +42% 1,451 3,183 1,136 2,978 (30%) 2,461 +41% 1,120 1,105 693 1,092 (35%) 1,225 (28%) (37%) 1,734 866 601 2,676 (35
Slide 8: Strategic Financial KPIs
Strategic Financial KPI’s – deepening customer relationships, increased interest income and NFI, boosting return on equity and assets Return on Equity (ROE) Cost to Income Ratio 20.84% -5% +25% 27.11% 27.18% 26.14% 15.99% 23.55% 13.22% +30% -10% 10.69% 2020 2021 2022 H1 23 2020 2021 2022 H1 23 Retur
Slide 9: Profitability and Returns
Profitability and Returns – revenue outperformance driving outstanding returns and positive jaws despite increase in expenses AED m Expenses Revenue and Expense JAWS Revenue Expenses 2,461 +11% 997 +22% 865 3,812 807 580 3,183 +15% 2,978 475 +13% +5% +7% 0% 997 580 807 865 2020 2021 2022 H1 22 H1 23
Slide 10: Net Interest Margin
excellent net interest income benefitting from higher benchmark interest rates Net Interest Margin – notwithstanding higher funding costs and pressure on customer spreads Interest Income and Expense Net Interest Margin Interest Income Interest Expense AED m NIM YTD NIM QTD 880 889 823 3.39 3.27 720
Slide 11: Net Profit Bridge on Prior Year
Net Profit Bridge on Prior Year – record profit driven by higher NII and OOI partially offset by expenses and specific impairments AED m NII higher by 635m on Fees and Other Other Operating Staff expenses Other Impairment Net Credit increasing market Income favourable by expenses were higher increas
Slide 12: Asset Quality and Impairments
Asset Quality and Impairments – higher coverage with improved underlying asset quality AED m Cost of Risk Credit Impairment Charges Cost of Risk and Recoveries Credit Impairment Coverage Recoveries Coverage inc collateral stage 3 1.51% 1.25% 119.53% 120.83% 119.26% 1.17% 110.15% 1.03% 1,063 1,076 90
Slide 13: Balance Sheet and Capital Strength
Balance Sheet and Capital Strength – capital ratios sequentially higher, 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% 16.65% 16.04% 16.43% 12.71% 12.40% 12.92% 15.82% 12.1
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 +7% Due to Banks < 1year Green Bond 85.7 Due to Banks > 1year AT1 Capital 82.7 81.1 69.8 +11% 37.4 43.1
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 3.5% 6.2% 12.2% +8% 9.8% 2.7% Cash and balances with CB Due from banks AED 123.1 billion Net loans and advances 123.1 116.1 114.2 Tot
Slide 16: Diversified business mix
Diversified business mix – improving returns through economic cycles Revenue Revenue Asset Funding Diversification Segmentation Diversification Diversification 19% 29% 35% 19% H1 23 H1 23 34% H1 23 H1 23 72% 25% 34% 35% Revenue Revenue Assets 13% Funding 6% 3% 19% 22% 24% 11% 72% 28% 44% 56% 63% 37%
Slide 17: Divisional Contributions
Divisional Contributions – Personal Banking Group the main net profit contributor AED m Divisional net profit movement Divisional revenue movement +41% +42% 475.0 1,225.5 475.3 2,461.5 326.2 866.4 1,734.0 27.6 226.1 -101.6 -185.3 -156.7 H1 22 Instit Corp Personal Other H1 23 H1 22 Instit Corp Person
Slide 18: USD 500m Green Bond Issuance
USD$ 500m Green Bond Issuance – landmark issuance supporting the UAE strategic agenda Investor allocation Transaction Highlights • An inaugural landmark green issuance by CBD, first one by a Dubai bank outlining to the Public Markets our green credentials and our Institutional, support of Sustainabl
Slide 19: Innovating in Digital
Investing in award winning and industry recognized digital customer Innovating in Digital – experience CBD Digital App CBD Investr iBusiness Mobile App • App rated 4.8 on App store and 4.4 • Best Innovation in Investment • Best Mobile Banking Service on Google Play Banking and Best Robo Advisory imp
Slide 20: Benefits of our investments
Benefits of our investments – Driving growth through innovation, partnerships and digital transformation Value drivers and key initiatives DEFAULT INSIGHTFUL SMART EMBEDDED DIGITAL SIMPLIFICATION DATA AUTOMATION RESILIENCE EXPERIENCES Rationalise legacy Backing customer Strengthen Improved business
Slide 21: Concluding remarks
Concluding remarks Excellent net profit growth at outstanding returns Embedded ESG focus across the bank supported by a landmark Green Bond issuance Accelerated investment in end-to-end digital solutions Delivering higher shareholder returns with growth to continue throughout 2023 and into 2024 CBD
Slide 22: Board of Directors and Executive Committee
Board of Directors and Executive Committee Board of Directors Executive Committee H.E. Humaid Mohammad Dr. Bernd van Linder Al Qutami Chief Executive Officer Chairman H.E. Sultan Saeed Mohamed Mr. Abdullah Salim Alturifi Mr. Darren Clarke Mr. Fahad Al Muhairi Nasser Al Mansoori Director Chief Financ
Slide 23: Global Economic Update
Global Economic Update – rising inflation and increasing central bank interest rates US Dollar Index Interest Interbank Rates USD LIBOR EURO LIBOR GBP LIBOR 120.0 5.8 5.1 115.0 4.8 5.1 110.0 3.8 3.6 105.0 2.8 100.0 102.9 1.8 95.0 0.8 90.0 -0.2 85.0 -1.2 Jan-19 Jun-19 Jan-19 Nov-19 Apr-20 Nov-19 Apr-
Slide 24: UAE Economic Update
UAE Economic Update – strong real estate and tourism sector performance with population growth driving economic activity and confidence UAE GDP and Inflation Growth Purchasing Managers Index Inflation GDP UAE KSA 59.6 56.9 7.41% 5.10% 4.83% 4.07% 3.80% 3.52% 3.42% 3.10% 2.40% 3.10% 2.50% 1.61% 1.97%
Slide 25: UAE Economic Update – 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 11,500 200 176.0 10% 10,500 9,550 9.44% 150 4.96% 4.23% 9,500 5% 8,500 100 1.90% 90.9 80.6 0% 7,500 0.59% -1.68% 0.33% 6,500 50 -2.82% (5%)
Slide 26: Dubai Economic Update – Business confidence
Dubai Economic Update – Business confidence remains robust with recent short term indicators influenced by higher global market interest rates Business Confidence Index Outlook on Sales for Overall Services Sector China Dubai USA UK India Germany Further increase in tourism and population expected t
Slide 27: Dubai Economic Update – economic activity
Dubai Economic Update – strong economic activity and business confidence Dubai GDP growth Dubai hospitality Apr-22 Apr-23 AED 7.60% 6.20% -4.7% 788 751 2.70% 2.80% +15.6% 1.90% 2.20% 536 464 +21.3% 59 71 -3.50% 2016 2017 2018 2019 2020 2021 2022 Occupancy % Average daily rate Revenue per available r
Slide 28: UAE Banking Sector
UAE Banking Sector – backbone of the UAE economy and supporting business ambition Key industry indicators Average Loan Yield & Cost of Deposits vs 3M EIBOR AEDb 2020 2021 2022 Apr-23 YTD 3M EIBOR Yield on Loans Cost of Deposits 6.30% Total assets 3,188 3,322 3,669 3,802 3.7% 6.00% 5.50% 5.20% 5.00
Slide 29: UAE Banking Industry – credit growth moderating
UAE Banking Industry – credit growth moderating as interest rates rise System-wide Gross loans and deposits Credit Growth in the UAE Banking Sector Gross loans Deposits Domestic Credit Foreign Credit 2,351 31.18% 2,222 AED Billion 1,997 1,870 1,885 1,881 1,897 1,756 1,759 1,779 1,794 1,656 1,580 1,6
Slide 30: 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 31: Our commitment – progressing ESG program in H1 2023
Our commitment – progressing ESG program in H1 2023 Environment People Financial Inclusion Governance Community Baselining scope 1, Emiratisation – 91% of customers ESG Policy Awarded by Sharjah 2 & 3 GHG 37% of all registered for approved by Board City for Humanitarian emissions employees UAENs dig
Slide 32: Awards and Achievements
Awards and Achievements “Number One Bank in the UAE” “Best Digitization Initiatives” # 1 – Forbes World’s Best Banks 2022 Report – ME Banking AI Awards 2023 “Best Robo Advisory Provider” “Best Innovation in Investment Banking” for CBD Investr – MEA Finance Wealth & Investment Awards 2022 – MEA Finan
Slide 33: Disclaimer
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