Commercial Bank Of Dubai(psc) · DFM:CBD
Commercial Bank Of Dubai(psc) — Commercial Bank of Dubai — FY2022 Earnings Presentation
33 slides from Commercial Bank Of Dubai(psc)'s earnings presentation, Feb 1, 2023
Slide 1: Investor Presentation for the 12 months ended 31st December 2022
2022 Investor Presentation for the 12 months ended 31st December 2022 Dr Bernd van Linder Chief Executive Officer Mr Darren Clarke 1st February 2023 Chief Financial Officer
Slide 2: Executive Summary: Financial Highlights FY 2022
Executive Summary Financial Highlights FY 2022 Record net profit result with sound growth in revenue and operating profit AED 1,825m Record cash dividend combined with p 25.8% from 2021 Net Profit bonus shares Well positioned to back our customers’ Operating AED 2,816m ambitions p 21.5% from 2
Slide 3: CBD dividend history – Record cash dividend and special bonus share
CBD dividend history – Record cash dividend of 26.05 fils per share together with a special bonus share of 6.51 fils per share AED m Net Profit Cash Payout % Cash dividend Total Dividend % Bonus shares +5.9% 1,825 1,451 1,400 50% 1,162 40% 1,120 913 50% 183 50% 41% 725 730 50% 580 580 561 730 2018 2
Slide 4: Earnings Snapshot
Earnings Snapshot – Afunded record financial performance on higher market interest rates and non- income, partially offset by increased expenses and cost of risk AED m Change Change (%) 2022 2022 - 2021 2022 - 2021 Net profit 1,825.0 374.5 25.8% Return on equity (RoE) 15.99% 277 bp 21.0% Return on a
Slide 5: Financial Performance Snapshot – FY 2022
Financial Performance Snapshot – FY 2022 AED b Shareholder Solid Robust Solid Operating Value Creation Balance Sheet Core Ratios Performance Revenues Assets Capital Adequacy Ratio Operating Profit +19.8% +1.6% +22bps +21.5% 3.8 114.2 116.1 16.7% 15.8% 16.0% 2.8 3.0 3.0 3.2 88.1 97.4 14.2% 2.1 2.2 2.
Slide 6: Progress against Strategic Execution FY 2022
Progress against Strategic Execution FY 2022 Achieve Become Customer Default Financial Results Employer of Choice Focus Digital Interest rate tailwinds Recruiting, Deepening % of wholesale supported by a rise in developing and customers 98% transactions initiated CASA retaining UAE relationships dig
Slide 7: Financial Guidance 2023 estimate
Financial Guidance 2023 estimate – Underlying business conditions support forward looking net profit growth Looking Ahead 2023e Financial Guidance • Moderate loan growth with continued diversification Loan growth Low-Mid single digit growth • Cost of Risk expected to be lower in 2023 Cost of Risk <
Slide 8: Core Performance Trends
Core Performance Trends – strong revenue outcome driven by higher interest rates, partially offset by loan prepayments AED m Net profit Revenue OOI NII +9% 1,825 +8% 3,812 1,400 1,451 1,136 3,183 3,033 2,978 (30%) 1,120 1,105 1,068 1,092 (35%) (35%) (37%) 2,676 1,966 1,887 2,078 (70%) (65%) (63%) (6
Slide 9: Strategic Financial KPI's
Strategic Financial KPI’s – customer relationships boosting return on equity and assets Return on Equity (ROE) Cost to Income Ratio +3% -4% 15.99% 29.18% 27.11% 27.18% 26.14% 14.61% 13.22% -4% 10.69% +21% 2019 2020 2021 2022 2019 2020 2021 2022 Return on Assets (ROA) Other Operating Income Fees and
Slide 10: 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 +4% 997 3,812 885 865 3,033 3,183 2,978 807 +15% +5% +8% +7% 0% 885 997 807 865 2019 2020 2021 2022 2019 2020 2021 20
Slide 11: Net Interest Margin – well managed funding costs
net interest income increasing on higher benchmark interest rates and Net Interest Margin – well managed funding costs Interest Income and Expense Net Interest Margin Interest Income Interest Expense AED m NIM YTD NIM QTD 823 720 3.10 590 510 543 2.68 1,285 1,003 2.08 2.02 2.14 802 2.51 656 693 2.28
Slide 12: Net Profit Bridge on Prior Year
Net Profit Bridge on Prior Year – strong profit driven by improved NII, OOI offset by higher expenses and specific credit losses AED m NII higher by 598m on Foreign Exchange Other Impairment Staff expenses Higher Other Net Credit increasing market Income favourable by Charge pertains to the increase
Slide 13: Asset Quality and Impairments
Asset Quality and Impairments – higher coverage with improved underlying asset quality AED m Cost of Risk Impairment Charges and Recoveries Cost of Risk Impairment Coverage 1 Recoveries Coverage inc collateral stage 3 1.51% 120.83% 119.53% 1.16% 1.17% 1.03% 1,075 1,132 110.15% 942 79.89% 69.70% 62.5
Slide 14: Balance Sheet and Capital Strength
Balance Sheet and Capital Strength – capital ratios improving year on year Capital Adequacy Ratio (CAR) Common Cost Equity Tier 1 (CET1) of Risk CAR Regulatory limit (Minimum) CET1 Regulatory limit (Minimum) 4% -2% 16.65% 16.04% 13.02% 12.71% 15.82% 12.13% 12.40% 14.17% 13.00% 13.00% 13.00% 13.00% 9
Slide 15: 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 Due to Banks > 1year AT1 Capital +9% Due to Banks < 1year Notes and Medium Term Borrowing Equity 82.7 81.1 69.8 +12% 35.0 63.3 45.4 42.7 31.5
Slide 16: 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 3.9% 7.4% 13.6% +10% 7.6% 3.2% Cash and balances with CB Due from banks AED 116.1 billion Net loans and advances 116.1 114.2 Total As
Slide 17: Diversified business mix
Diversified business mix – improving returns through economic cycles Revenue Revenue Asset Funding Diversification Segmentation Diversification Diversification 24% 25% 33% 20% 2022 2022 2022 2022 70% 34% 37% 13% 37% Revenue Revenue Assets Funding 31% 8% 18% 2% 11% 25% 12% 70% 30% 58% 42% 62% 38% 70%
Slide 18: Divisional Contributions
Divisional Contributions – stellar outperformance by Retail AED m Divisional net profit movement Divisional revenue movement +20% +26% 501.6 3,812.2 338.5 1,825.0 3,183.0 201.5 1,450.5 217.0 -9.5 -64.3 -31.9 -149.1 2021 Instit Corp Personal Other 2022 2021 Instit Corp Personal Other 2022 2022 Instit
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 Strong net profit growth at excellent returns Backing customer and employees to accomplish their ambitions Continued investment in end-to-end digital solutions Delivering improved shareholder returns with growth to continue in 2023 CBD is well positioned to successfully execute ou
Slide 22: Board of Directors and Management Team
Board of Directors and Management Team 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 Financial
Slide 23: Global Economic Update
Global Economic Update – rising inflation and increasing central bank interest rates US Dollar Index Interest Interbank Rates 120 USD LIBOR EURO LIBOR GBP LIBOR JPY LIBOR 115 4.3 4.1 3.8 110 3.3 105 2.3 1.9 103.3 100 1.3 95 0.3 90 -0.7 -0.0 85 -1.7 Jan-19 Jun-19 Nov-19 Apr-20 Sep-20 Feb-21 Jul-21 De
Slide 24: UAE Economic Update – sustained recovery
UAE Economic Update – sustained recovery in real estate and tourism sectors and strong oil prices driving economic rebound UAE GDP and Inflation Growth Purchasing Managers Index Inflation GDP UAE KSA 56.9 54.2 5.10% 5.22% 5.05% 4.07% 3.80% 3.10% 3.10% 2.50% 50 2.40% 1.97% 1.61% 1.20% 1.70% (1.9%) (2
Slide 25: 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 11,500 200 10% 10,221 7.66% 10,500 4.88% 150 141.8 5% 9,500 8,500 93.0 100 1.90% 0% 7,500 0.59% 0.33% -1.68% -3.36% -2.82% 6,500 50 (5%) 9.
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 will lead to an upward tr
Slide 27: Dubai Economic Update – robust trade
Dubai Economic Update – robust trade and strong economic activity Dubai GDP growth Dubai hospitality Dec-21 Dec-22 AED 6.20% -6.6% 4.60% 956 2.70% 2.80% 893 1.90% 2.20% -8.5% 747 684 -2.0% 78 77 -3.50% 2016 2017 2018 2019 2020 2021 9M 2022 Occupancy % Average daily rate Revenue per available room So
Slide 28: UAE Banking Sector
UAE Banking Sector – backbone of the UAE economy and supporting credit growth Key industry indicators Average Loan Yield & Cost of Deposits vs 3M EIBOR AEDb 2019 2020 2021 Nov-22 YTD 3M EIBOR Yield on Loans Cost of Deposits Total assets 3,083 3,188 3,322 3,639 p 9.6% 5.50% 5.20% 5.10% 5.10% 5.00% 5.
Slide 29: UAE Banking Industry – market continues to extend credit
UAE Banking Industry – market continues to extend credit as economy grows System-wide Gross loans and deposits Credit Growth in the UAE Banking Sector Gross loans Deposits Domestic Credit Foreign Credit 24.21% 2,239 AED Billion 1,997 1,870 1,885 1,888 1,756 1,759 1,779 1,794 1,627 1,656 15.88% 1,554
Slide 30: ESG Framework – five key pillars
ESG Framework – five key pillars of the ESG roadmap Community People Financial Inclusion Governance Environment Backing Our people are Innovating and Resilient and Managing customer what makes CBD partnering for sustainable climate risk ambitions the place to the future business work practices Our p
Slide 31: Our commitment – Progressing ESG program
Our commitment – Progressing ESG program Community People Financial Inclusion Governance Environment CBD in affiliation Emiratisation - Building Established an Established a with Emirates Red UAE National Financial ESG Steering Sustainable Crescent and the Program with Inclusion Committee to Finance
Slide 32: Awards and Achievements
Awards and Achievements “Number One Bank in the UAE” “Best Mobile Banking Service ” for iBusiness Mobile App # 1 – Forbes World’s Best Banks 2022 Report – MEA Finance Industry Awards 2022 “Best Robo Advisory Provider” “Best Innovation in Investment Banking” for CBD Investr – MEA Finance Wealth & Inv
Slide 33: Disclaimer
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