Commercial Bank Of Dubai(psc) · DFM:CBD
Commercial Bank Of Dubai(psc) — Commercial Bank of Dubai — 9M 2020 Earnings Presentation
29 slides from Commercial Bank Of Dubai(psc)'s earnings presentation, October 2020
Slide 1: Q3 2020 Financial Results Investor Presentation
2020 Q3 Financial Results For the 9 months ended 30th September 2020 Investor Presentation Financial Highlights Dr Bernd van Linder Chief Executive Officer Mr Darren Clarke Chief Financial Officer
Slide 2: Commercial Bank of Dubai 9M 2020 Overview
Commercial Bank of Dubai 9M 2020 Overview Net Profit Gross Lending Employees AED 816m 3.7% >1300 23.3% from 9M 19 UAE Loan Market Share Corporate Social Responsibility Credit Rating 15 Branches A- (Fitch) Contributed to the 150 Back to School 2020 Baa1 (Moody’s) ATM/CDM Campaign with UAE Red Cresce
Slide 3: Earnings Snapshot
Earnings Snapshot – COVID-19 business conditions have resulted in lower net interest income, increased provisions AED m Change Change (%) 9M 20 9M 20 - 9M 19 9M 20 - 9M 19 Net profit 815.8 (247.4) (23.3%) Return on equity (RoE) 10.76% (428) bp (28.5%) Return on assets (RoA) 1.22% (60) bp (33.2%) Int
Slide 4: Financial Performance Snapshot – Q3 2020
Financial Performance Snapshot – Q3 2020 Revenues Net Profit Return on Equity Shareholder Value Creation AED 2,107m AED 816m 10.76% 6.0% from 9M 19 23.3% from 9M 19 428 bps from 9M 19 Assets Customer Deposits Gross Loans Focus on Growth AED 92.8bn AED 64.0bn AED 66.5bn 5.3% from FY 19 1.1% from
Slide 5: Performance Highlights Q3 2020
Performance Highlights Q3 2020 Supporting our customers during the challenging business conditions via economic support measures, and extending credit across the economy Low interbank interest rates adversely impacted net interest income, these headwinds were partially offset by growth in loan volum
Slide 6: Strategic Execution in Q3 2020
Strategic Execution in Q3 2020 o Net profit down 23.3% compared to 9M 2019 Achieve o Sharply lower interbank interest rates impacted net interest income Financial Results o Increased provisions related to COVID-19 impacts o Supporting employees through the COVID-19 crisis Become Employer o Embedding
Slide 7: Core Performance Trends
Core Performance Trends – lower results from specific credit losses and decreased net interest income AED m Revenue Net profit OOI NII +7% 1,400 3,033 +18% 2,642 2,725 1,162 1,068 (6%) (23%) 813 +11% 1,002 822 (35%) +20% (30%) 2,242 1,063 (31%) 2,107 738 734 816 (33%) (35%) 1,821 1,911 1,966 (69%) (
Slide 8: Profitability and Returns
Profitability and Returns – accelerated expense optimisation, restrained business activity AED m Expenses Revenue and expense JAWS Revenue Expenses (1%) 901 885 3,033 858 2,107 +3% 2,642 2,725 2,462 (9%) +8.2% 653 +3.9% +7.8% +3.5% 591 +3.3% 871 901 858 885 591 2017 2018 2019 9M 19 9M 20 2016 2017 2
Slide 9: Strategic Financial KPI's
Strategic Financial KPI’s – returns impacted by the unprecedented market environment Return on Equity (ROE) Cost to Income Ratio (11%) (6%) 14.61% 31.50% 13.47% 29.18% 28.07% 10.76% (4%) (26%) 2018 2019 9M 20 2018 2019 9M 20 Return on Assets (ROA) Other Operating Income as % of Expenses (12%) +14% 1
Slide 10: Net Profit Bridge
Net Profit Bridge – below prior period due to lower interest income and specific credit losses AED m Staff Expenses decreased Gain from investments FX income increased by NII decreased by 132m due Net credit impairment by 46m or 10% and Other increased 6m over 9M 2019 24m or 17% compared to to a dro
Slide 11: Asset Quality and Impairments
Asset Quality and Impairments – system wide asset quality headwinds AED m Cost of Risk Impairment Charges and Recoveries Cost of Risk Impairment charges Recoveries Coverage (%) 105%* 90% (Including Collateral) 102% 64% 78% 83% 64% 1.37% 1.39% 1.26% 1.26% 1.16% 752 789 704 852 716 560 115 112 48 42 3
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) (0.3%) (0.4%) 23bp 22bp 14.51% 14.56% 14.17% 14.40% 13.39% 13.41% 13.02% 13.24% 12.38% 13
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 +10% Due to Banks < 1year Notes and Medium Term Borrowing 63,334 64,000 +9% 28,750 53,165 48,411 24,735 7,0
Slide 14: Balance Sheet Analysis
Balance Sheet Analysis – supporting customers across sectors and product portfolios AED m Assets Mix Assets and Loans Net Loans and Advances Total Assets 3.6% +10% 12.2% 3.5% Cash and balances with CB 5.4% Due from banks Net loans and advances 92,750 AED 93 billion 88,068 7.5% Investment securities
Slide 15: Divisional Contributions
Divisional Contributions – dedicated segments supporting our customers AED m Divisional net profit movement Divisional RWA movement (23.3%) +8.8% 33.0 33.3 3.8 0.4 78.0 282.7 1,063.1 3.5 (1.3) (0.2) 71.7 815.8 (230.2) (366.2) 9M 2019 Instit Corp Fin Inst Personal Others 9M 2020 Q3 19 Instit Corp Fin
Slide 16: 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 17: 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 18: COVID-19 Economic impact and stimulus
COVID-19 Economic impact and stimulus Economic impacts UAE economic stimulus The COVID-19 pandemic has become an unprecedented challenge for Governments and Central banks have responded with stimulus the global society and the medical system. packages and other fiscal measures to sustain the eco
Slide 19: USD$ 600m AT1 Issuance
USD$ 600m AT1 Issuance – landmark AT1 issuance setting the course of the future AED m Order by Type Order by Country Singapore Switzerland Corporates 7.4% United Kingdom Fund Managers 14.1% 22.5% 6.1% 26.2% Hong Kong 5.7% Others 2.5% Liechtenstein 1.4% 7.8% Private Banks 2.3% 3.3% Asset Managers Oth
Slide 20: United Arab Emirates – macro environment
United Arab Emirates – the macro environment has deteriorated due to the COVID-19 pandemic UAE Stock market indices Fiscal Deficits to be posted Surplus / (Deficit) (AEDb) As % of GDP 6,000 DFM ADX 5,500 5,000 18.1 4,518 4,500 (44.2) (26.5) (19.7) (24.0) (42.7) (47.4) (41.9) (40.2) 4,000 3,500 1.2%
Slide 21: UAE Economic Update
UAE Economic Update – GDP expected to contract in 2020, oil prices under downward pressure UAE GDP and Inflation Trend Purchasing Managers Index Inflation GDP UAE KSA 51.0 50.7 5.1% 3.7% 2.9% 3.1% 3.1% 2.1% 1.7% 1.4% 0.5% (1.4%) 2015 2016 2017 2018 2019 Sep-16 May-17 Jan-18 Sep-18 May-19 Jan-20 Sep-
Slide 22: Dubai – external headwinds continue
Dubai – external headwinds continue with all sectors 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 4.1% 4.6% 574 545 536 4.1% 502 514 518 3.8% 471 479 442 3.0% 364 2.7% 2.8% 280 290 325 337 291 2.2
Slide 23: Dubai Economic Update
Dubai Economic Update – challenging real estate prices, business conditions and confidence Dubai GDP growth Dubai hospitality Jun-19 (28.9%) AED Jun-20 388 2.20% 2.80% (72.2%) 2.70% 2.20% 276 261 1.90% (60.8%) 67 73 26 2016 2017 2018 2019 (3.5%) Q1 19 Q1 20 Occupancy % Average daily rate Revenue per
Slide 24: UAE Banking Sector
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 Aug 20 YTD 5.5% Total assets 2,694 2,869 3,083 3,223 4.6% 5.2% 5.1% 5.0% 5.0% 5.0% 4
Slide 25: UAE Banking Industry – continued growth, low EIBOR
UAE Banking Industry – CBD execution delivering continued growth, EIBOR rates remain low Gross loans and deposits Credit Growth in the UAE Banking Sector Gross loans Deposits Domestic Credit Foreign Credit +1.54% +2.4% AED Billion 15.9% 1,870 1,899 15.0% 1,756 1,759 1,801 1,656 13.1% 1,554 1,563 1,5
Slide 26: 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 27: Q3 2020 CSR Activities
Corporate Social Responsibility – supporting the wider community Q3 2020 CSR Activities Education & Charity and volunteer programs CBD consistently endorses charitable initiatives supporting the education and empowerment of “Back to School 2020” the UAE youth. CBD also encourages its CSR Initiative
Slide 28: Awards and Achievements
Awards and Achievements Joined the UAE Business Relief Package to A record 90% of wholesale banking customers CBD partnered with NOW Money to provide support the UAE Economy adopt CBD digital platforms financial inclusion across the UAE Partnered with Thunes to offer real time CBD became the first b
Slide 29: Disclaimer
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