Commercial Bank Of Dubai(psc) · DFM:CBD
Commercial Bank Of Dubai(psc) — Commercial Bank of Dubai — 9M 2024 Earnings Presentation
32 slides from Commercial Bank Of Dubai(psc)'s earnings presentation, Oct 23, 2024
Slide 1: Investor Presentation for the 9 months ended 30th September 2024
2024 Investor Presentation for the 9 months ended 30th September 2024 Dr Bernd van Linder Chief Executive Officer Mr Darren Clarke 23 October 2024 Chief Financial Officer
Slide 2: Executive Summary – Financial Highlights 9M 24
Executive Summary Financial Highlights 9M 24 ▪ Good net profit result with above system loan growth Net Profit AED 2,450m 26.5% from 9M 23 ▪ Strong return on equity generating before tax internal capital for growth Operating AED 3,147m ▪ Strong balance sheet with all liquidity, 11.0% from 9M 23
Slide 3: Earnings Snapshot
Earnings Snapshot – Good net profit result with excellent growth in loans and improved Cost of Risk offsetting lower NIM and higher expenses AED m Change Change (%) Q3 24 Q3 24 - Q3 23 Q3 24 - Q3 23 Net profit before tax 2,450.1 514.6 26.5% Net profit after tax 2,231.2 295.7 15.2% Return on equity (
Slide 4: Financial Performance Snapshot – 9M 24
Financial Performance Snapshot – 9M 24 AED b Shareholder Strong Robust Solid Operating Value Creation Balance Sheet Core Ratios Performance Revenues Assets CET1 Ratio Operating Profit +12.1% +8.7% +83bps +11.0% 3.7 4.2 129.0 140.2 12.1% 12.4% 12.5% 13.4% 3.1 114.3 116.2 2.8 2.4 2.7 2.0 1.8 9M 21 9M
Slide 5: Progress against Strategic Execution 9M 24
Progress against Strategic Execution 9M 24 Achieve Become Customer Default Financial Results Employer of Choice Focus Digital Recruiting, Deepening customer Interest rate tailwinds % of wholesale developing and relationships 93% supported by growth transactions initiated retaining UAE through servic
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 ≥ 10% • Improved asset quality with a lower Non-Performing Cost of Risk < 92 bps Loan
Slide 7: Net Profit Bridge on Prior Year
Good net profit outcome with higher NFI and lower CoR, more Net Profit Bridge on Prior Year – than offsetting higher cost of funds, higher expenses and the introduction of corporate tax AED m NFI higher on credit NII higher on robust Other Impairment Net Credit Staff expenses Other Operating card gr
Slide 8: Core Performance Trends
Core Performance Trends – Excellent loan growth supported by high interest rates and lower CoR negating higher cost of funds and expenses AED m Net profit before tax Revenue NFI NII Net profit after tax is 2,231m 4,938 2,650 +25% +35% 1,368 +27% 3,812 (28%) +12% 1,825 2,450 3,183 1,136 4,164 1,936 (
Slide 9: Strategic Financial KPIs
Strategic Financial KPI’s – Excellent loan growth, lower CoR, offsetting weaker Net Interest Margins and significantly higher expenses Return on Equity (ROE) before tax Cost to Income Ratio ROE after tax is 21.41% -3% 27.18% 26.14% 24.87% 24.44% +21% 23.51% 21.23% -2% 15.99% +11% 13.22% 2021 2022 20
Slide 10: Profitability and Returns
Profitability and Returns – Solid returns were supported by improved CoR despite lower margins and increased expenses AED m Expenses Revenue and Expense JAWS Revenue Expenses 1,228 4,164 +19% 4,938 997 +16% 3,812 865 1,018 3,183 +2% 881 +6% +5% 0% 1,228 1,018 865 997 2021 2022 2023 9M 23 9M 24 2021
Slide 11: Net Interest Margin
Net Interest Margin – Higher NII benefitting from loan growth and high market interest rates notwithstanding increased funding costs and decreasing credit spreads Interest Income and Expense Net Interest Margin Interest Income Interest Expense AED m NIM YTD NIM QTD 959 947 943 885 916 3.18 3.19 3.16
Slide 12: Asset Quality and Impairments
Improved asset quality with non-performing loan ratio the lowest Asset Quality and Impairments – in over 15 years together with a sharply higher coverage ratio AED m Cost of Risk Credit Impairment Charges Cost of Risk and Recoveries Credit Impairment Coverage Recoveries Coverage inc collateral stage
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) +2% +3% 16.04% 15.95% 16.56% 13.37% 15.82% 12.40% 12.54% 12.13% 13.00% 13
Slide 14: Funding and Liquidity
Funding and Liquidity – Diversified deposit base with increased Term Deposit funding AED b Customer Deposits Other Funding Sources Time CASA Acceptances and Others Notes and Medium Term Borrowing Equity Due to Banks < 1year Green Bond +6% 98.7 Due to Banks > 1year AT1 Capital 88.3 82.7 81.1 +10% 50.
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 6.5% 2.5% 11.5% +7% 3.0% 11.1% Cash and balances with CB Due from banks AED 140.2 billion Net loans and advances 140.2 129.0 Total As
Slide 16: Diversified business mix
Diversified business mix – Broad diversification across key financial attributes Revenue Revenue Asset Funding Diversification Segmentation Diversification Diversification 24% 29% 34% 20% 9M 24 9M 24 9M 24 9M 24 68% 29% 32% 36% Revenue Revenue Assets 14% Funding 6% 39% 18% 6% 8% 25% 12% 68% 32% 53%
Slide 17: Divisional Contributions
Divisional Contributions – Solid performance across all business lines AED m Divisional operating profit movement Divisional revenue movement +11% +12% 159.6 3,146.7 256.2 4,164.3 114.3 77.1 158.6 110.7 2,834.7 -39.0 3,716.0 -77.2 9M 23 Instit Corp Personal Other 9M 24 9M 23 Instit Corp Personal Oth
Slide 18: Consumers – Digital Innovation
Consumers – Digital Innovation - Investing in award winning and industry recognized digital customer experience CBD Digital App and Features CBD Investr • App rated 4.8 on App store and • Optimized experience through • Best Innovation in Investment 4.3 on Google Play redesigned Customer Journeys Ban
Slide 19: Businesses – Digital Innovation
Investing in award winning and industry recognized digital Businesses – Digital Innovation - customer experience CBD iBusiness Mobile CBD iBusiness Online Best Innovation in Corporate Banking and Finance Best Mobile Banking Service Implementation – MEA Finance – MEA Finance A digital ecosystem of ta
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 – Further progress across all 5 pillars
Our commitment – Further progress across all 5 pillars of our ESG Framework during Q3 2024 Environment People Financial Inclusion Governance Community Introduction of Launch of the Launch of new Refreshed website Representation at recycled credit and Leadership Digital Trade app to incorporate Ru’ya
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 “Customer & Partner Authentication Award” “Best Financial Green Bond in EMEA” – KuppingerCole European Identity – Th
Slide 23: Concluding remarks
Concluding remarks Good net profit result Excellent loan growth increasing market share and improved asset quality Targeted investment in end-to-end digital solutions Delivering high shareholder returns with momentum to continue for remainder of 2024 and beyond CBD is well placed to successfully exe
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 Deputy Chairman Director Chief Financial Off
Slide 25: Global Economic Update
Global Economic Update – Lower inflation and decreasing central bank interest rates US Dollar Index Central Bank Overnight Rates 120.0 SOFR (USD) SONIA (GBP) STR (EURO) 6.00 115.0 5.0 5.00 4.8 110.0 4.00 105.0 3.4 3.00 100.0 100.5 2.00 95.0 1.00 90.0 0.00 85.0 -1.00 Jan-20 Sep-20 May-21 Jan-22 Sep-2
Slide 26: UAE Economic Update
UAE Economic Update – Public sector strategic intent, investment and broad based business Performance, and population growth driving economic activity and confidence UAE GDP and Inflation Growth Purchasing Managers Index Inflation GDP UAE KSA 56.3 7.85% 4.83% 3.10% 3.80% 3.40% 3.52% 53.8 2.40% 3.10%
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 9,469 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% 6,
Slide 28: Dubai Economic Update – Business confidence
Dubai Economic Update – Business confidence and broad-based economic growth expected to continue into 2025 and beyond Business Confidence Index SME Index Trend China Dubai USA UK Germany Dubai’s BCI ranks highest at 137.3 180 180 170 170 160 160 150 150 140 140 130 137.3 130 120 128.2 120 110 110 10
Slide 29: Dubai Economic Update – Strong economic activity
Dubai Economic Update – Strong economic activity and business confidence Dubai GDP growth Dubai hospitality Apr-23 Apr-24 AED 7.60% +18.7% 6.20% 891 +13.1% 3.60% 3.20% 2.70% 2.80% 805 1.90% 2.20% 751 712 +30.1% 93 71 -3.50% 2016 2017 2018 2019 2020 2021 2022 2023 Q1 2024 Occupancy % Average daily ra
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 Jun-24 YTD 3M EIBOR Yield on Loans Cost of Deposits Total assets 3,322 3,669 4,075 4,310 5.9% 6.80% 6.70% 6.00% Customer depo
Slide 31: UAE Banking Industry – Market Interest Rates
UAE Banking Industry – Market Interest Rates have started to decline, credit growth is expected to continue in the years ahead System-wide Gross loans and deposits Credit Growth in the UAE Banking Sector Gross loans Deposits Domestic Credit Foreign Credit 31.18% AED Billion 2,693 2,522 2,222 2,101 1
Slide 32: Disclaimer
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