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Commercial Bank of Dubai
Management Discussion and Analysis Report
First Half 2023
12 July 2023
Page | 1Commercial Bank of Dubai (CBD) reports net profit of
AED 1,225m, up 41.5% on H1 2022
Key Performance Indicators
Net Profit Return on Equity Cost to Income
AED 1,225m 20.84% 23.55%
Capital Adequacy
Assets CET1 ratio
Ratio
AED 123b 12.92%
16.43%
Prudent provisioning for
Excellent performance uplift in
expected credit losses
H1 2023 compared to H1 2022
Net impairment allowances were
Net profit of AED 1,225 million up
AED 656 million. Coverage ratio at
41.5% versus the prior comparative
81.72%, up 916 bps compared to
period
H1 2022
Strong balance sheet supporting
liquidity, funding and capital
Cost to income ratio ratios
Excellent cost to income ratio at Gross loans were AED 86.4 billion,
23.55% an increase of 8.5% compared to
31 December 2022
Page | 2Dubai, 12th July 2023: Commercial Bank of Dubai (CBD) today reported its financial results for the
first six months of 2023.
Commercial Bank of Dubai has delivered a record net profit of AED 1,225 million for the first half of
2023, up 41.5% compared to the corresponding period in 2022. Outstanding revenue contribution
across Net Interest and Other Operating Income, supported by robust loan growth generated a
substantial rise in net profit. Notably, market interest rates increased, which contributed to the
financial uplift. The UAE economic outlook and business confidence remains encouraging, backed by
buoyant domestic activity that should enable economic growth for the remainder of 2023.
Commenting on the bank’s performance, Dr. Bernd van Linder, Chief Executive Officer, said, “CBD
has delivered an outstanding result attributable to strong revenue growth at excellent returns.
Overall, our net profit for 1H 2023 was a record AED 1,225 million, well above the same period
last year on account of higher revenue and well managed costs and impairments. We remain well
positioned in meeting our long term goals and deliver superior performance outcomes in 2023
and beyond.
CBD’s strategy is to deliver global best digital experiences and technology and so we will continue
to develop innovative banking solutions to ensure we provide our customers with a high quality
and seamless banking experience. We continue to actively support the digital transformation
programmes across the UAE, including the CBUAE FIT programme, and as a leading UAE Bank,
we will continue to be a central participant in these programmes, supporting our customers and
the broader UAE economy.
In the second quarter, CBD has successfully issued our inaugural green bond, raising USD $500
million. This accomplishment marks a momentous milestone in our ESG programme and shows
our commitment to sustainable finance during the UAE Year of Sustainability.”
H1 2023 results:
► Net profit was AED 1,225 million, 41.5% above H1 2022.
► Operating income was AED 2,461 million, up 41.9% driven by higher net interest income,
fees and commissions.
► Operating expenses were AED 580 million.
► Operating profit was AED 1,882 million, up by 49.5%.
► Net impairment allowances were AED 656 million.
As at 30 June 2023:
► Capital ratios remained strong with the capital adequacy ratio (CAR) at 16.43%, Tier 1 ratio
at 15.27% and Common Equity Tier 1 (CET1) ratio at 12.92%, well in excess of regulatory
requirements.
► Gross loans were AED 86.4 billion, an increase of 8.5% compared to 31 December 2022.
► Advances to stable resources ratio (ASRR) stood at 86.18%.
Page | 3Income Statement
Operating income for the first half was AED 2,461 million, up 41.9%, attributable to an increase in
Net Interest Income (NII) by 56.0% on higher interest rates, and growth in Other Operating Income
(OOI) by 15.3% from improved business activities.
Operating expenses were AED 580 million, with the increase driven by inflation and ongoing
investments in digitisation, technology, business growth, governance and regulatory compliance.
The cost-to-income ratio remains excellent at 23.55%.
(AED Million)
Income statement H1 23 H1 22 HoH Var Q2 23 Q1 23 QoQ Var
Net interest income 1,768 1,133 56.0% 880 889 (1.0%)
Other operating income 693 601 15.3% 344 349 (1.4%)
Total income 2,461 1,734 41.9% 1,224 1,237 (1.1%)
Operating expenses 580 475 22.1% 290 289 0.3%
Operating profit 1,882 1,259 49.5% 934 948 (1.5%)
Net impairment allowances 656 393 66.9% 283 373 (24.1%)
Net profit 1,225 866 41.5% 650 575 13.0%
Balance Sheet
Total assets were AED 123.1 billion as at 30 June 2023, an increase of 4.8% compared to AED 117.5
billion as at 30 June 2022.
Net loans and advances were AED 80.8 billion, registering an increase of 2.4% compared to AED
78.9 billion as at 30 June 2022.
Customers’ deposits were AED 85.7 billion as at 30 June 2023, representing an increase of 1.1%
compared to AED 84.8 billion as at 30 June 2022. Low-cost current and savings accounts (CASA)
constitute 49.7% of the total customer deposit base, while the loan-to-deposits ratio stood at 94.2%.
(AED Million)
Balance sheet H1 23 H1 22 HoH Var Q2 23 Q1 23 QoQ Var
Gross loans and advances 86,401 83,593 3.4% 86,401 81,788 5.6%
Allowances for impairment 5,635 4,741 18.9% 5,635 5,266 7.0%
Net loans and advances 80,766 78,852 2.4% 80,766 76,522 5.5%
Total assets 123,129 117,537 4.8% 123,129 119,315 3.2%
Customers' deposits 85,720 84,827 1.1% 85,720 86,193 (0.5%)
Total Equity 14,319 13,121 9.1% 14,319 13,761 4.1%
Page | 4Asset Quality
The non-performing loan (NPL) ratio decreased to 6.63%, down from 6.73% at the end of 2022.
The net impairment charge totaled AED 656 million for the first half of 2023. The headline coverage
ratio increased by 183 bps to 81.72% (December 2022: 79.89%) and was 119.26% inclusive of
collateral for stage 3 loans. As at 30 June 2023, total allowances for impairments amounted to AED
5,635 million.
Liquidity and Capital position
The bank’s liquidity position remained robust with the advances to stable resources ratio at
86.18% as at 30 June 2023 (December 2022: 87.09%), compared to the UAE Central Bank maximum
of 100%.
CBD’s capital ratios further strengthened with the capital adequacy ratio (CAR) at 16.43%, Tier 1
ratio at 15.27% and Common Equity Tier 1 (CET1) ratio at 12.92%. All capital ratios were well above
the minimum regulatory thresholds mandated by the UAE Central Bank.
(%)
HoH Var QoQ Var
Key ratios % H1 23 H1 22 (bps) Q2 23 Q1 23 (bps)
Return on equity 20.84% 15.69% 515 22.26% 20.04% 222
Return on assets 2.05% 1.50% 55 2.15% 1.95% 20
Cost to income ratio 23.55% 27.39% (384) 23.73% 23.38% 35
Non-performing loans (NPL) 6.63% 6.78% (15) 6.63% 6.71% (8)
Provision coverage 81.72% 72.56% 916 81.72% 80.69% 103
Loan-to-deposit ratio 94.22% 92.96% 126 94.22% 88.78% 544
Advances to stable resources 86.18% 89.35% (317) 86.18% 84.78% 140
Capital adequacy ratio 16.43% 15.43% 100 16.43% 16.33% 10
Tier 1 ratio 15.27% 14.28% 99 15.27% 15.18% 9
CET1 ratio 12.92% 11.88% 104 12.92% 12.74% 18
Ratings
Agency Rating Outlook Date
Fitch Ratings A- Stable Apr-23
Moody's Baa1 Stable Apr-23
Page | 5About CBD
The bank was incorporated in Dubai, United Arab Emirates in 1969 and is registered as a Public Joint
Stock Company (PJSC).
The bank is listed on the Dubai Financial Market and is majority owned by UAE Nationals, including
20% by the Investment Corporation of Dubai (ICD). The bank employs over 1,400 staff and offers a
wide range of conventional and Islamic banking products and services to its institutional, corporate
and personal banking customers through a network of 14 branches. Moreover, the bank has invested
in an extensive network of 168 ATMs/CDMs.
For further information, kindly contact: CBD Investor Relations @ investor.relations@cbd.ae
Page | 6

Sentiment: positive