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Commercial Bank of Dubai
Management Discussion and Analysis Report
Third Quarter 2023
25 October 2023
Page | 1Commercial Bank of Dubai (CBD) reports net profit of
AED 1,936m, up 46.4% on the prior period
Key Performance Indicators
AED 1,936m 21.38% 23.72%
Net Profit Return on Equity Cost to Income
Capital Adequacy
AED 126b 13.34%
Assets CET1 ratio
16.80%
Ratio
Prudent provisioning for
Excellent performance uplift in
expected credit losses
9M 2023 compared to 9M 2022
Net impairment allowances were
Net profit of AED 1,936 million up
AED 899 million. Coverage ratio at
46.4% versus the prior comparative
80.60%, up 570 bps compared to
period
9M 2022
Strong loan growth whilst
maintaining healthy liquidity,
Cost to income ratio funding and capital ratios
Excellent cost-to-income ratio at Gross loans were AED 88.5 billion,
23.72% an increase of 11.1% compared to
December 2022
Page | 2Dubai, 25th October 2023:
Commercial Bank of Dubai (CBD) today reported its financial results for
the first nine months of 2023.
Commercial Bank of Dubai has delivered a record net profit of AED 1,936 million for the first nine
months of 2023, up 46.4% compared to the corresponding period in 2022. Outstanding revenue
contribution across Net Interest and Other Operating Income, backed by strong loan growth
generated a significant rise in net profit. Notably, market interest rates remained high, which
contributed to the financial uplift. The UAE economic outlook and business confidence is strong,
supported by resilient domestic activity that should enable economic growth through 2024.
Commenting on the bank’s performance, Dr. Bernd van Linder, Chief Executive Officer, said, “CBD
has delivered a record result attributable to strong revenue growth. Overall, our net profit for the
nine months to 30 September 2023 was a record AED 1,936 million, well above the same period
last year on account of higher revenue and strong loan growth. We remain well positioned to
deliver on our strategic goals and in achieving exceptional performance outcomes in 2023 and
beyond.
In the third quarter, CBD received two prestigious awards - "Best Instant Payment Technology"
and "Payments Innovation of the Year" at the MEA Finance Magazine Leaders and Payment
Awards 2023. These awards are the result of our relentless focus on enhancing the experience of
our customers, and I am convinced that further recognition will follow as we continue to build
innovative digital solutions for our customers.
CBD is taking proactive measures to tackle climate change head-on. Our commitment to carbon
neutral operations by 2030 signifies our dedication to a sustainable future. As the bank that is
backing the nation's ambition, we take pride in aligning our efforts with the UAE's net-zero 2050
goal.”
Q3 2023 results:
►
►
Net profit was AED 1,936 million, 46.4% above the prior year comparative period.
Operating income was AED 3,716 million, up 36.6% driven by higher net interest income,
►
fees and commissions.
►
Operating expenses were AED 881 million.
►
Operating profit was AED 2,835 million, up by 42.5%.
As at 30 NSeetp itmempabiremr 2en0t2 a3ll:o wances were AED 899 million.
►
Capital ratios remained strong with the capital adequacy ratio (CAR) at 16.80%, Tier 1 ratio
at 15.65% and Common Equity Tier 1 (CET1) ratio at 13.34%, well in excess of regulatory
►
requirements.
►
Gross loans were AED 88.5 billion, an increase of 11.1% compared to 31 December 2022.
Advances to stable resources ratio (ASRR) stood at 87.23%.
Page | 3Income Statement
Operating income
for the first nine months was AED 3,716 million, up 36.6%, attributable to an
increase in Net Interest Income (NII) by 43.2% owing to loan growth and higher market rates, and
Ogrpoewrtaht iinng O etxhpere nOspeesrating Income (OOI) by 22.5% from improved business accomplishments.
were AED 881 million, with the increase in cost driven by inflation and ongoing
investments in digitisation, technology, business growth, governance and regulatory compliance.
The cost-to-income ratio remains excellent at 23.72%.
Income statement 9M 23 9M 22 YoY Var Q3 23 Q2 23 (AED Q MoQil lVioanr)
43.2% 0.6%
22.5% 7.3%
Net interest income 2,654 1,853 885 880
Total income 3,716 2,720 36.6% 1,255 1,224 2.5%
Other operating income 1,062 867 369 344
20.7% 4.1%
Operating profit 2,835 1,990 42.5% 953 934 2.0%
Operating expenses 881 730 302 290
34.6% (14.1%)
Net profit 1,936 1,322 46.4% 710 650 9.2%
Net impairment allowances 899 668 243 283
Balance Sheet
Total assets
were AED 126.0 billion as at 30 September 2023, an increase of 7.2% compared to AED
Net loans and advances
117.5 billion as at 30 September 2022.
were AED 82.9 billion, registering an increase of 4.7% compared to AED
Customers’ deposits
79.1 billion as at 30 September 2022.
were AED 86.4 billion as at 30 September 2023, representing an increase of
5.7% compared to AED 81.8 billion as at 30 September 2022. Low-cost current and savings accounts
(CASA) constitute 50.9% of the total customer deposit base, while the loan-to-deposits ratio stood
at 95.9%.
Balance sheet Sep 23 Sep 22 YoY Var Sep 23 Jun 2 3 ( AEDQ MoQil lVioanr)
5.2% 2.4%
13.3% (0.8%)
Gross loans and advances 88,478 84,068 88,478 86,401
Net loans and advances 82,889 79,138 4.7% 82,889 80,766 2.6%
Allowances for impairment 5,588 4,930 5,588 5,635
7.2% 2.4%
5.7% 0.8%
Total assets 126,024 117,531 126,024 123,129
11.7% 4.4%
Customers' deposits 86,442 81,778 86,442 85,720
Total Equity 14,951 13,387 14,951 14,319
Page | 4Asset Quality
The non-performing loan (NPL) ratio decreased to 6.49%, down from 6.73% at the end of 2022.
The net impairment charge totaled AED 899 million for the first nine months of 2023. The headline
coverage ratio increased by 71 bps to 80.60% (December 2022: 79.89%) and was 120.84% inclusive
of collateral for stage 3 loans. As at 30 September 2023, total allowances for impairments amounted
Ltoiq AuEiDd i5ty,5 a8n8d m Cilalpiointa. l position
The bank’s liquidity
position remained robust with the advances to stable resources ratio at
87.23% as at 30 September 2023 (December 2022: 87.09%), compared to the UAE Central Bank
maximum of 100%.
capital ratios
CBD’s further strengthened with the capital adequacy ratio (CAR) at 16.80%, Tier 1
ratio at 15.65% and Common Equity Tier 1 (CET1) ratio at 13.34%. All capital ratios were well above
the minimum regulatory thresholds mandated by the UAE Central Bank.
YoY Var QoQ Var
(%)
Key ratios % 9M 23 9M 22 (bps) Q3 23 Q2 23 (bps)
560 87
61 13
Return on equity 21.38% 15.78% (312) 23.13% 22.26% 31
Return on assets 2.13% 1.52% (26) 2.28% 2.15% (14)
Cost to income ratio 23.72% 26.84% 570 24.04% 23.73% (112)
Non-performing loans (NPL) 6.49% 6.75% (88) 6.49% 6.63% 167
Provision coverage 80.60% 74.90% (570) 80.60% 81.72% 105
Loan-to-deposit ratio 95.89% 96.77% 121 95.89% 94.22% 37
Advances to stable resources 87.23% 92.93% 122 87.23% 86.18% 38
Capital adequacy ratio 16.80% 15.59% 128 16.80% 16.43% 42
Tier 1 ratio 15.65% 14.43% 15.65% 15.27%
CET1 ratio 13.34% 12.06% 13.34% 12.92%
Ratings
Agency Rating Outlook Date
A-
Baa1
Fitch Ratings Stable Apr-23
Moody's Stable Oct-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 1,100 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 167 ATMs/CDMs.
For further information, kindly contact: CBD Investor Relations @ investor.relations@cbd.ae
Page | 6

Sentiment: positive