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Commercial Bank of Dubai
Management Discussion and Analysis Report
First Quarter 2023
3rd May 2023
Page | 1Commercial Bank of Dubai (CBD) reports net profit of
AED 575m, up 33.4% on the prior comparative period
Key Performance Indicators
Net Profit Return on Equity Cost to Income
AED 575m 20.04% 23.38%
Capital Adequacy
Assets CET1 ratio
Ratio
AED 119b 12.74%
16.33%
Prudent provisioning for
Robust performance uplift in Q1
expected credit losses
2023 compared to Q1 2022
Net impairment allowances were
Net profit of AED 575 million up
AED 373 million. Coverage ratio at
33.4% versus the prior comparative
80.69%, up 1,311 bps compared to
period
Q1 2022
Strong balance sheet supporting
liquidity, funding and capital
Cost to income ratio ratios
Excellent cost to income ratio at Gross loans were AED 81.8 billion,
23.38% an increase of 2.7% compared to
31 December 2022
Page | 2Dubai, 3rd May 2023: Commercial Bank of Dubai (CBD) today reported its financial results for the
first quarter of 2023.
Commercial Bank of Dubai has delivered an excellent net profit of AED 575 million for the first
quarter of 2023, up 33.4% compared to the corresponding period in 2022. Stronger revenue across
Net Interest and Other Operating Income, supported by solid loan growth generated a significant
increase in net profit. Notably, market interest rates rose, which contributed to the financial
performance, delivered at outstanding returns for the quarter. The UAE economic outlook and
business confidence remains positive, backed by resilient domestic activity that should underpin a
growing economy throughout 2023.
Commenting on the bank’s performance, Dr. Bernd van Linder, Chief Executive Officer, said, “CBD
has delivered an excellent result attributable to strong revenue growth at outstanding returns.
Overall, our net profit for Q1 2023 was a record AED 575 million, well above the prior
comparative period on account of higher net interest income and a strong operating performance.
We remain focused on the disciplined execution of our long-term strategy and are well placed for
sustained success for the remainder of 2023 and beyond.
Default digital capability in banking services is instrumental to our ongoing success, and so we
will continue to develop pioneering banking solutions to ensure we provide our customers with
a high quality, seamless banking experience. We welcome the ongoing government initiated
digital transformation programmes across the UAE, including the CBUAE FIT programme, and as
a leading UAE Bank, we will be a central participant in these programmes, supporting our
customers and the broader UAE economy.
There has been noteworthy advancement in our ESG programme by embedding ESG principles
across the Bank. We will continue to invest in our employees and provide them with the skills,
knowledge, and resources to drive innovation and support our digital and ESG strategy.”
Q1 2023 results:
► Net profit was AED 575 million, 33.4% above the prior comparative period
► Operating income was AED 1,237 million, up 44.0% driven by net interest income, fees and
commissions
► Operating expenses were AED 289 million
► Operating profit was AED 948 million, up by 52.2%
► Net impairment allowances were AED 373 million
As at 31 March 2023:
► Capital ratios remained strong with the capital adequacy ratio (CAR) at 16.33%, Tier 1 ratio
at 15.18% and Common Equity Tier 1 (CET1) ratio at 12.74%, well in excess of regulatory
requirements
► Gross loans were AED 81.8 billion, an increase of 2.7% compared to 31 December 2022
► Advances to stable resources ratio (ASRR) stood at 84.78%, a decrease of 231 bps
compared to 31 December 2022
Page | 3Income Statement
Operating income for the first quarter was AED 1,237 million, up 44.0%, attributable to an increase
in Net Interest Income (NII) by 63.7% on higher interest rates, and growth in Other Operating
Income (OOI) by 10.4% from improved business activities.
Operating expenses were AED 289 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 23.38%.
(AED Million)
Income statement Q1 23 Q1 22 Var Q1 23 Q4 22 QoQ Var
Net interest income 889 543 63.7% 889 823 8.0%
Other operating income 349 316 10.4% 349 270 29.3%
Total income 1,237 859 44.0% 1,237 1,093 13.2%
Operating expenses 289 236 22.5% 289 267 8.2%
Operating profit 948 623 52.2% 948 826 14.8%
Net impairment allowances 373 192 94.3% 373 323 15.5%
Net profit 575 431 33.4% 575 503 14.3%
Balance Sheet
Total assets were AED 119.3 billion as at 31 March 2023, an increase of 2.8% compared to AED
116.1 billion as at 31 December 2022.
Net loans and advances were AED 76.5 billion, registering an increase of 2.6% compared to AED
74.6 billion as at 31 December 2022.
Customers’ deposits were AED 86.2 billion as at 31 March 2023, representing an increase of 6.3%
compared to AED 81.1 billion as at 31 December 2022. Low-cost current and savings accounts
(CASA) constitute 48.1% of the total customer deposit base, while the financing-to-deposits ratio
stood at 88.8%.
(AED Million)
Balance sheet Mar 23 Mar 22 YoY Var Mar 23 Dec 22 QoQ Var
Gross loans and advances 81,788 83,199 (1.7%) 81,788 79,620 2.7%
Allowances for impairment 5,266 4,513 16.7% 5,266 5,012 5.1%
Net loans and advances 76,522 78,686 (2.8%) 76,522 74,608 2.6%
Total assets 119,315 119,036 0.2% 119,315 116,074 2.8%
Customers' deposits 86,193 82,808 4.1% 86,193 81,074 6.3%
Total Equity 13,761 12,996 5.9% 13,761 13,882 (0.9%)
Page | 4Asset Quality
The non-performing loan (NPL) ratio decreased to 6.71%, down from 6.73% at the end of 2022.
The net impairment charge totaled AED 373 million for the first quarter of 2023. The headline
coverage ratio increased by 80 bps to 80.69% (December 2022: 79.89%) and was 120.02% inclusive
of collateral for stage 3 loans. As at 31 March 2023, total allowances for impairments amounted to
AED 5,266 million.
Liquidity and Capital position
The bank’s liquidity position remained robust with the advances to stable resources ratio at
84.78% as at 31 March 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 16.33%, Tier 1
ratio at 15.18% and Common Equity Tier 1 (CET1) ratio at 12.74%. All capital ratios were well above
the minimum regulatory thresholds mandated by the UAE Central Bank.
(%)
YoY Var QoQ Var
Key ratios % Q1 23 Q1 22 (bps) Q1 23 Q4 22 (bps)
Return on equity 20.04% 15.71% 433 20.04% 17.78% 226
Return on assets 1.95% 1.48% 47 1.95% 1.72% 23
Cost to income ratio 23.38% 27.47% (409) 23.38% 24.43% (105)
Non-performing loans (NPL) 6.71% 6.93% (22) 6.71% 6.73% (2)
Provision coverage 80.69% 67.58% 1,311 80.69% 79.89% 80
Financing-to-deposit ratio 88.78% 95.02% (624) 88.78% 92.02% (324)
Advances to stable resources 84.78% 90.42% (564) 84.78% 87.09% (231)
Capital adequacy ratio 16.33% 15.61% 72 16.33% 16.04% 29
Tier 1 ratio 15.18% 14.46% 72 15.18% 14.90% 28
CET1 ratio 12.74% 12.00% 74 12.74% 12.40% 34
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
Company (P SC).
STthoec kbank is listed oJn 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 170 ATMs/CDMs.
For further information, kindly contact: CBD Investor Relations @ investor.relations@cbd.ae
Page | 6

Sentiment: positive