Commercial Bank of Dubai (CBD) reported its financial results for the first quarter of 2022.
Commercial Bank of Dubai has delivered a net profit of AED 431 million for the first quarter of 2022, up 32.6% compared to the first quarter of 2021. Higher revenue across Net Interest and Other Operating Income, underpinned by solid loan growth, generated a robust increase in net profit. Notably, market interest rates have risen, strengthening margins in the first quarter. The positive economic outlook together with improved business confidence is expected to facilitate further performance improvements throughout 2022.
Commenting on the bank’s performance, Dr. Bernd van Linder, Chief Executive Officer said, “CBD has reached a record AED 119 billion in assets attributable to growth in loans which have increased by 3.4% since 31 December 2021. Overall, our net profit was AED 431 million, well above the prior comparative period on the back of higher revenue and overall improved business performance. CBD continues to deliver on its long-term strategy and is well positioned for continued success for the remainder of 2022 and beyond.”
He added, “I’m extremely proud that CBD was ranked by Forbes as the Number One Bank in the UAE in the World’s Best Banks 2022 report. This is affirmation of our commitment to our customers.
This year is special as CBD was the first bank to host its Annual General Meeting (AGM) at Expo 2020, reflecting our commitment in supporting United Arab Emirates’ innovation. CBD’s customer promise will shape much of what we are striving to achieve over the coming years and as a bank that backs our customers’ ambitions.”
Q1 2022 results:
- Net profit at AED 431 million, 32.6% above the prior comparative period
- Operating income was AED 859 million, up 17.5% driven by net interest income, fees and commissions
- Operating expenses were AED 236 million, down 2.1% from Q4 2021
- Operating profit was AED 623 million, up by 16.4% comparable to Q1 2021
- Net impairment allowances were AED 192 million, down 8.6%
As at 31 March 2022:
- Capital ratios remained strong with the capital adequacy ratio (CAR) at 15.61%, Tier 1 ratio at 14.46% and Common Equity Tier 1 (CET1) ratio at 12.00%
- Gross loans were AED 83.2 billion, an increase of 3.4% compared to 31 December 2021
- Advances to stable resources ratio (ASRR) stood at 90.42%
Income Statement
Operating income was AED 859 million for the first quarter of 2022, an increase of 17.5%, attributable to higher Other Operating Income (OOI) from strengthened business activities.
Operating expenses were AED 236 million, on the back of investment in digitisation, growth and risk management. The cost-to-income ratio remains excellent at 27.47% and is comparable with the last quarter of 2021.
(AED Million)
| Income statement | Q1 22 | Q1 21 | YoY Var | Q1 22 | Q4 21 | QoQ Var |
| Net interest income | 543 | 476 | 14.1% | 543 | 510 | 6.5% |
| Other operating income | 316 | 255 | 23.9% | 316 | 285 | 10.9% |
| Total income | 859 | 731 | 17.5% | 859 | 795 | 8.1% |
| Operating expenses | 236 | 196 | 20.4% | 236 | 241 | (2.1%) |
| Operating profit | 623 | 535 | 16.4% | 623 | 554 | 12.5% |
| Net impairment allowances | 192 | 210 | (8.6%) | 192 | 154 | 24.7% |
| Net profit | 431 | 325 | 32.6% | 431 | 399 | 8.0% |
Balance Sheet
Total assets were AED 119.0 billion as at 31 March 2022, an increase of 4.2% compared to AED 114.2 billion as at 31 December 2021.
Net loans and advances were AED 78.7 billion, registering an increase of 2.9% compared to AED 76.4 billion as at 31 December 2021.
Customers’ deposits were AED 82.8 billion as at 31 March 2022, marginally higher than at 31 December 2021. Low cost current and savings accounts (CASA) constitute 46.8% of the total customer deposit base, while the financing-to-deposits ratio stood at 95.0%.
(AED Million)
| Balance sheet | Q1 22 | Q1 21 | YoY Var | Q1 22 | Q4 21 | QoQ Var |
| Gross loans and advances | 83,199 | 73,619 | 13.0% | 83,199 | 80,465 | 3.4% |
| Allowances for impairment | 4,513 | 4,021 | 12.2% | 4,513 | 4,024 | 12.2% |
| Net loans and advances | 78,686 | 69,598 | 13.1% | 78,686 | 76,441 | 2.9% |
| Total assets | 119,036 | 102,471 | 16.2% | 119,036 | 114,213 | 4.2% |
| Customers’ deposits | 82,808 | 70,902 | 16.8% | 82,808 | 82,722 | 0.1% |
| Total Equity | 12,996 | 12,623 | 3.0% | 12,996 | 13,567 | (4.2%) |
Asset Quality
The non-performing loan (NPL) ratio decreased to 6.93%, down from 6.95% at the end of 2021.
The net impairment charge totaled AED 192 million for the first quarter of 2022. The headline coverage ratio increased by 499 bps to 67.6% (Dec 2021: 62.6%) and 117.99% inclusive of collateral for stage 3 loans. As at 31 March 2022, total allowances for impairments amounted to AED 4,513 million.
Liquidity and Capital position
The bank’s liquidity position remained robust with the advances to stable resources ratio at 90.42% as at 31 March 2022 (Dec 2021: 88.00%), compared to the UAE Central Bank maximum of 100%.
CBD’s capital ratios remained strong with the capital adequacy ratio (CAR) at 15.61%, Tier 1 ratio at 14.46% and Common Equity Tier 1 (CET1) ratio at 12.00%. All capital ratios were well above the minimum regulatory thresholds mandated by the UAE Central Bank.
| Key ratios % |
Q1 22 |
Q1 21 |
YoY Var (bps) |
Q1 22 |
Q4 21 |
% QoQ Var (bps) |
| Return on equity | 15.71% | 12.38% | 333 | 15.71% | 14.37% | 134 |
| Return on assets | 1.48% | 1.30% | 18 | 1.48% | 1.44% | 4 |
| Cost to income ratio | 27.47% | 26.80% | 67 | 27.47% | 30.33% | (286) |
| Non-performing loans (NPL) | 6.93% | 6.62% | 31 | 6.93% | 6.95% | (2) |
| Provision coverage | 67.58% | 70.66% | (308) | 67.58% | 62.59% | 499 |
| Financing-to-deposit ratio | 95.02% | 98.16% | (314) | 95.02% | 92.41% | 261 |
| Advances to stable resources | 90.42% | 92.00% | (158) | 90.42% | 88.00% | 242 |
| Capital adequacy ratio | 15.61% | 16.25% | (64) | 15.61% | 15.82% | (21) |
| Tier 1 ratio | 14.46% | 15.09% | (63) | 14.46% | 14.66% | (20) |
| CET1 ratio | 12.00% | 12.44% | (44) | 12.00% | 12.13% | (13) |
