Commercial Bank of Dubai has delivered a net profit of AED 1,451 million for the year ended 31 December 2021, up 29.5% year-on-year. The improved operating performance coupled with lower expected credit losses have contributed to the increase in net profit. Notwithstanding lower interbank interest rates, net interest income is up by 10.1% compared to 2020 primarily from strong business growth and lower funding costs. The economic outlook and business confidence for 2022 remains positive for further performance improvement in the year ahead.
Commenting on the bank’s performance, Dr. Bernd van Linder, Chief Executive Officer said, “This year is a particularly special milestone with the UAE turning 50. I would like to take this opportunity to reaffirm our commitment to the UAE community, continuing to back the efforts of the government to make the UAE one of the happiest and most developed countries in the world.
He added, “CBD has reached a record AED 114 billion in assets driven by strong growth in loans which have increased 17% compared to 2020. Overall, our net profit was AED 1,451 million, above the prior year by 29.5% on the back of improved net interest income, stable non funded income and lower expected credit losses.
We remain positive looking ahead to 2022, delivering the most innovative products for all our customers and continue setting the standard in digital banking experience.”
2021 full year results:
- Record net profit at AED 1,451 million, 29.5% above the prior year
- Record cash dividend of 25.88%
- Industry leading market share growth
- Operating income was AED 3,183 million, up by 6.9% primarily due to higher net interest income and improved fee and commission income
- Operating expenses were AED 865 million, up by 7.2%
- Operating profit was AED 2,318 million, up by 6.8%
- Net impairment allowances were AED 867 million, down 17.5%
As at 31 December 2021:
- Capital ratios remained strong with the capital adequacy ratio (CAR) at 15.82%, Tier 1 ratio at 14.66% and Common Equity Tier 1 (CET1) ratio at 12.13%
- Gross loans were AED 80.5 billion, an increase of 16.5% compared to 31 December 2020
- Advances to stable resources ratio (ASRR) stood at 88.00%
Income Statement
Operating income for the full year of 2021 amounted to AED 3,183 million, an increase of 6.9%, attributable to higher Net Interest Income (NII) by 10.1% as a result of higher volumes and lower funding costs, and 1.2% increase in Other Operating Income (OOI) from increased business activities.
Operating expenses were AED 865 million, up 7.2% compared to the full year of 2020. The cost-to-income ratio remains outstanding at 27.18%.
Balance Sheet
Total assets were AED 114.2 billion as at 31 December 2021, an increase of 17.3% compared to AED 97.4 billion as at 31 December 2020.
Net loans and advances were AED 76.4 billion, registering an increase of 17.1% compared to AED 65.3 billion as at 31 December 2020.
Customers’ deposits were AED 82.7 billion as at 31 December 2021, representing an increase of 18.6% compared to AED 69.8 billion as at 31 December 2020. Low cost current and savings accounts (CASA) constitute 45.2% of the total customer deposit base, while the financing-to-deposits ratio stood at 92.4%.
Asset Quality
The non-performing loan (NPL) ratio increased to 6.95%, up from 6.77% at the end of 2020.
In accordance with IFRS9 accounting standards, the net impairment charge totaled AED 867 million for the full year of 2021. The headline coverage ratio was 62.59% and 119.53% inclusive of collateral for stage 3 loans up from 110.15% at 31 December 2020. As at 31 December 2021, total allowances for impairments amounted to AED 4,024 million.
Liquidity and Capital position
The bank’s liquidity position remained robust with the advances to stable resources ratio at 88.00% as at 31 December 2021 (Dec 2020: 86.33%), compared to the UAE Central Bank maximum of 100%.
CBD’s capital ratios remained strong with the capital adequacy ratio (CAR) at 15.82%, Tier 1 ratio at 14.66% and Common Equity Tier 1 (CET1) ratio 12.13%. All capital ratios were well above the minimum regulatory thresholds mandated by the UAE Central Bank.
