Commercial Bank International P S C : CBI Financial Statement December 2021 - English /Arabic

Commercial Bank

International P.S.C.

REPORTS AND THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

These audited consolidated financial statements are subject to approval of the Central Bank of the UAE and adoption by shareholders at the annual general meeting.

Commercial Bank International P.S.C.

Table of contents

	Pages
Board of Directors' report	1
Independent auditor's report	2
Consolidated statement of financial position	8
Consolidated income statement	9
Consolidated statement of comprehensive income	10
Consolidated statement of changes in equity	11
Consolidated statement of cash flows	12
Notes to the consolidated financial statements	13
Appendix: Glossary of abbreviations	101

Deloitte & Touche (M.E.)

Building 3, Level 6

2Emaar Square

Downtown Dubai

P.O. Box 4254

Dubai

United Arab Emirates

Tel: [phone]

Fax:[phone]

www.deloitte.com

INDEPENDENT AUDITOR'S REPORT

The Shareholders

Commercial Bank International P.S.C

United Arab Emirates

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Commercial Bank International P.S.C (the "Bank") and its subsidiaries (together the "Group"), United Arab Emirates which comprise the consolidated statement of financial position as at 31 December 2021, and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group, as at 31 December 2021, and its consolidated financial performance and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRSs").

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (the "IESBA Code") together with the other ethical requirements that are relevant to our audit of the Group's consolidated financial statements in the United Arab Emirates and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Cont'd…

Akbar Ahmad (1141), Cynthia Corby (995), Georges Najem (809), Mohammad Jallad (1164), Mohammad Khamees Al Tah (717), Musa Ramahi (872), Mutasem M. Dajani (726), Obada Alkowatly (1056), Rama Padmanabha Acharya (701) and Samir Madbak (386) are registered practicing auditors with the UAE Ministry of Economy.

3

Independent Auditor's Report to the Shareholders of Commercial Bank International P.S.C (continued)

Key Audit Matters

Key audit matter	How our audit addressed the key audit matter
IT systems and controls over financial reporting

We identified IT systems and controls over the Bank's financial reporting as an area of focus due to the extensive volume and variety of transactions which are processed daily by the Bank and rely on the effective operation of automated and IT dependent manual controls. There is a risk that automated accounting procedures and related internal controls are not accurately designed and operating effectively. In particular, the incorporated relevant controls are essential to limit the potential for fraud and error as a result of change to an application or underlying data.

Our audit approach relies on automated controls and therefore the following procedures were designed to test access and control over IT systems:

We obtained an understanding of the applications relevant to financial reporting and the infrastructure supporting these applications.

We tested IT general controls relevant to automated controls and computer-generated information covering access security, program changes, data centre and network operations.

We examined computer generated information used in financial reports from relevant applications and key controls over their report logics.

We performed testing on the key automated controls on significant IT systems relevant to business processes.

Measurement of expected credit losses

The assessment of the Bank's determination of impairment allowances for finance receivable requires management to make judgements over the staging of financial assets and measurement of the Expected Credit Loss ("ECL"). The audit was focused on this matter due to the materiality of the finance receivables to customers (representing 56.7% of total assets) and the complexity of the judgements, assumptions and estimates used in the ECL models. Refer to Note 3.26 to the consolidated financial statements for the accounting policy and Note 39.1 for the credit risk disclosure.

We performed the following audit procedures on the computation of the ECL included in the Group's consolidated financial statements for the year ended 31 December 2021:

• Gained an understanding of the credit risk management process and the estimation process of determining impairment allowances for loans and advances and tested the operating effectiveness of relevant controls within these processes.
• For a sample of exposures, we performed a detailed credit review and challenged the appropriateness of the Group's application of the staging criteria.
• Tested the completeness and accuracy of the data used in the calculation of ECL;
• Assessed the Conceptual framework used for developing the Group's impairment policy in the context of its compliance with the requirements of IFRS 9.