Commercial Bank of Dubai : Consolidated Financial Statements

Commercial Bank of Dubai PSC

Group condensed consolidated interim financial statements

For the three-month period ended 31 March 2024

Commercial Bank of Dubai PSC

Group condensed consolidated interim financial statements

For the three-month period ended 31 March 2024

Contents	Page
Independent auditor's report on review of the Group condensed consolidated interim	1
financial statements
Group condensed consolidated interim statement of financial position	2
Group condensed consolidated interim statement of profit or loss	3
Group condensed consolidated interim statement of profit or loss and other	4
comprehensive income
Group condensed consolidated interim statement of changes in equity	5
Group condensed consolidated interim statement of cash flows	6
Notes to the Group condensed consolidated interim financial statements	7 - 37

Deloitte & Touche (M.E.)

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Downtown Dubai

P.O. Box 4254

Dubai

United Arab Emirates

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www.deloitte.com

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

The Board of Directors

Commercial Bank of Dubai PSC

Dubai

United Arab Emirates

Introduction

We have reviewed the accompanying interim condensed consolidated statement of financial position of Commercial Bank of Dubai PSC (the "Bank") and its subsidiaries (together referred to as the "Group") as at 31 March 2024 and the interim condensed consolidated income statement, and the related statements of comprehensive income, changes in equity and cash flows for the three months period then ended, and material accounting policy information and other explanatory notes. Management is responsible for the preparation and presentation of this interim financial information in accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS 34"). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34.

Other matter

The financial statements of the Group for the year ended 31 December 2023 were audited by another auditor who expressed an unmodified opinion on those statements on 31 January 2024. The interim financial information for the period ended 31 March 2023 was reviewed by another auditor who expressed an unmodified conclusion on that information on 3 May 2023.

Deloitte & Touche (M.E.)

Musa Ramahi

Registration No.: 872

24 April 2024

Dubai

United Arab Emirates

Akbar Ahmad (1141), Cynthia Corby (995), Faeza Sohawon (5508), Firas Anabtawi (5482), Georges Najem (809), Jazala Hamad (1267), Mohammad Jallad (1164), Mohammad Khamees Al Tah (717), Musa Ramahi (872), Mutasem M. Dajani (726), Nurani Subramanian Sundar (5540), Obada Alkowatly (1056), Rama Padmanabha Acharya (701) and Samir Madbak (386) are registered practicing auditors with the UAE Ministry of Economy.

Commercial Bank of Dubai PSC

Group condensed consolidated interim statement of profit or loss

For the three-month period ended 31 March 2024 (unaudited)

		31 March		31 March
		2024	2023
	Notes	AED'000		AED'000
		(Unaudited)		(Unaudited)
Interest income		1,619,067	1,306,924
Interest expense		(730,342)		(518,692)
Net interest income		888,725	788,232
Income from Islamic financing		220,728	176,614
Distribution on Islamic deposits		(150,133)		(76,154)
Net income from Islamic financing		70,595	100,460
Total net interest income and net income from Islamic financing		959,320	888,692
Fees and commission income		354,146	318,983
Fees and commission expense		(77,125)		(104,057)
Net fees and commission income		277,021	214,926
Other operating income	16	135,901		133,775
Total operating income		1,372,242	1,237,393
Operating expenses	17	(315,098)		(289,319)
Operating Profit before impairment		1,057,144	948,074
Net impairment loss	18	(287,048)		(372,851)
Net profit for the period before income tax expense		770,096	575,223
Income tax expense		(69,112)		-
Net profit for the period		700,984	575,223
Basic and diluted earnings per share	19	AED 0.23		AED 0.19

The attached notes from 1 to 26 form part of the Group condensed consolidated interim financial statements.

The independent auditor's report on review of the Group condensed consolidated interim financial statements is set out on page 1.

3

Commercial Bank of Dubai PSC

Group condensed consolidated interim statement of profit or loss and other comprehensive income For the three-monthperiod ended 31 March 2024 (unaudited)

Net profit for the period

Items that will not be reclassified to profit or loss:

Realised loss on sale of equity investments held at fair value through other comprehensive income

31 March

2024

AED'000

(Unaudited)

700,984

(5,176)

31 March

2023

AED'000

(Unaudited)

575,223

-

Net change in fair value of equity investments (or instruments) at FVOCI	6,513
Tax related	(121)
Items that may be subsequently reclassified to profit or loss:
Changes in fair value reserve of property	-
Changes in fair value reserve of an associate	826
Net amount transferred (or reclassified) to profit or loss on debt	(951)
investments (or instruments) at FVOCI
Net change in fair value of debt investments (or instruments) at FVOCI	2,317
		2,192
Other comprehensive income for the period, net of tax	3,408
Total comprehensive income for the period	704,392

(9,287)

-

(6,574)

722

-

71,413

65,561

56,274

631,497

The attached notes from 1 to 26 form part of the Group condensed consolidated interim financial statements.

The independent auditor's report on review of the Group condensed consolidated interim financial statements is set out on page 1.

4

Commercial Bank of Dubai PSC

Group condensed consolidated interim statement of changes in equity

For the three-month period ended 31 March 2024 (unaudited)

			Legal and
	Share capital	Tier 1	statutory	General	Capital	Fair value	Retained
		capital notes	reserve	reserve	reserve	reserve	earnings	Total
	AED'000	AED'000	AED'000	AED'000	AED'000	AED'000	AED'000	AED'000
Balance as at 1 January 2024	2,985,192	2,203,800	1,492,596	1,328,025	38,638	(552,325)	8,285,431	15,781,357
Net profit for the period	-	-	-	-	-	-	700,984	700,984
Other comprehensive income for the period, net of tax	-	-	-	-	-	8,584	(5,176)	3,408
Transactions with shareholders, recorded directly in equity
Cash dividend for 2023 (44.38%) [Note 15.1]	-	-	-	-	-	-	(1,324,828)	(1,324,828)
Directors' remuneration for 2023	-	-	-	-	-	-	(23,000)	(23,000)
Balance as at 31 March 2024 (unaudited)	2,985,192	2,203,800	1,492,596	1,328,025	38,638	(543,741)	7,633,411	15,137,921
Balance as at 1 January 2023	2,802,734	2,203,800	1,401,447	1,328,025	38,638	(693,832)	6,801,434	13,882,246
Net profit for the period	-	-	-	-	-	-	575,223	575,223
Other comprehensive income for the period, net of tax	-	-	-	-	-	56,274	-	56,274
Transactions with shareholders, recorded directly in equity
Bonus shares for 2022 (6.51%)	182,458	-	-	-	-	-	(182,458)	-
Cash dividend for 2022 (26.05%) [Note 15.1]	-	-	-	-	-	-	(730,112)	(730,112)
Directors' remuneration for 2022	-	-	-	-	-	-	(23,000)	(23,000)
Balance as at 31 March 2023 (unaudited)	2,985,192	2,203,800	1,401,447	1,328,025	38,638	(637,558)	6,441,087	13,760,631

The attached notes from 1 to 26 form part of the Group condensed consolidated interim financial statements.

The independent auditor's report on review of the Group condensed consolidated interim financial statements is set out on page 1.

5

Commercial Bank of Dubai PSC

Group condensed consolidated interim statement of cash flows

For the three-month period ended 31 March 2024 (unaudited)

		31 March		31 March
		2024	2023
	Notes	AED'000		AED'000
		(Unaudited)		(Unaudited)
OPERATING ACTIVITIES
Net profit for the period before income tax expense		770,096	575,223
Adjustments for non-cash and other items:
Depreciation and amortisation		12,328	10,818
Amortisation of (discount) / premium on investments		(100,006)	(40,188)
Amortisation of transaction cost on notes and medium term borrowings		617	239
Loss / (gain) on foreign exchange translation		5,792	(5,202)
Realised gain on sale of investments		(951)	-
Net unrealized gain on derivatives		(12,021)	(8,529)
Impairment allowance on investment securities		32	133
Other operating income		(1,896)	(78)
Dividend income		(1,754)	(1,754)
Impairment allowance on loans and advances and Islamic financing		309,193	325,225
Impairment allowance on due from banks		133	145
Impairment allowance on other assets		211	78,448
Impairment allowance on financial guarantees and loans commitments		20,362	783
Loss / (gain) on disposal of property and equipment		81		(56)
		1,002,217	935,207
Tax paid		(191)	-
Increase in negotiable Central Bank U.A.E. certificate of deposits with		-	(900,000)
original maturity of more than three months
Increase in due from banks with original maturity of more than three		(473,4 80)	(456,120)
months
Increase in loans and advances and Islamic financing		(3,787,344)	(2,240,247)
(Increase) / decrease in other assets		(241,370)	73,776
Increase / (decrease) in due to banks		939,608	(755,369)
Increase in customer deposits and Islamic customer deposits		2,054,623	5,118,485
Increase in other liabilities		551,669	320,459
Directors' remuneration paid		(23,000)		(23,000)
Net cash flow generated from operating activities		22,732	2,073,191
INVESTING ACTIVITIES
Purchase of investments		(4,000,512)	(5,363,117)
Purchase of property and equipment		(31,287)	(21,844)
Dividend income received		1,754	1,754
Proceeds from sale and matured investments		2,318,703	728,468
Proceeds from sale of property and equipment		-		56
Net cash flow used in investing activities		(1,711,342)	(4,654,683)
FINANCING ACTIVITIES
Repayment of notes and medium-term borrowings		(624,410)	-
Dividend paid		(1,324,828)		(730,112)
Net cash flow used in financing activities		(1,949,238)		(730,112)
Net decrease in cash and cash equivalents		(3,637,848)	(3,311,604)
Cash and cash equivalents at 1 January		15,416,916		17,991,801
Cash and cash equivalents at end of the period	20	11,779,068		14,680,197

The attached notes from 1 to 26 form part of the Group condensed consolidated interim financial statements.

The independent auditor's report on review of the Group condensed consolidated interim financial statements is set out on page 1.

6

Commercial Bank of Dubai PSC

Notes to the Group condensed consolidated interim financial statements

For the three-month period ended 31 March 2024 (unaudited)

1. LEGAL STATUS AND ACTIVITIES

Commercial Bank of Dubai PSC ("the Bank") was incorporated in Dubai, United Arab Emirates (U.A.E.) in 1969 and is registered as a Public Joint Stock Company (PJSC) in accordance with Federal Law No. 32 of 2021. The Bank is listed on the Dubai Financial Market. The Bank's principal activity is commercial and retail banking. The registered address of the Bank is CBD Head Office, Al Ittihad Street, P. O. Box 2668, Dubai, United Arab Emirates.

The condensed consolidated interim financial statements of the Group for the three-month period ended 31 March 2024 comprise the results of the Bank, its wholly owned subsidiaries (together referred to as

"the Group") and the Group's interest in an associate. No income of a seasonal nature was recorded in the condensed consolidated interim financial information for the three-month periods ended 31 March 2024 and 2023, respectively. Details about subsidiaries, special purpose entities and an associate:

	Ownership
	Interest	County of
Name of Subsidiary	31	31	Principle activities
Incorporation
	March	December
	2024	2023
Subsidiary
CBD Financial Services	100%	100%	UAE	Providing	brokerage facilities	for
LLC				local shares and bonds.
CBD Employment	100%	100%	UAE	Supply of manpower services.
Services One Person
Company LLC
Attijari Properties LLC	100%	100%	UAE	Self-owned property management
				services as well as buying and
				selling of real estate.
Noor Almethaq Real	100%	100%	UAE	Development of real estate.
Estate Development LLC
Special Purpose Entity
CBD (Cayman) Limited	100%	100%	Cayman	Issuance of debt securities.
			Islands
CBD (Cayman II)	100%	100%	Cayman	Transact and negotiate derivative
Limited			Islands	agreements.
VS 1897 (Cayman)	100%	100%	Cayman	Manage investment acquired in the
Limited			Islands	settlement of debt.
CBD Digital Lab Limited	100%	100%	UAE	Technology	research		and
[Subsidiary of VS 1897				development.
(Cayman) Limited]
Hortin Holding Limited	100%	100%	British Virgin	Manage	real	estate	related
[Subsidiary of VS 1897			Islands	investment	acquired	in	the
(Cayman) Limited]				settlement of debt.
Lodge Hill Limited	100%	100%	British Virgin	Manage	real	estate	related
[Subsidiary of VS 1897			Islands	investment	acquired	in	the
(Cayman) Limited]				settlement of debt.
Westdene Investment	100%	100%	British Virgin	Manage	real	estate	related
Limited			Islands	investment	acquired	in	the
[Subsidiary of VS 1897				settlement of debt.
(Cayman) Limited]
Associate
National General	17.8%	17.8%	UAE	Life and general insurance business
Insurance Co. (PJSC)				as well as certain reinsurance
				business.
		7

Commercial Bank of Dubai PSC

Notes to the Group condensed consolidated interim financial statements

For the three-month period ended 31 March 2024 (unaudited)

2. BASIS OF PREPARTION

2.1 Statement of compliance

These Group condensed consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial reporting. These condensed consolidated interim financial statements do not include all the information required for full annual audited consolidated financial statements and should be read in conjunction with the audited consolidated financial statements of the Group as at and for the year ended 31 December 2023.

The accounting policies adopted in the preparation of these Group condensed consolidated interim financial statements are consistent with those followed in the preparation of these Group audited consolidated financial statements for the year ended 31 December 2023, except for the new and revised International Financial Reporting Standards mentioned in note 5.

A number of new accounting standards and amendments to accounting standards are effective for annual periods beginning after 1 January 2024 and earlier application is permitted. The Group has not early adopted any of the forthcoming new or amended accounting standards in preparing these condensed consolidated interim financial statements.

2.2 Functional and presentation currency

These Group condensed consolidated interim financial statements are presented in United Arab Emirates Dirhams ("AED"), which is the Group's functional and presentation currency, rounded to the nearest thousand unless otherwise stated.

2.3 Basis of consolidation

These Group condensed consolidated interim financial statements comprise the financial statements of the Bank, its wholly owned subsidiaries (together referred to as "the Group"), which it controls and the Group's interest in an associate, as at 31 March 2024. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

3. MATERIAL ACCOUNTING POLICIES

3.1 Financial Assets

3.1.1 Classification

The Group classifies financial assets on initial recognition in the following categories:

• Amortised cost;
• Fair value through other comprehensive income (FVOCI); and
• Fair value through profit or loss (FVPL).

Business model assessment

The Group makes an assessment of the objective of a business model in which a financial asset is held at portfolio level, because this reflects the way the business is managed and information is provided to the management. The assessment is not determined by a single factor or activity. Instead, the entity considers all relevant information available at the date of the assessment. The information considered includes:

8