Commercial Bank of Dubai PSC : Consolidated Financial Statements

Commercial Bank of Dubai PSC

Group condensed consolidated interim financial statements

For the nine-month period ended 30 September 2023

Commercial Bank of Dubai PSC

Group condensed consolidated interim financial statements

For the nine-month period ended 30 September 2023

Contents	Page
Independent auditor's report on review of the Group condensed consolidated interim	1 - 2
financial statements
Group condensed consolidated interim statement of financial position	3
Group condensed consolidated interim statement of profit or loss	4
Group condensed consolidated interim statement of profit or loss and other	5
comprehensive income
Group condensed consolidated interim statement of changes in equity	6
Group condensed consolidated interim statement of cash flows	7
Notes to the Group condensed consolidated interim financial statements	8 - 38

Commercial Bank of Dubai PSC

Group condensed consolidated interim statement of profit or loss

For the three-month and nine-month periods ended 30 September 2023 (unaudited)

		Three-month period ended		Nine-month period ended
		30 September		30 September		30 September		30 September
		2023	2022	2023	2022
	Notes	AED'000		AED'000		AED'000		AED'000
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Interest income		1,562,749	874,151	4,314,362	2,182,427
Interest expense		(736,501)		(226,135)		(1,886,468)		(506,648)
Net interest income		826,248	648,016	2,427,894	1,675,779
Income from Islamic financing		188,633	128,943	547,657	315,940
Distribution on Islamic deposits		(129,686)		(56,848)		(322,017)		(138,615)
Net income from Islamic financing		58,947	72,095	225,640	177,325
Total net interest income and net		885,195	720,111	2,653,534	1,853,104
income from Islamic financing
Fees and commission income		334,130	265,766	940,965	838,556
Fees and commission expense		(70,187)		(86,725)		(219,933)		(252,624)
Net fees and commission income		263,943	179,041	721,032	585,932
Share of gain of an associate		3,284	2,551	6,140	6,619
Other operating income	16	102,108		84,229		335,315		274,276
Total operating income		1,254,530	985,932	3,716,021	2,719,931
Operating expenses	17	(301,537)		(255,490)		(881,297)		(730,100)
Operating Profit before impairment		952,993	730,442	2,834,724	1,989,831
Net impairment loss	18	(242,910)		(274,820)		(899,152)		(667,828)
Net profit for the period		710,083		455,622		1,935,572		1,322,003
Basic and diluted earnings per share	19	0.24		0.15		0.63		0.42

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 pages 1 to 2.

4

Commercial Bank of Dubai PSC

Group condensed consolidated interim statement of profit or loss and other comprehensive income For the three-monthand nine-monthperiods ended 30 September 2023 (unaudited)

Three-month period ended

Nine-month period ended

Net profit for the period

Items that will not be reclassified to profit or loss:

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

Net change in fair value of equity investments (or instruments) at FVOCI

Items that are or may be subsequently reclassified to profit or loss:

Changes in fair value of effective portion of cash flow hedge

Changes in fair value reserve of property

Changes in fair value reserve of an associate

Net amount transferred (or reclassified) to profit or loss on debt investments (or instruments) at FVOCI

Net change in fair value of debt investments (or instruments) at FVOCI

30 September

2023

AED'000

(Unaudited)

710,083

438

(3,406)

-

(7,524)

(100)

-

(67,637)

(75,261)

30 September

2022

AED'000

(Unaudited)

455,622

-

(22,206)

-

-

(776)

-

(166,515)

(167,291)

30 September

2023

AED'000

(Unaudited)

1,935,572

438

(16,773)

-

(13,869)

423

-

(10,529)

(23,975)

30 September

2022

AED'000

(Unaudited)

1,322,003

406

4,443

1,641

-

(1,260)

(398)

(695,712)

(695,729)

Other comprehensive loss for the period

Total comprehensive income for the period

(78,229) (189,497)

631,854266,125

(40,310) (690,880)

1,895,262631,123

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 pages 1 to 2.

5

Commercial Bank of Dubai PSC

Group condensed consolidated interim statement of changes in equity

For the nine-month period ended 30 September 2023 (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 2023	2,802,734	2,203,800	1,401,447	1,328,025	38,638	(693,832)	6,801,434	13,882,246
Transactions with shareholders, recorded directly in equity
Bonus shares for 2022 (6.51%)	182,458	-	-	-	-	-	(182,458)	-
Cash dividend for 2022 (26.05%)	-	-	-	-	-	-	(730,112)	(730,112)
Directors' remuneration for 2022	-	-	-	-	-	-	(23,000)	(23,000)
Interest on Tier 1 capital notes	-	-	-	-	-	-	(66,114)	(66,114)
Share of Director's remuneration of an associate	-	-	-	-	-	-	(866)	(866)
Other reserves	-	-	-	-	-	-	(6,694)	(6,694)
Other comprehensive income
Net profit for the period	-	-	-	-	-	-	1,935,572	1,935,572
Gain on sale of equity investments at fair value	-	-	-	-	-	(438)	438	-
through other comprehensive income
Other comprehensive loss for the period	-	-	-	-	-	(40,310)	-	(40,310)
Total comprehensive income for the period	-	-	-	-	-	(40,748)	1,936,010	1,895,262
Balance as at 30 September 2023 (unaudited)	2,985,192	2,203,800	1,401,447	1,328,025	38,638	(734,580)	7,728,200	14,950,722
Balance as at 1 January 2022	2,802,734	2,203,800	1,401,447	1,328,025	38,638	(61,174)	5,853,744	13,567,214
Transactions with shareholders, recorded directly in equity
Cash dividend for 2021 (25.88%)	-	-	-	-	-	-	(725,348)	(725,348)
Directors' remuneration for 2021	-	-	-	-	-	-	(19,250)	(19,250)
Interest on Tier 1 capital notes	-	-	-	-	-	-	(66,114)	(66,114)
Share of Director's remuneration of an associate	-	-	-	-	-	-	(909)	(909)
Other comprehensive income
Net profit for the period	-	-	-	-	-	-	1,322,003	1,322,003
Gain on sale of equity investments at fair value	-	-	-	-	-	(406)	406	-
through other comprehensive income
Other comprehensive loss for the period	-	-	-	-	-	(690,880)	-	(690,880)
Total comprehensive income for the period	-	-	-	-	-	(691,286)	1,322,409	631,123
Balance as at 30 September 2022 (unaudited)	2,802,734	2,203,800	1,401,447	1,328,025	38,638	(752,460)	6,364,532	13,386,716

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 pages 1 to 2.

6

Commercial Bank of Dubai PSC

Group condensed consolidated interim statement of cash flows

For the nine-month period ended 30 September 2023 (unaudited)

		30 September		30 September
		2023	2022
	Notes	AED'000		AED'000
		(Unaudited)		(Unaudited)
OPERATING ACTIVITIES
Net profit for the period		1,935,572	1,322,003
Adjustments for non-cash and other items:
Depreciation and amortisation		35,579	25,963
Amortisation of (discount) / premium on investments		(145,673)	1,821
Amortisation of transaction cost on notes and medium term borrowings		725	726
Loss on foreign exchange translation		3,435	45,437
Unrealized gain on investments at fair value through profit or loss		(43)	-
Realised loss / (gain) on sale of investments		660	(1,382)
Net unrealized loss on derivatives		37,704	49,538
Impairment allowance on investment securities		362	90
Share of profit of an associate		(6,140)	(6,619)
Dividend income		(8,005)	(4,544)
Impairment allowance on loans and advances and Islamic financing		826,744	740,572
Charge / (reversal) of impairment allowance on due from banks		673	(167)
Impairment allowance on other assets		151,516	30,123
Gain on disposal of property and equipment and investment properties		(113)		(28)
		2,832,996	2,203,533
Increase in negotiable Central Bank U.A.E. certificate of deposits with		(250,000)	(1,250,000)
original maturity of more than three months
(Increase) / decrease in due from banks with original maturity of more than		(1,305,153)	109,043
three months
Increase in loans and advances and Islamic financing		(9,108,304)	(3,437,611)
Decrease / (increase) in other assets		257,600	(191,768)
Decrease in due to banks with original maturity of more than three months		(447,378)	(368,688)
Increase / (decrease) in customer deposits and Islamic customer deposits		5,360,946	(943,386)
Increase in other liabilities		1,127,713	141,670
Directors' remuneration paid		(23,000)		(19,250)
Net cash flow used in operating activities		(1,554,580)	(3,756,457)
INVESTING ACTIVITIES
Purchase of investments		(10,628,158)	(9,760,368)
Purchase of property and equipment and investment properties		(80,432)	(47,856)
Dividend income received		8,005	4,544
Dividend from an associate		6,653	7,984
Proceeds from sale of investments		6,166,305	8,172,795
Proceeds from sale of property and equipment and investment properties		443		2,529
Net cash flow used in investing activities		(4,527,184)	(1,620,372)
FINANCING ACTIVITIES
Issuance / (repayment) of notes and medium term borrowings		3,670,467	(551,442)
Interest on Tier 1 capital notes		(66,114)	(66,114)
Dividend paid		(730,112)		(725,348)
Net cash flow from / (used in) financing activities		2,874,241		(1,342,904)
Net decrease in cash and cash equivalents		(3,207,523)	(6,719,733)
Cash and cash equivalents at 1 January		16,182,045		16,036,787
Cash and cash equivalents at end of the period	20	12,974,522		9,317,054

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 pages 1 to 2.

7

Commercial Bank of Dubai PSC

Notes to the Group condensed consolidated interim financial statements

For the nine-month period ended 30 September 2023 (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 statement of the Group for the nine-month period ended 30 September 2023 comprise the results of the Bank, its wholly owned subsidiaries (together referred to as

"the Group") and the Group's interest in an associate.

Details about subsidiaries, special purpose entities and an associate:
	Ownership
Name of Subsidiary	Interest		County of	Principle activities
30 Sep	31 Dec		Incorporation
	2023	2022
Subsidiary
CBD Financial Services	100%	100%		UAE	Providing	brokerage facilities	for
LLC		local shares and bonds.
CBD Employment
Services One Person	100%	100%		UAE	Supply of manpower services.
Company LLC
					Self-owned property management
Attijari Properties LLC	100%	100%		UAE	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					Technology		research		and
[Subsidiary of VS 1897	100%	100%		UAE
	development.
(Cayman) Limited]
Hortin Holding Limited				British Virgin	Manage	real	estate	related
[Subsidiary of VS 1897	100%	100%		investment		acquired		in	the
	Islands
(Cayman) Limited]				settlement of debt.
Lodge Hill Limited				British Virgin	Manage	real	estate	related
[Subsidiary of VS 1897	100%	100%		investment		acquired		in	the
	Islands
(Cayman) Limited]				settlement of debt.
Westdene Investment					Manage	real	estate	related
Limited				British Virgin
100%	100%		investment		acquired		in	the
[Subsidiary of VS 1897		Islands
			settlement of debt.
(Cayman) Limited]
Associate
National General					Life and general insurance business
17.8%	17.8%		UAE	as well	as	certain	reinsurance
Insurance Co. (PJSC)
				business.
			8