Report
EUR 9.28 For Business Accounts Only

Credit costs to remain elevated on SME stress and IFRS 9


  • ​​A small earnings beat on lower than expected credit costs, while over the year earnings growth affected by elevated loan loss charges (+125%) driven by its legacy SME loans. IFRS 9 would further increase provisioning in the next 2 years for CBD.
  • Revenues remain weak on margin compression (driven by higher funding costs) and low business volumes.
  • Capital and liquidity (LCR and NSFR above 100% already) remain strong, though payout will be lower as CBD preserves its capital base against the backdrop of deteriorating profitability (driven by higher provisioning).

Underlying
Commercial Bank of Dubai(PSC)

Provider
Arqaam Capital
Arqaam Capital

Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa. 

Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research. 

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