Commercial Bank International: Interim Financial Information - 31 March 2021

Transcription

1. Commercial Bank International P .S.C. Review report and interim financial information For the three months period ended 31 March 2021
2. Commercial Bank International P .S.C. Table of contents Pages Independent auditor’s report on review of interim financial information 1 Condensed consolidated statement of financial position 2 Condensed consolidated income statement 3 Condensed consolidated statement of comprehensive income 4 Condensed consolidated statement of changes in equity 5 Condensed consolidated statement of cash flows 7 Notes to the condensed consolidated financial statements 9 Appendix: Glossary of abbreviations 38
3. Deloitte & Touche (M.E.) Building 3, Level 6 Emaar Square Downtown Dubai P.O. Box 4254 Dubai United Arab Emirates Tel: +971 (0) 4 376 8888 Fax:+971 (0) 4 376 8899 www.deloitte.com August 17th, 2016 REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION The Board of Directors Commercial Bank International P.S.C. Dubai United Arab Emirates Introduction We have reviewed the accompanying condensed consolidated statement of financial position of Commercial Bank International P.S.C., Dubai, United Arab Emirates (the “Bank”) and its Subsidiaries (together referred to as the "Group") as at 31 March 2021 and the related condensed consolidated income statement, comprehensive income, changes in equity and cash flows for the three month period then ended. 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. Deloitte & Touche (M.E.) Musa Ramahi Registration No.: 872 6 May 2021 Dubai United Arab Emirates 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.
4. 2 Commercial Bank International P .S.C. Condensed consolidated statement of financial position as at 31 March 2021 Note Assets Cash and balances with the Central Bank of the UAE Derivative financial instruments Deposits and balances due from banks Loans and advances to customers Islamic financing and investing assets Receivables and other assets Property inventory Investment securities measured at fair value Investment securities measured at amortised cost Investment properties Intangible assets Property and equipment Non-current asset held for sale Total assets Liabilities and equity Liabilities Balance due to the Central Bank of the UAE Derivative financial instruments Deposits and balances due to banks Customers’ deposits Islamic customers’ deposits Payables and other liabilities Liabilities associated with non-current asset held for sale Total liabilities Equity Share capital Tier 1 Capital Securities Reserves Accumulated losses Equity attributable to owners of the Bank Non-controlling interests Total equity Total liabilities and equity 8 9 10 11 12 8 13 14 15 16 31 Mar 2021 AED ’000 (unaudited) 31 Dec 2020 AED ’000 (audited) 825,810 26,478 129,398 9,651,015 574,671 2,335,831 630,885 165,182 1,368,311 51,495 50,579 67,498 92,665 15,969,818 1,522,628 33,506 79,863 9,778,359 593,485 2,508,499 648,615 167,735 1,534,076 52,277 53,382 75,645 92,665 17,140,735 59,708 27,718 1,233,033 9,431,736 497,525 2,314,774 12,206 13,576,700 306,048 35,584 1,292,987 10,024,423 457,032 2,521,941 12,206 14,650,221 1,737,383 459,125 428,823 (292,372) 2,332,959 60,159 2,393,118 15,969,818 1,737,383 459,125 424,774 (192,094) 2,429,188 61,326 2,490,514 17,140,735 To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the condensed consolidated financial statements present fairly in all material respects the consolidated financial position, financial performance and cash flows of the Group. Ali Sultan Rakkad (May 6, 2021 14:43 GMT+4) ………………...………………………… Ali Sultan Rakkad Al Amri Chief Executive Officer saif alshehhi (May 6, 2021 14:07 GMT+4) ………………...…………………………. Saif Ali Al Shehhi Chairman The accompanying notes and appendix form an integral part of these condensed consolidated financial statements.
5. 3 Commercial Bank International P .S.C. Condensed consolidated income statement for the three months period ended 31 March Note 2021 AED ’000 (unaudited) 2020 AED ’000 (unaudited) Interest income Income from Islamic financing and investing assets Total interest income and income from Islamic financing and investing assets 129,107 12,627 199,657 7,524 141,734 207,181 Interest expense Distribution to Islamic depositors Net interest income and income from Islamic financing and investing assets (49,863) (1,421) (80,366) (4,773) 90,450 122,042 34,847 (4,017) 30,830 Fee and commission income Fee and commission expense Net fee and commission income Other operating income, net Net operating income General and administrative expenses Net impairment loss on financial assets Net impairment loss on non-financial assets Share of results of an associate (Loss)/profit for the period 17 18 (Loss)/profit for the period attributable to: Owners of the Bank Non-controlling interests (Loss)/profit for the period Basic and diluted earnings per share (AED) 19 46,408 (4,972) 41,436 7,763 129,043 13,193 176,671 (78,928) (136,601) (10,830) (97,316) (73,473) (92,058) (1,050) 10,090 (96,149) (1,167) (97,316) 10,090 10,090 (0.055) 0.006 The accompanying notes and appendix form an integral part of these condensed consolidated financial statements.
6. 4 Commercial Bank International P .S.C. Condensed consolidated statement of comprehensive income for the three months period ended 31 March 2021 AED ’000 (unaudited) 2020 AED ’000 (unaudited) (97,316) 10,090 (80) (80) - Total comprehensive (loss)/income for the period (97,396) 10,090 Total comprehensive (loss)/income attributable to: Owners of the Bank Non-controlling interests Total comprehensive (loss)/income for the period (96,229) (1,167) (97,396) 10,090 10,090 (Loss)/profit for the period Other comprehensive income Items that will not be reclassified subsequently to profit or loss: Changes in fair value of financial assets measured at fair value through other comprehensive income Other comprehensive loss for the period The accompanying notes and appendix form an integral part of these condensed consolidated financial statements.
7. 5 Commercial Bank International P .S.C. Condensed consolidated statement of changes in equity for the three months period ended 31 March 2021 Balance as at 1 January - audited Loss for the period Other comprehensive loss for the period Total comprehensive loss for the period Transfer from accumulated losses to specific provision reserve Balance as at 31 March - unaudited Reserves AED ’000 Accumulated losses AED ’000 Equity attributable to owners of the Bank AED ’000 NonControlling interests AED ’000 Total AED ’000 459,125 424,774 (192,094) 2,429,188 61,326 2,490,514 - - (80) (80) (96,149) (96,149) (96,149) (80) (96,229) (1,167) (1,167) (97,316) (80) (97,396) 1,737,383 459,125 4,129 428,823 (4,129) (292,372) 2,332,959 60,159 2,393,118 Share capital AED ’000 Tier 1 Capital Securities AED ’000 1,737,383 The accompanying notes and appendix form an integral part of these condensed consolidated financial statements.
8. 6 Commercial Bank International P .S.C. Condensed consolidated statement of changes in equity (continued) for the three months period ended 31 March 2020 Balance as at 1 January - audited Profit for the period Other comprehensive income for the period Total comprehensive income for the period Transfer from general reserve to accumulated losses Transfer from general provision reserve to accumulated losses Transfer from specific provision reserve to accumulated losses Balance as at 31 March - unaudited Reserves AED ’000 Accumulated losses AED ’000 Equity attributable to owners of the Bank AED ’000 NonControlling interests AED ’000 Total AED ’000 459,125 481,884 (206,914) 2,471,478 312 2,471,790 - - - 10,090 10,090 10,090 10,090 - 10,090 10,090 - - (11,104) 11,104 - - - - - (33,534) 33,534 - - - 1,737,383 459,125 (10,248) 426,998 10,248 (141,938) 2,481,568 312 2,481,880 Share capital AED ’000 Tier 1 Capital Securities AED ’000 1,737,383 The accompanying notes and appendix form an integral part of these condensed consolidated financial statements.
9. 7 Commercial Bank International P .S.C. Condensed consolidated statement of cash flows for the three months period ended 31 March 2021 AED ’000 (unaudited) Cash flows from operating activities (Loss)/profit for the period Adjustments for: Depreciation of property and equipment Depreciation of investment property Amortisation of intangible assets Impairment of financial assets Impairment of non-financial assets Gain on disposal of property and equipment Amortisation of financial assets measured at amortised cost Right to use asset adjustment Net loss on financial assets measured at FVTPL Share of results of associates Provision for end of service benefits Changes in operating assets and liabilities: Decrease in balances with the Central Bank of the UAE (Increase)/decrease in loans and advances to customers Decrease /(increase) in Islamic financing and investing assets Decrease in property inventory Decrease/(increase) in receivables and other assets Decrease in due to the central bank of the UAE (Decrease)/increase in deposits and balances due to banks Decrease in customers’ deposits Increase/(decrease) in Islamic customers’ deposits (Decrease)/increase in payables and other liabilities Cash (used in)/from operating activities End of service benefits paid Net cash (used in)/flows from operating activities Cash flows from investing activities: Purchase of property and equipment Purchase of intangible assets Net settlement of financial assets measured at FVTPL Proceeds from sale of property and equipment Proceeds from sale/redemption of financial assets measured at amortised cost Net cash generated from investing activities 2020 AED ’000 (unaudited) (97,316) 10,090 5,937 782 4,507 136,601 10,830 (20) 463 2,351 1,300 65,435 4,262 782 4,113 92,058 (96) 2,483 3,390 1,735 1,050 2,055 121,922 54,022 (3,706) 18,249 6,900 171,509 (246,340) (59,954) (592,687) 40,493 (205,791) (751,870) (1,859) (753,729) 969,272 631,933 (195,704) (247,458) 113,091 (921,219) (150,664) 194,196 515,369 (3,647) 511,722 (2,370) (1,704) (716) 200 (2,114) (288) (558) 162 165,163 160,573 77,971 75,173 The accompanying notes and appendix form an integral part of these condensed consolidated financial statements.
10. 8 Commercial Bank International P .S.C. Condensed consolidated statement of cash flows (continued) for the three months period ended 31 March Note Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Operational cash flows from: Interest received Income from Islamic financing and investing assets received Interest paid Distribution to Islamic depositors paid 21 2021 AED ’000 (unaudited) 2020 AED ’000 (unaudited) (593,156) 997,112 403,956 586,895 382,590 969,485 77,736 19,204 43,083 1,009 158,746 12,375 89,033 2,987 The accompanying notes and appendix form an integral part of these condensed consolidated financial statements.
11. 9 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements 1. Status and activities Commercial Bank International P.S.C. (the “Bank”) is a public shareholding company with limited liability incorporated under an Emiri Decree Number 5/91 on 28 April 1991 by His Highness Ruler of Ras Al-Khaimah. The registered office of the Bank is at P.O. Box 793, Ras Al-Khaimah. The Bank is listed on the Abu Dhabi Exchange (Ticker “CBI”). The Bank carries on commercial banking activities through its branches in the United Arab Emirates (“the UAE”). These condensed consolidated financial statements incorporate the financial statements of the Bank and its subsidiaries (collectively referred to as the “Group”). The list of the Bank’s subsidiaries and associate is as follows: Name Principal activity Principal place of business Place of incorporation % of ownership 2021 2020 Subsidiaries International Financial Brokerage L.L.C. Takamul Real Estate L.L.C. Al Khaleejiah Property Investments LLC Brokerage Real estate Real estate Dubai - the UAE Dubai - the UAE Sharjah - the UAE Al Caribi Development Limited CBI Financial Services Limited CBI Tier 1 Private Ltd Real estate SPV SPV Dubai - the UAE Dubai - the UAE Sharjah - the UAE British Virgin Antigua and Barbuda Islands Dubai - the UAE Cayman Islands Dubai - the UAE Cayman Islands Associate Arzaq Holdings (Private J.S.C.) Real estate Sharjah - the UAE Sharjah - the UAE 99.4 100.0 52.8 99.4 100.0 52.8 95.0 100.0 100.0 95.0 100.0 100.0 48.0 48.0 2. Application of new and revised IFRSs 2.1 New and revised IFRSs applied with no material effect on the condensed consolidated financial statements The following new and revised IFRSs, which became effective for annual periods beginning on or after 1 January 2021, have been adopted in these condensed consolidated financial statements. The application of these revised IFRSs has not had any material impact on the amounts reported for the current and prior years but may affect the accounting for future transactions or arrangements. Amendments to IFRS 16 Leases provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification Amendments to IFRS 4 Insurance Contracts, IFRS 7 Financial Instruments: Disclosures, IFRS 9 Financial Instruments and IFRS 16 Leases regarding replacement issues in the context of the IBOR reform   2.2 New and revised IFRSs in issue but not yet effective and not early adopted The Group has not yet early applied the following new standards, amendments and interpretations that have been issued but are not yet effective: New and revised IFRSs Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures relating to the treatment of the sale or contribution of assets from an investor to its associate or joint venture. Amendments to IAS 1 Presentation of Financial Statements regarding the classification of liabilities. Effective for annual periods beginning on or after Effective date deferred indefinitely 1 January 2023
12. 10 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 2. Application of new and revised IFRSs (continued) 2.2 New and revised IFRSs in issue but not yet effective and not early adopted (continued) New and revised IFRSs IFRS 17 Insurance Contracts establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 Insurance Contracts. Effective for annual periods beginning on or after 1 January 2023 Amendments IFRS 3 Business Combination updating a reference to the Conceptual Framework 1 January 2022 Amendments to IAS 16 Property, Plant and Equipment prohibiting a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use 1 January 2022 Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets regarding the costs to include when assessing whether a contract is onerous 1 January 2022 Annual Improvements to IFRS 2018 – 2020 Cycle amending IFRS 1, IFRS 9, IFRS 16 and IAS 41. 1 January 2022 Management anticipates that these new standards, interpretations and amendments will be adopted in the Group’s condensed consolidated financial statements for the period of initial application and adoption of these new standards, interpretations and amendments may have no material impact on the condensed consolidated financial statements of the Group in the period of initial application. 3. Significant accounting policies 3.1 Basis of preparation The condensed consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments, which are carried at fair value. These condensed consolidated financial statements are prepared in accordance with IAS 34 - Interim Financial Reporting issued by the IASB. The accounting policies used in the preparation of these condensed consolidated financial statements are consistent with those used in the audited consolidated financial statements for the year ended 31 December 2020. These condensed consolidated financial statements do not include all the information required for full annual consolidated financial statements and should be read in conjunction with the Group’s consolidated financial statements as at and for the year ended 31 December 2020. In addition, results for the three months period ended 31 March 2021 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2021. As required by the SCA Notification No. 2624/2008 dated 12 October 2008, accounting policies relating to financial instruments and investment properties have been disclosed in the condensed consolidated financial statements.
13. 11 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.2 Financial instruments Financial assets and financial liabilities are recognised in the Group’s condensed consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Recognised financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in profit or loss. If the transaction price differs from fair value at initial recognition, the Group will account for such difference as follows:   if fair value is evidenced by a quoted price in an active market for an identical asset or liability or based on a valuation technique that uses only data from observable markets, then the difference is recognised in profit or loss on initial recognition (i.e. day 1 profit or loss); in all other cases, the fair value will be adjusted to bring it in line with the transaction price (i.e. day 1 profit or loss will be deferred by including it in the initial carrying amount of the asset or liability). After initial recognition, the deferred gain or loss will be released to profit or loss on a rational basis, only to the extent that it arises from a change in a factor (including time) that market participants would take into account when pricing the asset or liability. 3.3 Financial assets All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at FVTPL. Transaction costs directly attributable to the acquisition of financial assets classified as at FVTPL are recognised immediately in profit or loss. All recognised financial assets that are within the scope of IFRS 9 are required to be subsequently measured at amortised cost or fair value on the basis of the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. Specifically:    debt instruments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding (SPPI), are subsequently measured at amortised cost; debt instruments that are held within a business model whose objective is both to collect the contractual cash flows and to sell the debt instruments, and that have contractual cash flows that are SPPI, are subsequently measured at FVTOCI; all other debt instruments (e.g. debt instruments managed on a fair value basis, or held for sale) and equity investments are subsequently measured at FVTPL.
14. 12 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.3 Financial assets (continued) However, the Group may make the following irrevocable election / designation at initial recognition of a financial asset on an asset-by-asset basis:   3.3.1 the Group may irrevocably elect to present subsequent changes in fair value of an equity investment that is neither held for trading nor contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies, in OCI; and the Group may irrevocably designate a debt instrument that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch (referred to as the fair value option). Debt instruments at amortised cost or at FVTOCI The Group assesses the classification and measurement of a financial asset based on the contractual cash flow characteristics of the asset and the Group’s business model for managing the asset. For an asset to be classified and measured at amortised cost or at FVTOCI, its contractual terms should give rise to cash flows that are solely payments of principal and interest on the principal outstanding (SPPI). For the purpose of the SPPI test, principal is the fair value of the financial asset at initial recognition. That principal amount may change over the life of the financial asset (e.g. if there are repayments of principal). Interest consists of consideration for the time value of money, for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin. The SPPI assessment is made in the currency in which the financial asset is denominated. Contractual cash flows that are SPPI are consistent with a basic lending arrangement. Contractual terms that introduce exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement, such as exposure to changes in equity prices or commodity prices, do not give rise to contractual cash flows that are SPPI. An originated or an acquired financial asset can be a basic lending arrangement irrespective of whether it is a loan in its legal form. An assessment of business models for managing financial assets is fundamental to the classification of a financial asset. The Group determines the business models at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. The Group’s business model does not depend on management’s intentions for an individual instrument, therefore the business model assessment is performed at a higher level of aggregation rather than on an instrument-by-instrument basis. The Group may have more than one business model for managing its financial instruments which reflect how the Group manages its financial assets in order to generate cash flows. The Group’s business models determine whether cash flows will result from collecting contractual cash flows, selling financial assets or both. The Group considers all relevant information available when making the business model assessment. However, this assessment is not performed on the basis of scenarios that the Group does not reasonably expect to occur, such as socalled ‘worst case’ or ‘stress case’ scenarios. The Group takes into account all relevant evidence available such as:    how the performance of the business model and the financial assets held within that business model are evaluated and reported to the entity’s key management personnel; the risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way in which those risks are managed; and how managers of the business are compensated (e.g. whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected).
15. 13 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.3 Financial assets (continued) 3.3.1 Debt instruments at amortised cost or at FVTOCI (continued) At initial recognition of a financial asset, the Group determines whether newly recognised financial assets are part of an existing business model or whether they reflect the commencement of a new business model. The Group reassesses its business models each reporting period to determine whether the business models have changed since the preceding period. For the current and prior reporting period the Group has not identified a change in its business models. When a debt instrument measured at FVTOCI is derecognised, the cumulative gain/loss previously recognised in OCI is reclassified from equity to profit or loss. In contrast, for an equity investment designated as measured at FVTOCI, the cumulative gain/loss previously recognised in OCI is not subsequently reclassified to profit or loss but transferred within equity. Debt instruments that are subsequently measured at amortised cost or at FVTOCI are subject to impairment. 3.3.2 Financial assets at FVTPL Financial assets at FVTPL are:    assets with contractual cash flows that are not SPPI; and/or assets that are held in a business model other than held to collect contractual cash flows or held to collect and sell; or assets designated at FVTPL using the fair value option. These assets are measured at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Fair value is determined in the manner described in note 24. 3.3.3 Reclassifications If the business model under which the Group holds financial assets changes, the financial assets affected are reclassified. The classification and measurement requirements related to the new category apply prospectively from the first day of the first reporting period following the change in business model that results in reclassifying the Group’s financial assets. During the current and previous financial periods there was no change in the business model under which the Group holds financial assets and therefore no reclassifications were made. Changes in contractual cash flows are considered under the accounting policy on ‘Modification and derecognition of financial assets’ see note 3.3.10. 3.3.4 Foreign exchange gains and losses The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. Specifically:     for financial assets measured at amortised cost that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss; for debt instruments measured at FVTOCI that are not part of a designated hedging relationship, exchange differences on the amortised cost of the debt instrument are recognised in profit or loss. Other exchange differences are recognised in OCI in the investments revaluation reserve; for financial assets measured at FVTPL that are not part of a designated hedge accounting relationship, exchange differences are recognised in profit or loss; and for equity instruments measured at FVTOCI, exchange differences are recognised in OCI in the investments revaluation reserve.
16. 14 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.3 Financial assets (continued) 3.3.5 Impairment The Group recognises loss allowances for expected credit losses (ECL) on the financial instruments that are not measured at FVTPL (including loan commitments and financial guarantee contracts). No impairment loss is recognised on equity investments. With the exception of ‘Purchased or Originated Credit-Impaired’ (POCI) financial assets (which are considered separately below), ECL are required to be measured through a loss allowance at an amount equal to:   12-month ECL, i.e. lifetime ECL that result from those default events on the financial instrument that are possible within 12 months after the reporting date, (referred to as Stage 1); or full lifetime ECL, i.e. lifetime ECL that result from all possible default events over the life of the financial instrument, (referred to as Stage 2 and Stage 3). A loss allowance for full lifetime ECL is required for a financial instrument if the credit risk on that financial instrument has increased significantly since initial recognition. For all other financial instruments, ECL are measured at an amount equal to the 12-month ECL. ECL are a probability-weighted estimate of the present value of credit losses. These are measured as the present value of the difference between the cash flows due to the Group under the contract and the cash flows that the Group expects to receive arising from the weighting of multiple future economic scenarios, discounted at the asset’s EIR.   for undrawn loan commitments, the ECL is the difference between the present value of the difference between the contractual cash flows that are due to the Group if the holder of the commitment draws down the loan and the cash flows that the Group expects to receive if the loan is drawn down; and for financial guarantee contracts, the ECL is the difference between the expected payments to reimburse the holder of the guaranteed debt instrument less any amounts that the Group expects to receive from the holder, the debtor or any other party. The Group measures ECL on an individual basis, or on a collective basis for portfolios of loans that share similar economic risk characteristics. The measurement of the loss allowance is based on the present value of the asset’s expected cash flows using the asset’s original EIR, regardless of whether it is measured on an individual basis or a collective basis. 3.3.6 Credit-impaired financial assets A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Credit-impaired financial assets are referred to as Stage 3 assets. Evidence of credit-impairment includes observable data about the following events:      significant financial difficulty of the borrower or issuer; a breach of contract such as a default or past due event; the lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider; the disappearance of an active market for a security because of financial difficulties; or the purchase of a financial asset at a deep discount that reflects the incurred credit losses. It may not be possible to identify a single discrete event, instead, the combined effect of several events may have caused financial assets to become credit-impaired. The Group assesses whether debt instruments that are financial assets measured at amortised cost or FVTOCI are credit-impaired at each reporting date. To assess if sovereign and corporate debt instruments are credit impaired, the Group considers factors such as bond yields, credit ratings and the ability of the borrower to raise funding.
17. 15 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.3 Financial assets (continued) 3.3.6 Credit-impaired financial assets (continued) A loan is considered credit-impaired when a concession is granted to the borrower due to a deterioration in the borrower’s financial condition, unless there is evidence that as a result of granting the concession the risk of not receiving the contractual cash flows has reduced significantly and there are no other indicators of impairment. For financial assets where concessions are contemplated but not granted the asset is deemed credit impaired when there is observable evidence of credit-impairment including meeting the definition of default. The definition of default (see below) includes unlikeliness to pay indicators and a backstop if amounts are overdue for 90 days or more. 3.3.7 Purchased or originated credit-impaired (POCI) financial assets POCI financial assets are treated differently because the asset is credit-impaired at initial recognition. For these assets, the Group recognises all changes in lifetime ECL since initial recognition as a loss allowance with any changes recognised in profit or loss. A favourable change for such assets creates an impairment gain. 3.3.8 Definition of default Critical to the determination of ECL is the definition of default. The definition of default is used in measuring the amount of ECL and in the determination of whether the loss allowance is based on 12-month or lifetime ECL, as default is a component of the probability of default (PD) which affects both the measurement of ECL and the identification of a significant increase in credit risk. The Group considers the following as constituting an event of default:   the borrower is past due more than 90 days on any material credit obligation to the Group; or the borrower is unlikely to pay its credit obligations to the Group in full. The definition of default is appropriately tailored to reflect different characteristics of different types of assets. Overdrafts are considered as being past due once the customer has breached an advised limit or has been advised of a limit smaller than the current amount outstanding. When assessing if the borrower is unlikely to pay its credit obligation, the Group takes into account both qualitative and quantitative indicators. The information assessed depends on the type of the asset, for example in corporate lending a qualitative indicator used is the breach of covenants, which is not relevant for retail lending. Quantitative indicators, such as overdue status and non-payment on another obligation of the same counterparty are key inputs in this analysis. The Group uses a variety of sources of information to assess default which are either developed internally or obtained from external sources. 3.3.9 Significant increase in credit risk (SICR) The Group monitors all financial assets, issued loan commitments and financial guarantee contracts that are subject to the impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been a significant increase in credit risk the Group will measure the loss allowance based on lifetime rather than 12-month ECL. The Group’s accounting policy is not to use the practical expedient that financial assets with ‘low’ credit risk at the reporting date are deemed not to have had a significant increase in credit risk. As a result, the Group monitors all financial assets, issued loan commitments and financial guarantee contracts that are subject to impairment for significant increase in credit risk.
18. 16 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.3 Financial assets (continued) 3.3.9 Significant increase in credit risk (continued) In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group compares the risk of a default occurring on the financial instrument at the reporting date based on the remaining maturity of the instrument with the risk of a default occurring that was anticipated for the remaining maturity at the current reporting date when the financial instrument was first recognised. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort, based on the Group’s historical experience and expert credit assessment including forward-looking information. Multiple economic scenarios form the basis of determining the probability of default at initial recognition and at subsequent reporting dates. Different economic scenarios will lead to a different probability of default. It is the weighting of these different scenarios that forms the basis of a weighted average probability of default that is used to determine the ECL. For corporate lending, forward-looking information includes the future prospects of the industries in which the Group’s counterparties operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant thinktanks and other similar organisations, as well as consideration of various internal and external sources of actual and forecast economic information. For retail lending, forward looking information includes the same economic forecasts as corporate lending with additional forecasts of local economic indicators, particularly for regions with a concentration to certain industries, as well as internally generated information of customer payment behaviour. The Group allocates its counterparties to a relevant internal credit risk grade depending on their credit quality. The quantitative information is a primary indicator of significant increase in credit risk and is based on the change in credit worthiness of borrowers measured by rating downgrade which result in higher PD as per staging criteria. The PDs used are forward looking and the Group uses the same methodologies and data used to measure the loss allowance for ECL. The qualitative factors that indicate significant increase in credit risk are reflected in PD models on a timely basis. However, the Group still considers separately some qualitative factors to assess if credit risk has increased significantly. For corporate lending there is particular focus on assets that are included on a ‘watch list’ given an exposure is on a watch list once there is a concern that the creditworthiness of the specific counterparty has deteriorated. For retail lending the Group considers the expectation of forbearance and payment holidays, credit scores and events such as unemployment, bankruptcy, divorce or death. As a back-stop when an asset becomes 30 days past due, the Group considers that a significant increase in credit risk has occurred and the asset is in stage 2 of the impairment model, i.e. the loss allowance is measured as the lifetime ECL, unless the Group has reasonable and supportable information that demonstrates otherwise. 3.3.10 Modification and derecognition of financial assets A modification of a financial asset occurs when the contractual terms governing the cash flows of a financial asset are renegotiated or otherwise modified between initial recognition and maturity of the financial asset. A modification affects the amount and/or timing of the contractual cash flows either immediately or at a future date. In addition, the introduction or adjustment of existing covenants of an existing loan would constitute a modification even if these new or adjusted covenants do not yet affect the cash flows immediately but may affect the cash flows depending on whether the covenant is or is not met (e.g. a change to the increase in the interest rate that arises when covenants are breached).
19. 17 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.3 Financial assets (continued) 3.3.10 Modification and derecognition of financial assets (continued) The Group renegotiates loans to customers in financial difficulty to maximise collection and minimise the risk of default. A loan forbearance is granted in cases where although the borrower made all reasonable efforts to pay under the original contractual terms, there is a high risk of default or default has already happened and the borrower is expected to be able to meet the revised terms. The revised terms in most of the cases include an extension of the maturity of the loan, changes to the timing of the cash flows of the loan (principal and interest repayment), reduction in the amount of cash flows due (principal and interest forgiveness) and amendments to covenants. When a financial asset is modified the Group assesses whether this modification results in derecognition. In accordance with the Group’s policy a modification results in derecognition when it gives rise to substantially different terms. To determine if the modified terms are substantially different from the original contractual terms the Group considers the following:   Qualitative factors, such as contractual cash flows after modification are no longer SPPI, change in currency or change of counterparty, the extent of change in interest rates, maturity and covenants. If these do not clearly indicate a substantial modification, then; A quantitative assessment is performed to compare the present value of the remaining contractual cash flows under the original terms with the contractual cash flows under the revised terms, with both amounts discounted at the original effective interest. If the difference in present value is substantial the Group deems the arrangement is substantially different leading to derecognition. In the case where the financial asset is derecognised the loss allowance for ECL is remeasured at the date of derecognition to determine the net carrying amount of the asset at that date. The difference between this revised carrying amount and the fair value of the new financial asset with the new terms will lead to a gain or loss on derecognition. The new financial asset will have a loss allowance measured based on 12-month ECL except in the rare occasions where the new loan is considered to be originated credit impaired. This applies only in the case where the fair value of the new loan is recognised at a significant discount to its revised par amount because there remains a high risk of default which has not been reduced by the modification. The Group monitors credit risk of modified financial assets by evaluating qualitative and quantitative information, such as if the borrower is in past due status under the new terms. When the contractual terms of a financial asset are modified and the modification does not result in derecognition, the Group determines if the financial asset’s credit risk has increased significantly since initial recognition by comparing:   the remaining lifetime PD estimated based on data at initial recognition and the original contractual terms; with the remaining lifetime PD at the reporting date based on the modified terms. For financial assets modified as part of the Group’s forbearance policy, where modification did not result in derecognition, the estimate of PD reflects the Group’s ability to collect the modified cash flows taking into account the Group’s previous experience of similar forbearance action, as well as various behavioural indicators, including the borrower’s payment performance against the modified contractual terms. If the credit risk remains significantly higher than what was expected at initial recognition the loss allowance will continue to be measured at an amount equal to lifetime ECL. The loss allowance on forborne loans will generally only be measured based on 12-month ECL when there is evidence of the borrower’s improved repayment behaviour following modification leading to a reversal of the previous significant increase in credit risk. Where a modification does not lead to derecognition the Group calculates the modification gain/loss comparing the gross carrying amount before and after the modification (excluding the ECL allowance). Then the Group measures ECL for the modified asset, where the expected cash flows arising from the modified financial asset are included in calculating the expected cash shortfalls from the original asset.
20. 18 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.3 Financial assets (continued) 3.3.10 Modification and derecognition of financial assets (continued) The Group derecognises a financial asset only when the contractual rights to the asset’s cash flows expire (including expiry arising from a modification with substantially different terms), or when the financial asset and substantially all the risks and rewards of ownership of the asset are transferred to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain/loss that had been recognised in OCI and accumulated in equity is recognised in profit or loss, with the exception of equity investment designated as measured at FVTOCI, where the cumulative gain/loss previously recognised in OCI is not subsequently reclassified to profit or loss. On derecognition of a financial asset other than in its entirety (e.g. when the Group retains an option to repurchase part of a transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain/loss allocated to it that had been recognised in OCI is recognised in profit or loss. A cumulative gain/loss that had been recognised in OCI is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts. This does not apply for equity investments designated as measured at FVTOCI, as the cumulative gain/loss previously recognised in OCI is not subsequently reclassified to profit or loss. 3.3.11 Write-off Loans and debt securities are written off when the Group has no reasonable expectations of recovering the financial asset (either in its entirety or a portion of it). This is the case when the Group determines that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the writeoff, or in the case of retail loan, when the amounts are over 180 days past due, whichever occurs sooner. A write-off constitutes a derecognition event. The Group may apply enforcement activities to financial assets written off. Recoveries resulting from the Group’s enforcement activities will result in impairment gains. 3.3.12 Presentation of allowance for ECL in the statement of financial position Loss allowances for ECL are presented in the statement of financial position as follows:     for financial assets measured at amortised cost: as a deduction from the gross carrying amount of the assets; for debt instruments measured at FVTOCI: no loss allowance is recognised in the statement of financial position as the carrying amount is at fair value. However, the loss allowance is included as part of the revaluation amount in the investments revaluation reserve; for loan commitments and financial guarantee contracts: as a provision; and where a financial instrument includes both a drawn and an undrawn component, and the Group cannot identify the ECL on the loan commitment component separately from those on the drawn component, the Group presents a combined loss allowance for both components. The combined amount is presented as a deduction from the gross carrying amount of the drawn component. Any excess of the loss allowance over the gross amount of the drawn component is presented as a provision.
21. 19 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.4 Equity and financial liabilities Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. 3.4.1 Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs. Repurchase of the Group’s own equity instruments is recognised and deducted directly in equity. No gain/loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. 3.4.2 Financial liabilities A financial liability is a contractual obligation to deliver cash or another financial asset or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the Group or a contract that will or may be settled in the Group’s own equity instruments and is a non-derivative contract for which the Group is or may be obliged to deliver a variable number of its own equity instruments, or a derivative contract over own equity that will or may be settled other than by the exchange of a fixed amount of cash (or another financial asset) for a fixed number of the Group’s own equity instruments. Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’. 3.4.2.1 Financial liabilities at FVTPL Financial liabilities are classified as at FVTPL when the financial liability is 1) contingent consideration of an acquirer in a business combination to which IFRS 3 applies, 2) held for trading, or 3) it is designated as at FVTPL. A financial liability is classified as held for trading if:    it has been acquired principally for the purpose of repurchasing it in the near term; or on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or it is a derivative, except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument. A financial liability other than a financial liability held for trading or contingent consideration of an acquirer in a business combination may be designated as at FVTPL upon initial recognition if:    such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or it forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at FVTPL. Financial liabilities at FVTPL are stated at fair value with any gains or losses arising on changes in fair value recognised in profit or loss to the extent that they are not part of a designated hedging relationship. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liabilities.
22. 20 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 3. Significant accounting policies (continued) 3.4 Equity and financial liabilities (continued) 3.4.2 Financial liabilities (continued) 3.4.2.2 Other financial liabilities Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The EIR is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. 3.4.3 Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss. When the Group exchanges with the existing lender one debt instrument into another one with substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. 3.5 Investment properties Investment properties are properties held to earn rentals and/or for capital appreciation, including property under construction for such purposes. Investment properties are measured initially at its cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated so as to write off the cost of investment properties using the straight line method over their estimated useful lives of 25 years. Investment properties are accounted for as acquisitions on the date when ownership passes to the Group under the contract for the purchase of the relevant property, pending which event payments in respect of investment property acquisitions are included in ‘receivable and other assets’. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of asset is recognised in the consolidated income statement in the period of derecognition.
23. 21 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 4. Basis for consolidation The condensed consolidated financial statements incorporate the condensed financial statements of the Bank and the entities controlled by the Bank (its subsidiaries). Control is achieved where the Bank has:    power over an investee, exposures, or rights, to variable returns from its involvement with the investee, and has the ability to use its power to affect its returns. The condensed financial statements of subsidiaries are prepared using similar policies as those used by the Bank. All significant inter-group company balances, income and expense items are eliminated on consolidation. 5. Estimates and judgments The preparation of condensed consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated financial statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the audited consolidated financial statements as at and for the year ended 31 December 2020. 6. Seasonality of results No income of seasonal nature was recorded in the condensed consolidated financial statements for the three months periods ended 31 March 2021 and 2020. 7. Financial risk management The Group’s financial risk management objectives and policies are consistent with those disclosed in the audited annual consolidated financial statements as at and for the year ended 31 December 2020.
24. 22 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 7. Financial risk management (continued) Summarised information of the Group’s credit risk exposure per class of financial asset (subject to impairment) is provided in following table. 31 March 2021 Gross carrying ECL amount allowance AED ’000 AED ’000 (unaudited) (unaudited) 31 December 2020 Gross carrying ECL amount allowance AED ’000 AED ’000 (audited) (audited) Carrying amount AED ’000 (audited) 761,445 1,445,477 1,445,477 (203) 129,398 79,961 (98) 79,863 Loans and advances to customers - retail lending Stage 1 835,637 (8,268) Stage 2 572,006 (36,349) Stage 3 109,026 (25,503) 1,516,669 (70,120) 827,369 535,657 83,523 1,446,549 810,313 702,297 103,806 1,616,416 (9,041) (41,263) (20,773) (71,077) 801,272 661,034 83,033 1,545,339 Loans and advances to customers - wholesale lending Stage 1 5,223,790 (29,654) Stage 2 2,092,052 (122,800) Stage 3 1,847,055 (805,977) 9,162,897 (958,431) 5,194,136 1,969,252 1,041,078 8,204,466 5,370,865 1,942,183 1,724,745 9,037,793 (28,041) (120,540) (656,192) (804,773) 5,342,824 1,821,643 1,068,553 8,233,020 574,671 596,307 (2,822) 593,485 (3,132) (422) (3,554) 2,262,257 9,267 2,269,274 2,465,852 2,651 2,468,503 (2,328) (67) (2,395) 2,463,524 2,584 2,466,108 Investment securities measured at amortised cost Stage 1 1,371,452 (3,141) 1,368,311 1,537,078 (3,002) 1,534,076 4,688,104 192,273 25,568 4,905,945 (12,210) (4,421) (4,988) (21,619) 4,675,894 187,852 20,580 4,884,326 21,687,480 (905,786) 20,781,694 Balances with the Central Bank of the UAE Stage 1 761,445 Deposits and balances due from banks Stage 1 129,601 Carrying Amount AED ’000 (unaudited) - Islamic financing and investing assets - wholesale lending Stage 1 578,058 (3,387) Receivables and other assets Stage 1 2,265,389 Stage 2 9,689 2,272,828 Loan commitments, letters of credit and financial guarantee contracts Stage 1 3,816,344 (9,988) 3,806,356 Stage 2 378,147 (10,018) 368,129 Stage 3 25,075 (5,196) 19,879 4,219,566 (25,202) 4,194,364 20,014,766 7.1 (1,064,038) 18,950,728 - Covid-19 and its impact on ECL Covid-19 pandemic continues to cause economic disruption globally. In the determination of ECL, the Group has considered the potential impact on its portfolio within the available information around the economic uncertainties caused by the Covid-19 pandemic, including financial support and relief measures of the CBUAE. The Group has taken into account the specific guidelines issued by the CBUAE with regards to the TESS program and guidance issued by IASB.
25. 23 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 7. Financial risk management (continued) 7.1 Covid-19 and its impact on ECL (continued) Identification of SICR event As explained in note 3.3.9, if there is a significant increase in credit risk since initial recognition, the Group measures the loss allowance based on lifetime rather than 12-month ECL i.e. financial assets are migrated from stage 1 to stage 2. A SICR event occurs when there has been a significant increase in the risk of a default occurring, over the expected life of a financial instrument. The Group continuously reviews its portfolio for other indicators of unlikeliness to meet its financial obligations, any financial deterioration beyond temporary liquidity stress and whether it is likely to be short term, because of Covid-19, or longer term. In line with the CBUAE guidance to support the economy, the Group has initiated a program of payment relief for its impacted customers by deferring interest/principal due until the end of June 2021 to extend bridge loans to help impacted customers recover. The Group will be participating in this program on a case to case basis as per internal credit guidelines. These payment reliefs are considered as short-term liquidity support to address borrower cash flow issues. The relief offered to customers may indicate a potential SICR event, however, management believes that the extension of these payment reliefs do not automatically trigger a SICR event and do not warrant a stage migration for the purposes of calculating ECL, as these should in fact support customer affected by the Covid-19 outbreak and help them to resume regular payments. The Group has divided its customers benefitting from payment deferrals into two groups. Group 1 are those customers who are not expected to face substantial changes in their creditworthiness, beyond liquidity issues, caused by the Covid-19 crisis whereas Group 2 customers are expected to face substantial changes in their creditworthiness, in addition to liquidity issues that will be addressed by payment deferrals. This analysis has been done based on the industry of the customer or its employer as well as changes in the customer’s risk profile during COVID. The customers in Group 2 which were classified as stage 1 have been downgraded to Stage 2. Reasonableness of Forward Looking Information and probability weights Through robust modelling technique, the Group has identified key macroeconomic variables influencing credit risk of each portfolio. Forecasts for these economic variables (for both baseline and adverse economic scenario) are obtained from governmental bodies and monetary authorities such as the CBUAE, IMF, and World Bank, which reflect the current and forecasted economic impacts in the fallout of Covid. In line with the CBUAE guidance, the Group has applied judgmental overlays on the forecasts to commensurate with economic impact observed so far, with the near-term outlook and with the ongoing nature of the pandemic. Additionally, Expert judgmental overlay has been exercised on wholesale portfolio in line with the CBUAE guidance to incorporate uncertainty in measuring ECL.
26. 24 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 7. Financial risk management (continued) 7.1 Covid-19 and its impact on ECL (continued) The table below summarises the relief provided to customer (both TESS and non-TESS customers) by product as at 31 March 2021 and 31 December2020: Number of Borrowers Amount of deferment allowed AED ’000 Gross exposure AED ’000 ECL AED ’000 25 201 6,463 119 21 6 27 154 82 236 4,446 1,533 5,979 179 35 214 Total retail lending 52 437 12,442 333 Wholesale lending  Stage 1 Group 1 2 32,851 355,846 229 2 54 32,851 32,288 355,846 368,288 229 562 349 2,501 58,619 1,395  Stage 3 Total retail lending 213 2,305 2,518 130 2,997 1,315 90,140 91,455 2,464 96,420 45,705 597,682 643,387 12,439 714,445 3,314 32,186 35,500 5,528 42,423 Wholesale lending  Stage 1 Group 1 16 77,736 1,139,732 2,271 2 22 24 2 42 3,039 2,795 106,010 108,805 2,691 189,232 285,652 19,661 376,656 396,317 11,165 1,547,214 2,261,659 748 23,878 24,626 5,562 32,459 74,882 31 March 2021 Retail lending  Stage 1 Group 1  Stage 2 Group 1 Group 2 Total wholesale lending 31 December 2020 Retail lending  Stage 1 Group 1  Stage 2 Group 1 Group 2  Stage 2 Group 1 Group 2  Stage 3 Total wholesale lending
27. 25 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 7. Financial risk management (continued) 7.1 Covid-19 and its impact on ECL (continue) The tables below analyse the movement of the gross carrying amount and ECL allowance during the period per class of financial assets.  Loans and advances to customers - retail lending Gross carrying amount As at 1 January 2021 Transfer to stage 1 Transfer to stage 2 Transfer to stage 3 Change in exposure Write-offs New financial assets recognised Financial assets derecognised As at 31 March 2021 ECL allowance As at 1 January 2021 Transfer to stage 1 Transfer to stage 2 Transfer to stage 3 Change in credit risk Write-offs New financial assets recognised Financial assets derecognised As at 31 March 2021  Stage 1 12 months ECL AED ’000 Stage 2 Life time ECL AED ’000 Stage 3 Life time ECL AED ’000 POCI Life time ECL AED ’000 Total AED ’000 810,313 56,281 (10,010) (1,010) (20,435) 15,337 (14,839) 835,637 702,297 (56,281) 13,832 (20,679) (28,568) (113) 191 (38,673) 572,006 103,806 (3,822) 21,689 (927) (11,661) (59) 109,026 - 1,616,416 (49,930) (11,774) 15,528 (53,571) 1,516,669 9,041 5,922 (437) (87) (6,150) 133 (154) 8,268 41,263 (5,922) 2,033 (4,032) 3,552 (28) 8 (525) 36,349 20,773 (1,596) 4,119 7,635 (5,402) (26) 25,503 - 71,077 5,037 (5,430) 141 (705) 70,120 Stage 1 12 months ECL AED ’000 Stage 2 Life time ECL AED ’000 Stage 3 Life time ECL AED ’000 POCI Life time ECL AED ’000 Total AED ’000 5,370,865 (295,292) (6,537) 77,613 125,016 (47,875) 5,223,790 1,942,183 295,681 (96,308) (68,595) 19,143 (52) 2,092,052 1,724,745 (389) 102,845 19,857 (3) 1,847,055 - 9,037,793 28,875 144,159 (47,930) 9,162,897 Loans and advances to customers - wholesale lending Gross carrying amount As at 1 January 2021 Transfer to stage 1 Transfer to stage 2 Transfer to stage 3 Change in exposure Write-offs New financial assets recognised Financial assets derecognised As at 31 March 2021
28. 26 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 7. Financial risk management (continued) 7.1 Covid-19 and its impact on ECL (continue)  Loans and advances to customers - wholesale lending (continue) ECL allowance As at 1 January 2021 Transfer to stage 1 Transfer to stage 2 Transfer to stage 3 Change in credit risk Write-offs New financial assets recognised Financial assets derecognised As at 31 March 2021  Stage 1 12 months ECL AED ’000 Stage 2 Life time ECL AED ’000 Stage 3 Life time ECL AED ’000 POCI Life time ECL AED ’000 Total AED ’000 28,041 (2,713) (59) 4,557 693 (865) 29,654 120,540 3,101 (13,913) 12,226 846 122,800 656,192 (388) 13,972 136,748 (547) 805,977 - 804,773 153,531 1,539 (1,412) 958,431 Islamic financing and investing assets - wholesale lending Gross carrying amount As at 1 January 2021 Change in exposure Financial assets derecognised As at 31 March 2021 ECL allowance As at 1 January 2021 Change in credit risk Financial assets derecognised As at 31 March 2021 Stage 1 12 months ECL AED ’000 Stage 2 Life time ECL AED ’000 Stage 3 Life time ECL AED ’000 POCI Life time ECL AED ’000 Total AED ’000 596,307 (17,723) (526) 578,058 - - - 596,307 (17,723) (526) 578,058 2,822 568 (3) 3,387 - - - 2,822 568 (3) 3,387
29. 27 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 7. Financial risk management (continued) 7.1 Covid-19 and its impact on ECL (continue) The tables below analyse the movement of the ECL allowance during the period by sector per class of financial assets.  Loans and advances to customers - retail lending As at 1 January 2021 Mortgages Unsecured lending As at 31 March 2021  Stage 1 12 months ECL AED ’000 Stage 2 Life time ECL AED ’000 Stage 3 Life time ECL AED ’000 POCI Life time ECL AED ’000 Total AED ’000 1,395 (26) (1,250) 119 35,500 (3,046) (32,240) 214 5,528 (19) (5,509) - - 42,423 (3,090) (38,999) 333 Stage 1 12 months ECL AED ’000 Stage 2 Life time ECL AED ’000 Stage 3 Life time ECL AED ’000 POCI Life time ECL AED ’000 Total AED ’000 2,271 (413) (176) (526) (389) (538) 229 24,626 (8,089) (1,948) (10,365) (4,051) (173) - 5,562 (2,573) (2,989) - - 32,459 (8,502) (2,124) (13,464) (7,429) (711) 229 Loans and advances to customers - wholesale lending As at 1 January 2021 Real estate Construction Trade Manufacturing Other As at 31 March 2021 The Group has used updated macro-economic indicators and incorporated Covid- 19 impact through stressed macroeconomic variables with the institutions like IMF and World Bank. The Group has not applied any additional judgmental overlay on the ECL output. 8. Cash and balances with the Central Bank of the UAE In the table below, statutory cash ratio requirements with the Central Bank of the UAE represent mandatory reserve deposits and are not available for use in the Group’s day-to-day operations. Cash on hand and current accounts and other balances are non-interest bearing. Monetary Bills carry interest rates ranging between 0.07% and 0.17% per annum. Repurchase agreement borrowings are under TESS relief facility received from the CBUAE and carry interest rate of 0% per annum (2020: 0% per annum).
30. 28 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 8. Cash and balances with the Central Bank of the UAE (continued) Cash on hand Balances with the Central Bank of the UAE: Statutory cash ratio requirements Monetary Bills Overnight deposits Certificates of deposit Balances due to the Central Bank of the UAE: Current account Repurchase agreement borrowings 9. 2020 AED ’000 (audited) 64,365 77,151 344,544 416,901 825,810 205,477 840,000 400,000 1,522,628 9,708 50,000 59,708 1,048 305,000 306,048 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) Deposits and balances due from banks Demand and call deposit Islamic investment deposits Less: ECL allowance 10. 2021 AED ’000 (unaudited) 74,504 55,097 129,601 (203) 129,398 79,961 79,961 (98) 79,863 Loans and advances to customers Retail lending: Mortgage loans Credit cards Other Less: ECL allowance Wholesale lending: Loans Overdrafts Trust receipts Bills discounted Less: ECL allowance 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) 901,447 65,731 549,491 1,516,669 (70,120) 1,446,549 937,741 72,631 606,044 1,616,416 (71,077) 1,545,339 7,222,806 1,368,085 359,094 212,912 9,162,897 (958,431) 8,204,466 9,651,015 7,078,619 1,309,144 274,272 375,758 9,037,793 (804,773) 8,233,020 9,778,359
31. 29 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 11. Investment securities measured at fair value The Group has designated the following investments in equity instruments and investment fund at FVTOCI as these are the investments that the Group plans to hold in the long term for strategic reasons. The table below shows fair value of these investments. Investment at FVTOCI Investment in quoted shares Investment in unquoted shares Investment in unquoted investment fund Investment at FVTPL Investment in unquoted shares 12. 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) 13,672 22,019 2,695 38,386 13,752 22,019 2,695 38,466 126,796 165,182 129,269 167,735 Investment securities measured at amortised cost The table below shows investment securities at amortised cost held by the Group at the end of the reporting period. The Group holds these investment securities with an average yield of 2.1% to 7.0% per annum (2020: 2.1% to 7.0% per annum). The investment securities are redeemable at par on various maturity dates from 2021 to 2030 (2020: 2021 to 2030). At the end of the reporting period, investment securities aggregating to AED 80.4 [fair value of AED 81.4 million] (2020: AED 342.9 [fair value of AED 364.9 million]) were collateralised against borrowings under repurchase agreement with the CBUAE. 2021 AED ’000 (unaudited) Investment in debt instrument Investment in Islamic Sukuk Less: ECL allowance 13. 704,671 832,407 1,537,078 (3,002) 1,534,076 Customers’ deposits Current accounts Savings accounts Time deposits Other 14. 695,698 675,754 1,371,452 (3,141) 1,368,311 2020 AED ’000 (audited) 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) 1,818,900 876,570 6,535,362 200,904 9,431,736 1,890,476 1,098,015 6,803,522 232,410 10,024,423 Share capital The authorised, issued, and paid up capital of the Bank comprises 1,737,383,050 shares of AED 1 each (2020: 1,737,383,050 shares of AED 1 each). Fully paid up shares carry one vote per share and carry a right to dividends.
32. 30 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 15. Tier 1 Capital Securities On 23 December 2015, the Bank issued Tier 1 Capital Securities (the “Capital Securities”) through an SPV, CBI Tier 1 Private Ltd, (the “Issuer”) amounting to USD 125 million (AED 459.125 million). These Capital Securities are perpetual and carry an interest rate of 6.50 % (calculated based on the relevant Six- Years Mid Swap Rate plus 4.71 percent per annum) during the “initial period”. After the initial period, at every reset date, interest would be calculated for the next reset period at the relevant Six-Year Mid Swap Rate plus a margin of 4.71 percent per annum. Interest is payable semiannually in arrears on these Capital Securities. The “Initial Period” is the period (from and including) the Issue Date to (but excluding) the First Call Date. The “Reset Date” is the First Call Date and every sixth anniversary thereafter. These Capital Securities are callable by the Bank beginning from 23 December 2021 “First Call date” and every interest payment date thereafter. Tier 1 Capital Securities are perpetual, subordinated and unsecured. The Bank may elect not to pay a coupon at its own discretion. The holder of the Capital Securities does not have a right to claim the coupon and an election by the Bank not to service the coupon is not considered an event of default. 16. Reserves The movements in the reserves during the period were as follows: 2021 As at 1 January (audited) Other comprehensive loss Transfers As at 31 March (unaudited) 2020 As at 1 January (audited) Other comprehensive income Transfers As at 31 March (unaudited) Statutory reserve AED ’000 General reserve AED ’000 Investment revaluation reserve AED ’000 Specific provision reserve AED ’000 General provision reserve AED ’000 Total AED ’000 272,146 - 3,368 - (66,729) (80) - 215,989 4,129 - 424,774 (80) 4,129 272,146 3,368 (66,809) 220,118 - 428,823 268,778 11,104 (54,909) 223,377 33,534 481,884 268,778 (11,104) - (54,909) (10,248) 213,129 (33,534) - (54,886) 426,998
33. 31 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 17. Other operating income, net 2021 AED ’000 (unaudited) Foreign exchange gains Net loss on financial assets measured at FVTPL Other 18. 3,215 (2,351) 6,899 7,763 8,271 (1,735) 6,657 13,193 Net impairment loss on financial assets 2021 AED ’000 (unaudited) Net ECL charge for the period Recoveries against written off loans Other 19. 2020 AED ’000 (unaudited) 149,066 (12,854) 389 136,601 2020 AED ’000 (unaudited) 112,777 (21,336) 617 92,058 Basic and diluted earnings per share Earnings per share are calculated by dividing the profit for the period attributed to the owners of the Bank by the weighted average number of shares in issue throughout the period as follows: 2021 (unaudited) (Loss)/profit for the period attributable to owners of the Bank (AED’000) Weighted average number of shares in issue (’000) Basic and diluted earnings per share (AED) 20. (96,149) 2020 (unaudited) 10,090 1,737,383 1,737,383 (0.055) 0.006 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) 2,229,620 229,386 2,459,006 2,446,470 276,340 2,722,810 Contingent liabilities and commitments Letters of credit and guarantees: Guarantees Letters of credit
34. 32 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 20. Contingent liabilities and commitments (continued) Other commitments: Loan Commitments Capital commitments 21. 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) 1,760,560 2,063 1,762,623 2,183,135 1,567 2,184,702 Cash and cash equivalents Cash and cash equivalents included in the condensed consolidated statement of cash flows comprise the following: 31 March 2021 AED ’000 (unaudited) Cash and balances with the Central Bank of the UAE Deposits and balances due from banks Less: Statutory reserve with the Central Bank of the UAE Less: Monetary Bills with original maturity of more than 90 days Less: CDs with original maturity of more than 90 days 22. 825,810 129,601 955,411 (344,544) (206,911) 403,956 31 December 2020 AED ’000 (audited) 31 March 2020 AED ’000 (unaudited) 1,522,628 79,961 1,602,589 (205,477) (400,000) 997,112 1,475,806 742,698 2,218,504 (599,019) (650,000) 969,485 Related party transactions a) The Group enters into transactions with companies and entities that fall within the definition of a related party as contained in IAS 24 Related Party Disclosures. Related parties comprise companies under common ownership and/or common management and control, their shareholders and key management personnel. Transactions with associate and other related parties are made on substantially the same terms, as those prevailing at the same time for comparable transactions with external customers and parties. b) Related party balances at the end of the reporting period were as follows: Terms % 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) 25,000 5,000 3.3 - 93,341 16,910 92,576 16,910 2.75 - 3.0 2.5 15,734 4,839 13,778 7,722 Subsidiaries Financial guarantee contract Associate Loans and advances to customers Receivables and other assets Key management personnel (including directors) Loans and advances to customers Customers’ deposits
35. 33 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 22. Related party transactions (continued) Other related parties Deposits and balances due from banks Deposits and balances due to banks Interest rate swaps (Notional amount) Tier 1 capital securities c) 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) 6.5 1,048 31,982 36,730 459,125 31,501 36,730 459,125 2021 AED ’000 (unaudited) 2020 AED ’000 (unaudited) 764 1,150 136 15 10 4,544 119 7 120 5,370 Significant transactions with related parties during the period were as follows: Associate Interest income Key management personnel (including directors) Interest income Interest expense Directors’ expenses Compensation of key management personnel 23. Terms % Operating segments Operating Segments are identified on the basis of internal reports about the components of the Group that are regularly reviewed by the Group’s CEO in order to allocate resources to the segment and to assess its performance. The Group’s reportable segments under IFRS 8 are therefore as follows:      Wholesale banking; Retail banking; Treasury; Real estate (financial position and results of real estate subsidiaries); Other
36. 34 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 23. Operating segments (continued) Wholesale banking AED ’000 Retail banking AED ’000 Treasury AED ’000 Real estate AED ’000 Other AED ’000 Eliminations AED ’000 Net interest income from external customers Inter-segmental net interest income Fee and commission income Fee and commission expense Other operating income, net Revenue 62,063 (8,839) 30,198 (354) 7,770 90,838 15,631 3,379 4,645 (3,479) 768 20,944 12,968 10,117 4 (75) 918 23,932 (1,704) 290 (1,414) 1,489 (4,654) (109) (1,983) (5,257) (1,701) 1,701 - 90,450 34,847 (4,017) 7,763 129,043 Impairment losses and provisions, net General and administrative expenses excluding depreciation and amortisation Depreciation and amortization Profit/(loss) for the period (168,865) (9,869) (401) - 31,704 (147,431) (43,135) (4,140) (125,302) (20,671) (5,808) (15,404) (4,554) (496) 18,481 (466) (782) (2,662) 31,704 (67,702) (11,226) (97,316) 2,385,688 1,370,459 383,485 459,601 Three months period ended 31 March 2021 (unaudited) As at 31 March 2021 (unaudited) Assets Liabilities 11,364,247 10,173,607 1,446,549 1,858,570 1,124 (4,133) 634,845 272,952 (244,996) (558,489) Consolidated AED ’000 15,969,818 13,576,700
37. 35 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 23. Operating segments (continued) Wholesale banking AED ’000 Retail banking AED ’000 Treasury AED ’000 Real estate AED ’000 Other AED ’000 Eliminations AED ’000 Consolidated AED ’000 Net interest income from external customers Inter-segmental net interest income Fee and commission income Fee and commission expense Other operating income, net Revenue 84,790 (6,808) 37,806 (787) 10,857 125,858 16,732 10,970 8,595 (3,995) 1,284 33,586 18,991 (2,633) 7 (183) 548 16,730 1,722 (1,722) 504 504 (193) 193 (7) (7) - 122,042 46,408 (4,972) 13,193 176,671 Impairment losses and provisions, net General and administrative expenses excluding depreciation and amortisation Depreciation and amortisation Share of results of an associate Profit/(loss) for the period (71,077) (19,772) (1,209) - - (92,058) (34,432) (5,147) (1,050) 14,152 (25,748) (2,775) (14,709) (3,463) (453) 11,605 (517) (782) (795) (156) (163) - (64,316) (9,157) (1,050) 10,090 11,163,910 10,604,778 1,545,339 2,166,200 3,208,539 1,634,619 397,268 480 825,679 244,144 - 17,140,735 14,650,221 Three months period ended 31 March 2020 (unaudited) As at 31 December 2020 (audited) Assets Liabilities - Non-current asset held for sale and associated liabilities are presented in ‘Wholesale banking’ segment. The Group conducted all of its operation in the UAE, there is no operation outside the UAE apart from non-current asset held for sale and associated liabilities. 24. Fair value of financial instruments This note provides information about how the Group determines the fair value of various financial assets and financial liabilities. 24.1 Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis Some of the Group's financial assets and financial liabilities are measured at fair value at the end of each reporting period. The fair value of financial assets and financial liabilities are determined as follows:  Fair value of all quoted investments measured at fair value through profit or loss and at fair value through other comprehensive income are based on quoted bid prices in an active market;
38. 36 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 24. Fair value of financial instruments (continued) 24.1 Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis (continued)   Fair value of all unquoted equity investments and unquoted investment funds measured at fair value through other comprehensive income is mainly based on market approach based valuation technique using price/book value multiple of trading peers and precedent transactions. These price/book values multiples and precedent transactions are unobservable inputs. Fair value of financial assets at FVTPL is calculated by taking proportionate share of the fair value of its assets (real estate) and liabilities; and Fair value of all derivatives is calculated using discounted cash flows. Discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives. Derivatives are measured using quoted rates and yield curves derived from quoted rates matching maturities of the contracts. The table below summarises the Group’s financial instruments fair value according to fair value hierarchy: 2021 AED ’000 Level 2 2020 AED ’000 2021 AED ’000 Level 3 2020 AED ’000 Financial assets at fair value through other comprehensive income Equity shares 13,672 13,752 Investment fund - - 22,019 2,695 22,019 2,695 2021 AED ’000 Level 1 2020 AED ’000 Financial assets at fair value through profit or loss Equity shares Positive fair value of derivatives financial assets Financial assets at fair value through profit or loss Negative fair value of derivatives financial liabilities - - - - 126,796 129,269 - 26,478 33,506 - - - 27,718 35,584 - - For level 3 fair valuation measured using price/book value multiple, the higher the unobservable input of price/book value multiple, the higher is fair value. The price/book value multiple used in valuation ranges between 0.90X to 0.91X (2020: 0.90X to 0.91X). For level 3 fair valuation of financial assets at FVTPL, measured using proportionate share of the fair value of its assets (real estate) and liabilities, the higher the net asset value, the higher is fair value. There were no transfers between Level 1 and 2 during the periods ended 31 March 2021 and 2020. Reconciliation of Level 3 fair value measurements of financial assets Balance at the beginning of the period/year Total losses in other comprehensive income Redemption 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) 35,811 35,811 45,523 (9,510) (202) 35,811
39. 37 Commercial Bank International P .S.C. Notes to condensed consolidated financial statements (continued) 24. Fair value of financial instruments (continued) 24.1 Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis (continued) The financial liabilities subsequently measured at fair value are classified as level 2 in the fair value hierarchy. There are no financial liabilities classified as fair value as level 3 in the fair value hierarchy. All gains and losses included in other comprehensive income relate to FVTOCI (quoted investments or unquoted investments) held at the end of the period and are reported as changes in ‘Investment revaluation reserve’. 24.2 Fair value of financial instruments carried at amortised cost Except as detailed below, the directors consider that the carrying amounts of financial assets and financial liabilities recognised at amortised cost in the consolidated financial statements approximate their fair values. Carrying amount 2021 2020 AED ’000 AED ’000 (unaudited) (audited) Investment securities measured at amortised cost 25. 1,368,311 1,534,076 Fair value 2021 2020 AED ’000 AED ’000 (unaudited) (audited) 1,389,242 1,574,703 Capital management The Group’s capital management objectives and policies are consistent with those disclosed in the consolidated financial statements for the year ended 31 December 2020. Regulatory capital The Bank calculates its Capital Adequacy Ratio in line with guidelines issued by the Central Bank of the UAE. The Group’s regulatory capital position at the end of reporting period under Basel III is as follows: CET1 capital AT1 capital T2 capital Total capital base Credit risk Market risk Operational risk Total risk weighted assets CET1 capital ratio Tier 1 capital ratio Total capital ratio 26. 2021 AED ’000 (unaudited) 2020 AED ’000 (audited) 1,564,640 459,125 155,507 2,179,272 1,696,981 459,125 158,761 2,314,867 12,440,534 9,445 1,365,801 13,815,780 12,700,872 8,468 1,489,725 14,199,065 11.33% 14.65% 15.77% 11.95% 15.18% 16.30% Approval of the condensed consolidated financial statements The condensed consolidated financial statements were approved by the Board of Directors and authorised for issue on 6th May 2021.
40. 38 Commercial Bank International P .S.C. Appendix Glossary of abbreviations AED AKPI AT1 Basel III CBI CBUAE CDs CEO CET1 ECL EIR EPS FVTOCI FVTPL IAS IASB IASs IFB IFRIC IFRS IFRSs LGD LLC OCI PD POCI SCA SIC SICR SPPI SPV T2 TESS the UAE TRE United Arab Emirates Dirham Al Khaleejiah Property Investments LLC Additional Tier 1 Basel III: International regulatory framework for banks Commercial Bank International PSC Central Bank of the UAE Certificates of Deposit Chief Executive Officer Common Equity Tier 1 Expected Credit Losses Effective Interest Rate Earnings Per Share Fair Value Through Other Comprehensive Income Fair Value Through Profit or Loss International Accounting Standard International Accounting Standards Board International Accounting Standards International Financial Brokerage LLC International Financial Reporting Interpretations Committee International Financial Reporting Standard International Financial Reporting Standards Loss Given Default Limited Liability Company Other Comprehensive Income Probability of Default Purchased or Originated Credit Impaired Securities and Commodities Authority of the UAE Standard Interpretations Committee Significant Increase in Credit Risk Solely Payments of Principal and Interest on the principal amount outstanding Special Purpose Vehicle Tier 2 Targeted Economic Support Scheme the United Arab Emirates Takamul Real Estate LLC