Last checked at 3 Nov 2023 07:05
2 November 2023
COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS
THIRD-QUARTER 2023 CONSOLIDATED REVENUE OF EGP 13.8 BILLION AND
NET INCOME OF EGP 8.35 BILLION, OR EGP 2.24 PER SHARE, UP 89% FROM THIRD-QUARTER 2022
· Third-Quarter 2023 Consolidated Financial Results
o Net income of EGP 8.35 billion, up 89% year-on-year (YoY)
o Revenues of EGP 13.8 billion, up 64% YoY
o Return on average equity (ROAE) of 45.8%
o Return on average assets (ROAA) of 4.16%
o Efficiency ratio of 14.6%
o Net interest margin (NIM)[1] of 7.46%
· Nine-Months 2023 Consolidated Financial Results
o Net income of EGP 22.4 billion, up 84% YoY
o Revenues of EGP 39.3 billion, up 70% YoY
o ROAE of 41.2%
o ROAA of 4.13%
o Efficiency ratio of 15.6%
o NIM1 of 7.36%
· Balance Sheet Performance
o Total tier capital recorded EGP 91.5 billion, or 21.4% of risk-weighted assets
o CBE local currency liquidity ratio of 34.1%, foreign currency liquidity ratio of 73.5% (comfortably above CBE requirements of 20% and 25%, respectively)
o CIB remains well above the 100% requirement in the Basel III NSFR and LCR ratios
o High quality of funding, with customer deposits comprising 91% of total liabilities
o Non-performing loans coverage ratio of 231%
· Supporting our Economy
o Funding to businesses and individuals recorded EGP 255 billion, growing by 15% over nine-months 2023, or 7% net of the EGP devaluation impact, with a loan market share of 5.08%[2].
o Deposits recorded EGP 666 billion, growing by 26% over nine-months 2023, or 17% net of the EGP devaluation impact, with a deposit market share of 6.84%2.
o Loan-to-Deposit Ratio recorded 38.2% by end of nine-months 2023.
o In third-quarter 2023, CIB's operations generated EGP 4.20 billion in corporate, payroll, and other taxes.
· Committed to our Community
o CIB Foundation endowed "Egyptian Clothing Bank" with the first installment to manufacture 120,000 training suits.
o CIB Foundation joined forces with Al-Joud Foundation to support "Al Nas Hospital for Children's Heart" with the first installment to cover 100 surgeries.
o CIB Foundation funded "Nile-of-Hope Foundation" with the first installment to cover the cost of 100 open-heart surgeries and 200 catheterizations.
o CIB Foundation financed "Ibrahim A.Badran Foundation" with the first installment to cover the operating costs of medical convoys under "Our Kids - Our Future" initiative.
· Awards & Rankings
o Global Finance:
§ Best Private Bank
§ Best Supply Chain Finance Bank in Africa 2023
§ Best Trade Finance Provider in Egypt
§ Best Bank for Cash Management in Egypt
§ Transaction Banking Award
§ Best Bank in Egypt 2023
o EMEA Finance:
§ Best Mergers & Acquisitions Deal in MENA
§ Best Securitization House in Africa
§ Best Securitization Deal in Africa
§ Best Payment Services in North Africa
§ Best Cash Management Services in North Africa
§ Best Trade Finance Services in North Africa
§ Best Payment Services in Africa
o MEED:
§ Best Bank in Trade Finance
o Euromoney:
§ Best Bank in Egypt
§ Best Bank for SMEs in Egypt
§ Best Bank for ESG in Egypt
§ Best Service for Cash Management
o African Banker
§ Lifetime Achievement Award
Management Commented: "Notwithstanding the outlook beset with challenges, CIB was able to sustain its comfortable solvency, largely fueled by its typical strong financial performance, as well as its robust liquidity and asset quality levels. Precisely, CIB succeeded to maintain its Capital Adequacy Ratio (CAR) at 21.4% by end of third-quarter of 2023, securely above the minimum regulatory requirement and coming higher than last quarter by 240 basis points, mainly benefitting from third-quarter robust interim profits of EGP 8.35 billion, translating into Return on Average Equity (ROAE) of 45.8% for the quarter, which basically resulted from strong core business performance. This came largely driven by Management due focus on growing the Bank's Balance Sheet and Funding Base, yet without compromising on spreads and margins, which came in achievable despite the highly-competitive market for local and foreign currency liquidity, benefitting largely from maintaining a healthy share of Current and Saving Accounts (CASA) of 55% to Total Deposits, which is an ongoing Management strategy that continues to reap its fruits. This came while upholding the Bank's leading market position in asset quality, with Loan Loss Provision Balance covering 11.7% of the Bank's Total Gross Loan Portfolio, and 17% of the unsecured portion therein.
Simultaneously, liquidity levels remained stable with ample room above both, minimum regulatory requirements and Basel III requirements, in both local and foreign currency, with CBE Liquidity Ratio recording 34.1% in LCY and 73.5% in FCY, along with Basel III Liquidity Coverage Ratio (LCR) recording 1303% in LCY and 265% in FCY, and Net Stable Funding Ratio (NSFR) recording 208% in LCY and 206% in FCY. This came with CIB managing to decently grow its Local Currency Deposit Base, adding EGP 9.1 billion over the quarter, while maintaining its Foreign Currency Deposit Base, despite the challenging foreign currency landscape.
Further committed to its prudent and proactive risk management, CIB Management decided to take an accounting impairment on the Bank's Kenyan Investment, based on extreme variations in the macroeconomic assumptions and business plans that were made at the time of the acquisition. We would like to assure our stakeholders that we remain confident that the underlying fundamentals of our Kenyan Investment are still very much valid and that we took measures to weather these economic variations, and revamped the strategy on the ground as well as recalibrated key management personnel to implement the new strategy. We remain focused on our Kenyan Subsidiary being the first international acquisition and the corner stone of our East African expansion strategy.
As we approach the end of this year, and notwithstanding the ambiguity that yet lies ahead, on both global and local fronts, Management remains positive about growth and profitability prospects for CIB, and committed to secure sufficient levels of liquidity that would cater for potential market needs in the short-run, while sustaining its top-notch solvency, employing all proactive measures that would cement the Capital Position for CIB, as well as for the Egyptian Banking Sector as a whole, against current and potential economic and political variations."
THIRD-QUARTER 2023 FINANCIAL HIGHLIGHTS
REVENUES
Third-quarter 2023 standalone revenues were EGP 12.7 billion, up 51% from third-quarter 2022. Nine-months 2023 standalone revenues were EGP 38.2 billion, up 66% from nine-months 2022, on the back of 73% increase in net interest income.
NET INTEREST INCOME
Nine-months 2023 standalone net interest income recorded EGP 37.6 billion, increasing by 73% YoY, generated at 7.36% Total NIM1, which increased by 141 basis points (bp) YoY, with Local Currency NIM1 recording 9.25%, coming 179bp higher YoY, and Foreign Currency NIM1 recording 3.78%, coming 190bp higher YoY.
NON-INTEREST INCOME
Nine-months 2023 standalone non-interest income recorded EGP 647 million, with Trade Service fees recording EGP 1.77 billion, growing by 2.2x YoY, with outstanding balance of EGP 169 billion[3].
OPERATING EXPENSE
Nine-months 2023 standalone operating expense was EGP 6.30 billion, up 25% YoY. Cost-to-income[4] reported 15.5%, coming 490bp lower YoY, and remaining comfortably below the desirable level of 30%.
LOANS
Gross loan portfolio recorded EGP 255 billion, growing by 15% over nine-months 2023, with real growth of 7% net of the EGP devaluation impact, which added EGP 16.7 billion to the EGP equivalent balance. Growth was driven wholly by local currency loans, increasing by 15% or EGP 23.1 billion, sufficiently counterbalancing net foreign currency loan repayments of 8% or USD 221 million. CIB's loan market share reached 5.08%2 as of July 2023.
DEPOSITS
Deposits recorded EGP 666 billion, growing by 26% over nine-months 2023, with real growth of 17% net of the EGP devaluation impact, which added EGP 40.0 billion to the EGP equivalent balance. Growth was driven by local currency deposits, increasing by 23% or EGP 86.7 billion, together with foreign currency deposits adding 4% or USD 292 million. CIB's deposit market share recorded 6.84%2 as of July 2023, maintaining the highest deposit market share among all private-sector banks.
ASSET QUALITY
Standalone non-performing loans represented 5.04% of the gross loan portfolio, and were covered 233% by the Bank's EGP 29.8 billion loan loss provision balance. Nine-months 2023 loan loss provision expense recorded EGP 1.25 billion compared to EGP 263 million in nine-months 2022.
CAPITAL AND LIQUIDITY
Total tier capital recorded EGP 91.5 billion, or 21.4% of risk-weighted assets as of September 2023. Tier I capital reached EGP 76.4 billion, or 84% of total tier capital. CIB maintained its comfortable liquidity and funding position above CBE requirements and Basel III guidelines in both local currency and foreign currency. CBE liquidity ratios remained well above the regulator's requirements, with local currency liquidity ratio recording 34.1% by end of September 2023, compared to the regulator's threshold of 20%, and foreign currency liquidity ratio reaching 73.5%, above the threshold of 25%. NSFR was 208% for local currency and 206% for foreign currency, and LCR was 1303% for local currency and 265% for foreign currency, comfortably above the 100% Basel III requirement.
KEY METRICS AND BUSINESS UPDATES[5]
o #1 private-sector bank in Egypt in terms of revenues, net income, deposits, and total assets.
INSTITUTIONAL BANKING
o End-of-period gross loans were EGP 189.5 billion, 17% higher Year-to-Date (YtD), with real growth of 6% net of the EGP devaluation impact, predominantly on 18% growth in local currency loans.
o End-of-period deposits were EGP 216.5 billion, 11% higher YtD, with real growth of 3% net of the EGP devaluation impact, mainly on 3% growth in local currency deposits and 4% growth in foreign currency deposits.
o Gross outstanding contingent business reached EGP 176 billion, 26% higher YtD.
BUSINESS BANKING
o End-of-period gross loans were EGP 9.3 billion, 36% higher YtD, wholly on 36% growth in local currency loans.
o End-of-period deposits were EGP 90.2 billion, 33% higher YtD, with real growth of 26% net of the EGP devaluation impact, mainly on 32% growth in local currency deposits and 9% growth in foreign currency deposits.
o Gross outstanding contingent business reached EGP 4.97 billion, 35% higher YtD.
RETAIL INDIVIDUALS BANKING
o End-of-period gross loans were EGP 55.8 billion, higher by 6% YtD, wholly on 6% higher local currency loans.
o End-of-period deposits were EGP 359.1 billion, 34% higher YtD, with real growth of 24% net of the EGP devaluation impact, driven by 37% growth in local currency deposits and 4% growth in foreign currency deposits.
o CIB continued to expand its network to reach a total of 194 branches and 16 units across Egypt, supported by a network of 1,348 ATMs.
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||
Income Statement | 3Q23 | 2Q23 | QoQ Change | 3Q22 | YoY Change | 9M23 | 9M22 | YoY Change | ||||
EGP million | EGP million | (3Q23 vs. 2Q23) | EGP million | (3Q23 vs. 3Q22) | EGP million | EGP million | (9M23 vs. 9M22) | |||||
Net Interest Income | 13,838 | 13,009 | 6% | 8,089 | 71% | 37,731 | 21,818 | 73% | ||||
Non-Interest Income | 11 | 483 | -98% | 363 | -97% | 1,594 | 1,304 | 22% | ||||
Net Operating Income | 13,849 | 13,492 | 3% | 8,452 | 64% | 39,325 | 23,122 | 70% | ||||
Non-Interest Expense | (2,205) | (2,233) | -1% | (1,872) | 18% | (6,502) | (5,142) | 26% | ||||
Loan Loss Provision | (34) | (238) | -86% | (224) | -85% | (1,217) | (298) | 308% | ||||
Net Profit before Tax | 11,610 | 11,022 | 5% | 6,357 | 83% | 31,607 | 17,682 | 79% | ||||
Income Tax | (3,792) | (3,486) | 9% | (1,872) | 103% | (9,540) | (4,886) | 95% | ||||
Deferred Tax | 535 | 502 | 7% | (67) | NM | 393 | (597) | NM | ||||
Net profit from continued operations | 8,353 | 8,038 | 4% | 4,419 | 89% | 22,459 | 12,199 | 84% | ||||
Net profit from discontinued operations | (0.1) | (50) | NM | 0 | NM | (50) | 0 | NM | ||||
Net profit | 8,353 | 7,987 | 5% | 4,419 | 89% | 22,409 | 12,199 | 84% | ||||
Non-Controlling Interest | (0.1) | (0.4) | -61% | 10 | NM | 3 | 26 | -87% | ||||
Bank's Shareholders | 8,353 | 7,988 | 5% | 4,408 | 89% | 22,406 | 12,173 | 84% | ||||
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Financial Indicators | 3Q23 | 2Q23 | QoQ Change | 3Q22 | YoY Change | 9M23 | 9M22 | YoY Change | ||||
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| (3Q23 vs. 2Q23) | (3Q23 vs. 3Q22) |
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| (9M23 vs. 9M22) | ||||||
Profitability | ||||||||||||
ROAE | 45.8% | 49.1% | -7% | 27.1% | 69% | 41.2% | 24.4% | 69% | ||||
ROAA | 4.16% | 4.31% | -4% | 3.16% | 32% | 4.13% | 2.98% | 39% | ||||
Efficiency |
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Cost-to-Income | 14.6% | 15.8% | -7% | 21.4% | -32% | 15.6% | 20.9% | -25% | ||||
Liquidity | ||||||||||||
Gross Loans-to-Deposits | 38.2% | 38.4% | -0.4% | 40.3% | -5% | 38.2% | 40.3% | -5% | ||||
Asset Quality |
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NPLs-to-Gross Loans | 5.08% | 5.07% | 0.2% | 4.61% | 10% | 5.08% | 4.61% | 10% | ||||
Capital Adequacy Ratio | 21.4% | 19.0% | 13% | 26.7% | -20% | 21.4% | 26.7% | -20% | ||||
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STANDALONE FINANCIAL HIGHLIGHTS | ||||||||||||
Income Statement | 3Q23 | 2Q23 | QoQ Change | 3Q22 | YoY Change | 9M23 | 9M22 | YoY Change | ||||
EGP million | EGP million | (3Q23 vs. 2Q23) | EGP million | (3Q23 vs. 3Q22) | EGP million | EGP million | (9M23 vs. 9M22) | |||||
Net Interest Income | 13,797 | 12,958 | 6% | 8,015 | 72% | 37,587 | 21,711 | 73% | ||||
Non-Interest Income | (1,074) | 529 | NM | 397 | NM | 647 | 1,364 | -53% | ||||
Net Operating Income | 12,723 | 13,488 | -6% | 8,412 | 51% | 38,234 | 23,075 | 66% | ||||
Non-Interest Expense | (2,133) | (2,166) | -1% | (1,791) | 19% | (6,304) | (5,025) | 25% | ||||
Loan loss provision | (36) | (265) | -86% | (248) | -85% | (1,249) | (263) | 376% | ||||
Net Profit before Tax | 10,554 | 11,056 | -5% | 6,372 | 66% | 30,681 | 17,787 | 72% | ||||
Income Tax | (3,771) | (3,505) | 8% | (1,874) | 101% | (9,541) | (4,984) | 91% | ||||
Deferred Tax | 805 | 508 | 59% | (67) | NM | 591 | (597) | NM | ||||
Net Profit | 7,589 | 8,059 | -6% | 4,432 | 71% | 21,732 | 12,206 | 78% | ||||
Financial Indicators | 3Q23 | 2Q23 | QoQ Change | 3Q22 | YoY Change | 9M23 | 9M22 | YoY Change |
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| (3Q23 vs. 2Q23) | (3Q23 vs. 3Q22) |
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| (9M23 vs. 9M22) | ||
Profitability | ||||||||
ROAE | 41.5% | 49.1% | -16% | 27.3% | 52% | 40.0% | 24.4% | 64% |
ROAA | 3.79% | 4.36% | -13% | 3.19% | 19% | 4.02% | 2.99% | 34% |
NIM* | 7.46% | 7.47% | 0% | 6.24% | 20% | 7.36% | 5.95% | 24% |
Efficiency |
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Cost-to-Income | 15.3% | 15.3% | 0.1% | 20.6% | -26% | 15.5% | 20.4% | -24% |
Liquidity | ||||||||
Gross Loans-to-Deposits | 38.2% | 38.4% | -0.3% | 40.2% | -5% | 38.2% | 40.2% | -5% |
Asset Quality |
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NPLs-to-Gross Loans | 5.04% | 5.02% | 0.5% | 4.59% | 10% | 5.04% | 4.59% | 10% |
Direct Coverage Ratio | 233% | 236% | -2% | 216% | 8% | 233% | 216% | 8% |
*NIM based on standalone managerial accounts
BALANCE SHEET | |||||||
| Consolidated | Standalone |
| ||||
Balance Sheet | Sep-23 | Dec-22 | YtD Change | Sep-23 | Dec-22 | YtD Change |
|
| EGP million | EGP million | (Sep-23 Vs.Dec-22) | EGP million | EGP million | (Sep-23 Vs.Dec-22) |
|
Cash & Due from Central Bank | 59,950 | 47,493 | 26% | 59,819 | 47,385 | 26% |
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Due from Banks | 276,843 | 133,857 | 107% | 276,244 | 133,766 | 107% |
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Net Loans & Overdrafts | 223,086 | 196,578 | 13% | 222,327 | 195,599 | 14% |
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Financial Derivatives | 1,647 | 1,940 | -15% | 1,647 | 1,940 | -15% |
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Financial Investment Securities | 228,276 | 238,545 | -4% | 226,930 | 237,095 | -4% |
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Investments in Associates and Subsidiaries | 132 | 186 | -29% | 695 | 1,074 | -35% |
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Other Assets | 21,134 | 17,233 | 23% | 21,081 | 16,784 | 26% |
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Total Assets | 811,069 | 635,832 | 28% | 808,743 | 633,643 | 28% |
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Due to Banks | 19,023 | 3,497 | 444% | 19,030 | 3,476 | 448% |
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Customer Deposits | 667,669 | 531,617 | 26% | 665,895 | 530,125 | 26% |
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Other Liabilities | 46,941 | 32,381 | 45% | 46,539 | 32,322 | 44% |
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Total Liabilities | 733,633 | 567,494 | 29% | 731,464 | 565,922 | 29% |
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Shareholders' Equity & Net Profit | 77,307 | 67,758 | 14% | 77,278 | 67,721 | 14% |
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Non-Controlling Interest | 129 | 580 | -78% | 0 | 0 | NM |
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Total Liabilities & Shareholders' Equity | 811,069 | 635,832 | 28% | 808,743 | 633,643 | 28% |
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[1] Based on standalone managerial accounts.
[2] As of July-23; latest available CBE data at time of publishing.
[3]Net of Collateral, Gross of Provisions.
[4]Cost-to-income is calculated using revenues after adding/deducting back other provision charged/released.
[5] 1) Loan, deposit, and outstanding contingent balances are based on managerial accounts. 2) Growth in foreign currency balances is in real terms, excluding the effect of EGP devaluation by EGP 6.2 YtD. 3) Outstanding contingent balances are gross of collateral and provisions.