Last checked at 9 Nov 2017 07:00
News Release
8 November 2017
COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS
RECORD THIRD-QUARTER 2017 CONSOLIDATED REVENUE OF EGP 4.16 BILLION AND NET INCOME OF EGP 2.09 BILLION, OR EGP 1.59 PER SHARE, UP 23% FROM THIRD-QUARTER 2016
· Record Third-Quarter 2017 Consolidated Financial Results
o Net income of EGP 2.09 billion, up 23% year-on-year (YoY)
o Revenues of EGP 4.16 billion, up 45% YoY
o Return on average equity of 32.88%
o Return on average assets of 2.98%
o Efficiency ratio of 18.46%
o Net interest margin of 5.47%
· Record 9M17 Consolidated Financial Results
o Net income of EGP 5.65 billion, up 27% YoY
o Revenues of EGP 11.03 billion, up 35% YoY
o Return on average equity of 31.39%
o Return on average assets of 2.74%
o Efficiency ratio of 20.47%
o Net interest margin of 4.94%
· Robust Balance Sheet
o Total tier capital recorded EGP 27.21 billion, or 16.95% of risk-weighted assets
o CBE local currency liquidity ratio of 67.64%, foreign currency of 53.53% (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 97% of total liabilities
o Non-performing loans coverage ratio of 155%
· Supporting our Economy
o Funding to businesses and individuals grew by 4% year-to-date (YtD), though shrinking by 3% during the third quarter of 2017 to reach EGP 102 billion, with a loan market share of 7.30%1
o Deposits grew by 7% YtD and 1% during the third quarter of 2017 to reach EGP 248 billion, translating into a deposit market share of 8.18%1
o In third-quarter 2017, CIB's operations generated EGP 857 million in corporate, payroll and other taxes
· Committed to our Community
o CIB Foundation purchased an outfitted mobile dental caravan for the Faculty of Oral and Dental Medicine at Cairo University, in collaboration with Rotary Club of Zamalek.
o CIB Foundation conducted 6 blood donation campaigns for collecting 201 blood bags to cover the needs of more than 600 patients.
o CIB Foundation launched the second phase of "Squash for Everyone" with the aim of offering an equal opportunity to underprivileged children to explore and develop their athletic capabilities.
o CIB Foundation organized multiple visits to Kidzania, whereby the children of "Move Foundation - Logain Foundation" performed several professions and engaged in various activities in a unique fully-fledged edutainment environment.
· Awards & Rankings
o EMEA Finance: Best Cash Management Services in North Africa
o EMEA Finance: Best FX Services in North Africa
o EMEA Finance: Best Local Bank in Egypt
o EMEA Finance: Most Innovative Bank - Pan Africa
CAIRO - Commercial International Bank (EGX: COMI) today reported year-to-date consolidated net income of EGP 5.65 billion, or EGP 4.34 per share, and consolidated revenue of EGP 11.03 billion, up 27% and 35% from last year, respectively.
Management commented: Marked by its robust fundamentals and steadfast balance sheet growth, CIB continued to deliver strong financial results in the third quarter of 2017, albeit challenging macroeconomic and regulatory conditions.
CIB's exceptional performance throughout the eventful 2017 largely owes to successful balance sheet and treasury management performance. Re-engineering of the Bank's balance sheet, previously communicated in our latest releases, to become more perceptive to interest rate fluctuations, proved powerful during the third quarter of the year. That said, the Bank was able to grow its net interest income, despite intense market competition, which pushed all banks to raise their cost of deposits in order to compete efficiently with the rates offered by public sector banks.
On a different note, Bank's Management has also been proficient in making the most of foreign currency availability following the floatation of the Egyptian Pound, distinctly growing its non-interest income, driven specifically by an increased momentum in contingent business activity. Not only did CIB succeed in delivering strong growth across its different revenue lines amid current circumstances, but has also been successful in improving efficiency, as evident in a decrease in its cost-to-income ratio, notwithstanding inflationary pressures on the Bank's expenses.
The road ahead remains challenging, especially after the CBE's latest decision to increase the Required Reserve Ratio back to its historical 14%, which is expected to impact Banks' interest margins in the short run, after which pressure would start to ease off as Banks gradually adjust their cost of deposits, thereby placing downward pressure on interest rates and helping bring inflation down.
THIRD-QUARTER FINANCIAL HIGHLIGHTS
REVENUES
Third-quarter 2017 standalone revenues were EGP 4.17 billion, up 45% from third-quarter 2016, driven by growth in both net interest income and non-interest income.
Net Interest Income
YtD Net Interest Margin (NIM)2 was 4.94%, generating net interest income of EGP 9.31 billion, up 32% YoY.
Non-Interest Income
Standalone non-interest income for 9M17 was EGP 2.03 billion, 18% of revenues.
Trade service fees were EGP 662 million. Trade service net outstanding balances stood at EGP 70.83 billion, 3% higher YtD.
OPERATING EXPENSE
Standalone operating expense for 9M17 was EGP 2.26 billion, up 26% YoY. Cost-to-income reported 19.92% down from 21.42% for the same period last year, comfortably below the desirable level of 30%.
LOANS
CIB's total consolidated gross loan portfolio was EGP 102 billion, adding EGP 4.3 billion, or 4% YtD. CIB's loan market share reached 7.30% as of July 2017. CIB witnessed 26% growth in its local currency gross loan portfolio in 9M17 adding EGP 11 billion and outweighing foreign currency loan repayments by an equivalent of EGP 7 billion.
DEPOSITS
Deposits were EGP 248 billion, adding EGP 16 billion, or 7% YtD. CIB's deposit market share was 8.18% as of July 2017, maintaining the highest deposit market share among all private-sector banks.
ASSET QUALITY
CIB maintained its resilient asset quality. Standalone non-performing loans represented 6.94% of the gross loan portfolio, covered 155% by the Bank's EGP 10.94 billion loan loss provision balance. Loan loss provision expenses were EGP 623 million in the third quarter of 2017, as CIB continued its conservative risk management strategy to counter current and potential economic challenges in certain industries.
CAPITAL AND LIQUIDITY
Total tier capital was EGP 27.21 billion, or 16.95% of risk-weighted assets as of September 2017. Tier I capital was EGP 25.59 billion, or 94% of total tier capital.
CIB maintained its comfortable liquidity position above CBE requirements and Basel III guidelines, which have been recently enforced by the CBE, in both local currency and foreign currency. LCY CBE liquidity ratio remained well above the regulator's 20% requirement, recording 67.64% as of September 2017, while FCY CBE liquidity ratio reached 53.53%, above the threshold of 25%. NSFR was 177.22% for local currency and 151.86% for foreign currency, and LCR was 704.34% for local currency and 527.39% for foreign currency, comfortably above the 100% Basel III requirement.
KEY METRICS AND BUSINESS UPDATES3
· #1 private-sector bank in Egypt in terms of revenues, net income, deposits, and total assets
INSTITUTIONAL BANKING
· End-of-period gross loans were EGP 80.9 billion, 5% lower QoQ and 1% lower YtD.
· End-of-period deposits were EGP 46.3 billion, 8% lower QoQ and 21% lower YtD.
· Gross outstanding contingent business reached EGP 72.44 billion, flat QoQ and 2% higher YtD.
BUSINESS BANKING
· End-of-period gross loans were EGP 2.2 billion, 1% lower QoQ and 7% higher YtD.
· End-of-period deposits were EGP 61.3 billion, 3% higher QoQ and 15% higher YtD.
· Gross outstanding contingent business reached EGP 2.04 billion, 11% higher both QoQ and YtD.
RETAIL INDIVIDUALS BANKING
· End-of-period gross loans were EGP 18.6 billion, 6% higher QoQ and 32% higher YtD.
· End-of-period deposits were EGP 140.1 billion, 3% higher QoQ and 17% higher YtD.
· CIB continued to expand its network to reach a total of 172 branches and 22 units across Egypt, supported by a network of 802 ATMs.
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||
Income Statement | 3Q17 | 2Q17 | QoQ Change | 3Q16 | YoY Change | 9M17 | 9M16 | YoY change |
EGP million | EGP million | (3Q17 vs. 2Q17) | EGP million | (3Q17 vs. 3Q16) | EGP million | EGP million | (9M17 vs. 9M16) | |
Net Interest Income | 3,567 | 2,959 | 21% | 2,532 | 41% | 9,310 | 7,066 | 32% |
Non-Interest Income | 588 | 594 | -1% | 336 | 75% | 1,721 | 1,135 | 52% |
Net Operating Income | 4,155 | 3,554 | 17% | 2,868 | 45% | 11,030 | 8,200 | 35% |
Non-Interest Expense | (762) | (754) | 1% | (589) | 29% | (2,263) | (1,794) | 26% |
Loan loss provision | (623) | (303) | 106% | (74) | 745% | (1,432) | (578) | 148% |
Net Profit before Tax | 2,770 | 2,497 | 11% | 2,205 | 26% | 7,336 | 5,829 | 26% |
Income Tax | (695) | (651) | 7% | (496) | 40% | (1,945) | (1,453) | 34% |
Deferred Tax | (7) | (18) | -62% | (5) | 34% | (10) | (0) | NM |
Net profit from continued operations | 2,068 | 1,828 | 13% | 1,704 | 21% | 5,381 | 4,376 | 23% |
CI Capital Profit (Net of Tax) | 18 | - | NM | 7 | 148% | 291 | 96 | 204% |
Net profit | 2,087 | 1,828 | 14% | 1,711 | 22% | 5,672 | 4,472 | 27% |
Minority Interest | - | - | NM | 9 | NM | 24 | 14 | 75% |
Net Profit After Minority | 2,087 | 1,828 | 14% | 1,703 | 23% | 5,648 | 4,458 | 27% |
Financial Indicators | 3Q17 | 2Q17 | QoQ Change | 3Q16 | YoY Change | 9M17 | 9M16 | YoY change |
(3Q17 vs. 2Q17) | (3Q17 vs. 3Q16) | (9M17 vs. 9M16) | ||||||
Profitability | ||||||||
ROAE | 32.88% | 31.65% | 4% | 37.40% | -12% | 31.39% | 33.26% | -6% |
ROAA | 2.98% | 2.66% | 12% | 3.38% | -12% | 2.74% | 3.07% | -11% |
Efficiency | ||||||||
Cost-to-Income | 18.46% | 21.44% | -14% | 19.83% | -7% | 20.47% | 21.56% | -5% |
Liquidity | ||||||||
Gross Loans-to-Deposits | 41.08% | 42.62% | -4% | 38.05% | 8% | 41.08% | 38.05% | 8% |
Asset Quality | ||||||||
NPLs-to-Gross Loans | 6.94% | 6.81% | 2% | 5.29% | 31% | 6.94% | 5.29% | 31% |
Capital Adequacy Ratio | 16.95% | 15.61% | 9% | 13.90% | 22% | 16.95% | 13.90% | 22% |
STANDALONE FINANCIAL HIGHLIGHTS | ||||||||
Income Statement | 3Q17 | 2Q17 | QoQ Change | 3Q16 | YoY Change | 9M17 | 9M16 | YoY change |
EGP million | EGP million | (3Q17 vs. 2Q17) | EGP million | (3Q17 vs. 3Q16) | EGP million | EGP million | (9M17 vs. 9M16) | |
Net Interest Income | 3,567 | 2,959 | 21% | 2,532 | 41% | 9,310 | 7,066 | 32% |
Non-Interest Income | 602 | 588 | 2% | 335 | 80% | 2,029 | 1,191 | 70% |
Net Operating Income | 4,169 | 3,547 | 18% | 2,867 | 45% | 11,339 | 8,257 | 37% |
Non-Interest Expense | (762) | (754) | 1% | (589) | 29% | (2,263) | (1,794) | 26% |
Loan loss provision | (623) | (303) | 106% | (74) | 745% | (1,432) | (578) | 148% |
Net Profit before Tax | 2,784 | 2,490 | 12% | 2,204 | 26% | 7,644 | 5,886 | 30% |
Income Tax | (695) | (651) | 7% | (496) | 40% | (1,945) | (1,453) | 34% |
Deferred Tax | (7) | (18) | -62% | (5) | 34% | (10) | (0) | NM |
Net Profit | 2,082 | 1,821 | 14% | 1,703 | 22% | 5,689 | 4,433 | 28% |
Financial Indicators | 3Q17 | 2Q17 | QoQ Change | 3Q16 | YoY Change | 9M17 | 9M16 | YoY change |
(3Q17 vs. 2Q17) | (3Q17 vs. 3Q16) | (9M17 vs. 9M16) | ||||||
Profitability | ||||||||
ROAE | 32.87% | 31.59% | 4% | 37.54% | -12% | 31.72% | 33.15% | -4% |
ROAA | 2.60% | 2.65% | -2% | 3.44% | -24% | 2.78% | 3.09% | -10% |
NIM* | 5.47% | 4.72% | 16% | 5.75% | -5% | 4.94% | 5.68% | -13% |
Efficiency | ||||||||
Cost-to-Income | 18.40% | 21.48% | -14% | 19.84% | -7% | 19.92% | 21.42% | -7% |
Liquidity | ||||||||
Gross Loans-to-Deposits | 41.08% | 42.62% | -4% | 38.29% | 7% | 41.08% | 38.29% | 7% |
Asset Quality | ||||||||
NPLs-to-Gross Loans | 6.94% | 6.81% | 2% | 5.26% | 32% | 6.94% | 5.26% | 32% |
Direct Coverage Ratio | 155% | 148% | 4% | 158% | -2% | 155% | 158% | -2% |
* NIM based on managerial accounts
BALANCE SHEET | ||||||
Consolidated | Standalone | |||||
Sep-17 | Dec-16 | YtD Change | Sep-17 | Dec-16 | YtD Change | |
EGP million | EGP million | (Sep-17 Vs. Dec-16) | EGP million | EGP million | (Sep-17 Vs. Dec-16) | |
Cash & Due from Central Bank | 23,175 | 10,522 | 120% | 23,175 | 10,522 | 120% |
Due from Banks | 38,891 | 58,011 | -33% | 38,891 | 58,011 | -33% |
Treasury Bills & Governmental Notes | 54,950 | 39,177 | 40% | 54,950 | 39,177 | 40% |
Trading Financial Assets | 4,599 | 2,445 | 88% | 4,599 | 2,445 | 88% |
Available-for-Sale Investments | 17,781 | 5,447 | 226% | 17,781 | 5,447 | 226% |
Financial assets held for sale | - | 4,890 | NM | - | 428 | NM |
Net Loans & Overdrafts | 87,997 | 85,384 | 3% | 87,997 | 86,152 | 2% |
Financial Derivatives | 69 | 269 | -75% | 69 | 269 | -75% |
Held-to-Maturity Investments | 47,495 | 53,925 | -12% | 47,495 | 53,925 | -12% |
Financial Investment in Subsidiaries | 59 | 37 | 60% | 10 | 11 | -7% |
Other Assets | 7,870 | 7,436 | 6% | 7,870 | 7,465 | 5% |
Total Assets | 282,886 | 267,544 | 6% | 282,837 | 263,852 | 7% |
Due to Banks | 664 | 3,009 | -78% | 664 | 3,009 | -78% |
Customer Deposits | 247,734 | 231,741 | 7% | 247,734 | 231,965 | 7% |
Other Liabilities | 7,879 | 11,286 | -30% | 7,879 | 7,602 | 4% |
Total Liabilities | 256,277 | 246,036 | 4% | 256,277 | 242,576 | 6% |
Total Shareholders' Equity | 20,961 | 15,365 | 36% | 20,871 | 15,325 | 36% |
Net Profit for the Period | 5,648 | 6,009 | -6% | 5,689 | 5,951 | -4% |
Shareholders' Equity & Net Profit | 26,609 | 21,374 | 24% | 26,560 | 21,276 | 25% |
Minority Interest | - | 133 | NM | - | - | |
Total Liabilities & Shareholders' Equity | 282,886 | 267,544 | 6% | 282,837 | 263,852 | 7% |
1 As of July 2017; latest available CBE data at time of print
2 Based on managerial accounts
3 Loan and deposit balances based on managerial accounts
4 On gross basis; based on managerial accounts