Last checked at 10 Nov 2016 07:00
News Release
9 November 2016
COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS
THIRD QUARTER 2016 CONSOLIDATED REVENUE OF EGP 2.87 BILLION ANDRECORD NET INCOME OF EGP 1.70 BILLION, OR EGP 1.31 PER SHARE, UP 28% FROM THIRD QUARTER 2015
· Record Third-Quarter 2016 Consolidated Financial Results
o Record net income of EGP 1.70 billion, up 28% year-on-year (YoY)
o Revenues of EGP 2.87 billion, up 11% YoY
o Return on average equity of 37.4%
o Return on average assets of 3.38%
o Efficiency ratio of 19.8%
o Standalone net interest margin of 5.75%
· Record 9M16 Consolidated Financial Results
o Record net income of EGP 4.46 billion, up 24% YoY
o Revenues of EGP 8.20 billion, up 10% YoY
o Return on average equity of 33.3%
o Return on average assets of 3.07%
o Efficiency ratio of 21.6%
o Standalone net interest margin of 5.68%
· Robust Balance Sheet
o Total tier capital of EGP 14.95 billion, or 13.90% of risk-weighted assets, of which 92% is high quality Tier I capital
o CBE local currency liquidity ratio of 58.0%, foreign currency of 47.0% (comfortably above CBE requirements of 20% and 25% respectively)
o CIB is well above the 100% requirement in the Basel III NSFR and LCR ratios
o High quality of funding, with customer deposits comprising 95% of total liabilities
o Standalone non-performing loans coverage ratio of 158%
· Supporting our Economy
o Funding to businesses and individuals grew by 7% during 9M16 to reach EGP 61.2 billion, with a loan market share of 7.13% as of July 2016[1]
o Deposits grew by 15% in 9M16 to EGP 178.2 billion, translating into a deposit market share of 8.07% as of July 2016
o In third quarter of 2016, CIB's operations generated EGP 610.4 million in corporate, payroll and other taxes
· Committed to our Community
o CIB Foundation started with Gozour Foundation the implementation of 264 eye exam Caravans, providing free eye exams and care for primary school students in Upper Egypt governorates
o CIB Foundation provided several donations throughout this quarter for "Magdi Yacoub Heart Foundation's Aswan Heart Center", the renovation and outfitting of "the Pediatric Critical Care Unit at the Sohag University Hospital" and "the Pediatric Catheter Lab at the Ain Shams University Hospital"
o CIB Foundation started through the Magdi Yacoub Heart Foundation to fund fifty (50) children's open heart surgeries
o CIB Foundation organized entertainment, edutainment, and sports events, in association with the Egyptian Red Crescent, and other foundations for children with special needs, including MOVE Foundation, the Advance Society for Autism, Right to Live Association and Logain Foundation
· Awards & Rankings
o EMEA Finance: "Best Cash Management Services in North Africa in 2016"
o EMEA Finance: "Best FX Services in North Africa in 2016"
o EMEA Finance: "Best Bank in Egypt in 2016"
o Global Finance: "Best Private Bank in Egypt in 2017"
CAIRO - Commercial International Bank (EGX: COMI) today reported third-quarter 2016 consolidated net income of EGP 1.7 billion, or EGP 1.31 per share, an increase of 28% over third-quarter 2015 net income of EGP 1.3 billion, or EGP 1.27 per share.
Management commented: "CIB maintained its record performance in the third-quarter, signaling a strong closure of the year despite the ambiguous macroeconomic environment, turning in record consolidated year-to-date top and bottom lines of EGP 8.20 billion and EGP 4.46 billion, up 10% and 24% from last year, respectively.
"Going back in time to the end of 2015, CIB Management has correctly foreseen the possible forthcoming macroeconomic and regulatory circumstances. Since then, CIB has been taking a cautious stance regarding its capital adequacy and foreign currency position towards the long-awaited increases in interest rates and exchange rates, both of which significantly materialized last week. By 2015 year-end, CIB underwent a cut in dividends in anticipation of a devaluation and interest rate hike along with higher regulatory capital requirements, such as the ICAAP and the Capital Conservation Buffer. Moving into second-quarter of 2016, and as the ambiguity of macroeconomic conditions continued, CIB took the lead in the decision to reclassify EGP 15bn of the available-for-sale sovereign bond portfolio as held-to-maturity, as a precautionary measure to minimize the impact of interest rate movements on the Bank's capital adequacy levels. CIB's Management also continued its focus on lowering the Bank's balance sheet duration, in order to maintain a proper balance sheet structure that would help boost the return to shareholders in light of an increasing interest rate environment, while maintaining its liquidity ratios comfortably above regulatory requirements. More impressively, and despite currently prevailing shortages in hard currency, CIB managed to exceed the minimum required liquidity ratios by Basel III in foreign currency, as Management has always been keeping an eye on international best practices together with CBE regulatory requirements."
THIRD-QUARTER FINANCIAL HIGHLIGHTS
REVENUES
Third-quarter standalone revenues were EGP 2.87 billion, up 12% from third-quarter 2015. Growth was driven by a 21% increase in net interest income.
Net Interest Income
Year-to-date standalone net interest margin (NIM)[2] was 5.68%, generating standalone net interest income of
EGP 7.07 billion, up 20% YoY.
Non-Interest Income
Standalone non-interest income for third quarter of 2016 was EGP 335 million (12% of revenues).
Trade service fees for the quarter recorded EGP 115 million. Trade service net outstanding balances stood at EGP 38 billion, up 25% YoY. Dealing room profits were EGP 101 million in the third quarter.
OPERATING EXPENSE
Standalone operating expense for 9M16 was EGP 1.8 billion, up 27% YoY. Consequently, 9M16 cost-to-income reported 21.4% compared to 19.4% last year, comfortably below the desirable level of 30%.
LOANS
CIB's total standalone gross loan portfolio was EGP 68.2 billion, adding EGP 5.3 billion, or 8% YtD. CIB's loan market share reached 7.13% as of July 2016.
DEPOSITS
Standalone deposits were EGP 178.1 billion, adding EGP 23 billion, or 15% YtD. CIB's deposit market share was 8.07% as of July 2016, maintaining the highest deposit market share of all private sector banks.
ASSET QUALITY
CIB maintained its resilient asset quality. Standalone non-performing loans represented 5.26% of the gross loan portfolio, covered 158% by the bank's EGP 5.7 billion loan loss provision balance. Loan loss provision expenses were EGP 74 million in the third quarter as CIB continued its conservative and proactive risk management strategy to counter potential challenges in certain industries.
CAPITAL AND LIQUIDITY
Total tier capital was EGP 14.95 billion in September 2016, or 13.90% of risk-weighted assets. Tier I capital was EGP 13.8 billion, or 92% 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 58.0% as of Sep-16, FCY CBE liquidity ratio reached 47.0%, above the threshold of 25%. NSFR was 216% for local currency and 122% for foreign currency, and LCR was 1343% for local currency and 444% for foreign currency.
KEY METRICS AND BUSINESS UPDATES[3]
· #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 52.5 billion, up 5% YtD
· End-of-period deposits were EGP 46.2 billion, down 5% YtD
· Gross outstanding contingent business reached EGP 39.6[4] billion, up 23% YtD
BUSINESS BANKING
· End-of-period gross loans were EGP 1.8 billion, below 7% YtD
· End-of-period deposits were EGP 42.3 billion, up 19% YtD
· Gross outstanding contingent business reached EGP 1.54 billion, up 2% YtD
RETAIL INDIVIDUALS BANKING
· End-of-period gross loans were EGP 13.9 billion, up 28% YtD
· End-of-period deposits were EGP 89.6 billion, up 26% YtD
· CIB continued to expand its network to reach a total of 163 branches and 24 units throughout Egypt, supported by a network of 719 ATMs
SECURITIES BROKERAGE, ASSET MANAGEMENT & INVESTMENT BANKING
· CI Capital[5] recorded 9M16 revenues of EGP 654 million and net income of EGP 82 million
· Brokerage[6] reached a market share of 9.0% and EGP 146 million in revenue
· EIMA ranked CIB Amman Fund second by 9M16 return; Blom Bank money market and Al Thabet Funds ranked third
· Investment Banking successfully closed four transactions in 9M16
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||
Income Statement | 3Q16 | 2Q16 | QoQ Change | 3Q15 | YoY Change | YtD Sep-16 | YtD Sep-15 | YoY change |
EGP million | EGP million | (2Q16 vs. 1Q16) | EGP million | (2Q16 vs. 2Q15) | EGP million | EGP million | (1H16vs.1H15) | |
Net Interest Income | 2,532 | 2,266 | 12% | 2,099 | 21% | 7,066 | 5,907 | 20% |
Non-Interest Income | 336 | 527 | -36% | 476 | -29% | 1,135 | 1,527 | -26% |
Net Operating Income | 2,868 | 2,793 | 3% | 2,575 | 11% | 8,200 | 7,434 | 10% |
Non-Interest Expense | (589) | (646) | -9% | (456) | 29% | (1,794) | (1,409) | 27% |
Loan loss provision | (74) | (216) | -66% | (472) | -84% | (578) | (1,120) | -48% |
Net Profit before Tax | 2,205 | 1,930 | 14% | 1,646 | 34% | 5,829 | 4,905 | 19% |
Income Tax | (496) | (475) | 4% | (299) | 66% | (1,453) | (1,430) | 2% |
Deferred Tax | (5) | (54) | -91% | (15) | -68% | (0) | 86 | NM |
Net profit from continued operations | 1,704 | 1,402 | 22% | 1,332 | 28% | 4,376 | 3,561 | 23% |
CI Capital Profit (Net of Tax) | 7 | 63 | -88% | (4) | NM | 96 | 23 | 319% |
Net profit | 1,711 | 1,464 | 17% | 1,328 | 29% | 4,472 | 3,584 | 25% |
Minority Interest | 9 | 0 | NM | 0 | NM | 14 | 0 | NM |
Net Profit After Minority | 1,703 | 1,464 | 16% | 1,328 | 28% | 4,458 | 3,583 | 24% |
Financial Indicators | 3Q16 | 2Q16 | QoQ Change | 3Q15 | YoY Change | YtD Sep-16 | YtD Sep-15 | YoY change |
(2Q16 vs. 1Q16) | (2Q16 vs. 2Q15) | (1H16vs.1H15) | ||||||
Profitability | ||||||||
ROAE | 37.4% | 36.9% | 1.4% | 34.6% | 7.9% | 33.3% | 31.3% | 6.3% |
ROAA | 3.38% | 3.02% | 12.2% | 3.1% | 8.2% | 3.07% | 2.98% | 3.0% |
Efficiency | ||||||||
Cost-to-Income | 19.8% | 22.9% | -13.6% | 18.2% | 8.9% | 21.6% | 19.2% | 12.1% |
Liquidity | ||||||||
Gross Loans-to-Deposits | 38.1% | 39.6% | -3.9% | 40.6% | -6.2% | 38.1% | 40.6% | -6.2% |
Asset Quality | ||||||||
NPLs-to-Gross Loans | 5.29% | 4.95% | 7.0% | 4.45% | 18.9% | 5.29% | 4.45% | 18.9% |
Capital Adequacy Ratio | 13.9% | 14.0% | -1.0% | 14.0% | -1.0% | 13.9% | 14.0% | -1.0% |
STANDALONE FINANCIAL HIGHLIGHTS | ||||||||
Income Statement | 3Q16 | 2Q16 | QoQ Change | 3Q15 | YoY Change | YtD Sep-16 | YtD Sep-15 | YoY change |
EGP million | EGP million | (2Q16 vs. 1Q16) | EGP million | (2Q16 vs. 2Q15) | EGP million | EGP million | (1H16vs.1H15) | |
Net Interest Income | 2,532 | 2,266 | 11.8% | 2,099 | 20.6% | 7,066 | 5,907 | 20% |
Non-Interest Income | 335 | 526 | -36% | 460 | -27.3% | 1,191 | 1,481 | -20% |
Net Operating Income | 2,867 | 2,792 | 2.7% | 2,559 | 12% | 8,257 | 7,388 | 12% |
Non-Interest Expense | (589) | (646) | -8.8% | (460) | 28% | (1,794) | (1,413) | 27% |
Loan loss provision | (74) | (216) | -65.9% | (472) | -84.4% | (578) | (1,120) | -48% |
Net Profit before Tax | 2,204 | 1,929 | 14.2% | 1,627 | 35.4% | 5,886 | 4,855 | 21% |
Income Tax | (496) | (475) | 4.4% | (299) | 65.5% | (1,453) | (1,430) | 2% |
Deferred Tax | (5) | (54) | NM | (15) | NM | (0) | 86 | NM |
Net Profit | 1,703 | 1,401 | 21.6% | 1,312 | 29.8% | 4,433 | 3,511 | 26% |
Financial Indicators | 3Q16 | 2Q16 | QoQ Change | 3Q15 | YoY Change | YtD Sep-16 | YtD Sep-15 | YoY change |
(2Q16 vs. 1Q16) | (2Q16 vs. 2Q15) | (1H16vs.1H15) | ||||||
Profitability | ||||||||
ROAE | 37.5% | 35.3% | 6.2% | 34.3% | 9.6% | 33.1% | 30.6% | 8.3% |
ROAA | 3.44% | 2.92% | 17.6% | 3.10% | 10.9% | 3.09% | 2.93% | 5.5% |
NIM | 5.75% | 5.51% | 4.3% | 5.55% | 3.7% | 5.68% | 5.58% | 1.8% |
Efficiency | ||||||||
Cost-to-Income | 19.8% | 23.0% | -13.6% | 18.5% | 7.3% | 21.4% | 19.4% | 10.3% |
Liquidity | ||||||||
Gross Loans-to-Deposits | 38.3% | 40.0% | -4.3% | 40.9% | -6.3% | 38.3% | 40.9% | -6.3% |
Asset Quality | ||||||||
NPLs-to-Gross Loans | 5.26% | 4.89% | 7.5% | 4.41% | 19.1% | 5.26% | 4.41% | 19.1% |
Direct Coverage Ratio | 158% | 169% | -6.4% | 155% | 1.8% | 158% | 155% | 1.8% |
BALANCE SHEET | ||||||
Consolidated | Standalone | |||||
Sep-16 | Dec-15 | YtD Change | Sep-16 | Dec-15 | YtD Change | |
EGP million | EGP million | (Sep-16 Vs. Dec-15) | EGP million | EGP million | (Sep-16 Vs. Dec-15) | |
Cash & Due from Central Bank | 12,435 | 9,849 | 26% | 12,435 | 9,849 | 26% |
Due from Banks | 41,178 | 21,002 | 96% | 41,178 | 21,002 | 96% |
Treasury Bills & Governmental Notes | 21,613 | 22,130 | -2.3% | 21,613 | 22,130 | -2% |
Trading Financial Assets | 3,662 | 5,848 | -37% | 3,662 | 5,848 | -37% |
Available-for-Sale Investments | 29,880 | 46,289 | -35% | 29,880 | 46,289 | -35% |
Financial assets held for sale | 4,633 | 1,066 | 334% | 428 | 503 | -15% |
Net Loans & Overdrafts | 60,785 | 56,836 | 7% | 61,235 | 57,211 | 7% |
Financial Derivatives | 66 | 81 | -18% | 66 | 81 | -18% |
Held-to-Maturity Investments | 26,312 | 9,261 | 184% | 26,312 | 9,261 | 184% |
Financial Investment in Subsidiaries | 35 | 160 | -78% | 11 | 13 | -12% |
Other Assets | 6,540 | 6,977 | -6% | 6,569 | 7,006 | -6% |
Total Assets | 207,139 | 179,500 | 15% | 203,388 | 179,193 | 14% |
Due to Banks | 478 | 1,601 | -70% | 478 | 1,601 | -70% |
Customer Deposits | 178,069 | 155,234 | 15% | 178,170 | 155,370 | 15% |
Other Liabilities | 9,248 | 6,082 | 52% | 5,592 | 5,711 | -2% |
Total Liabilities | 187,794 | 162,918 | 15% | 184,240 | 162,681 | 13% |
Total Shareholders' Equity | 14,754 | 11,806 | 25% | 14,716 | 11,871 | 24% |
Net Profit for the Period | 4,458 | 4,729 | -6% | 4,433 | 4,641 | -4% |
Shareholders' Equity & Net Profit | 19,212 | 16,535 | 16% | 19,148 | 16,512 | 16% |
Minority Interest | 133 | 47 | 180% | |||
Total Liabilities & Shareholders' Equity | 207,139 | 179,500 | 15% | 203,388 | 179,193 | 14% |
[1] 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
[5] CI capital revenues and net profit after minority interest
[6] Brokerage includes CIBC and Dynamic