Last checked at 4 Feb 2020 07:00
News Release
3 February 2020
COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS
RECORD FULL-YEAR 2019 CONSOLIDATED REVENUE OF EGP 23.0 BILLION AND NET INCOME OF EGP 11.8 BILLION, OR EGP 7.33 PER SHARE, UP 23% FROM 2018
FOURTH-QUARTER 2019 CONSOLIDATED REVENUE OF EGP 6.15 BILLION AND NET INCOME OF EGP 3.26 BILLION, OR EGP 2.06 PER SHARE, UP 27% FROM FOURTH-QUARTER 2018
·; Record Full-Year 2019 Consolidated Financial Results
o Net income of EGP 11.8 billion, up 23% year-on-year (YoY)
o Revenues of EGP 23.0 billion, up 13% YoY
o Return on average equity of 29.5%
o Return on average assets of 3.26%
o Efficiency ratio of 21.6%
o Net interest margin (NIM)1 of 6.48%
·; Record Fourth-Quarter 2019 Consolidated Financial Results
o Net income of EGP 3.26 billion, up 27% YoY
o Revenues of EGP 6.15 billion, up 18% YoY
o Return on average equity of 26.2%
o Return on average assets of 3.43%
o Efficiency ratio of 17.8%
o NIM[1] of 7.00%
·; Robust Balance Sheet
o Total tier capital recorded EGP 52.0 billion, or 26.1% of risk-weighted assets
o CBE local currency liquidity ratio of 74.9%, foreign currency of 56.5% (comfortably above CBE requirements of 20% and 25%, respectively)
o CIB remains well above the 100% requirement in 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 225%
·; Supporting our Economy
o Funding to businesses and individuals grew by 10% over 2019 to record EGP 132 billion, with real loan growth of 16%[2] and a loan market share of 6.82%[3]
o Deposits grew by 7% over 2019 to reach EGP 304 billion, with real deposit growth of 10%2, translating into a deposit market share of 7.44%3
o In 2019, CIB's operations generated EGP 5.78 billion in corporate, payroll and other taxes
·; Committed to our Community
o CIB Foundation joined forces with Ibrahim Badran Foundation to provide 48 medical convoys for children in underprivileged areas, targeting several children health issues such as internal medicine, pulmonology, orthopaedics and dermatology.
o CIB Foundation, in partnership with Yahiya Arafa Children's Charity Foundation, supported the operations of 5 paediatric units in Ain Shams University Hospital.
o CIB Foundation collaborated with Magdy Yacoub Foundation to cover 50 paediatric open-heart surgeries at Magdy Yacoub Aswan Heart Center.
o CIB Foundation, under management of Rotary Club of Giza Metropolitan, covered 32 open-heart surgeries that took place at El Kasr El Eini Hospital.
·; Awards & Rankings
o Global Finance: Best Trade Finance Provider in Egypt, Best Bank for Payment & Collections in the Middle East, Best Treasury & Cash Management Providers in Egypt, Best Bank in Egypt, Best Online Portal Services, Best Information Security and Fraud Management, Best Online Deposit, Credit and Investment Product Offerings, Best Bill Payment and Presentment, Best Integrated Consumer Banking Site, Best in Mobile Banking, Best Mobile Banking App, Most Innovative Digital Bank, Best Trade Finance Services, Best Sub-custodian Bank in Egypt
o Euromoney: Best Bank in Egypt, The Middle East's Best Bank for Corporate Responsibility
o EMEA Finance: Best FX Services in North Africa, Best Payment Services in North Africa
CAIRO - Commercial International Bank (EGX: COMI) today reported fourth-quarter 2019 consolidated net income of EGP 3.26 billion, or EGP 2.06 per share, up 27% from fourth-quarter 2018. Full-year 2019 consolidated net income recorded EGP 11.8 billion, or EGP 7.33 per share, growing by 23% from last year.
Management commented: "Leaving behind a year of considerable macroeconomic and regulatory dynamism, 2019 witnessed numerous economic reforms as stipulated by the IMF guidelines, which, though radical and challenging in nature, placed the Egyptian economy among the highly attractive destinations for global investment. The Banking Sector had its share of the recast, with a series of consecutive corridor cut episodes slashing rates down year-round by 450bp, urged by a notable deceleration in inflation levels and relatively stabilizing macroeconomic conditions. In that event, the Banking Sector faced vigorous competition over market funds, which, alongside the new tax law enactment at the onset of the year, came in challenging to the Sector's growth prospects. Confronted with an eventful outlook, however, CIB managed to deliver a new set of record results, posting top and bottom line of EGP 23.0 billion and EGP 11.8 billion over 2019, growing from last year by 24% and 23%, respectively, after normalizing for the EGP 1.82 billion recycled in 2018 from unearned interest to interest income.
Notwithstanding the competitive outlook, CIB came through, managing to gain market share in both loans and deposits, aided by Management efforts and strategic focus on robustly growing the Bank's balance sheet while simultaneously preserving spreads to secure profitability. In evidence, CIB came amongst the fastest growing balance sheets in the market, driven primarily by growth in local currency deposits. Moreover, fourth quarter of 2019 has been a distinctively good quarter for CIB with regards to lending activity, with both local and foreign currency loans growing by 6% and 9% over the quarter, respectively, bringing entire-year loan growth to 20% in local currency and 11% in foreign currency and foreshadowing an upcoming period of impressive lending uplift in line with Management aspirations and focused efforts to keep tabs on growing the Bank's core business. Adding on, Management has been proactive in foreseeing interest rate movements, tactically furnishing the Bank's treasury portfolio in a way that would smoothly accommodate market dynamics, while retaining sufficient flexibility to capture worthy trading opportunities amidst interest rate descents.
Going apace with the Bank's strategy in sustaining the desirable balance between liquidity, solvency and profitability, CIB recorded a comfortable Capital Adequacy Ratio of 26%, granting the Bank robust coverage for both expected and unexpected losses and emphasizing its ability to secure top-notch solvency without sacrificing its normal and singular standard in top and bottom line growth.
2019 witnessed a key achievement for CIB, making it to the first institution in the history of the Egyptian Tax Society and Tax Authority to conclude the tax inspection process for 2018 prior to the subsequent year-end and to clear all cases and disputes outstanding with the Tax Authority, further affirming its leadership in compliance with regulatory initiatives and re-instating its continuous record in granting investors a higher level of comfort in the quality of the Bank's financial reporting and regulatory standing.
Moving into 2020, we remain positive about the economic outlook and confident about CIB's ability to ride out market variations in light of the expected continuation of the monetary easing cycle, drawing on its proven record of resilient balance sheet fundamentals and effective management besides its affluent capital buffer."
FOURTH-QUARTER 2019 FINANCIAL HIGHLIGHTS
REVENUES
Fourth-quarter 2019 standalone revenues were EGP 6.15 billion, up 18% from fourth-quarter 2018. Full-year 2019 standalone revenues were EGP 23.0 billion, up 24% YoY, after excluding EGP 1.82 billion pertaining to the transfer from unearned interest to interest income in 2018.
NET INTEREST INCOME
2019 standalone NIM1 was 6.48%, generating net interest income of EGP 21.6 billion, up 32% YoY, excluding the aforementioned EGP 1.82 billion.
NON-INTEREST INCOME
2019 standalone non-interest income recorded EGP 1.44 billion, representing 6% of revenues. Trade service fees were EGP 739 million, with net outstanding balance of EGP 70.2 billion.
OPERATING EXPENSE
2019 standalone operating expense was EGP 5.04 billion, up 19% YoY. Cost-to-income recorded 21.6%, 123bp higher YoY, but still comfortably below the desirable level of 30%.
LOANS
Gross loan portfolio recorded EGP 132 billion, adding EGP 12.4 billion or 10% YoY. Growth was driven by both local currency and foreign currency loans, which added 20% or EGP 12.7 billion and 11% or USD 341 million, respectively, while the EGP appreciation brought the FCY equivalent balance down by EGP 6.47 billion. Excluding the latter, CIB's gross loans grew by 16% YoY. CIB's loan market share reached 6.82% as of November 2019.
DEPOSITS
Deposits recorded EGP 304 billion, adding EGP 19.1 billion or 7% YoY. Growth was driven wholly by local currency deposits, which grew by 18%, adding EGP 33.3 billion over 2019, while FCY deposits came lower by 4% or USD 217 million and the EGP appreciation brought the FCY equivalent balance down by a further EGP 10.3 billion. Excluding the latter, CIB's deposits grew by 10% YoY. CIB's deposit market share recorded 7.44% as of November 2019, maintaining the highest deposit market share among all private-sector banks.
ASSET QUALITY
CIB maintained its resilient asset quality. Standalone non-performing loans represented 3.99% of the gross loan portfolio, covered 225% by the Bank's EGP 11.8 billion loan loss provision balance. Loan Loss Provision Expense recorded EGP 1.44 billion for 2019, 14% higher YoY, excluding the aforementioned EGP 1.82 billion, transferred to interest income and fully provisioned for.
CAPITAL AND LIQUIDITY
Total tier capital was EGP 52 billion, or 26.1% of risk-weighted assets as of December 2019. Tier I capital was EGP 47.1 billion, or 90.5% of total tier capital.
CIB maintained its comfortable liquidity position above CBE requirements and Basel III guidelines in both local currency and foreign currency. Local-currency CBE liquidity ratio remained well above the regulator's 20% requirement, recording 74.9% for 2019, while foreign-currency CBE liquidity ratio reached 56.5%, above the threshold of 25%. NSFR was 255% for local currency and 156% for foreign currency, and LCR was 757% for local currency and 231% for foreign currency, comfortably above the 100% Basel III requirement.
KEY METRICS AND BUSINESS UPDATES[4]
·; #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 105 billion, 9% higher both QoQ and YoY.
·; End-of-period deposits were EGP 98 billion, 1% higher QoQ while 1% lower YoY.
·; Gross outstanding contingent business reached EGP 75 billion, 2% higher QoQ while 4% lower YoY.
BUSINESS BANKING
·; End-of-period gross loans were EGP 1 billion, 16% higher QoQ and 70% higher YoY.
·; End-of-period deposits were EGP 23 billion, 1% higher QoQ and 18% higher YoY.
·; Gross outstanding contingent business reached EGP 1.31 billion, 11% higher QoQ and 10% higher YoY.
RETAIL INDIVIDUALS BANKING
·; End-of-period gross loans were EGP 26 billion, 1% higher QoQ and 15% higher YoY.
·; End-of-period deposits were EGP 183 billion, 2% lower QoQ while 10% higher YoY.
·; CIB continued to expand its network to reach a total of 180 branches and 27 units across Egypt, supported by a network of 1,012 ATMs.
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||
Income Statement | 4Q19 | 3Q19 | QoQ Change | 4Q18 | YoY change | FY19 | FY18 | YoY change |
EGP million | EGP million | (4Q19 vs. 3Q19) | EGP million | (4Q19 vs. 4Q18) | EGP million | EGP million | (FY19 vs. FY18) | |
Net Interest Income | 6,130 | 5,443 | 13% | 4,835 | 27% | 21,579 | 18,144 | 19% |
Non-Interest Income | 19 | 617 | -97% | 381 | -95% | 1,441 | 2,235 | -36% |
Net Operating Income | 6,149 | 6,060 | 1% | 5,216 | 18% | 23,019 | 20,379 | 13% |
Non-Interest Expense | (1,160) | (1,270) | -9% | (1,276) | -9% | (5,049) | (4,224) | 20% |
Loan loss provision | (228) | (412) | -45% | (273) | -16% | (1,435) | (3,076) | -53% |
Net Profit before Tax | 4,761 | 4,378 | 9% | 3,667 | 30% | 16,535 | 13,079 | 26% |
Income Tax | (1,356) | (1,225) | 11% | (1,063) | 28% | (4,639) | (3,626) | 28% |
Deferred Tax | (142) | 30 | NM | (42) | NM | (95) | 129 | NM |
Net profit from continued operations | 3,263 | 3,183 | 3% | 2,563 | 27% | 11,801 | 9,582 | 23% |
Net profit from discontinued operations | 0 | 0 | NM | 0 | NM | 0 | 0 | NM |
Net profit | 3,263 | 3,183 | 3% | 2,563 | 27% | 11,801 | 9,582 | 23% |
Minority Interest | 0 | 0 | NM | 0 | NM | 0 | 0 | NM |
Net Profit After Minority | 3,263 | 3,183 | 3% | 2,563 | 27% | 11,801 | 9,582 | 23% |
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Financial Indicators | 4Q19 | 3Q19 | QoQ Change | 4Q18 | YoY change | FY19 | FY18 | YoY change |
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Profitability |
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ROAE* | 26.2% | 28.4% | -8% | 31.7% | -17% | 29.5% | 33.1% | -11% |
ROAA* | 3.43% | 3.46% | -1% | 3.06% | 12% | 3.26% | 3.03% | 8% |
Efficiency |
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Cost-to-Income | 17.8% | 20.7% | -14% | 24.0% | -26% | 21.6% | 20.3% | 6% |
Liquidity |
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Gross Loans-to-Deposits | 43.3% | 40.0% | 8% | 41.9% | 3% | 43.3% | 41.9% | 3% |
Asset Quality |
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NPLs-to-Gross Loans | 3.99% | 5.27% | -24% | 4.06% | -2% | 3.99% | 4.06% | -2% |
Capital Adequacy Ratio | 26.1% | 27.2% | -4% | 19.1% | 37% | 26.1% | 19.1% | 37% |
STANDALONE FINANCIAL HIGHLIGHTS | ||||||||
Income Statement | 4Q19 | 3Q19 | QoQ Change | 4Q18 | YoY change | FY19 | FY18 | YoY change |
EGP million | EGP million | (4Q19 vs. 3Q19) | EGP million | (4Q19 vs. 4Q18) | EGP million | EGP million | (FY19 vs. FY18) | |
Net Interest Income | 6,130 | 5,443 | 13% | 4,835 | 27% | 21,578 | 18,144 | 19% |
Non-Interest Income | 18 | 615 | -97% | 370 | -95% | 1,440 | 2,208 | -35% |
Net Operating Income | 6,147 | 6,059 | 1% | 5,205 | 18% | 23,018 | 20,351 | 13% |
Non-Interest Expense | (1,159) | (1,269) | -9% | (1,275) | -9% | (5,045) | (4,223) | 19% |
Loan loss provision | (228) | (412) | -45% | (273) | -16% | (1,435) | (3,076) | -53% |
Net Profit before Tax | 4,760 | 4,378 | 9% | 3,657 | 30% | 16,537 | 13,053 | 27% |
Income Tax | (1,356) | (1,225) | 11% | (1,063) | 28% | (4,639) | (3,626) | 28% |
Deferred Tax | (142) | 30 | NM | (42) | NM | (95) | 129 | NM |
Net Profit | 3,262 | 3,183 | 2% | 2,553 | 28% | 11,804 | 9,556 | 24% |
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Financial Indicators | 4Q19 | 3Q19 | QoQ Change | 4Q18 | YoY change | FY19 | FY18 | YoY change |
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Profitability |
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ROAE | 26.3% | 28.5% | -8% | 31.7% | -17% | 29.6% | 33.1% | -11% |
ROAA | 3.43% | 3.46% | -1% | 3.05% | 12% | 3.26% | 3.02% | 8% |
NIM** | 7.00% | 6.41% | 9% | 6.23% | 12% | 6.48% | 6.43% | 1% |
Efficiency |
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Cost-to-Income | 17.8% | 20.7% | -14% | 24.0% | -26% | 21.6% | 20.3% | 6% |
Liquidity |
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Gross Loans-to-Deposits | 43.3% | 40.0% | 8% | 41.9% | 3% | 43.3% | 41.9% | 3% |
Asset Quality |
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NPLs-to-Gross Loans | 3.99% | 5.27% | -24% | 4.06% | -2% | 3.99% | 4.06% | -2% |
Direct Coverage Ratio | 225% | 190% | 18% | 269% | -16% | 225% | 269% | -16% |
*Full-year ROAE and ROAA after profit appropriation**NIM based on managerial accounts | ||||||||
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| Consolidated | Standalone | ||||
BALANCE SHEET | Dec-19 | Dec-18 | YoY Change | Dec-19 | Dec-18 | YoY Change |
| EGP million | EGP million | (Dec-19 Vs. Dec-18) | EGP million | EGP million | (Dec-19 Vs. Dec-18) |
Cash & Due from Central Bank | 28,274 | 20,059 | 41% | 28,274 | 20,059 | 41% |
Due from Banks | 28,353 | 46,519 | -39% | 28,353 | 46,519 | -39% |
Net Loans & Overdrafts | 119,946 | 106,377 | 13% | 119,946 | 106,377 | 13% |
Financial Derivatives | 216 | 52 | 314% | 216 | 52 | 314% |
Financial Investments Securities | 197,542 | 157,586 | 25% | 197,542 | 157,586 | 25% |
Financial Investment in Subsidiaries | 108 | 107 | 1% | 64 | 69 | -7% |
Other Assets | 12,303 | 11,762 | 5% | 12,301 | 11,762 | 5% |
Total Assets | 386,742 | 342,461 | 13% | 386,697 | 342,423 | 13% |
Due to Banks | 11,811 | 7,260 | 63% | 11,811 | 7,260 | 63% |
Customer Deposits | 304,448 | 285,297 | 7% | 304,484 | 285,340 | 7% |
Other Liabilities | 18,603 | 15,676 | 19% | 18,603 | 15,676 | 19% |
Total Liabilities | 334,862 | 308,233 | 9% | 334,897 | 308,276 | 9% |
Shareholders' Equity & Net Profit | 51,880 | 34,228 | 52% | 51,800 | 34,147 | 52% |
Total Liabilities & Shareholders' Equity | 386,742 | 342,461 | 13% | 386,697 | 342,423 | 13% |
[1] Based on managerial accounts
[2] Adjusted for the EGP appreciation
[3] As of November 2019; latest available CBE data at time of print
[4] Loan, deposit, and gross outstanding contingent balances based on managerial accounts