REG - Commercial Int Bank - 3Q23 Earnings Release

Commercial International Bank Egypt CIBAnnouncement

03/11/2023 07:15

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RNS Number : 2595S  Commercial Intnl Bank (Egypt) SAE  03 November 2023

 

News Release

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  (#_ftn1) 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  (#_ftn2) )).

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

 

CAIRO - Commercial International Bank (EGX: COMI) today reported third-quarter 2023 consolidated net income of EGP 8.35 billion, or EGP 2.24 per share, up by 89% from third-quarter 2022.

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  (#_ftn3) .

OPERATING EXPENSE

Nine-months 2023 standalone operating expense was EGP 6.30 billion, up 25%
YoY. Cost-to-income 4  (#_ftn4) 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  (#_ftn5) ))

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%

 Financial Indicators                     3Q23           2Q23         QoQ Change                 3Q22         YoY Change                 9M23              9M22              YoY Change
                                                                      (3Q23 vs. 2Q23)                         (3Q23 vs. 3Q22)                                                (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
 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
 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%

 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
                                        (3Q23 vs. 2Q23)         (3Q23 vs. 3Q22)                (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
 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
 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.   EGP million    EGP million   (Sep-23 Vs.

Dec-22)
Dec-22)
 Cash & Due from Central Bank                  59,950         47,493         26%          59,819         47,385         26%
 Due from Banks                                276,843        133,857        107%         276,244        133,766        107%
 Net Loans & Overdrafts                        223,086        196,578        13%          222,327        195,599        14%
 Financial Derivatives                         1,647          1,940          -15%         1,647          1,940          -15%
 Financial Investment Securities               228,276        238,545        -4%          226,930        237,095        -4%
 Investments in Associates and Subsidiaries    132            186            -29%         695            1,074          -35%
 Other Assets                                  21,134         17,233         23%          21,081         16,784         26%
 Total Assets                                  811,069        635,832        28%          808,743        633,643        28%
 Due to Banks                                  19,023         3,497          444%         19,030         3,476          448%
 Customer Deposits                             667,669        531,617        26%          665,895        530,125        26%
 Other Liabilities                             46,941         32,381         45%          46,539         32,322         44%
 Total Liabilities                             733,633        567,494        29%          731,464        565,922        29%
 Shareholders' Equity & Net Profit             77,307         67,758         14%          77,278         67,721         14%
 Non-Controlling Interest                      129            580            -78%         0              0              NM
 Total Liabilities & Shareholders' Equity      811,069        635,832        28%          808,743        633,643        28%

 

 1  (#_ftnref1) Based on standalone managerial accounts.

 2  (#_ftnref2) As of July-23; latest available CBE data at time of
publishing.

 3  (#_ftnref3) Net of Collateral, Gross of Provisions.

 4  (#_ftnref4) Cost-to-income is calculated using revenues after
adding/deducting back other provision charged/released.

 

 5  (#_ftnref5) 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.

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