REG - Commercial Int Bank - 3rd Quarter 2022 (Earnings Release)

Commercial International Bank Egypt CIBAnnouncement

04/11/2022 07:00

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RNS Number : 2915F  Commercial Intnl Bank (Egypt) SAE  04 November 2022

News Release

3 November 2022

COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

THIRD-QUARTER 2022 CONSOLIDATED REVENUE OF EGP 8.45 BILLION AND NET INCOME OF
EGP 4.41 BILLION, OR EGP 1.32 PER SHARE, UP 16% FROM THIRD-QUARTER 2021

 

·    Third-Quarter 2022 Consolidated Financial Results

o  Net income of EGP 4.41 billion, up 16% year-on-year (YoY)

o  Revenues of EGP 8.45 billion, up 18% YoY

o  Return on average equity of 27.1%

o  Return on average assets of 3.16%

o  Efficiency ratio of 21.4%

o  Net interest margin (NIM) 1  (#_ftn1) of 6.24%

·    Nine-Months 2022 Consolidated Financial Results

o  Net income of EGP 12.2 billion, up 23% YoY

o  Revenues of EGP 23.1 billion, up 17% YoY

o  Return on average equity of 24.4%

o  Return on average assets of 2.98%

o  Efficiency ratio of 20.9%

o  NIM1 of 5.95%

·    Resilient Balance Sheet

o  Total tier capital recorded EGP 72.6 billion, or 26.7% of risk-weighted
assets.

o  CBE local currency liquidity ratio of 63.2%, foreign currency liquidity
ratio of 66.9% (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 95% of total
liabilities

o  Non-performing loans coverage ratio of 216%

·    Supporting our Economy

o  Funding to businesses and individuals recorded EGP 200 billion, growing by
22% over nine-months 2022, or 14% net of the EGP devaluation impact, with a
loan market share of 5.40%(( 2  (#_ftn2) )).

o  Deposits recorded EGP 498 billion, growing by 23% over nine-months 2022,
or 16% net of the EGP devaluation impact, with a deposit market share of
5.84%(2).

o  Loan-to-Deposit Ratio recorded 40.2% by end of nine-months 2022.

o  In third-quarter 2022, CIB's operations generated EGP 2.21 billion in
corporate, payroll, and other taxes.

·    Committed to our Community

o  CIB Foundation supported "Magdi Yacoub Heart Foundation" with the first
installment in 2022 to furnish a Catheterization Lab at The New Global Heart
Center in Cairo.

o  CIB Foundation joined forces with "Al Joud Foundation" to fund "Al Naas
Hospital" with the needed amount to cover pediatric heart surgeries.

o  CIB Foundation financed "Aswan University Hospital" with the needed amount
to outfit the Pediatric Neurosurgery Department.

o  CIB Foundation subsidized "Mabara El Maadi Hospital" with the needed
amount to establish Pediatric Open-Heart Surgery Rooms.

o  CIB Foundation financed "Ibrahim A. Badran Foundation" with the fourth
installment to support "Our Kids Our Future" Campaign with medical convoys.

·    Awards & Rankings

o  Global Finance:

§ Best Trade Finance Providers in Egypt for 2022

§ World's Best Foreign Exchange Providers 2022

o  The Digital Banker:

§ Best Wholesale\Transaction Bank for Digital Customer Experience

o  Euromoney:

§ Best Bank for Digital Solutions in Egypt

§ Best Bank in Egypt

§ Best Bank for SME Banking in Egypt

§ Middle East's Best Bank for SMEs

o  EMEA Finance:

§ Best Green Bond in Africa

§ Best Structured Finance Deal in Africa

§ Best Local Currency Loan

§ Best Cash Management Services in North Africa

§ Best Payment Services in North Africa

§ Best Trade Finance Services in North Africa

o  MENA

§ Sustainable Bank of the Year

CAIRO - Commercial International Bank (EGX: COMI) today reported third-quarter
2022 consolidated net income of EGP 4.41 billion, or EGP 1.32 per share, up
16% from third-quarter 2021.

Management commented: "Notwithstanding the globally-heightening inflation and
macroeconomic ambiguity, CIB ended the third quarter of 2022 on a positive
note, with the Bank's agile Management coming in well-accommodating for the
dynamics.

On one hand, and following a period of intense competition, CIB managed to
sustain its strong balance sheet growth momentum, especially in local
currency, with local currency deposits witnessing genuine growth by 14% or EGP
44bn in the quarter. Uncompromised by this robust deposit growth, Management
upheld its due focus on margins and spreads, as the sustainable top line
pillar, thanks to the Bank's flexible balance sheet structure and adept
Treasury Management, assembled through the years. Those factors came in
conducive to margin expansions, despite the competitive environment, and are
yet expected to give a further boost to margins as interest rates continue to
rise, and reinvestment of the portfolio occurs.

On the other side of the coin, CIB sustained its lending growth momentum,
growing its local currency loan book by decent 6% or EGP 9bn in the quarter,
as well as securitization transactions in excess of EGP 10 billion,
translating into cumulative growth of 35% or EGP 43bn since the beginning of
the year. This, coupled with a relative rebound in Trade Finance activity,
which CIB has been well-equipped to accommodate, capitalizing on its
comfortable foreign currency liquidity position, echoed growth in the
sustainable non-interest-income stream. Simultaneously, foreign currency loan
payoffs, gradually witnessed since beginning of year, came in concert with the
looked-for amelioration in economic activity, as indicative of key economic
sectors making a gradual comeback, having more sustainable cash flows that
paved the way for timely repayments.

This healthy growth in lending got through while maintaining solid asset
quality, without reflecting into any exceptional provisioning, with the
proportion of non-performing loans decreasing over the year, and with coverage
for expected losses remaining intact and pioneer in the market. Similarly,
coverage for unexpected losses remained anchored, with the Bank's Capital
Adequacy Ratio (CAR) resting at 27%, comfortably above the minimum regulatory
threshold, and with this comfortable capital buffer catering for the
macroeconomic dynamics as well as for strong growth in core business. Those
factors, altogether, fed positively into the Bank's Return on Average Equity
(ROAE), which recorded a healthy 24%, further reinstating Management
attentiveness to preserving the interests of both, current and future
shareholders.

Moving forward, and given the realization of the long-awaited flotation of the
Egyptian Pound and the IMF Loan, prospects are generally expected to be
further promising. Management thus remains optimistic, though cautiously so,
about the expected dynamics, drawing largely on the Bank's healthy coverage
and prudent risk management preserved over the years."

THIRD-QUARTER 2022 FINANCIAL HIGHLIGHTS

REVENUES

Third-quarter 2022 standalone revenues were EGP 8.41 billion, up 18% from
third-quarter 2021. Nine-months 2022 standalone revenues were EGP 23.1
billion, up 17% from nine-months 2021, wholly driven by 20% increase in net
interest income, partially offset by 15% decrease in non-interest income.

NET INTEREST INCOME

Nine-months 2022 standalone net interest income recorded EGP 21.7 billion,
increasing by 20% YoY, generated at 5.95% Total NIM1, which increased by 28
basis points (bp) YoY, with Local Currency NIM1 recording 7.46%, coming higher
by 11bp YoY, and with Foreign Currency NIM1 recording 1.89%, coming 93bp
higher YoY.

NON-INTEREST INCOME

Nine-months 2022 standalone non-interest income recorded EGP 1.36 billion,
coming 15% lower YoY. Upon adding back other provision charged, which is
normally deducted from Non-Interest Income as part of Other Operating
Expenses, recording EGP 1.53 billion for nine-months 2022 and EGP 211 million
for nine-months 2021, standalone non-interest income grew by 60% YoY. Trade
service fees were EGP 805 million, growing by 37% YoY, with outstanding
balance of EGP 110 billion 3  (#_ftn3) .

OPERATING EXPENSE

Nine-months 2022 standalone operating expense was EGP 5.02 billion, up 15%
YoY. Cost-to-income recorded 20.4%, 158bp lower YoY 4  (#_ftn4) , remaining
comfortably below the desirable level of 30%.

LOANS

Gross loan portfolio recorded EGP 200 billion, growing by 22% Year-to-Date
(YtD), with real growth of 14% net of the EGP devaluation impact, which added
EGP 11.9 billion to the EGP equivalent balance. Growth was driven wholly by
local currency loans, growing by 28% or EGP 32.3 billion, sufficiently
counterbalancing net foreign currency loan repayments of 13% or USD 393
million. CIB's loan market share reached 5.40% as of July 2022.

DEPOSITS

Deposits recorded EGP 498 billion, of which EGP 20 billion pertained to an
inward transfer that took place on September 29th, 2022, and which was
withdrawn on October 2nd, 2022. Upon excluding the aforementioned amount,
Deposits grew by 18% YtD, with real growth of 11% net of the EGP devaluation
impact, which added EGP 23.0 billion to the EGP equivalent balance. Growth was
driven by local currency deposits 5  (#_ftn5) , growing by 14% or EGP 42.1
billion, coupled with foreign currency deposits adding 5% or USD 325 million.
Upon normalizing for the aforementioned excess deposit amount as well,
Loan-to-Deposit Ratio would record 41.9%, compared to the reported 40.2%.
CIB's deposit market share recorded 5.84% as of July 2022, maintaining the
highest deposit market share among all private-sector banks.

ASSET QUALITY

CIB maintained its resilient asset quality. Standalone non-performing loans
represented 4.59% of the gross loan portfolio, covered 216% by the Bank's EGP
19.8 billion loan loss provision balance. Nine-months 2022 loan loss provision
expense recorded EGP 263 million compared to EGP 1.33 billion in nine-months
2021.

 

CAPITAL AND LIQUIDITY

Total tier capital recorded EGP 72.6 billion, or 26.7% of risk-weighted assets
as of September 2022. Tier I capital reached EGP 63.3 billion, or 87% of total
tier capital. CIB maintained its comfortable liquidity position above CBE
requirements and Basel III guidelines in both local currency and foreign
currency. CBE local currency liquidity ratio remained well above the
regulator's 20% requirement, recording 63.2% as of September 2022, while CBE
foreign currency liquidity ratio reached 66.9%, above the threshold of 25%.
NSFR was 209% for local currency and 179% for foreign currency, and LCR was
798% for local currency and 260% for foreign currency, comfortably above the
100% Basel III requirement.

 

KEY METRICS AND BUSINESS UPDATES(( 6  (#_ftn6) ))

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 145 billion, 21% higher YtD, wholly
backed by 29% growth in local currency loans.

o  End-of-period deposits were EGP 194 billion, 26% higher YtD, mostly driven
by 26% growth in local currency deposits, besides 2% growth in foreign
currency deposits.

o  Gross outstanding contingent business reached EGP 114 billion, 20% higher
YtD.

BUSINESS BANKING

o  End-of-period gross loans were EGP 6 billion, 72% higher YtD, solely on
73% growth in local currency loans.

o  End-of-period deposits were EGP 61 billion, 45% higher YtD, driven by 39%
growth in local currency deposits along with 41% growth in foreign currency
deposits.

o  Gross outstanding contingent business reached EGP 3.4 billion, 25% higher
YtD.

RETAIL INDIVIDUALS BANKING

o  End-of-period gross loans were EGP 49 billion, 22% higher YtD, wholly on
23% growth in local currency loans.

o  End-of-period deposits were EGP 243 billion, 7% higher YtD, mainly driven
by 3% growth in foreign currency deposits and 1% growth in local currency
deposits.

o  CIB continued to expand its network to reach a total of 190 branches and
23 units across Egypt, supported by a network of 1,293 ATMs.

 

 

 

 

 

 CONSOLIDATED FINANCIAL HIGHLIGHTS
 Income Statement            3Q22           2Q22          QoQ Change        3Q21           YoY Change       9M22             9M21            YoY Change
                             EGP million    EGP million   (3Q22 vs. 2Q22)   EGP million   (3Q22 vs. 3Q21)   EGP million       EGP million   (9M22 vs. 9M21)
 Net Interest Income        8,089          7,011          15%              6,458          25%              21,818            18,155         20%
 Non-Interest Income        363            (116)          NM               682            -47%             1,304             1,587          -18%
 Net Operating Income       8,452          6,896          23%              7,140          18%              23,122            19,741         17%
 Non-Interest Expense       (1,872)        (1,599)        17%              (1,492)        25%              (5,142)           (4,438)        16%
 Loan Loss Provision        (224)          (113)          99%              (303)          -26%             (298)             (1,324)        -77%
 Net Profit before Tax      6,357          5,183          23%              5,344          19%              17,682            13,979         26%
 Income Tax                 (1,872)        (1,642)        14%              (1,525)        23%              (4,886)           (4,116)        19%
 Deferred Tax               (67)           (21)           214%             (7)            853%             (597)             12             NM
 Net profit                 4,419          3,521          26%              3,812          16%              12,199            9,875          24%
 Minority Interest          10             10             5%               (0.2)          NM               26                (2)            NM
 Net Profit After Minority  4,408          3,511          26%              3,812          16%              12,173            9,877          23%

 Financial Indicators        3Q22           2Q22           QoQ Change       3Q21           YoY Change       9M22             9M21            YoY Change
                                                          (3Q22 vs. 2Q22)                 (3Q22 vs. 3Q21)                                   (9M22 vs. 9M21)
 Profitability
 ROAE                       27.1%          21.5%          26%              23.7%          15%              24.4%             21.0%          16%
 ROAA                       3.16%          2.68%          18%              3.17%          0%               2.98%             2.86%          4%
 Efficiency
 Cost-to-Income             21.4%          21.7%          -1%              21.4%          0%               20.9%             22.2%          -6%
 Liquidity
 Gross Loans-to-Deposits    40.3%          44.9%          -10%             39.1%          3%               40.3%             39.1%          3%
 Asset Quality
 NPLs-to-Gross Loans        4.61%          4.84%          -5%              5.42%          -15%             4.61%             5.42%          -15%
 Capital Adequacy Ratio     26.7%          28.8%          -7%              32.1%          -17%             26.7%             32.1%          -17%

 

 

 

 

 

 

 

 

 STANDALONE FINANCIAL HIGHLIGHTS
 Income Statement        3Q22           2Q22           QoQ Change       3Q21           YoY Change       9M22          9M21            YoY Change
                         EGP million    EGP million   (3Q22 vs. 2Q22)   EGP million   (3Q22 vs. 3Q21)   EGP million    EGP million   (9M22 vs. 9M21)
 Net Interest Income    8,015          7,093          13%              6,433          25%              21,711         18,106         20%
 Non-Interest Income    397            (59)           NM               687            -42%             1,364          1,601          -15%
 Net Operating Income   8,412          7,034          20%              7,119          18%              23,075         19,706         17%
 Non-Interest Expense   (1,791)        (1,688)        6%               (1,464)        22%              (5,025)        (4,382)        15%
 Loan loss provision    (248)          (55)           351%             (307)          -19%             (263)          (1,326)        -80%
 Net Profit before Tax  6,372          5,291          20%              5,349          19%              17,787         13,998         27%
 Income Tax             (1,874)        (1,735)        8%               (1,525)        23%              (4,984)        (4,115)        21%
 Deferred Tax           (67)           (21)           215%             (7)            853%             (597)          12             NM
 Net Profit             4,432          3,534          25%              3,817          16%              12,206         9,895          23%

 

 Financial Indicators      3Q22    2Q22    QoQ Change       3Q21    YoY Change       9M22   9M21    YoY Change
                                          (3Q22 vs. 2Q22)          (3Q22 vs. 3Q21)                 (9M22 vs. 9M21)
 Profitability
 ROAE                     27.3%   21.6%   26%              23.7%   15%              24.4%   21.0%  16%
 ROAA                     3.19%   2.71%   18%              3.19%   0%               2.99%   2.88%  4%
 NIM*                     6.24%   5.91%   6%               5.70%   9%               5.95%   5.67%  5%
 Efficiency
 Cost-to-Income           20.6%   22.5%   -8%              21.0%   -2%              20.4%   22.0%  -7%
 Liquidity
 Gross Loans-to-Deposits  40.2%   44.8%   -10%             39.0%   3%               40.2%   39.0%  3%
 Asset Quality
 NPLs-to-Gross Loans      4.59%   4.84%   -5%              5.43%   -15%             4.59%   5.43%  -15%
 Direct Coverage Ratio    216%    209%    4%               206%    5%               216%    206%   5%

*NIM based on managerial accounts

 

                                               Consolidated                                       Standalone
 BALANCE SHEET                                 Sep-22         Dec-21         YtD Change           Sep-22         Dec-21         YtD Change
                                                EGP million    EGP million   (Sep-22 Vs. Dec-21)   EGP million    EGP million   (Sep-22 Vs. Dec-21)
 Cash & Due from Central Bank                  43,858         43,492         1%                   43,777         43,385         1%
 Due from Banks                                90,458         80,142         13%                  90,378         79,991         13%
 Net Loans & Overdrafts                        179,655        145,887        23%                  178,614        145,078        23%
 Financial Derivatives                         951            225            322%                 951            225            322%
 Financial Investment Securities               263,678        213,987        23%                  262,368        212,951        23%
 Investments in Associates and Subsidiaries    187            205            -9%                  1,074          1,014          6%
 Other Assets                                  13,581         14,296         -5%                  13,197         14,006         -6%
 Total Assets                                  592,368        498,236        19%                  590,360        496,651        19%
 Due to Banks                                  1,747          866            102%                 1,704          863            97%
 Customer Deposits                             499,020        407,242        23%                  497,585        406,101        23%
 Other Liabilities                             26,591         20,826         28%                  26,540         20,759         28%
 Total Liabilities                             527,358        428,933        23%                  525,829        427,723        23%
 Shareholders' Equity & Net Profit             64,464         68,848         -6%                  64,531         68,928         -6%
 Minority Interest                             546            455            20%                  0              0              NM
 Total Liabilities & Shareholders' Equity      592,368        498,236        19%                  590,360        496,651        19%

 

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 1 Based on managerial accounts.

 2 As of July 2022; 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 Excluding EGP 20 billion pertaining to an inward transfer, which took place
on September 29(th), 2022 and which was withdrawn on October 2(nd), 2022.

 6  1) Loan, deposit, and outstanding contingent balances are based on
managerial accounts. 2) Growths in Total and LCY Institutional Banking
Deposits are excluding EGP 20 billion pertaining to an inward transfer, which
took place on September 29(th), 2022, and which was withdrawn on October 2nd,
2022. 3) Growth in foreign currency balances is in real terms, excluding the
effect of EGP devaluation by EGP 3.8 over nine-months 2022. 4) Outstanding
contingent balances are gross of collateral and provisions.

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