REG - Commercial Int Bank - 4Q23 Earnings Release
12/02/2024 07:00
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RNS Number : 7295C Commercial Intnl Bank (Egypt) SAE 11 February 2024
News Release
11 February 2024
COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS
FULL-YEAR 2023 CONSOLIDATED REVENUE OF EGP 56.0 BILLION AND NET INCOME OF
EGP 29.6 BILLION, OR EGP 8.59 PER SHARE, UP 84% FROM FULL-YEAR
2022
FOURTH-QUARTER 2023 CONSOLIDATED REVENUE OF EGP 16.7 BILLION AND NET INCOME OF
EGP 7.23 BILLION, UP 83% FROM FOURTH-QUARTER 2022
· Fourth-Quarter 2023 Consolidated Financial Results
o Net income of EGP 7.23 billion, up 83% year-on-year (YoY)
o Revenues of EGP 16.7 billion, up 71% YoY
o Return on average equity (ROAE) of 34.5%
o Return on average assets (ROAA) of 3.51%
o Efficiency ratio of 20.8%
o Net interest margin (NIM) 1 (#_ftn1) of 8.05%
· Full-Year 2023 Consolidated Financial Results
o Net income of EGP 29.6 billion, up 84% YoY
o Revenues of EGP 56.0 billion, up 70% YoY
o ROAE 2 (#_ftn2) of 39.7%
o ROAA(2) of 4.06%
o Efficiency ratio of 17.1%
o NIM1 of 7.55%
· Balance Sheet Performance
o Total tier capital recorded EGP 100 billion, or 26.2% of risk-weighted
assets.
o CBE local currency liquidity ratio of 30.2%, foreign currency liquidity
ratio of 45.3% (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 305%
· Supporting our Economy
o Funding to businesses and individuals recorded EGP 266 billion, growing by
20% over full-year 2023, or 12% net of the EGP devaluation impact, with a loan
market share of 4.97%(( 3 (#_ftn3) )).
o Deposits recorded EGP 675 billion, growing by 27% over full-year 2023, or
18% net of the EGP devaluation impact, with a deposit market share of
6.81%(3).
o Loan-to-Deposit Ratio recorded 39.4% by end of 2023.
o In full-year 2023, CIB's operations generated EGP 15.3 billion in
corporate, payroll, and other taxes.
· Committed to our Community
o CIB Foundation funded "Magdi Yacoub Heart Foundation" with the second
installment for establishing Catheterization Laboratory, "The New Global Heart
Centre in Cairo", in addition to the first installment for 100 pediatric
open-heart surgeries and 100 catheterizations.
o CIB Foundation subsidized "Aswan University Hospital" with the needed
amount to outfit the Pediatric Neurosurgery Department with the required
equipment.
o CIB Foundation endowed "Egyptian Clothing Bank" with the second
installment to manufacture 120,000 training suits.
o CIB Foundation financed "Yahiya Arafa Children's Charity Foundation" to
cover their annual operating costs of 2023.
o CIB Foundation funded "Shifa' Al-Omran Hospital" with the first
installment to augment their Emergency Department with medication and
equipment.
o CIB Foundation joined forces with "The Awad Charity Foundation" to
establish a Rehabilitation Center for children with special needs in "Beni
Suef University".
· 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
§ World's Best Sub-Custodian Bank Award 2023
§ Best SME Bank Award 2024
§ World's Best Foreign Exchange Awards 2024 - Country Awards
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
§ Best Digital Bank - Pan Africa
§ Best Local Bank in Egypt
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
o The Banker
§ Bank of the Year in Egypt
CAIRO - Commercial International Bank (EGX: COMI) today reported
fourth-quarter 2023 consolidated net income of EGP 7.23 billion, up by 83%
from fourth-quarter 2022. Full-Year 2023 consolidated net income recorded EGP
29.6 billion, or EGP 8.59 per share, up by 84% from last year.
Management commented: "Despite adverse market conditions caused by the
simultaneous and sequential global and local events, CIB has demonstrated the
strength and sustainability of its business model by achieving yet another
record year of financial performance, while maintaining industry-leading
solvency levels in the market.
Echoing an ambiguous macroeconomic outlook as certain challenges persisted
since 2022, Management upheld its prudent and proactive risk management
practices, accumulating EGP 3.5 billion of provisions in fourth-quarter 2023,
accounting for any unexpected deterioration in asset quality, while
safeguarding the Bank against any unsettling conditions. With that, CIB
maintained its Coverage for Expected Losses in the Sector, with Loan Loss
Provision Balance of EGP 29.2 billion, covering 11% of the Bank's Gross Loan
Portfolio, and 16% of the unsecured portion.
Liquidity management also remained a priority for CIB. The Bank is committed
to maintain sufficient liquidity levels, catering for potential market needs.
As such, liquidity ratios remained comfortable, in both local and foreign
currency, with ample room above both, the minimum regulatory requirements and
Basel III requirements.
Capitalizing on CIB's flexible balance sheet structure, the Bank delivered
strong profitability growth, with Full-Year 2023 Bottom Line recording EGP
29.6 billion, growing by 84% from last year, and with exceptional Top Line
growth of 70%. Management continued to focus on the sustainable revenue
stream, growing funds at a healthy pace, with an 18% real growth in deposits.
This growth is sustained by the Bank's commitment to controlling its cost of
funds, where CIB has successfully maintained its healthy share of Current and
Saving Accounts (CASA) of 55% to Total Deposits. The year also saw robust
lending activity, coupled with strong fee income growth, growing at a real
growth rate of 11%, and 15% after accounting for Securitization Deals, to
preserve its market position as the largest Lender-and-Securitizer among
Private-Sector Banks.
This strong financial performance fed into a stronger Capital Base with
Capital Adequacy Ratio (CAR) rebounding to 26.2%, after accounting for 2023
Proposed Profit Appropriation, despite the turbulent times. This came as
Management continued to focus on growing the Bank's core business, while
generating returns that would result in rapid growth in the Bank's Capital
Base and preserve the CAR against adverse economic fluctuations.
Moreover, on the capital front, and in an effort to ensure a sustainable,
comfortable Capital Base that is less vulnerable to external factors, this
quarter, CIB managed to secure USD 150 million subordinated Tier II loan from
The European Bank for Reconstruction and Development (EBRD), with 10-year
maturity, following another Loan secured from the International Finance
Corporation (IFC) in the second quarter of 2023. It is worthy to mention that
the aforementioned capital position increased, while delivering a Return on
Average Equity (ROAE) recording 39.7% - one of the highest in the Sector -, up
by 15 percentage points from last year after accounting for 2023 Proposed
Profit Appropriation.
Overall, despite the challenges faced throughout the year, which are expected
to remain, Management remains optimistic about CIB's growth and profitability,
with great confidence in the Bank's ability to efficiently navigate through
challenging market conditions, capitalizing on its solid balance sheet
fundamentals and well-founded solvency."
FOURTH-QUARTER 2023 FINANCIAL HIGHLIGHTS
REVENUES
Fourth-quarter 2023 standalone revenues were EGP 16.3 billion, up 69% from
fourth-quarter 2022. Full-Year 2023 standalone revenues were EGP 54.6 billion,
up 67% from full-year 2022, on the back of 71% increase in net interest
income, while non-interest income had a marginal decrease by 4%.
NET INTEREST INCOME
Full-Year 2023 standalone net interest income recorded EGP 52.7 billion,
increasing by 71% YoY, generated at 7.55% Total NIM1, which increased by 145
basis points (bp) YoY, with Local Currency NIM1 recording 9.37%, coming 181bp
higher YoY, and Foreign Currency NIM1 recording 3.87%, coming 153bp higher
YoY.
NON-INTEREST INCOME
Full-Year 2023 standalone non-interest income recorded EGP 1.83 billion, with
Trade Service fees recording EGP 2.28 billion, growing by 96% YoY, with
outstanding balance of EGP 174 billion 4 (#_ftn4) .
OPERATING EXPENSE
Full-Year 2023 standalone operating expense was EGP 9.77 billion, up 36% YoY.
Cost-to-income 5 (#_ftn5) reported 17.0%, coming 373bp lower YoY, and
remaining comfortably below the desirable level of 30%.
LOANS
Gross loan portfolio recorded EGP 266 billion, growing by 20% over full-year
2023, with real growth of 12% 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 24% or EGP 37.2 billion, sufficiently
counterbalancing net foreign currency loan repayments of 11% or USD 310
million. CIB's loan market share reached 4.97% as of August 2023.
DEPOSITS
Deposits recorded EGP 675 billion, growing by 27% over full-year 2023, with
real growth of 18% 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 26% or EGP 94.3 billion, together with foreign
currency deposits adding 5% or USD 352 million. CIB's deposit market share
recorded 6.81% as of August 2023.
ASSET QUALITY
Standalone non-performing loans represented 3.54% of the gross loan portfolio,
and were covered 309% by the Bank's EGP 29.1 billion loan loss provision
balance. Full-year 2023 impairment charge for credit losses recorded EGP 4.29
billion, compared to EGP 1.51 billion in full-year 2022.
CAPITAL AND LIQUIDITY
Total tier capital recorded EGP 100 billion, or 26.2% of risk-weighted assets
as of December 2023. Tier I capital reached EGP 83.8 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 30.2% by end of
December 2023, compared to the regulator's threshold of 20%, and foreign
currency liquidity ratio reaching 45.3%, above the threshold of 25%. NSFR was
264% for local currency and 229% for foreign currency, and LCR was 2250% for
local currency and 175% 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 198 billion, 22% higher YoY, with real
growth of 11% net of the EGP devaluation impact, predominantly on 30% growth
in local currency loans.
o End-of-period deposits were EGP 247 billion, 26% higher YoY, with real
growth of 18% net of the EGP devaluation impact, mostly driven by 20% growth
in local currency deposits, besides 13% growth in foreign currency deposits.
o Gross outstanding contingent business reached EGP 180 billion, 28% higher
YoY.
BUSINESS BANKING
o End-of-period gross loans were EGP 9 billion, 26% higher YoY, wholly on
26% growth in local currency loans.
o End-of-period deposits were EGP 60 billion, 11% lower YoY, with 17%
decrease in local currency deposits and 15% decrease in foreign currency
deposits.
o Gross outstanding contingent business reached EGP 3.70 billion, coming
flat YoY.
RETAIL INDIVIDUALS BANKING
o End-of-period gross loans were EGP 59 billion, higher by 13% YoY, wholly
on 13% increase in local currency loans.
o End-of-period deposits were EGP 368 billion, 38% higher YoY, with real
growth of 28% net of the EGP devaluation impact, driven by 42% growth in local
currency deposits and 4% growth in foreign currency deposits.
o CIB continued to expand its network to reach a total of 193 branches and
15 units across Egypt, supported by a network of 1,339 ATMs.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Income Statement 4Q23 3Q23 QoQ Change 4Q22 YoY Change FY23 FY22 YoY Change
EGP million EGP million (4Q23 vs. 3Q23) EGP million (4Q23 vs. 4Q22) EGP million EGP million (FY23 vs. FY22)
Net Interest Income 15,199 13,838 10% 9,187 65% 52,930 31,005 71%
Non-Interest Income 1,476 11 NM 588 151% 3,070 1,893 62%
Net Operating Income 16,675 13,849 20% 9,776 71% 55,999 32,898 70%
Non-Interest Expense (3,574) (2,205) 62% (2,230) 60% (10,076) (7,372) 37%
Impairment Charge for Credit Losses (3,053) (34) NM (1,287) 137% (4,270) (1,585) 169%
Net Profit before Tax 10,047 11,610 -13% 6,259 61% 41,653 23,941 74%
Income Tax (3,560) (3,792) -6% (1,459) 144% (13,100) (6,345) 106%
Deferred Tax 765 535 43% (827) NM 1,158 (1,424) NM
Net Profit from Continued Operations 7,252 8,353 -13% 3,973 83% 29,711 16,172 84%
Net Profit from Discontinued Operations 7.6 (0.1) NM 0 NM (42) 0 NM
Net profit 7,260 8,353 -13% 3,973 83% 29,669 16,172 83%
Non-Controlling Interest 31 (0.1) NM 23 37% 34 58 -41%
Bank's Shareholders 7,229 8,353 -13% 3,951 83% 29,635 16,114 84%
Financial Indicators 4Q23 3Q23 QoQ Change 4Q22 YoY Change FY23 FY22 YoY Change
(4Q23 vs. 3Q23) (4Q23 vs. 4Q22) (FY23 vs. FY22)
Profitability
ROAE* 34.5% 45.8% -25% 23.9% 44% 39.7% 25.1% 58%
ROAA* 3.51% 4.16% -15% 2.57% 37% 4.06% 2.86% 42%
Efficiency
Cost-to-Income 20.8% 14.6% 42% 22.1% -6% 17.1% 21.2% -19%
Liquidity
Gross Loans-to-Deposits 39.5% 38.2% 3.1% 41.9% -6% 39.5% 41.9% -6%
Asset Quality
NPLs-to-Gross Loans 3.59% 5.08% -29% 4.86% -26% 3.59% 4.86% -26%
Capital Adequacy Ratio 26.2% 21.4% 22% 22.7% 16% 26.2% 22.7% 16%
*Full-Year ROAE and ROAA after profit appropriation
STANDALONE FINANCIAL HIGHLIGHTS
Income Statement 4Q23 3Q23 QoQ Change 4Q22 YoY Change FY23 FY22 YoY Change
EGP million EGP (4Q23 vs. 3Q23) EGP million (4Q23 vs. 4Q22) EGP million EGP million (FY23 vs. FY22)
million
Net Interest Income 15,160 13,797 10% 9,125 66% 52,747 30,836 71%
Non-Interest Income 1,184 (1,074) NM 551 115% 1,831 1,916 -4%
Net Operating Income 16,344 12,723 28% 9,677 69% 54,578 32,752 67%
Non-Interest Expense (3,462) (2,133) 62% (2,152) 61% (9,766) (7,177) 36%
Impairment Charge for Credit Losses (3,038) (36) NM (1,249) 143% (4,287) (1,512) 184%
Net Profit before Tax 9,844 10,554 -7% 6,275 57% 40,525 24,062 68%
Income Tax (3,535) (3,771) -6% (1,358) 160% (13,076) (6,342) 106%
Deferred Tax 728 805 -10% (992) NM 1,319 (1,590) NM
Net Profit 7,036 7,589 -7% 3,924 79% 28,768 16,130 78%
Financial Indicators 4Q23 3Q23 QoQ Change 4Q22 YoY Change FY23 FY22 YoY Change
(4Q23 vs. 3Q23) (4Q23 vs. 4Q22) (FY23 vs. FY22)
Profitability
ROAE* 33.6% 41.5% -19% 23.7% 41% 38.6% 25.1% 54%
ROAA* 3.43% 3.79% -9% 2.56% 34% 3.95% 2.87% 37%
NIM** 8.05% 7.46% 8% 6.49% 24% 7.55% 6.10% 24%
Efficiency
Cost-to-Income 20.6% 15.3% 35% 21.5% -4% 17.0% 20.7% -18%
Liquidity
Gross Loans-to-Deposits 39.4% 38.2% 3.0% 41.8% -6% 39.4% 41.8% -6%
Asset Quality
NPLs-to-Gross Loans 3.54% 5.04% -30% 4.81% -26% 3.54% 4.81% -26%
Direct Coverage Ratio 309% 233% 33% 229% 35% 309% 229% 35%
*Full-Year ROAE and ROAA after profit appropriation
**NIM based on managerial accounts
BALANCE SHEET
Consolidated Standalone
Balance Sheet Dec-23 Dec-22 YoY Change Dec-23 Dec-22 YoY Change
EGP million EGP million (Dec-23 Vs. EGP million EGP million (Dec-23 Vs.
Dec-22)
Dec-22)
Cash & Due from Central Bank 71,888 47,493 51% 71,747 47,385 51%
Due from Banks 231,085 133,857 73% 230,709 133,766 72%
Net Loans & Overdrafts 235,808 196,578 20% 234,647 195,599 20%
Financial Derivatives 1,105 1,940 -43% 1,102 1,940 -43%
Financial Investment Securities 271,466 238,545 14% 270,138 237,095 14%
Investments in Associates and Subsidiaries 116 186 -38% 672 1,074 -37%
Other Assets 23,397 17,233 36% 23,512 16,784 40%
Total Assets 834,866 635,832 31% 832,527 633,643 31%
Due to Banks 12,458 3,497 256% 12,427 3,476 258%
Customer Deposits 677,237 531,617 27% 675,310 530,125 27%
Other Liabilities 54,529 32,381 68% 54,490 32,322 69%
Total Liabilities 744,225 567,494 31% 742,227 565,922 31%
Shareholders' Equity & Net Profit 90,481 67,758 34% 90,300 67,721 33%
Non-Controlling Interest 160 580 -72% 0 0 NM
Total Liabilities & Shareholders' Equity 834,866 635,832 31% 832,527 633,643 31%
http://www.rns-pdf.londonstockexchange.com/rns/7295C_1-2024-2-11.pdf (http://www.rns-pdf.londonstockexchange.com/rns/7295C_1-2024-2-11.pdf)
1 (#_ftnref1) Based on standalone managerial accounts.
(( 2 (#_ftnref2) )) After 2023 profit appropriation.
3 (#_ftnref3) As of Aug-23; latest published CBE Monthly Statistical
Bulletin at time of publishing.
4 (#_ftnref4) Net of Collateral, Gross of Provisions.
5 (#_ftnref5) Cost-to-income is calculated using revenues after
adding/deducting back other provision charged/released.
6 (#_ftnref6) 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 6.15 YoY. 3)
Outstanding contingent balances are gross of collateral and provisions.
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