REG - Commercial Int Bank - CIB 1H2023 Earnings Release
24/07/2023 08:15
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RNS Number : 9353G Commercial Intnl Bank (Egypt) SAE 24 July 2023
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News Release
23 July 2023
COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS
SECOND-QUARTER 2023 CONSOLIDATED REVENUE OF EGP 13.5 BILLION AND NET INCOME OF
EGP 7.99 BILLION, OR EGP 2.38 PER SHARE, UP 2.3X FROM SECOND-QUARTER 2022
· Second-Quarter 2023 Consolidated Financial Results
o Net income of EGP 7.99 billion, up 2.3x year-on-year (YoY)
o Revenues of EGP 13.5 billion, up 96% YoY
o Return on average equity (ROAE) of 49.1%
o Return on average assets (ROAA) of 4.31%
o Efficiency ratio of 15.8%
o Net interest margin (NIM) 1 of 7.47%
· First-Half 2023 Consolidated Financial Results
o Net income of EGP 14.1 billion, up 81% YoY
o Revenues of EGP 25.5 billion, up 74% YoY
o ROAE of 41.3%
o ROAA of 3.92%
o Efficiency ratio of 16.1%
o NIM1 of 7.30%
· Balance Sheet Performance
o Total tier capital recorded EGP 83.4 billion, or 19.0% of risk-weighted
assets.
o CBE local currency liquidity ratio of 37.3%, foreign currency liquidity
ratio of 73.9% (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 91% of total
liabilities
o Non-performing loans coverage ratio of 234%
· Supporting our Economy
o Funding to businesses and individuals recorded EGP 252 billion, growing by
14% over first-half 2023, or 6% net of the EGP devaluation impact, with a loan
market share of 5.44%(( 2 )).
o Deposits recorded EGP 656 billion, growing by 24% over first-half 2023, or
15% net of the EGP devaluation impact, with a deposit market share of
6.23%(2).
o Loan-to-Deposit Ratio recorded 38.4% by end of first-half 2023.
o In second-quarter 2023, CIB's operations generated EGP 4.22 billion in
corporate, payroll, and other taxes.
· Committed to our Community
o CIB Foundation supported "Al Nas Hospital" and "Mabara El Maadi Hospital"
with the necessary amounts for the required medical equipment and facilities.
o CIB Foundation funded "Yahiya Arafa Children's Charity Foundation" with
the needed amount to cover their annual operating costs.
o CIB Foundation subsidized "Abnaa El Ghad Foundation" with fourth
installment to cover operating costs.
· 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
o EMEA Finance:
§ Best Mergers & Acquisitions Deal in MENA
§ Best Securitization House in Africa
§ Best Securitization Deal in Africa
o MEED:
§ Best Bank in Trade Finance
o Euromoney:
§ Best Bank in Egypt
o African Banker
§ Lifetime Achievement Award
CAIRO - Commercial International Bank (EGX: COMI) today reported
second-quarter 2023 consolidated net income of EGP 7.99 billion, or EGP 2.38
per share, up by 2.3x from second-quarter 2022.
Management Commented: "Building on a strong start to the year in the first
quarter, CIB delivered another record set of results in the second quarter of
2023, ending the first half of the year with top and bottom line growth of 74%
and 82%, respectively, compared to last year, which fed into Return on Average
Equity (ROAE) of 49.1% for the second quarter and 41.3% for the first half,
almost doubling from last year. This came as Management capitalized on the
Bank's resilient balance sheet in accommodating macroeconomic dynamics, while
sustaining fundamentals and growth momentum.
Performance in the second quarter came in noteworthy and primarily driven by
strong balance sheet growth. At one end, CIB maintained its deposit growth
impetus, growing its Local Currency Deposit base by 20% or EGP 75 billion,
while attracting Foreign Currency Deposits worth of USD 240 million, over the
second quarter. Uncompromised by this robust balance sheet growth, Management
upheld its due focus on Spreads and Margins, which CIB managed to expand by
around 40 basis points over the quarter, notwithstanding the
highly-competitive market for deposits, and the inherent pressure posed on
Cost of Funds. This came as Management remained keen towards maintaining a
healthy contribution of Current and Saving Accounts (CASA), of 53% to Total
Deposits, despite the current market inclination towards longer-term funding,
coupled with the Bank's proactive Treasury Management that allowed for
efficient allocation of excess funds, while preserving the desirable balance
between liquidity and profitability. Those factors combined fed into Net
Interest Income (NII) growth of 20% in the second quarter, compared to the
first, which, being the core top line pillar, sets the stage for second-half
performance. At the other end, the previous came paralleled with growth in the
Bank's sustainable stream of Non-Interest Income, with Core Fees and
Commissions growing by 10% over the second quarter, echoing decent lending
growth, coupled with a rebound in Trade Finance activity. The latter came
especially owing to CIB being well-equipped to cater Foreign Exchange and
Trade Finance client needs in a timely manner, as Management continued to
prioritize maintaining adequate foreign currency liquidity for potential
market needs.
Remaining committed to its role in extending funding to businesses and
individuals, CIB grew its Local Currency Loan book by 6% or EGP 9.4 billion in
the quarter, recording a Total Gross Loan Portfolio of EGP 252 billion, by end
of the first half of 2023, and of EGP 273 billion, upon considering the
Securitization Portfolio of EGP 21.7 billion, preserving its position as the
largest Lender-and-Securitizer among Private-Sector Banks. This came while
presuming its role in funding Small-and-Medium-Sized-Enterprises (SMEs),
exceeding the required target stipulated by CBE. This growth in lending got
through while maintaining solid asset quality, with the proportion of
non-performing loans decreasing over the quarter, and with Loan Loss Provision
Balance recording EGP 29.9 billion by end of the first half of 2023, securing
coverage for 11.9% of the Bank's Total Gross Loan Portfolio, and 17.7% of the
Unsecured Portion therein, consequently, maintaining the Bank's foremost
market position in Coverage for Expected Losses.
Simultaneously, Coverage for Unexpected Losses remained healthy, with Capital
Adequacy Ratio (CAR) resting at 19% by end of the first half of 2023,
comfortably above the minimum regulatory threshold, and maintained from last
quarter, despite global macroeconomic pressures and robust core business
growth. It is worth highlighting that Management continues to take proactive
actions to cement the Bank's Capital Position and CAR against macroeconomic
dynamics. Precisely, and further attesting investor confidence in its solid
fundamentals, CIB managed this quarter to secure loans from the International
Finance Corporation (IFC) worth of USD 250 million, which comes as a vote of
confidence by IFC in the growth prospects and balance sheet fundamentals for
CIB amidst current market conditions. Of this amount, USD 150 million is a
Subordinated Loan, which would come to support the Bank's Capital Base,
particularly Tier II Capital, while acting as a partial hedge tool for the
Bank's CAR against potential foreign exchange fluctuations. The remaining USD
100 million aims at helping CIB boost its focus on funding of green projects,
further emphasizing the Bank's integral role in setting the tone for
Responsible Banking, through providing distinct support to businesses that are
going green.
Overall, Management is content about CIB's performance for the first half of
the year. And, although the second half encloses a somewhat high degree of
ambiguity attending the macroeconomic outlook, on both, global and local
fronts, Management yet remains positive, with a strong confidence in the
ability of CIB, and the Egyptian Banking Sector as a whole, to endure
uncertainties and to well-accommodate macroeconomic and regulatory
developments."
SECOND-QUARTER 2023 FINANCIAL HIGHLIGHTS
REVENUES
Second-quarter 2023 standalone revenues were EGP 13.5 billion, up 92% from
second-quarter 2022. First-half 2023 standalone revenues were EGP 25.5
billion, up 74% from first-half 2022, on the back of 74% increase in net
interest income, coupled with 78% increase in non-interest income.
NET INTEREST INCOME
First-half 2023 standalone net interest income recorded EGP 23.8 billion,
increasing by 74% YoY, generated at 7.30% Total NIM1, which increased by 151
basis points (bp) YoY, with Local Currency NIM1 recording 9.21%, coming 180bp
higher YoY, and Foreign Currency NIM1 recording 3.79%, coming 237bp higher
YoY.
NON-INTEREST INCOME
First-half 2023 standalone non-interest income recorded EGP 1.72 billion,
coming 78% higher YoY. Trade service fees were EGP 1.17 billion, growing by
2.5x YoY, with outstanding balance of EGP 158 billion 3 .
OPERATING EXPENSE
First-half 2023 standalone operating expense was EGP 4.17 billion, up 29% YoY.
Cost-to-income 4 reported 15.6%, coming 469bp lower YoY, and remaining
comfortably below the desirable level of 30%.
LOANS
Gross loan portfolio recorded EGP 252 billion, growing by 14% over first-half
2023, with real growth of 6% 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 12% or EGP 18.5 billion, sufficiently
counterbalancing net foreign currency loan repayments of 6% or USD 163
million. CIB's loan market share reached 5.44%(2) as of March 2023.
DEPOSITS
Deposits recorded EGP 656 billion, growing by 24% over first-half 2023, with
real growth of 15% 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 21% or EGP 77.7 billion, together with foreign
currency deposits adding 4% or USD 278 million. CIB's deposit market share
recorded 6.23%(2) as of March 2023, maintaining the highest deposit market
share among all private-sector banks.
ASSET QUALITY
Standalone non-performing loans represented 5.02% of the gross loan portfolio,
and were covered 236% by the Bank's EGP 29.9 billion loan loss provision
balance. First-half 2023 loan loss provision expense recorded EGP 1.21 billion
compared to EGP 14 million in first-half 2022.
CAPITAL AND LIQUIDITY
Total tier capital recorded EGP 83.4 billion, or 19.0% of risk-weighted assets
as of June 2023. Tier I capital reached EGP 68.2 billion, or 82% 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 liquidity ratios remained well above the regulator's
requirements, with local currency liquidity ratio recording 37.3% by end of
June 2023, compared to the regulator's threshold of 20%, and foreign currency
liquidity ratio reaching 73.9%, above the threshold of 25%. NSFR was 226% for
local currency and 215% for foreign currency, and LCR was 1438% for local
currency and 308% for foreign currency, comfortably above the 100% Basel III
requirement.
KEY METRICS AND BUSINESS UPDATES(( 5 ))
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 191 billion, 18% higher Year-to-Date
(YtD), with real growth of 7% net of the EGP devaluation impact, predominantly
on 18% growth in local currency loans.
o End-of-period deposits were EGP 224 billion, 15% higher YtD, with real
growth of 7% net of the EGP devaluation impact, mainly on 8% growth in local
currency deposits and 5% growth in foreign currency deposits.
o Gross outstanding contingent business reached EGP 166 billion, 19% higher
YtD.
BUSINESS BANKING
o End-of-period gross loans were EGP 8.23 billion, 21% higher YtD, wholly on
21% growth in local currency loans.
o End-of-period deposits were EGP 82.3 billion, 21% higher YtD, with real
growth of 15% net of the EGP devaluation impact, mainly on 17% growth in local
currency deposits and 8% growth in foreign currency deposits.
o Gross outstanding contingent business reached EGP 4.62 billion, 25% higher
YtD.
RETAIL INDIVIDUALS BANKING
o End-of-period gross loans were EGP 52.1 billion, slightly lower by 1% YtD,
wholly on 1% lower local currency loans.
o End-of-period deposits were EGP 350 billion, 31% higher YtD, with real
growth of 21% net of the EGP devaluation impact, driven by 32% growth in local
currency deposits and 3% growth in foreign currency deposits.
o CIB continued to expand its network to reach a total of 191 branches and
20 units across Egypt, supported by a network of 1,330 ATMs.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Income Statement 2Q23 1Q23 QoQ Change 2Q22 YoY Change 1H23 1H22 YoY Change
EGP million EGP million (2Q23 vs. 1Q23) EGP million (2Q23 vs. 2Q22) EGP million EGP million (1H23 vs. 1H22)
Net Interest Income 13,009 10,884 20% 7,011 86% 23,893 13,729 74%
Non-Interest Income 483 1,100 -56% (116) NM 1,583 941 68%
Net Operating Income 13,492 11,984 13% 6,896 96% 25,476 14,670 74%
Non-Interest Expense (2,233) (2,064) 8% (1,599) 40% (4,297) (3,270) 31%
Loan Loss Provision (238) (945) -75% (113) 111% (1,182) (74) NM
Net Profit before Tax 11,022 8,975 23% 5,183 113% 19,997 11,325 77%
Income Tax (3,486) (2,262) 54% (1,642) 112% (5,748) (3,014) 91%
Deferred Tax 502 (645) NM (21) NM (143) (531) -73%
Net profit from continued operations 8,038 6,068 32% 3,521 128% 14,106 7,780 81%
Net profit from discontinued operations (50) 1 NM 0 NM (50) 0 NM
Net profit 7,987 6,069 32% 3,521 127% 14,056 7,780 81%
Minority Interest (0.4) 4 NM 10 NM 3 16 -78%
Net Profit After Minority 7,988 6,065 32% 3,511 127% 14,053 7,765 81%
Financial Indicators 2Q23 1Q23 QoQ Change 2Q22 YoY Change 1H23 1H22 YoY Change
(2Q23 vs. 1Q23) (2Q23 vs. 2Q22) (1H23 vs. 1H22)
Profitability
ROAE 49.1% 37.5% 31% 21.5% 129% 41.3% 23.1% 78%
ROAA 4.31% 3.67% 17% 2.68% 61% 3.92% 3.04% 29%
Efficiency
Cost-to-Income 15.8% 16.6% -5% 21.7% -27% 16.1% 20.6% -22%
Liquidity
Gross Loans-to-Deposits 38.4% 42.5% -10% 44.9% -15% 38.4% 44.9% -15%
Asset Quality
NPLs-to-Gross Loans 5.07% 5.26% -4% 4.84% 5% 5.07% 4.84% 5%
Capital Adequacy Ratio 19.0% 19.3% -2% 28.8% -34% 19.0% 28.8% -34%
STANDALONE FINANCIAL HIGHLIGHTS
Income Statement 2Q23 1Q23 QoQ Change 2Q22 YoY Change 1H23 1H22 YoY Change
EGP million EGP million (2Q23 vs. 1Q23) EGP million (2Q23 vs. 2Q22) EGP million EGP million (1H23 vs. 1H22)
Net Interest Income 12,958 10,832 20% 7,093 83% 23,790 13,695 74%
Non-Interest Income 529 1,192 -56% (59) NM 1,721 968 78%
Net Operating Income 13,488 12,024 12% 7,034 92% 25,511 14,663 74%
Non-Interest Expense (2,166) (2,005) 8% (1,688) 28% (4,171) (3,233) 29%
Loan loss provision (265) (948) -72% (55) 382% (1,213) (14) NM
Net Profit before Tax 11,056 9,071 22% 5,291 109% 20,128 11,415 76%
Income Tax (3,505) (2,265) 55% (1,735) 102% (5,770) (3,111) 85%
Deferred Tax 508 (722) NM (21) NM (214) (531) -60%
Net Profit 8,059 6,084 32% 3,534 128% 14,144 7,774 82%
Financial Indicators 2Q23 1Q23 QoQ Change 2Q22 YoY Change 1H23 1H22 YoY
Change
(2Q23 vs. 1Q23) (2Q23 vs. 2Q22) (1H23 vs. 1H22)
Profitability
ROAE 49.1% 37.5% 31% 21.6% 127% 41.3% 23.1% 79%
ROAA 4.36% 3.69% 18% 2.71% 61% 3.96% 3.05% 30%
NIM* 7.47% 7.09% 5% 5.91% 26% 7.30% 5.79% 26%
Efficiency
Cost-to-Income 15.3% 16.1% -5% 22.5% -32% 15.6% 20.3% -23%
Liquidity
Gross Loans-to-Deposits 38.4% 42.5% -10% 44.8% -14% 38.4% 44.8% -14%
Asset Quality
NPLs-to-Gross Loans 5.02% 5.20% -4% 4.84% 4% 5.02% 4.84% 4%
Direct Coverage Ratio 236% 233% 1% 209% 13% 236% 209% 13%
*NIM based on managerial accounts
BALANCE SHEET
Consolidated Standalone
Balance Sheet Jun-23 Dec-22 YtD Jun-23 Dec-22 YtD
Change Change
EGP million EGP million (Jun-23 Vs. EGP million EGP million (Jun-23 Vs.
Dec-22)
Dec-22)
Cash & Due from Central Bank 33,569 47,493 -29% 33,404 47,385 -30%
Due from Banks 282,231 133,857 111% 281,454 133,766 110%
Net Loans & Overdrafts 220,912 196,578 12% 219,949 195,599 12%
Financial Derivatives 2,072 1,940 7% 2,072 1,940 7%
Financial Investment Securities 235,089 238,545 -1% 233,749 237,095 -1%
Investments in Associates and Subsidiaries 145 186 -22% 2,116 1,074 97%
Other Assets 22,272 17,233 29% 21,933 16,784 31%
Total Assets 796,291 635,832 25% 794,678 633,643 25%
Due to Banks 23,938 3,497 585% 23,941 3,476 589%
Customer Deposits 658,531 531,617 24% 656,423 530,125 24%
Other Liabilities 45,186 32,381 40% 45,159 32,322 40%
Total Liabilities 727,656 567,494 28% 725,523 565,922 28%
Shareholders' Equity & Net Profit 68,507 67,758 1% 69,155 67,721 2%
Minority Interest 129 580 -78% 0 0 NM
Total Liabilities & Shareholders' Equity 796,291 635,832 25% 794,678 633,643 25%
1 Based on managerial accounts.
2 As of March-23; 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 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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