REG - Commercial Int Bank - CIB 1Q2022 Earnings Release

Commercial International Bank Egypt CIBAnnouncement

19/04/2022 07:00

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RNS Number : 4913I  Commercial Intnl Bank (Egypt) SAE  15 April 2022

News Release

14 April 2022

COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

FIRST-QUARTER 2022 CONSOLIDATED REVENUE OF EGP 7.77 BILLION AND NET INCOME OF
EGP 4.24 BILLION, OR EGP 1.90 PER SHARE, UP 48% FROM FIRST-QUARTER 2021

 

·    First-Quarter 2022 Consolidated Financial Results

o  Net income of EGP 4.24 billion, up 48% year-on-year (YoY)

o  Revenues of EGP 7.77 billion, up 24% YoY

o  Return on average equity of 25.3%

o  Return on average assets of 3.32%

o  Efficiency ratio of 19.6%

o  Net interest margin (NIM) 1  (#_ftn1) of 5.66%

·    Resilient Balance Sheet

o  Total tier capital recorded EGP 72.8 billion, or 30.6% of risk-weighted
assets

o  CBE local currency liquidity ratio of 51.5%, foreign currency liquidity
ratio of 66.5% (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 93% of total
liabilities

o  Non-performing loans coverage ratio of 218%

·    Supporting our Economy

o  Funding to businesses and individuals recorded EGP 177 billion, growing by
9% over first-quarter 2022, 4% net of EGP devaluation impact, with a loan
market share of 5.27%(( 2  (#_ftn2) )).

o  Deposits recorded EGP 428 billion, growing by 5% over first-quarter 2022,
1% net of EGP devaluation impact, with a deposit market share of 6.30%(2).

o  Loan-to-Deposit Ratio recorded 41.5% by end of first-quarter 2022.

o  In first-quarter 2022, CIB's operations generated EGP 1.97 billion in
corporate, payroll, and other taxes.

·    Committed to our Community

o  CIB Foundation financed "Sohag University Hospital" to outfit and expand
the Pediatric Dialysis Unit.

o  CIB Foundation subsidized "Magdy Yacoub Heart Foundation" with the third
installment to perform 200 open-heart surgeries and 345 catheterization
procedures.

o  CIB Foundation funded "57357 Children Cancer Hospitals" in Cairo and Tanta
with the needed amount to cover their annual operating costs.

o  CIB Foundation sponsored "Sporting Students Hospital" with the necessary
amount to establish an advanced pediatric cardiac operating room.

o  CIB Foundation joined forces with "The Awad Charity Foundation" to found a
rehabilitation center for children with special needs in Beni Suef University.

o  CIB Foundation, in collaboration with "Face for Children in Need,"
provided medical service and care for orphans and street children.

·     Awards & Rankings

o  Global Finance: The World's Best Trade Finance Providers in Egypt for 2022

o  Global Finance: World's Best Foreign Exchange Providers 2022

o  The Digital Banker: Best Wholesale/Transaction Bank for Digital CX

 

 

CAIRO - Commercial International Bank (EGX: COMI) today reported first-quarter
2022 consolidated net income of EGP 4.24 billion, or EGP 1.90 per share, up
48% from first-quarter 2021.

Management commented: "First quarter of 2022 ended on a challenging note on
both global and local fronts, as global economic uncertainty intensified with
the Russian-Ukrainian War. With this turn of events, the CBE raised the
Corridor Rate by 100 basis points, coupled with a devaluation in the Egyptian
Pound against the USD by EGP 2.5, as a result of the global inflation. CIB
Management opted to accrue total provisions of EGP 1 billion for direct and
contingent facilities in the first quarter of 2022, in line with the Bank's
prudent risk management, preemptively securing a coverage for 11% of the
Bank's gross loan portfolio by loan loss provisions. Moreover, solvency and
coverage for unexpected losses remained intact, with Capital Adequacy Ratio
resting comfortably at 31%, safely unscathed by recent developments.

With a focus on core performance, CIB had a strong start into the year,
delivering top and bottom line growth of 24% and 48%, compared to last year,
respectively. This came as a result of a balance sheet sustained growth
momentum at administered costs, especially on the local currency front,
associated with strong local currency deposit growth from last year, along
with proactive treasury management. In addition, local currency loans grew by
33%, compared to last year, boosting fee and commission income growth, with
continued progress in trade finance and foreign exchange activities.

Management remains confident in the Bank's ability to uphold its
market-leading performance, on both profitability and solvency fronts,
supported by its flexible balance sheet structure and prudent risk management,
which would cement the Bank's position against any unforeseen market
dynamics."

FIRST-QUARTER 2022 FINANCIAL HIGHLIGHTS

REVENUES

First-quarter 2022 standalone revenues were EGP 7.63 billion, up 22% from
first-quarter 2021, on the back of net interest income increasing by 16% or
EGP 0.93 billion, alongside non-interest income increasing by 74% or EGP 0.44
billion.

NET INTEREST INCOME

First-quarter 2022 standalone net interest income recorded EGP 6.60 billion,
increasing by 16% YoY, generated at Total NIM(1) of 5.66%, coming in flat YoY,
with Foreign Currency NIM recording 1.30%, increasing by 37bp YoY, exactly
offset by Local Currency NIM decreasing by 35bp, to record 7.14%.

NON-INTEREST INCOME

First-quarter 2022 standalone non-interest income recorded EGP 1.03 billion,
coming 74% higher YoY. Upon adding back contingent provision charged, which is
normally deducted from Non-Interest Income as part of Other Operating
Expenses, recording EGP 758 million for first-quarter 2022 and EGP 121 million
for first-quarter 2021, standalone non-interest income grew by 2.5x YoY. Trade
service fees were EGP 232 million, growing by 18% YoY, with outstanding
balance of EGP 106 billion 3  (#_ftn3) .

OPERATING EXPENSE

First-quarter 2022 standalone operating expense was EGP 1.55 billion, up 5%
YoY. Cost-to-income 4  (#_ftn4) reported 18.4%, 463bp lower YoY, remaining
comfortably below the desirable level of 30%.

LOANS

Gross loan portfolio recorded EGP 177 billion, growing by 9% Year-to-Date
(YtD), with a real growth of 4% net of EGP devaluation impact, which added EGP
7.92 billion to the EGP equivalent balance. Growth was driven mainly by local
currency loans, growing by 8% or EGP 9.38 billion, sufficiently
counterbalancing net foreign currency loan repayments by 6% or USD 184
million. CIB's loan market share reached 5.27% as of December 2021.

 

DEPOSITS

Deposits recorded EGP 428 billion, growing by 5% YtD, with a real growth of 1%
net of EGP devaluation impact, which added EGP 15.3 billion to the EGP
equivalent balance. Growth was driven mainly by foreign currency deposits
adding 8% or USD 468 million, covering net local currency deposit outflows by
1% or EGP 2.28 billion. CIB's deposit market share recorded 6.30% as of
December 2021, maintaining the highest deposit market share among all
private-sector banks.

ASSET QUALITY

CIB maintained its resilient asset quality. Standalone non-performing loans
represented 4.90% of the gross loan portfolio, covered 218% by the Bank's EGP
19.0 billion loan loss provision balance. First-quarter 2022 loan loss
provisions recorded EGP 41 million provision reversals compared to loan loss
provision expense of EGP 702 million in first-quarter 2021.

CAPITAL AND LIQUIDITY

Total tier capital recorded EGP 72.8 billion, or 30.6% of risk-weighted
assets as of March 2022. Tier I capital reached EGP 64.5 billion, or 89% 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 51.5% as of March 2022, while CBE foreign currency liquidity ratio
reached 66.5%, above the threshold of 25%. NSFR was 259% for local currency
and 171% for foreign currency, and LCR was 1921% for local currency and 271%
for foreign currency, comfortably above the 100% Basel III requirement.

KEY METRICS AND BUSINESS UPDATES(( 5  (#_ftn5) ))

·     #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 129.4 billion, 8% higher YtD,
wholly backed by 7% growth in local currency loans.

·     End-of-period deposits were EGP 152.4 billion, 10% higher YtD, on
19% growth in foreign currency deposits, besides 1% growth in local currency
deposits.

·     Gross outstanding contingent business reached EGP 111 billion, 17%
higher YtD.

BUSINESS BANKING

·     End-of-period gross loans were EGP 4.00 billion, 25% higher YtD,
solely on local currency loan growth.

·     End-of-period deposits were EGP 46.2 billion, 11% higher YtD,
mainly on 7% growth in local currency deposits, besides 12% growth in foreign
currency deposits.

·     Gross outstanding contingent business reached EGP 3.51 billion, 30%
higher YtD.

RETAIL INDIVIDUALS BANKING

·     End-of-period gross loans were EGP 44.0 billion, 9% higher YtD,
wholly on 9% growth in local currency loans.

·     End-of-period deposits were EGP 229 billion, coming almost flat
YtD.

·     CIB continued to expand its network to reach a total of 190
branches and 23 units across Egypt, supported by a network of 1,279 ATMs.

 

 

 

 

 

 CONSOLIDATED FINANCIAL HIGHLIGHTS
 Income Statement            1Q22               4Q21          QoQ Change        1Q21           YoY change
                             EGP million        EGP million   (1Q22 vs. 4Q21)   EGP million   (1Q22 vs. 1Q21)
 Net Interest Income        6,717              6,811          -1%              5,678          18%
 Non-Interest Income        1,057              119            792%             589            80%
 Net Operating Income       7,774              6,930          12%              6,266          24%
 Non-Interest Expense       (1,671)            (1,744)        -4%              (1,475)        13%
 Loan Loss Provision        39                 (356)          NM               (702)          NM
 Net Profit before Tax      6,142              4,829          27%              4,089          50%
 Income Tax                 (1,373)            (1,564)        -12%             (1,209)        14%
 Deferred Tax               (510)              102            NM               (6)            NM
 Net profit                 4,260              3,367          26%              2,873          48%
 Minority Interest          15.4               (2.5)          NM               0.4            NM
 Net Profit After Minority  4,244              3,370          26%              2,873          48%

 Financial Indicators        1Q22               4Q21           QoQ Change       1Q21           YoY change
                                                              (1Q22 vs. 4Q21)                 (1Q22 vs. 1Q21)
 Profitability
 ROAE                       25.3%              20.0%          27%              19.3%          31%
 ROAA                       3.32%              2.72%          22%              2.63%          26%
 Efficiency
 Cost-to-Income             19.6%              24.5%          -20%             23.1%          -15%
 Liquidity
 Gross Loans-to-Deposits    41.6%              40.3%          3%               38.0%          9.3%
 Asset Quality
 NPLs-to-Gross Loans        4.89%              5.12%          -4%              4.40%          11%
 Capital Adequacy Ratio     30.6%              29.9%          3%               31.5%          -3%

 

 STANDALONE FINANCIAL HIGHLIGHTS
 Income Statement          1Q22           4Q21                       QoQ Change          1Q21              YoY change
                           EGP million    EGP million               (1Q22 vs. 4Q21)      EGP million      (1Q22 vs. 1Q21)
 Net Interest Income      6,603          6,782                      -3%                 5,676             16%
 Non-Interest Income      1,027          266                        285%                590               74%
 Net Operating Income     7,629          7,048                      8%                  6,267             22%
 Non-Interest Expense     (1,545)        (1,714)                    -10%                (1,473)           5%
 Loan loss provision      41             (352)                      NM                  (702)             NM
 Net Profit before Tax    6,124          4,983                      23%                 4,092             50%
 Income Tax               (1,375)        (1,563)                    -12%                (1,209)           14%
 Deferred Tax             (510)          106                        NM                  (6)               NM
 Net Profit               4,240          3,526                      20%                 2,876             47%

 Financial Indicators      1Q22           4Q21                QoQ Change                 1Q21              YoY change
                                                                    (1Q22 vs. 4Q21)                       (1Q22 vs. 1Q21)
 Profitability
 ROAE                     25.3%          20.9%                      21%                 19.4%             31%
 ROAA                     3.33%          2.85%                      17%                 2.64%             26%
 NIM*                     5.66%          5.68%                      0%                  5.67%             0%
 Efficiency
 Cost-to-Income           18.4%          23.6%                      -22%                23.1%             -20%
 Liquidity
 Gross Loans-to-Deposits  41.5%          40.2%                      3%                  37.9%             9%
 Asset Quality
 NPLs-to-Gross Loans      4.90%          5.13%                      -4%                 4.41%             11%
 Direct Coverage Ratio    218%           213%                       2%                  279%              -22%

*NIM based on managerial accounts

 

                                               Consolidated                                       Standalone
 BALANCE SHEET                                 Mar-22         Dec-21         YtD Change           Mar-22         Dec-21         YtD Change
                                                EGP million    EGP million   (Mar-22 Vs. Dec-21)   EGP million    EGP million   (Mar-22 Vs. Dec-21)
 Cash & Due from Central Bank                  30,582         43,492         -30%                 30,471         43,385         -30%
 Due from Banks                                121,082        80,142         51%                  120,898        79,991         51%
 Net Loans & Overdrafts                        158,855        145,887        9%                   157,940        145,078        9%
 Financial Derivatives                         884            225            292%                 884            225            292%
 Financial Investment Securities               200,767        213,987        -6%                  199,523        212,951        -6%
 Investments in Associates and Subsidiaries    208            205            1%                   1,014          1,014          0%
 Other Assets                                  12,438         14,296         -13%                 12,147         14,006         -13%
 Total Assets                                  524,816        498,236        5%                   522,879        496,651        5%
 Due to Banks                                  3,726          866            330%                 3,696          863            328%
 Customer Deposits                             429,022        407,242        5%                   427,654        406,101        5%
 Other Liabilities                             26,381         20,826         27%                  26,331         20,759         27%
 Total Liabilities                             459,130        428,933        7%                   457,681        427,723        7%
 Shareholders' Equity & Net Profit             65,177         68,848         -5%                  65,198         68,928         -5%
 Minority Interest                             509            455            12%                  0              0              NM
 Total Liabilities & Shareholders' Equity      524,816        498,236        5%                   522,879        496,651        5%

 

 

 1  (#_ftnref1) Based on managerial accounts.

 2  (#_ftnref2) As of December 2021; latest available CBE data at time of
print.

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

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

 5  (#_ftnref5) Loan, deposit, and outstanding contingent balances are based
on managerial accounts.

 Outstanding contingent balances are gross of collateral and provisions.

 Growth in foreign currency balances is in real terms, excluding the effect
of EGP depreciation by EGP 2.5 over first-quarter 2022.

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