REG - Commercial Int Bank - CIB 1Q23 - Earnings Release

Commercial International Bank Egypt CIBAnnouncement

15/05/2023 07:00

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RNS Number : 3365Z  Commercial Intnl Bank (Egypt) SAE  14 May 2023

 

News Release

14 May 2023

 

COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

FIRST-QUARTER 2023 CONSOLIDATED REVENUE OF EGP 12.0 BILLION AND NET INCOME OF
EGP 6.06 BILLION, OR EGP 1.81 PER SHARE, UP 43% FROM FIRST-QUARTER 2022

·    First-Quarter 2023 Consolidated Financial Results

o  Net income of EGP 6.06 billion, up 43% Year-on-Year (YoY)

o  Revenues of EGP 12.0 billion, up 54% YoY

o  Return on average equity (ROAE) of 37.5%

o  Return on average assets (ROAA) of 3.67%

o  Efficiency ratio of 16.6%

o  Net interest margin (NIM) 1  (#_ftn1) of 7.09%

·    Balance Sheet Performance

o  Total tier capital recorded EGP 75.5 billion, or 19.3% of risk-weighted
assets.

o  CBE local currency liquidity ratio of 43.1%, foreign currency liquidity
ratio of 69.9% (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 92% of total
liabilities

o  Non-performing loans coverage ratio of 231%

·    Supporting our Economy

o  Funding to businesses and individuals recorded EGP 244 billion, growing by
10% over first-quarter 2023, or 2% net of the EGP devaluation impact, with a
loan market share of 5.41%(( 2  (#_ftn2) )).

o  Deposits recorded EGP 574 billion, growing by 8% over first-quarter 2023,
or 1% net of the EGP devaluation impact, with a deposit market share of
6.18%(2).

o  Loan-to-Deposit Ratio recorded 42.5% by end of first-quarter 2023.

o  In first-quarter 2023, CIB's operations generated EGP 2.87 billion in
corporate, payroll, and other taxes.

·    Committed to our Community

o  CIB Foundation supported "Ain Shams University Children's Hospital" with
the first installment to establish a Pediatric Surgical Suite.

o  CIB Foundation founded the first Rehabilitation Center for Children with
Cerebral Palsy and Muscular Dystrophy.

o  CIB Foundation joined forces with "Sona El-Kheir" to cover the operating
costs of medical convoys under L'Misr Initiative.

o  CIB Foundation financed "57357 Children Cancer Hospital" with the needed
amount to cover their annual operating costs.

o  CIB Foundation paid a 50%-down-payment to "Medal Egypt" company against
LGs to purchase pediatric medical equipment for "Ahl Masr Hospital".

·    Awards & Rankings

o  Global Finance:

§ Best Private Bank

§ Best Supply Chain Finance Bank in Africa 2023

o  MEED:

§ Best Bank in Trade Finance

 

CAIRO - Commercial International Bank (EGX: COMI) today reported first-quarter
2023 consolidated net income of EGP 6.06 billion, or EGP 1.81 per share, up by
43% from last year.

Management commented: "Despite the ambiguity witnessed on a global, regional
and local scale, CIB's performance is nothing short of exemplary. The Bank's
first-quarter results, delivering top and bottom line growth of 54% and 43%,
compared to last year, respectively, set the stage for what promised to be a
very strong 2023.

The Management continued to direct focus on sustaining the Bank's balance
sheet fundamentals and growth momentum, while simultaneously growing spreads
and margins and not compromising on solvency. Specifically, CIB continued its
deposit gathering momentum, growing its local currency deposit base by 20% or
EGP 62 billion over last year, while maintaining a share of Current and Saving
Accounts (CASA) of 55% to Total Deposits, which helped confine the increase in
Cost of Funds amidst the increasing-interest-rate and highly-competitive
environment. Together with Treasury Management placing due focus on
maintaining a balance sheet structure that strikes the balance between
liquidity and profitability, CIB managed to grow its NIM by 143 basis points
compared to last year.

Further committed to its role in growing funding to businesses and
individuals, CIB grew its local currency loan portfolio by 32% or EGP 40
billion over last year, and by 40% or EGP 54 billion upon considering the
Securitization Portfolio, notwithstanding the tightening monetary policy
environment. As a result, CIB marked the largest Lender-and-Securitizer among
Private-Sector Banks by end of first-quarter 2023, while managing to meet the
required minimum stipulated by CBE for funding to
Small-and-Medium-Sized-Enterprises (SMEs). This growth in loans, coupled with
a rebound in Trade Finance activities, reflected clearly in profitability,
fueling-up top line growth through the sustainable stream of non-interest
income, while not needing to accrue any special provisions. That mentioned,
Loan Loss Provision Expense recorded EGP 0.9 billion for first-quarter 2023,
bringing the Loan Loss Provision Balance to EGP 29.6 billion, which covers
12.1% of the Bank's Gross Loan Portfolio, sustaining the highest coverage in
the Egyptian Banking Sector. This came while recording a Capital Adequacy
Ratio (CAR) of 19.3% by end of first-quarter 2023, comfortably above the
minimum regulatory threshold.

All those factors collectively fed positively into the Bank's Return on
Average Equity (ROAE), which recorded 37.5%, further reiterating Management
focus on preserving the interests of both, current and future shareholders.

Building on our confidence in the financial sector's ability to navigate the
uncertainty ahead, Management holds an optimistic outlook on future economic
prospects, with greater confidence 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 unforeseen market dynamics."

FIRST-QUARTER 2023 FINANCIAL HIGHLIGHTS

REVENUES

First-quarter 2023 standalone revenues were EGP 12.0 billion, up 58% from
first-quarter 2022, backed by 64% increase in net interest income, alongside
increase in non-interest income by 16%.

NET INTEREST INCOME

First-quarter 2023 standalone net interest income recorded EGP 10.8 billion,
increasing by 64% YoY, generated at 7.09% Total NIM1, which increased by 143
basis points (bp) YoY, with Local Currency NIM1 recording 9.16%, coming 202bp
higher YoY, and Foreign Currency NIM1 recording 3.52%, coming 223bp higher
YoY.

NON-INTEREST INCOME

First-quarter 2023 standalone non-interest income recorded EGP 1.19 billion,
coming 16% higher YoY. Trade service fees were EGP 545 million, growing by
2.3x YoY, with outstanding balance of EGP 164 billion 3  (#_ftn3) .

OPERATING EXPENSE

First-quarter 2023 standalone operating expense was EGP 2.00 billion, up 30%
YoY. Cost-to-income recorded 16.1%, coming 237bp lower YoY 4  (#_ftn4) and
comfortably below the desirable level of 30%.

 

LOANS

Gross loan portfolio recorded EGP 244 billion, growing by 10% over
first-quarter 2023, with real growth of 2% 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 6% or EGP 9.08 billion,
sufficiently counterbalancing net foreign currency loan repayments of 4% or
USD 109 million. CIB's loan market share reached 5.41%(2) as of December 2022.

DEPOSITS

Deposits recorded EGP 574 billion, growing by 8% over first-quarter 2023, with
real growth of 1% net of the EGP devaluation impact, which added EGP 40.0
billion to the EGP equivalent balance. Growth was driven by local currency
deposits, growing by 1% or EGP 2.75 billion, coupled with foreign currency
deposits adding 1% or USD 39 million. CIB's deposit market share recorded
6.18%(2) as of December 2022, maintaining the highest deposit market share
among all private-sector banks.

ASSET QUALITY

Standalone non-performing loans represented 5.20% of the gross loan portfolio,
and were covered 233% by the Bank's EGP 29.6 billion loan loss provision
balance. First-quarter 2023 loan loss provision expense recorded EGP 948
million compared to loan loss provision reversal of EGP 41 million in
first-quarter 2022.

CAPITAL AND LIQUIDITY

Total tier capital recorded EGP 75.5 billion, or 19.3% of risk-weighted assets
as of March 2023. Tier I capital reached EGP 61.7 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 43.1% by end of
March 2023, compared to the regulator's threshold of 20%, and foreign currency
liquidity ratio reaching 69.9%, above the threshold of 25%. NSFR was 212% for
local currency and 200% for foreign currency, and LCR was 1503% for local
currency and 275% 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 184 billion, 14% higher Year-to-Date
(YtD), with real growth of 3% net of the EGP devaluation impact, mainly on 9%
growth in local currency loans.

o  End-of-period deposits were EGP 209 billion, 7% higher YtD, solely on the
EGP devaluation impact, while local and foreign currency deposits came in flat
YtD.

o  Gross outstanding contingent business reached EGP 170 billion, 22% higher
YtD.

BUSINESS BANKING

o  End-of-period gross loans were EGP 7.5 billion, 10% higher YtD, wholly on
10% growth in local currency loans.

o  End-of-period deposits were EGP 76 billion, 12% higher YtD, with real
growth of 6% net of the EGP devaluation impact, mainly on growth in both local
and foreign currency deposits by 6% each.

o  Gross outstanding contingent business reached EGP 3.7 billion, 1% lower
YtD.

RETAIL INDIVIDUALS BANKING

o  End-of-period gross loans were EGP 52.3 billion, coming in flat YtD.

o  End-of-period deposits were EGP 289 billion, 8% higher YtD, while
remaining almost flat net of the EGP devaluation impact, with 1% growth in
foreign currency deposits, and flat local currency deposits.

o  CIB continued to expand its network to reach a total of 190 branches and
20 units across Egypt, supported by a network of 1,299 ATMs.

 

 

 

 

 

 

 

 

 CONSOLIDATED FINANCIAL HIGHLIGHTS
 Income Statement                         1Q23         4Q22         QoQ Change       1Q22         YoY Change
                                          EGP million  EGP million  (1Q23 vs. 4Q22)  EGP million  (1Q23 vs. 1Q22)
 Net Interest Income                      10,884       9,187        18%              6,717        62%
 Non-Interest Income                      1,100        588          87%              1,057        4%
 Net Operating Income                     11,984       9,776        23%              7,774        54%
 Non-Interest Expense                     (2,064)      (2,230)      -7%              (1,671)      24%
 Loan Loss Provision                      (945)        (1,287)      -27%             39           NM
 Net Profit before Tax                    8,975        6,259        43%              6,142        46%
 Income Tax                               (2,262)      (1,459)      55%              (1,373)      65%
 Deferred Tax                             (645)        (827)        -22%             (510)        27%
 Net profit from continued operations     6,068        3,973        53%              4,260        42%
 Net profit from discontinued operations  1            0            NM               0            NM
 Net profit                               6,069        3,973        53%              4,260        42%
 Minority Interest                        4            23           -83%             15           -75%
 Net Profit After Minority                6,065        3,951        54%              4,244        43%

 Financial Indicators                     1Q23         4Q22         QoQ Change       1Q22         YoY Change
                                                                    (1Q23 vs. 4Q22)               (1Q23 vs. 1Q22)
 Profitability
 ROAE                                     37.5%        23.9%        57%              25.3%        48%
 ROAA                                     3.67%        2.57%        43%              3.32%        11%
 Efficiency
 Cost-to-Income                           16.6%        22.1%        -25%             19.6%        -15%
 Liquidity
 Gross Loans-to-Deposits                  42.5%        41.9%        1%               41.6%        2%
 Asset Quality
 NPLs-to-Gross Loans                      5.26%        4.86%        8%               4.89%        8%
 Capital Adequacy Ratio                   19.3%        22.7%        -15%             30.6%        -37%

 STANDALONE FINANCIAL HIGHLIGHTS
 Income Statement                         1Q23         4Q22         QoQ Change       1Q22         YoY Change
                                          EGP million  EGP million  (1Q23 vs. 4Q22)  EGP million  (1Q23 vs. 1Q22)
 Net Interest Income                      10,832       9,125        19%              6,603        64%
 Non-Interest Income                      1,192        551          116%             1,027        16%
 Net Operating Income                     12,024       9,677        24%              7,629        58%
 Non-Interest Expense                     (2,005)      (2,152)      -7%              (1,545)      30%
 Loan loss provision                      (948)        (1,249)      -24%             41           NM
 Net Profit before Tax                    9,071        6,275        45%              6,124        48%
 Income Tax                               (2,265)      (1,358)      67%              (1,375)      65%
 Deferred Tax                             (722)        (992)        -27%             (510)        42%
 Net Profit                               6,084        3,924        55%              4,240        44%

 Financial Indicators                     1Q23         4Q22         QoQ Change       1Q22         YoY Change
                                                                    (1Q23 vs. 4Q22)               (1Q23 vs. 1Q22)
 Profitability
 ROAE                                     37.5%        23.7%        58%              25.3%        48%
 ROAA                                     3.69%        2.56%        44%              3.33%        11%
 NIM*                                     7.09%        6.49%        9%               5.66%        25%
 Efficiency
 Cost-to-Income                           16.1%        21.5%        -25%             18.4%        -13%
 Liquidity
 Gross Loans-to-Deposits                  42.5%        41.8%        2%               41.5%        2%
 Asset Quality
 NPLs-to-Gross Loans                      5.20%        4.81%        8%               4.90%        6%
 Direct Coverage Ratio                    233%         229%         2%               218%         7%
 *NIM based on managerial accounts

 

 BALANCE SHEET
                                               Consolidated                               Standalone
 Balance Sheet                                 Mar-23         Dec-22         YtD Change   Mar-23         Dec-22         YtD Change
                                                EGP million    EGP million   (Mar-23 Vs.   EGP million    EGP million   (Mar-23 Vs.

Dec-22)
Dec-22)
 Cash & Due from Central Bank                  52,463         47,493         10%          52,320         47,385         10%
 Due from Banks                                170,682        133,857        28%          169,608        133,766        27%
 Net Loans & Overdrafts                        213,663        196,578        9%           212,643        195,599        9%
 Financial Derivatives                         2,089          1,940          8%           2,087          1,940          8%
 Financial Investment Securities               229,653        238,545        -4%          228,218        237,095        -4%
 Investments in Associates and Subsidiaries    157            186            -16%         2,116          1,074          97%
 Other Assets                                  17,580         17,233         2%           17,204         16,784         3%
 Total Assets                                  686,287        635,832        8%           684,196        633,643        8%
 Due to Banks                                  8,287          3,497          137%         8,287          3,476          138%
 Customer Deposits                             576,829        531,617        9%           574,114        530,125        8%
 Other Liabilities                             39,501         32,381         22%          39,671         32,322         23%
 Total Liabilities                             624,616        567,494        10%          622,072        565,922        10%
 Shareholders' Equity & Net Profit             61,548         67,758         -9%          62,124         67,721         -8%
 Minority Interest                             123            580            -79%         0              0              NM
 Total Liabilities & Shareholders' Equity      686,287        635,832        8%           684,196        633,643        8%

 

 1  (#_ftnref1) Based on managerial accounts.

 2  (#_ftnref2) As of December 2022; 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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