REG - Commercial Int Bank - CIB 3Q21 Earnings Release

Commercial International Bank Egypt CIBAnnouncement

12/11/2021 07:05

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RNS Number : 1597S  Commercial Intnl Bank (Egypt) SAE  12 November 2021

News Release

 11 November 2021

 

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COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

THIRD-QUARTER 2021 CONSOLIDATED REVENUE OF EGP 7.14 BILLION AND NET INCOME OF
EGP 3.81 BILLION, OR EGP 1.71 PER SHARE, UP 62% FROM THIRD-QUARTER 2020

 

·    Third-Quarter 2021 Consolidated Financial Results

o  Net income of EGP 3.81 billion, up 62% year-on-year (YoY)

o  Revenues of EGP 7.14 billion, up 7% YoY

o  Return on average equity of 23.7%

o  Return on average assets of 3.17%

o  Efficiency ratio of 21.4%

o  Net interest margin (NIM) 1  (#_ftn1) of 5.70%

·    Nine-Month 2021 Consolidated Financial Results

o  Net income of EGP 9.88 billion, up 34% YoY

o  Revenues of EGP 19.7 billion, up 2% YoY

o  Return on average equity of 21.0%

o  Return on average assets of 2.86%

o  Efficiency ratio of 22.2%

o  Net interest margin (NIM)(1) of 5.67%

·    Resilient Balance Sheet

o  Total tier capital recorded EGP 71.0 billion, or 32.1% of risk-weighted
assets

o  CBE local currency liquidity ratio of 63.8%, foreign currency liquidity
ratio of 69.3% (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 95% of total
liabilities

o  Non-performing loans coverage ratio of 206%

·    Supporting our Economy

o  Funding to businesses and individuals grew by 15% over nine-month 2021 to
record EGP 157 billion, with a loan market share of 5.13%(( 2  (#_ftn2) )).

o  Deposits grew by 19% over nine-month 2021 to record EGP 403 billion, with
a deposit market share of 6.63%(2).

o  Loan-to-Deposit Ratio recorded 39.0% by end of nine-month 2021.

o  In third-quarter 2021, CIB's operations generated EGP 1.78 billion in
corporate, payroll, and other taxes.

·    Committed to our Community

o  CIB Foundation subsidized "Children Cancer Hospital 57357" to establish
digital pathology lab.

o  CIB Foundation funded "Cairo University Hospitals" with the final
installment for purchasing 128-Slices-CT Scanner.

o  CIB Foundation financed "The Egyptian Naval Forces New Children's Hospital
in Alexandria" with the final installment to purchase the medical equipment
and furniture needed for the Hospital outfitting.

o  CIB Foundation supported "Ibrahim A. Badran Foundation" with the medical
convoys that provide examinations for children.

o  CIB Foundation sponsored "Raie Masr Foundation" with the final installment
to outfit and operate 2 mobile clinics.

·    Awards & Rankings

o  Global Finance: Best Consumer Digital Bank 2021

o  Global Finance: Best Institutional Bank 2021

o  Global Finance: Best Treasury and Cash Management Providers in Egypt

o  Global Finance: Best Trade Finance Provider in Egypt

o  Global Finance: Best Bank in Egypt

o  Global Finance: Financial Leadership in Sustaining Communities in the
Middle East

o  The Digital Banker: Best Financial Chain Initiative in Egypt

o  The Digital Banker: Best Supplier Financing Initiative

o  The Digital Banker: Best Bank for Cash Management

o  The Digital Banker: Best Bank for Payment Services

o  The Digital Banker: Best Transaction Banking

o  African Banker: Sustainable Bank of the Year

o  Euromoney: Best Bank in Egypt

o  The Banker: Best Digital Bank in Africa

o  Asiamoney: Best Domestic Bank in Egypt

o  MEED: Best CSR Initiative in Asia and Middle East

o  EMEA Finance: Most Innovative Bank in Pan-Africa

CAIRO - Commercial International Bank (EGX: COMI) today reported third-quarter
2021 consolidated net income of EGP 3.81 billion, or EGP 1.71 per share, up
62% from third-quarter 2020.

Management Commented: "CIB hit a new record in the third quarter of 2021, with
remarkable bottom line growth compared to last year. This exceptional
performance is driven by both balance sheet fundamentals and resilient
solvency, alongside continued progression during the interim.

Balance sheet growth sustained its momentum, especially in local currency,
with local currency deposits growing by 7% over the quarter and 28% over the
year, mainly concentrated on CASA gathering, in accordance with the
Management's strategic focus on growing funds at controlled costs. This,
alongside maintaining the Bank's flexible balance sheet structure that is
necessary to accommodate for interest rate volatilities, led to liquidity
management optimization.

Likewise, loan growth continued its upward momentum, with local currency loans
striking record growth of 26% compared to last year, hence boosting top line,
backed by increase in core fees and commissions. As a matter of fact, record
loan growth was achieved without posing pressure on the Bank's credit risk
requirements, thanks to CIB's prudent risk management and healthy coverage,
during 2020 and earlier, which paved the way for a significant slow-down in
provision accumulations, in light of the gradual macroeconomic restoration. It
remains noteworthy that this robust loan growth, coupled with moderated
provisions, maintained CIB's prime market position in terms of coverage for
both expected and unexpected losses.

As we near the end of 2021, Management remains positive about CIB's capability
to sustain its leading market position, drawing largely on its unique coverage
and its adaptable balance sheet structure, which would allow for stable
navigation through unforeseen market dynamics."

THIRD-QUARTER 2021 FINANCIAL HIGHLIGHTS

REVENUES

Third-quarter 2021 standalone revenues were EGP 7.12 billion, up 6% from
third-quarter 2020. Nine-month 2021 standalone revenues were EGP 19.7 billion,
up 2% from nine-month 2020, wholly driven by non-interest income coming 3x
higher YoY, partially pulled down by 4% decrease in net interest income.

 

NET INTEREST INCOME

Nine-month 2021 standalone net interest income recorded EGP 18.1 billion,
decreasing by 4% YoY, with Total NIM decreasing by 120 basis points (bp), due
mainly to the maturities of exceptionally-high-yielding bonds previously
purchased. Normalizing for the above-market-interest-rate-differential of the
aforementioned bonds in nine-month 2020, net interest income grew by 12% YoY,
generated at 5.67% Total NIM(1), down by 25bp YoY, with Local Currency NIM(1)
recording 7.35%, down 48bp, and Foreign Currency NIM(1) recording 0.96%, down
39bp YoY.

NON-INTEREST INCOME

Nine-month 2021 non-interest income recorded EGP 1.60 billion, coming 3x
higher YoY. Upon adding back contingent provision charged, which is normally
deducted from Non-Interest Income as part of Other Operating Expenses,
recording EGP 211 million for nine-month 2021 and EGP 1.02 billion for
nine-month 2020, standalone non-interest income grew by 19% YoY. Trade service
fees were EGP 586 million, growing by 14% YoY, with outstanding balance of EGP
92.3 billion 3  (#_ftn3) .

OPERATING EXPENSE

Nine-month 2021 standalone operating expense was EGP 4.38 billion, up 5% YoY.
Cost-to-income 4  (#_ftn4) reported 22.0%, 145bp higher YoY, while remaining
comfortably below the desirable level of 30%. Normalized for the
aforementioned 2020 bond yield-highs, cost-to-income came 158bp lower YoY.

LOANS

Gross loan portfolio recorded EGP 157 billion, growing by 15% or EGP 20.7
billion Year-to-Date (YtD). Growth was driven wholly by local currency loans,
which grew by 24% or EGP 21.6 billion, sufficiently offsetting foreign
currency net loan repayments of USD 52.9 million or 2%. CIB's loan market
share reached 5.13% as of August 2021.

DEPOSITS

Deposits recorded EGP 403 billion, growing by 19% or EGP 63.0 billion YtD.
Growth was driven mainly by local currency deposits, growing by 23% or EGP
57.0 billion, besides foreign currency deposits, adding 7% or USD 387 million.
CIB's deposit market share recorded 6.63% as of August 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 5.43% of the gross loan portfolio, covered 206% by the Bank's EGP
17.6 billion loan loss provision balance. Nine-month 2021 loan loss provision
expense recorded EGP 1.33 billion, 66% lower YoY.

CAPITAL AND LIQUIDITY

Total tier capital recorded EGP 71.0 billion, or 32.1% of risk-weighted
assets as of September 2021. Tier I capital reached EGP 64.1 billion, or 90%
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 63.8% as of September 2021, while CBE foreign currency liquidity
ratio reached 69.3%, above the threshold of 25%. NSFR was 230% for local
currency and 165% for foreign currency, and LCR was 1039% for local currency
and 296% 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 116.6 billion, 17% higher YtD,
solely on 32% growth in local currency loans.

·    End-of-period deposits were EGP 146.2 billion, 31% higher YtD, on 36%
growth in local currency deposits and 16% growth in foreign currency deposits.

·    Gross outstanding contingent business reached EGP 95.6 billion, 11%
higher YtD.

BUSINESS BANKING

·    End-of-period gross loans were EGP 2.5 billion, 48% higher YtD,
solely in local currency.

·    End-of-period deposits were EGP 38.8 billion, 31% higher YtD, mostly
on local currency deposit growth of 34%, besides foreign currency deposit
growth of 20%.

·    Gross outstanding contingent business reached EGP 2.5 billion, 35%
higher YtD.

RETAIL INDIVIDUALS BANKING

·    End-of-period gross loans were EGP 38.0 billion, 8% higher YtD,
wholly on 10% growth in local currency loans.

·    End-of-period deposits were EGP 218.1 billion, 10% higher YtD, driven
by local currency deposit growth of 13%.

·    CIB continued to expand its network to reach a total of 187 branches
and 28 units across Egypt, supported by a network of 1,284 ATMs.

 

 CONSOLIDATED FINANCIAL HIGHLIGHTS
 Income Statement           3Q21               2Q21         QoQ Change      3Q20         YoY Change  9M21         9M20         YoY Change
                            EGP million        EGP million  (3Q21 vs.2Q21)  EGP million  (3Q21       EGP million  EGP million  (9M21

                                                                                         vs. 3Q20)                             vs. 9M20)
 Net Interest Income        6,458              6,019        7%              6,363        1%          18,155       18,840       -4%
 Non-Interest Income        682                341          100%            290          135%        1,587        463          243%
 Net Operating Income       7,140              6,360        12%             6,653        7%          19,741       19,303       2%
 Non-Interest Expense       (1,492)            (1,471)      1%              (1,352)      10%         (4,438)      (4,201)      6%
 Loan Loss Provision        (303)              (318)        -5%             (1,603)      -81%        (1,324)      (3,863)      -66%
 Net Profit before Tax      5,344              4,571        17%             3,697        45%         13,979       11,239       24%
 Income Tax                 (1,525)            (1,382)      10%             (1,306)      17%         (4,116)      (3,959)      4%
 Deferred Tax               (7)                25           NM              (44)         -84%        12           63           -81%
 Net profit                 3,812              3,215        19%             2,346        62%         9,875        7,344        34%
 Minority Interest          (0.2)              (2.1)        -90%            (2)          -90%        (2)          (2)          -8%
 Net Profit After Minority  3,812              3,217        19%             2,349        62%         9,877        7,346        34%

 Financial Indicators       3Q21               2Q21         QoQ Change      3Q20         YoY Change  9M21         9M20         YoY Change
                                                            (3Q21 vs.2Q21)               (3Q21                                 (9M21

                                                                                         vs. 3Q20)                             vs. 9M20)
 Profitability
 ROAE                       23.7%              21.0%        13%             17.6%        34%         21.0%        18.5%        14%
 ROAA                       3.17%              2.81%        13%             2.31%        37%         2.86%        2.44%        17%
 Efficiency
 Cost-to-Income             21.4%              22.3%        -4%             20.5%        4%          22.2%        20.7%        8%
 Liquidity
 Gross Loans-to-Deposits    39.1%              38.8%        1%              40.6%        -4%         39.1%        40.6%        -4%
 Asset Quality
 NPLs-to-Gross Loans        5.42%              5.69%        -5%             3.96%        37%         5.42%        3.96%        37%
 Capital Adequacy Ratio     32.1%              32.0%        0%              31.03%       3%          32.1%        31.0%        3%

 

 

 

 STANDALONE FINANCIAL HIGHLIGHTS
 Income Statement                   3Q21               2Q21         QoQ Change      3Q20         YoY Change  9M21         9M20         YoY Change
                                    EGP million        EGP million  (3Q21 vs.2Q21)  EGP million  (3Q21       EGP million  EGP million  (9M21

                                                                                                 vs. 3Q20)                             vs. 9M20)
 Net Interest Income                6,433              5,997        7%              6,356        1%          18,106       18,833       -4%
 Non-Interest Income                687                323          112%            330          108%        1,601        504          217%
 Net Operating Income               7,119              6,320        13%             6,686        6%          19,706       19,337       2%
 Non-Interest Expense               (1,464)            (1,446)      1%              (1,339)      9%          (4,382)      (4,184)      5%
 Loan loss provision                (307)              (317)        -3%             (1,603)      -81%        (1,326)      (3,862)      -66%
 Net Profit before Tax              5,349              4,557        17%             3,745        43%         13,998       11,291       24%
 Income Tax                         (1,525)            (1,381)      10%             (1,306)      17%         (4,115)      (3,959)      4%
 Deferred Tax                       (7)                25           NM              (44)         -84%        12           63           -81%
 Net Profit                         3,817              3,201        19%             2,394        59%         9,895        7,396        34%

 Financial Indicators               3Q21               2Q21         QoQ Change      3Q20         YoY Change  9M21         9M20         YoY Change
                                                                    (3Q21 vs.2Q21)               (3Q21                                 (9M21

                                                                                                 vs. 3Q20)                             vs. 9M20)
 Profitability
 ROAE                               23.7%              21.0%        13%             18.0%        32%         21.0%        18.6%        13%
 ROAA                               3.19%              2.80%        14%             2.36%        35%         2.88%        2.47%        17%
 NIM*                               5.70%              5.62%        1%              6.71%        -15%        5.67%        6.87%        -18%
 Efficiency
 Cost-to-Income                     21.0%              22.0%        -5%             20.2%        4%          22.0%        20.6%        7%
 Liquidity
 Gross Loans-to-Deposits            39.0%              38.7%        1%              40.5%        -4%         39.0%        40.5%        -4%
 Asset Quality
 NPLs-to-Gross Loans                5.43%              5.71%        -5%             3.97%        37%         5.43%        3.97%        37%
 Direct Coverage Ratio              206%               204%         1%              289%         -29%        206%         289%         -29%
 *NIM based on managerial accounts

 

                                               Consolidated                               Standalone
 BALANCE SHEET                                 Sep-21         Dec-20         YtD Change   Sep-21         Dec-20         YtD Change
                                                EGP million    EGP million   (Sep-21 Vs.   EGP million    EGP million   (Sep-21 Vs. Dec-20)

                                                                             Dec-20)
 Cash & Due from Central Bank                  33,326         33,769         -1%          33,208         33,573         -1%
 Due from Banks                                72,235         87,426         -17%         71,954         86,997         -17%
 Net Loans & Overdrafts                        139,923        120,347        16%          139,110        119,632        16%
 Financial Derivatives                         267            249            7%           267            249            7%
 Financial Investment Securities               233,228        173,764        34%          232,360        173,027        34%
 Investments in Associates and Subsidiaries    332            140            137%         1,023          874            17%
 Other Assets                                  13,722         12,148         13%          13,421         11,793         14%
 Total Assets                                  493,032        427,842        15%          491,343        426,145        15%
 Due to Banks                                  1,546          8,818          -82%         1,543          8,816          -82%
 Customer Deposits                             404,203        341,169        18%          403,086        340,087        19%
 Other Liabilities                             20,822         17,896         16%          20,763         17,838         16%
 Total Liabilities                             426,571        367,883        16%          425,391        366,740        16%
 Shareholders' Equity & Net Profit             66,006         59,476         11%          65,952         59,405         11%
 Minority Interest                             456            483            -6%          0              0              NM
 Total Liabilities & Shareholders' Equity      493,032        427,842        15%          491,343        426,145        15%

 

 

 1  (#_ftnref1) Based on managerial accounts.

 2  (#_ftnref2) As of August 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 appreciation by EGP 0.02 over nine-month 2021.

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