REG - Commercial Int Bank - CIB FY20 Year End Earnings Release

Commercial International Bank Egypt CIBAnnouncement

01/03/2021 07:00

RNS Number : 6097Q
  
Commercial Intnl Bank (Egypt) SAE
  
01 March 2021
  
 


News Release

28 February 2021
COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS
 
FULL-YEAR 2020 CONSOLIDATED REVENUE OF EGP 25.9 BILLION AND NET INCOME OF EGP 10.2 BILLION, OR EGP 6.21 PER SHARE, DOWN 13% FROM 2019
 
FOURTH-QUARTER 2020 CONSOLIDATED REVENUE OF EGP 6.58 BILLION AND NET INCOME OF EGP 2.89 BILLION, OR EGP 1.75 PER SHARE, DOWN 11% FROM FOURTH-QUARTER 2019
·    Fourth-Quarter 2020 Consolidated Financial Results
o  Net income of EGP 2.89 billion, down 11% year-on-year (YoY) 
o  Revenues of EGP 6.58 billion, up 7% YoY
o  Return on average equity of 20.4%
o  Return on average assets of 2.75%
o  Efficiency ratio of 20.8%
o  Net interest margin (NIM)[1] of 6.40%
·    Full-Year 2020 Consolidated Financial Results
o  Net income of EGP 10.2 billion, down 13% YoY
o  Revenues of EGP 25.9 billion, up 12% YoY
o  Return on average equity[2] of 19.2%
o  Return on average assets2 of 2.53% 
o  Efficiency ratio of 20.7%
o  Net interest margin1 of 6.75%
·    Resilient Balance Sheet
o  Total tier capital recorded EGP 63.0 billion, or 31.4% of risk-weighted assets
o  CBE local currency liquidity ratio of 56.8%, foreign currency liquidity ratio of 67.6% (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 281%  
 
·    Supporting our Economy
o  Funding to businesses and individuals grew by 3% over 2020 to record EGP 136 billion, with a loan market share of 5.63%[3]
o  Deposits grew by 12% over 2020 to record EGP 340 billion, with a deposit market share of 6.56%3
o  In 2020, CIB's operations generated EGP 6.24 billion in corporate, payroll and other taxes 
·    Committed to our Community
o  CIB Foundation joined "AmCham Egypt Private Sector Movement Against COVID-19" with EGP 5 million to secure protective equipment for the medical staff in healthcare units across the nation.
o  CIB Foundation paid the second instalment of EGP 13 million for the "Children Cancer Hospital 57357" to purchase 390 syringe pumps and 216 infusion pumps.
o  CIB Foundation participated by EGP 12 million to secure a closed MRI machine for the "Nile of Hope Hospital".
o  CIB Foundation funded "Banha University Hospital" with the needed amount to purchase 40 incubators for the Intensive Care Unit and 10 paediatric ICU beds for the Paediatric Intensive Care Unit. 
o  CIB Foundation financed "Magdi Yacoub Heart Foundation" to cover 50 open-heart surgeries.
o  CIB Foundation, in collaboration with "Al Joud Foundation", covered 50 open-heart surgeries at "Al-Naas Hospital for Children's Heart".
·    Awards & Rankings
o  Global Finance: World's Best Bank in the Emerging Markets
o  Global Finance: Best Treasury & Cash Management Providers in Egypt
o  Global Finance: Best Foreign Exchange Provider in Egypt 
o  Global Finance: Best Bank in Egypt 
o  African Banker: Best Regional Bank in North Africa
o  Euromoney: Best Bank in Egypt
o  Asiamoney: Best Digital Bank in Egypt
CAIRO - Commercial International Bank (EGX: COMI) today reported fourth-quarter 2020 consolidated net income of EGP 2.89 billion, or EGP 1.75 per share, down 11% from fourth-quarter 2019. Full-year 2020 consolidated net income recorded EGP 10.2 billion, or EGP 6.21 per share, down by 13% from last year.
Management commented: "Ending a year beset with unprecedented dynamics on both macroeconomic and internal fronts, CIB achieved another milestone in financial performance, while maintaining top-notch solvency. As the second wave of COVID-19 hit, and ambiguity inherent in the macroeconomic outlook and client creditworthiness persisted, Management upheld its year-long strategy of prioritizing solvency over short-term profitability, accumulating a further EGP 1.2 billion of loan loss provisions in the fourth quarter of the year. Cumulatively, loan loss provision expense for full-year 2020 recorded EGP 5.0 billion, tripling from last year. With that, CIB maintained its pioneer coverage in the Sector, with loan loss provision balance of EGP 16.4 billion, covering 12% of the Bank's gross loan portfolio, and 16% of the unsecured portion therein. This, alongside the Bank's comfortable capital position reflected in robust Capital Adequacy Ratio of 31.4%, provide further credence to its resolute solvency and coverage for both expected and unexpected credit losses.
On another note, the Bank's flexible balance sheet structure, racked-up over the years, has been pivotal to sharp performance, serving well in special light of declining interest rates and reflecting Management farsightedness and adept strategic direction. This came evident in pre-provision bottom line growing by decent 15% over last year, notwithstanding macroeconomic challenges, backed by competent balance sheet growth attained at improved margins. Distinctly, local currency balance sheet grew impressively, with deposits adding EGP 36.5 billion at controlled cost, matched by notable growth in net loan bookings by EGP 12.8 billion over the year.
Moving into 2021, Management remains confident in CIB's ability to endure any arising challenges, drawing on its resilient balance sheet fundamentals and robust solvency."
FOURTH-QUARTER 2020 FINANCIAL HIGHLIGHTS
REVENUES
Fourth-quarter 2020 standalone revenues were EGP 6.50 billion, up 6% from fourth-quarter 2019. Full-year 2020 standalone revenues were EGP 25.8 billion, up 12% YoY, on the back of net interest income growth. Upon adding back contingent provision charged, which is normally deducted from Net Operating Income as part of Other Operating Expenses, full-year 2020 standalone revenues grew by 16% YoY. 
 
 
 
NET INTEREST INCOME 
Full-year 2020 standalone net interest income was EGP 25.1 billion, up 16% YoY, generated at 6.75% Total NIM1, up 27 basis points (bp) YoY. Local Currency NIM1 recorded 9.01%, up 54bp YoY, while Foreign Currency NIM1 recorded 1.25%, down 115bp YoY.
NON-INTEREST INCOME
Full-year 2020 standalone non-interest income recorded EGP 749 million, representing 3% of total revenues. Adding back contingent provision charged amounting to EGP 1.29 billion for full-year 2020, standalone non-interest income represented 8% of revenues. Trade service fees were EGP 699 million, with outstanding balance of EGP 82.5 billion[4].
OPERATING EXPENSE
Full-year 2020 standalone operating expense was EGP 5.55 billion, up 10% YoY. Cost-to-income reported 20.5%, 111bp lower YoY[5], and comfortably below the desirable level of 30%.
LOANS
Gross loan portfolio recorded EGP 136 billion, growing by 3% or EGP 4.52 billion over 2020. Growth was driven wholly by local currency loans, which grew impressively by 17% or EGP 12.8 billion, sufficiently offsetting foreign currency net loan repayments of USD 460 million or 13%, along with the effect of the EGP appreciation of EGP 0.31 over 2020, which brought the foreign currency equivalent balance down further by EGP 0.94 billion. CIB's loan market share reached 5.63% as of September 2020.
DEPOSITS
Deposits recorded EGP 340 billion, adding EGP 35.6 billion or 12% YoY. Growth was driven by local currency deposits, adding EGP 36.5 billion, while foreign currency deposits came almost flat adding modest USD 53 million, whereas EGP appreciation over the year brought the foreign currency equivalent balance down by EGP 1.74 billion. CIB's deposit market share recorded 6.56% as of September 2020, maintaining the highest deposit market share among all private-sector banks.
ASSET QUALITY
CIB maintained its resilient asset quality. Standalone non-performing loans represented 4.27% of the gross loan portfolio, covered 281% by the Bank's EGP 16.4 billion loan loss provision balance. Full-year 2020 loan loss provision expense recorded EGP 4.99 billion, 3.5x higher YoY. 
CAPITAL AND LIQUIDITY
Total tier capital recorded EGP 63.0 billion, or 31.4% of risk-weighted assets as of December 2020. Tier I capital reached EGP 56.3 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 56.8% as of December 2020, while CBE foreign currency liquidity ratio reached 67.6%, above the threshold of 25%. NSFR was 301% for local currency and 168% for foreign currency, and LCR was 1977% for local currency and 337% for foreign currency, comfortably above the 100% Basel III requirement.
 
 
 
 
 
KEY METRICS AND BUSINESS UPDATES[6]
·    #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 99.4 billion, 5% lower YoY, on foreign currency loans coming lower by 13%, partially offset by 6% growth in local currency loans.
·    End-of-period deposits were EGP 111.7 billion, 14% higher YoY, predominantly on growth in local currency deposits by 20%, while foreign currency deposits came in almost flat.
·    Gross outstanding contingent business reached EGP 86.3 billion, 15% higher YoY.
BUSINESS BANKING
·    End-of-period gross loans were EGP 1.7 billion, 2x higher YoY, primarily in local currency.
·    End-of-period deposits were EGP 29.5 billion, 26% higher YoY, mostly on local currency deposit growth of 33%, besides 5% growth in foreign currency deposits YoY.
·    Gross outstanding contingent business reached EGP 1.9 billion, 41% higher YoY. 
RETAIL INDIVIDUALS BANKING
·    End-of-period gross loans were EGP 35.3 billion, 33% higher YoY, primarily in local currency loans coming in higher by 37%, offsetting 11% lower foreign currency loans.
·    End-of-period deposits were EGP 198.9 billion, 9% higher YoY, wholly on local currency deposit growth of 13%, while foreign currency deposits came in almost flat YoY.
·    CIB continued to expand its network to reach a total of 182 branches and 27 units across Egypt, supported by a network of 1,121 ATMs.
 



CONSOLIDATED FINANCIAL HIGHLIGHTS




































Income Statement 


 4Q20 


 3Q20 


 QoQ Change 


 4Q19 


 YoY change 


 FY20 


FY19


 YoY change  




 EGP million 


 EGP million 


(4Q20 vs. 3Q20)


 EGP million 


(4Q20 vs. 4Q19)


 EGP million 


 EGP million 


(FY20 vs. FY19)




Net Interest Income


6,332 


6,363 


0%


6,130 


3%


25,172 


21,579 


17%




Non-Interest Income


246 


290 


-15%


19 


1163%


709 


1,441 


-51%




Net Operating Income


6,578 


6,653 


-1%


6,149 


7%


25,881 


23,019 


12%




Non-Interest Expense


(1,425)


(1,352)


5%


(1,160)


23%


(5,626)


(5,049)


11%




Loan Loss Provision


(1,156)


(1,603)


-28%


(228)


407%


(5,019)


(1,435)


250%




Net Profit Before Tax


3,997 


3,697 


8%


4,761 


-16%


15,236 


16,535 


-8%




Income Tax


(1,129)


(1,306)


-14%


(1,356)


-17%


(5,087)


(4,639)


10%




Deferred Tax


24 


(44)


NM


(142)


NM


87 


(95)


NM




Net Profit


2,892 


2,346 


23%


3,263 


-11%


10,236 


11,801 


-13%




Minority Interest


0 


(2)


NM


0 


NM


(2)


0 


NM




Net Profit After Minority


2,892 


2,349 


23%


3,263 


-11%


10,238 


11,801 


-13%










































Financial Indicators 


 4Q20 


 3Q20 


 QoQ Change 


 4Q19 


 YoY change 


 FY20 


FY19


 YoY change  












(4Q20 vs. 3Q20)






(4Q20 vs. 4Q19)










(FY20 vs. FY19)




Profitability




































ROAE


20.4%


17.6%


15%


26.2%


-22%


19.2%


29.5%


-35%




ROAA


2.75%


2.31%


19%


3.43%


-20%


2.53%


3.26%


-23%




Efficiency




































Cost-to-Income


20.8%


20.5%


2%


17.8%


17%


20.7%


21.6%


-4%




Liquidity




































Gross Loans-to-Deposits


40.2%


40.6%


-1%


43.3%


-7%


40.2%


43.3%


-7%




Asset Quality




































NPLs-to-Gross Loans


4.26%


3.96%


8%


3.99%


7%


4.26%


3.99%


7%




Capital Adequacy Ratio


31.4%


31.0%


1%


26.1%


20%


31.4%


26.1%


20%




 
STANDALONE FINANCIAL HIGHLIGHTS




































Income Statement


 4Q20 


 3Q20 


 QoQ Change 


 4Q19 


 YoY change 


 FY20 


FY19


 YoY change  




 EGP million 


 EGP million 


(4Q20 vs. 3Q20)


 EGP million 


(4Q20 vs. 4Q19)


 EGP million 


 EGP million 


(FY20 vs. FY19)




Net Interest Income


6,257 


6,356 


-2%


6,130 


2%


25,090 


21,578 


16%




Non-Interest Income


245 


330 


-26%


18 


1298%


749 


1,440 


-48%




Net Operating Income


6,502 


6,686 


-3%


6,147 


6%


25,839 


23,018 


12%




Non-Interest Expense


(1,368)


(1,339)


2%


(1,159)


18%


(5,553)


(5,045)


10%




Loan Loss Provision


(1,127)


(1,603)


-30%


(228)


394%


(4,989)


(1,435)


248%




Net Profit Before Tax


4,006 


3,745 


7%


4,760 


-16%


15,297 


16,537 


-8%




Income Tax


(1,126)


(1,306)


-14%


(1,356)


-17%


(5,085)


(4,639)


10%




Deferred Tax


24 


(44)


NM


(142)


NM


87 


(95)


NM




Net Profit 


2,904 


2,394 


21%


3,262 


-11%


10,300 


11,804 


-13%










































Financial Indicators


 4Q20 


 3Q20 


 QoQ Change 


 4Q19 


 YoY change 


 FY20 


FY19


 YoY change  












(4Q20 vs. 3Q20)






(4Q20 vs. 4Q19)










(FY20 vs. FY19)




Profitability




































ROAE


20.5%


18.0%


14%


26.3%


-22%


19.3%


29.6%


-35%




ROAA


2.77%


2.36%


17%


3.43%


-19%


2.55%


3.26%


-22%




NIM*


6.40%


6.71%


-5%


7.00%


-9%


6.75%


6.48%


4%




Efficiency




































Cost-to-Income


20.2%


20.2%


0%


17.8%


14%


20.5%


21.6%


-5%




Liquidity




































Gross Loans-to-Deposits


40.1%


40.5%


-1%


43.3%


-7%


40.1%


43.3%


-7%




Asset Quality




































NPLs-to-Gross Loans


4.27%


3.97%


8%


3.99%


7%


4.27%


3.99%


7%




Direct Coverage Ratio


281%


289%


-3%


225%


25%


281%


225%


25%




*NIM based on managerial accounts



































 







Consolidated


Standalone




BALANCE SHEET


Dec-20


Dec-19


YoY Change


Dec-20


Dec-19


YoY Change








 EGP million 


 EGP million 


(Dec-20 Vs. Dec-19)


 EGP million 


 EGP million 


(Dec-20 Vs. Dec-19)




Cash & Due from Central Bank


33,769 


28,274 


19%


33,573 


28,274 


19%




Due from Banks


87,426 


28,353 


208%


86,997 


28,353 


207%




Net Loans & Overdrafts


120,347 


119,946 


0%


119,632 


119,946 


0%




Financial Derivatives


249 


216 


15%


249 


216 


15%




Financial Investment Securities


173,764 


197,542 


-12%


173,027 


197,542 


-12%




Investments in Associates and Subsidiaries


140 


108 


30%


874 


64 


1267%




Other Assets


12,148 


12,303 


-1%


11,793 


12,301 


-4%




Total Assets


427,842 


386,742 


11%


426,145 


386,697 


10%




Due to Banks


8,818 


11,811 


-25%


8,816 


11,811 


-25%




Customer Deposits


341,169 


304,448 


12%


340,087 


304,484 


12%




Other Liabilities


17,896 


18,603 


-4%


17,838 


18,603 


-4%




Total Liabilities


367,883 


334,862 


10%


366,740 


334,897 


10%




Shareholders' Equity & Net Profit


59,476 


51,880 


15%


59,405 


51,800 


15%




Minority Interest


483 


0 


NM


0 


0 


NM




Total Liabilities & Shareholders' Equity


427,842 


386,742 


11%


426,145 


386,697 


10%



 





[1] Based on managerial accounts.


[2] After profit appropriation.


[3] As of September 2020; latest available CBE data at time of print.


[4] Net of Collateral, Gross of Provisions. 


[5] Cost-to-income is, as has normally been, calculated using revenues after adding/deducting back contingent provision charged/released.


[6] 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 0.31 over full-year 2020.


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