REG - Commercial Int Bank - CIB1H2021 Earnings Release

Commercial International Bank Egypt CIBAnnouncement

13/07/2021 07:00

RNS Number : 9929E
  
Commercial Intnl Bank (Egypt) SAE
  
13 July 2021
  
 


News Release

 12 July 2021
COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS
SECOND-QUARTER 2021 CONSOLIDATED REVENUE OF EGP 6.36 BILLION AND NET INCOME OF EGP 3.22 BILLION, OR EGP 1.92 PER SHARE, UP 24% FROM SECOND-QUARTER 2020
 
·    Second-Quarter 2021 Consolidated Financial Results
o  Net income of EGP 3.22 billion, up 24% year-on-year (YoY) 
o  Revenues of EGP 6.36 billion, up 2% YoY
o  Return on average equity of 21.0%
o  Return on average assets of 2.81%
o  Efficiency ratio of 22.3%
o  Net interest margin (NIM)[1] of 5.62% 
·    First-Half 2021 Consolidated Financial Results
o  Net income of EGP 6.09 billion, up 22% YoY 
o  Revenues of EGP 12.6 billion, coming in flat YoY
o  Return on average equity of 19.9%
o  Return on average assets of 2.72%
o  Efficiency ratio of 22.7%
o  Net interest margin (NIM)1 of 5.65% 
·    Resilient Balance Sheet
o  Total tier capital recorded EGP 67.8 billion, or 32.0% of risk-weighted assets
o  CBE local currency liquidity ratio of 62.8%, foreign currency liquidity ratio of 71.6% (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 95% of total liabilities
o  Non-performing loans coverage ratio of 204%
·    Supporting our Economy
o  Funding to businesses and individuals grew by 9% over first-half 2021 to record EGP 149 billion, with a loan market share of 5.16%[2], and EGP 157 billion when considering securitized bonds to corporate clients
o  Deposits grew by 13% over first-half 2021 to record EGP 385 billion, with a deposit market share of 6.67%2
o  Loan-to-Deposit Ratio recorded 39% by end of first-half 2021, and 41% when including securitized bonds
o  In second-quarter 2021, CIB's operations generated EGP 1.64 billion in corporate, payroll, and other taxes
·    Committed to our Community
o  CIB Foundation subsidized "South Valley University Hospitals (Qena University)" to establish a pediatric surgery unit. 
o  CIB Foundation financed "The Egyptian Naval Forces New Children's Hospital in Alexandria" with the amount needed to purchase medical equipment and furniture for the Hospital outfitting, as well as for the finishing of the medical and electro-mechanical works.
o  CIB Foundation funded "Nile of Hope Hospital" with the final installment for purchasing a closed MRI machine. 
o  CIB Foundation, in collaboration with Al Joud Foundation, sponsored "Al - Naas Hospital for Children's Heart" to cover 50 open heart surgeries. 
o  CIB Foundation supported "Shifa' Al-Orman Hospital" with the amount needed to outfit the pediatric department. 
 
·    Awards & Rankings
o  African Banker: Sustainable Bank of the Year
o  Euromoney: Best Bank in Egypt
o  Global Finance: Best Trade Finance Provider in Egypt
o  Global Finance: Best Treasury and Cash Management Providers in Egypt 
o  Global Finance: Best Bank in Egypt 
o  The Digital Banker: Best Transaction Banking 
o  The Digital Banker: Best Bank for Payment Services 
o  The Digital Banker: Best Bank for Cash Management
o  The Digital Banker: Best Supplier Financing Initiative
o  The Digital Banker: Best Financial Chain Initiative in Egypt
CAIRO - Commercial International Bank (EGX: COMI) today reported second-quarter 2021 consolidated net income of EGP 3.22 billion, or EGP 1.92 per share, up 24% from second-quarter 2020.
Management Commented: "Building on a strong first quarter of the year, CIB continued to outperform in the second quarter of 2021, which further saw notable growth in the Bank's balance sheet, particularly in local currency. Local currency deposits grew steadily throughout the quarter, and local currency loans increased by 14%, adding EGP 13 billion in the quarter, back to the all-time high growth levels of early 2017. This reaffirms that, while continuing to focus on growing the Bank's deposit base, Management remains committed to the Bank's role in supporting the economy through funding businesses and individuals. 
In line with this background, topline performance remained strong, benefitting primarily from robust deposit growth and largely from the impressive revival in corporate lending, with the associated pick-up in trade finance and foreign exchange trading activities, falling into line with improved economic prospects. This favorable turn of events synchronized with the Bank's flexible balance sheet structure, which served well in preserving the coherent balance between profitability and liquidity. It is worth mentioning that the remarkable growth in loans, coupled with normalized accumulation of provisions compared to last year, had not in any way impacted the Bank's coverage for both expected and unexpected losses, with loan loss provision balance covering 12% of gross loans, and regulatory capital base, covering 32% of risk-weighted assets.
In continuation of the Bank's leading role in Corporate Social Responsibility, CIB managed this quarter to secure the initial approval of the Financial Regulatory Authority on the issuance of Green Bonds, becoming the first institution in the Egyptian Economy to issue such bonds. This further emphasizes the Bank's integral role in setting the tone for Responsible Banking, through providing distinct support to businesses that are going green. 
SECOND-QUARTER 2021 FINANCIAL HIGHLIGHTS
REVENUES
Second-quarter 2021 standalone revenues were EGP 6.32 billion, up 1% from second-quarter 2020. First-half 2021 standalone revenues were EGP 12.6 billion, down 1% from first-half 2020, wholly driven by 6% decrease in net interest income, mostly offset by non-interest income coming 5x higher YoY. 
NET INTEREST INCOME 
First-half 2021 standalone net interest income recorded EGP 11.7 billion, decreasing by 6% YoY, with Total NIM decreasing by 131bp, 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 first-half 2020, net interest income grew by 9% YoY, generated at 5.65% Total NIM1, down 31 basis points (bp) YoY, with Local Currency NIM1 recording 7.41%, down 41bp, and Foreign Currency NIM1 recording 0.88%, down 66bp YoY.
NON-INTEREST INCOME
First-half 2021 non-interest income recorded EGP 914 million, coming 5x higher YoY. Upon adding back contingent provision charged, which is normally deducted from Non-Interest Income as part of Other Operating Expenses, recording EGP 0.37 billion for first-half 2021 and EGP 1.08 billion for first-half 2020, standalone non-interest income grew by 2% YoY. Trade service fees were EGP 390 million, growing by 18% YoY, with outstanding balance of EGP 86.1 billion[3].
OPERATING EXPENSE
First-half 2021 standalone operating expense was EGP 2.92 billion, up 3% YoY. Cost-to-income reported 22.5%, 181bp higher YoY[4], while remaining comfortably below the desirable level of 30%. Normalized for the aforementioned 2020 bond yield highs, cost-to-income came 130bp lower YoY. 
LOANS
Gross loan portfolio recorded EGP 149 billion, growing by 9% or EGP 12.5 billion Year-to-Date (YtD). Growth was driven wholly by local currency loans, which grew by 19% or EGP 17.0 billion, sufficiently offsetting foreign currency net loan repayments of USD 280 million or 9%. CIB's loan market share reached 5.16% as of April 2021. Securitized Bond Portfolio, extended to Corporate Clients, recorded EGP 7.63 billion, by end of first-half 2021. 
DEPOSITS
Deposits recorded EGP 385 billion, growing by 13% or EGP 44.9 billion YtD. Growth was driven mainly by local currency deposits, growing by 15% or EGP 37.8 billion, besides foreign currency deposits, adding 8% or USD 470 million. CIB's deposit market share recorded 6.67% as of April 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 5.71% of the gross loan portfolio, covered 204% by the Bank's EGP 17.3 billion loan loss provision balance. First-half 2021 loan loss provision expense recorded EGP 1.02 billion, 55% lower YoY. 
CAPITAL AND LIQUIDITY
Total tier capital recorded EGP 67.8 billion, or 32.0% of risk-weighted assets as of June 2021. Tier I capital reached EGP 61.0 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 62.8% as of June 2021, while CBE foreign currency liquidity ratio reached 71.6%, above the threshold of 25%. NSFR was 240% for local currency and 186% for foreign currency, and LCR was 2157% for local currency and 317% for foreign currency, comfortably above the 100% Basel III requirement.
 
 
KEY METRICS AND BUSINESS UPDATES[5]
·    #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 111 billion, coming 11% higher YtD, on 28% growth in local currency loans, partially offset by 9% decrease in foreign currency loans.
·    End-of-period deposits were EGP 138 billion, 23% higher YtD, on 24% growth in local currency deposits and 20% growth in foreign currency deposits.
·    Gross outstanding contingent business reached EGP 90 billion, coming 4% higher YtD.
BUSINESS BANKING
·    End-of-period gross loans were EGP 2 billion, 29% higher YtD, solely in local currency.
·    End-of-period deposits were EGP 35 billion, 20% higher YtD, mostly on local currency deposit growth of 22%.
·    Gross outstanding contingent business reached EGP 2 billion, 14% higher YtD. 
RETAIL INDIVIDUALS BANKING
·    End-of-period gross loans were EGP 36 billion, 3% higher YtD, wholly on 4% growth in local currency loans.
·    End-of-period deposits were EGP 212 billion, 7% higher YtD, mostly on local currency deposit growth of 8% besides 2% growth in foreign currency deposits. 
·    CIB continued to expand its network to reach a total of 184 branches and 28 units across Egypt, supported by a network of 1,258 ATMs.
 




CONSOLIDATED FINANCIAL HIGHLIGHTS


 


 


 


 


 


 


 




Income Statement 


 2Q21 


 1Q21 


 QoQ Change 


 2Q20 


 YoY change 


 1H21 


1H20


 YoY change  




 EGP million 


 EGP million 


(2Q21 vs.1Q21)


 EGP million 


(2Q21 vs. 2Q20)


 EGP million 


 EGP million 


(1H21 vs. 1H20)




Net Interest Income


6,019 


5,678 


6%


6,282 


-4%


11,697 


12,477 


-6%




Non-Interest Income


341 


589 


-42%


(53)


NM


929 


173 


438%




Net Operating Income


6,360 


6,266 


1%


6,229 


2%


12,626 


12,650 


0%




Non-Interest Expense


(1,471)


(1,475)


0%


(1,323)


11%


(2,946)


(2,848)


3%




Loan Loss Provision


(318)


(702)


-55%


(1,020)


-69%


(1,020)


(2,260)


-55%




Net Profit before Tax


4,571 


4,089 


12%


3,887 


18%


8,660 


7,542 


15%




Income Tax


(1,382)


(1,209)


14%


(1,320)


5%


(2,591)


(2,652)


-2%




Deferred Tax


25 


(6)


NM


32 


-22%


19 


108 


-82%




Net profit


3,215 


2,873 


12%


2,599 


24%


6,088 


4,998 


22%




Minority Interest


(2.0)


0.4 


NM


0.0 


NM


(1.7)


0.0 


NM




Net Profit After Minority


3,217 


2,873 


12%


2,599 


24%


6,090 


4,998 


22%




 


 


 


 


 


 


 


 


 




Financial Indicators 


 2Q21 


 1Q21 


 QoQ Change 


 2Q20 


 YoY change 


 1H21 


1H20


 YoY change  




 


 


(2Q21 vs.1Q21)


 


(2Q21 vs. 2Q20)


 


 


(1H21 vs. 1H20)




Profitability


 


 


 


 


 


 


 


 




ROAE


21.0%


19.3%


9%


21.1%


0%


19.9%


19.2%


4%




ROAA


2.81%


2.63%


7%


2.66%


6%


2.72%


2.54%


7%




Efficiency


 


 


 


 


 


 


 


 




Cost-to-Income


22.3%


23.1%


-4%


19.2%


16%


22.7%


20.7%


9%




Liquidity


 


 


 


 


 


 


 


 




Gross Loans-to-Deposits


38.8%


38.0%


2%


42.2%


-8%


38.8%


42.2%


-8%




Asset Quality


 


 


 


 


 


 


 


 




NPLs-to-Gross Loans


5.69%


4.40%


29%


4.01%


42%


5.69%


4.01%


42%




Capital Adequacy Ratio


32.0%


31.5%


2%


29.5%


8%


32.0%


29.5%


8%




STANDALONE FINANCIAL HIGHLIGHTS


 


 


 


 


 


 


 




Income Statement


 2Q21 


 1Q21 


 QoQ Change 


 2Q20 


 YoY change 


 1H21 


1H20


 YoY change  




 EGP million 


 EGP million 


(2Q21 vs.1Q21)


 EGP million 


(2Q21 vs. 2Q20)


 EGP million 


 EGP million 


(1H21 vs. 1H20)




Net Interest Income


5,997 


5,676 


6%


6,282 


-5%


11,673 


12,477 


-6%




Non-Interest Income


323 


590 


-45%


(43)


NM


914 


174 


426%




Net Operating Income


6,320 


6,267 


1%


6,239 


1%


12,587 


12,651 


-1%




Non-Interest Expense


(1,446)


(1,473)


-2%


(1,321)


9%


(2,919)


(2,845)


3%




Loan loss provision


(317)


(702)


-55%


(1,020)


-69%


(1,019)


(2,260)


-55%




Net Profit before Tax


4,557 


4,092 


11%


3,898 


17%


8,649 


7,546 


15%




Income Tax


(1,381)


(1,209)


14%


(1,320)


5%


(2,590)


(2,652)


-2%




Deferred Tax


25 


(6)


NM


32 


-23%


19 


108 


-83%




Net Profit 


3,201 


2,876 


11%


2,610 


23%


6,077 


5,002 


22%




 


 


 


 


 


 


 


 


 




Financial Indicators


 2Q21 


 1Q21 


 QoQ Change 


 2Q20 


 YoY change 


 1H21 


1H20


 YoY change  




 


 


(2Q21 vs.1Q21)


 


(2Q21 vs. 2Q20)


 


 


(1H21 vs. 1H20)




Profitability


 


 


 


 


 


 


 


 




ROAE


21.0%


19.4%


8%


21.2%


-1%


19.9%


19.2%


4%




ROAA


2.80%


2.64%


6%


2.68%


5%


2.72%


2.55%


7%




NIM*


5.62%


5.67%


-1%


6.99%


-19%


5.65%


6.96%


-19%




Efficiency


 


 


 


 


 


 


 


 




Cost-to-Income


22.0%


23.1%


-4%


19.1%


15%


22.5%


20.7%


9%




Liquidity


 


 


 


 


 


 


 


 




Gross Loans-to-Deposits


38.7%


37.9%


2%


42.1%


-8%


38.7%


42.1%


-8%




Asset Quality


 


 


 


 


 


 


 


 




NPLs-to-Gross Loans


5.71%


4.41%


29%


4.03%


41%


5.71%


4.03%


41%




Direct Coverage Ratio


204%


279%


-27%


257%


-21%


204%


257%


-21%




*NIM based on managerial accounts


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 




 
 




BALANCE SHEET


Jun-21


Dec-20


YtD Change


Jun-21


Dec-20


YtD Change




 EGP million 


 EGP million 


(Jun-21 Vs. Dec-20)


 EGP million 


 EGP million 


(Jun-21 Vs. Dec-20)




Cash & Due from Central Bank


31,958 


33,769 


-5%


31,793 


33,573 


-5%




Due from Banks


79,378 


87,426 


-9%


79,080 


86,997 


-9%




Net Loans & Overdrafts


132,034 


120,347 


10%


131,252 


119,632 


10%




Financial Derivatives


292 


249 


17%


292 


249 


17%




Financial Investment Securities


211,011 


173,764 


21%


210,195 


173,027 


21%




Investments in Associates and Subsidiaries


324 


140 


132%


1,022 


874 


17%




Other Assets


14,152 


12,148 


16%


13,842 


11,793 


17%




Total Assets


469,149 


427,842 


10%


467,476 


426,145 


10%




Due to Banks


1,316 


8,818 


-85%


1,313 


8,816 


-85%




Customer Deposits


386,001 


341,169 


13%


384,956 


340,087 


13%




Other Liabilities


18,501 


17,896 


3%


18,440 


17,838 


3%




Total Liabilities


405,818 


367,883 


10%


404,709 


366,740 


10%




Shareholders' Equity & Net Profit


62,850 


59,476 


6%


62,768 


59,405 


6%




Minority Interest


481 


483 


0%


0 


0 


NM




Total Liabilities & Shareholders' Equity


469,149 


427,842 


10%


467,476 


426,145 


10%




 
 

 


[1] Based on managerial accounts.


[2] As of April 2021; latest available CBE data at time of print.


[3] Net of Collateral, Gross of Provisions. 


[4]Cost-to-income is calculated using revenues after adding/deducting back contingent provision charged/released.


[5] 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 0.05 over first-half 2021.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
  END
 
 
MSCVLLFFFDLZBBQ