3rd Quarter 2022 (Earnings Release)

RNS Number : 2915F
Commercial Intnl Bank (Egypt) SAE
04 November 2022
 

News Release

3 November 2022

COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

THIRD-QUARTER 2022 CONSOLIDATED REVENUE OF EGP 8.45 BILLION AND NET INCOME OF EGP 4.41 BILLION, OR EGP 1.32 PER SHARE, UP 16% FROM THIRD-QUARTER 2021

 

· Third-Quarter 2022 Consolidated Financial Results

Net income of EGP 4.41 billion, up 16% year-on-year (YoY)

Revenues of EGP 8.45 billion, up 18% YoY

Return on average equity of 27.1%

Return on average assets of 3.16%

Efficiency ratio of 21.4%

Net interest margin (NIM)[1] of 6.24%

· Nine-Months 2022 Consolidated Financial Results

Net income of EGP 12.2 billion, up 23% YoY

Revenues of EGP 23.1 billion, up 17% YoY

Return on average equity of 24.4%

Return on average assets of 2.98%

Efficiency ratio of 20.9%

NIM1 of 5.95%

· Resilient Balance Sheet

Total tier capital recorded EGP 72.6 billion, or 26.7% of risk-weighted assets.

CBE local currency liquidity ratio of 63.2 % , foreign currency liquidity ratio of 66.9 % (comfortably above CBE requirements of 20% and 25%, respectively)

CIB remains well above the 100% requirement in the Basel III NSFR and LCR ratios.

High quality of funding, with customer deposits comprising 95% of total liabilities

Non-performing loans coverage ratio of 216%

· Supporting our Economy

Funding to businesses and individuals recorded EGP 200 billion, growing by 22% over nine-months 2022, or 14% net of the EGP devaluation impact, with a loan market share of 5.40%[2].

Deposits recorded EGP 498 billion, growing by 23% over nine-months 2022, or 16% net of the EGP devaluation impact, with a deposit market share of 5.84%2.

Loan-to-Deposit Ratio recorded 40.2% by end of nine-months 2022.

In third-quarter 2022, CIB's operations generated EGP 2.21 billion in corporate, payroll, and other taxes.

· Committed to our Community

CIB Foundation supported "Magdi Yacoub Heart Foundation" with the first installment in 2022 to furnish a Catheterization Lab at The New Global Heart Center in Cairo.

CIB Foundation joined forces with "Al Joud Foundation" to fund "Al Naas Hospital" with the needed amount to cover pediatric heart surgeries.

CIB Foundation financed "Aswan University Hospital" with the needed amount to outfit the Pediatric Neurosurgery Department.

CIB Foundation subsidized "Mabara El Maadi Hospital" with the needed amount to establish Pediatric Open-Heart Surgery Rooms.

CIB Foundation financed "Ibrahim A. Badran Foundation" with the fourth installment to support "Our Kids Our Future" Campaign with medical convoys.

· Awards & Rankings

Global Finance:

§ Best Trade Finance Providers in Egypt for 2022

§ World's Best Foreign Exchange Providers 2022

The Digital Banker:

§ Best Wholesale\Transaction Bank for Digital Customer Experience

Euromoney:

§ Best Bank for Digital Solutions in Egypt

§ Best Bank in Egypt

§ Best Bank for SME Banking in Egypt

§ Middle East's Best Bank for SMEs

EMEA Finance:

§ Best Green Bond in Africa

§ Best Structured Finance Deal in Africa

§ Best Local Currency Loan

§ Best Cash Management Services in North Africa

§ Best Payment Services in North Africa

§ Best Trade Finance Services in North Africa

MENA

§ Sustainable Bank of the Year

CAIRO - Commercial International Bank (EGX: COMI) today reported third-quarter 2022 consolidated net income of EGP 4.41 billion, or EGP 1.32 per share, up 16% from third-quarter 2021.

Management commented: "Notwithstanding the globally-heightening inflation and macroeconomic ambiguity, CIB ended the third quarter of 2022 on a positive note, with the Bank's agile Management coming in well-accommodating for the dynamics.

On one hand, and following a period of intense competition, CIB managed to sustain its strong balance sheet growth momentum, especially in local currency, with local currency deposits witnessing genuine growth by 14% or EGP 44bn in the quarter. Uncompromised by this robust deposit growth, Management upheld its due focus on margins and spreads, as the sustainable top line pillar, thanks to the Bank's flexible balance sheet structure and adept Treasury Management, assembled through the years. Those factors came in conducive to margin expansions, despite the competitive environment, and are yet expected to give a further boost to margins as interest rates continue to rise, and reinvestment of the portfolio occurs.

On the other side of the coin, CIB sustained its lending growth momentum, growing its local currency loan book by decent 6% or EGP 9bn in the quarter, as well as securitization transactions in excess of EGP 10 billion, translating into cumulative growth of 35% or EGP 43bn since the beginning of the year. This, coupled with a relative rebound in Trade Finance activity, which CIB has been well-equipped to accommodate, capitalizing on its comfortable foreign currency liquidity position, echoed growth in the sustainable non-interest-income stream. Simultaneously, foreign currency loan payoffs, gradually witnessed since beginning of year, came in concert with the looked-for amelioration in economic activity, as indicative of key economic sectors making a gradual comeback, having more sustainable cash flows that paved the way for timely repayments.

This healthy growth in lending got through while maintaining solid asset quality, without reflecting into any exceptional provisioning, with the proportion of non-performing loans decreasing over the year, and with coverage for expected losses remaining intact and pioneer in the market. Similarly, coverage for unexpected losses remained anchored, with the Bank's Capital Adequacy Ratio (CAR) resting at 27%, comfortably above the minimum regulatory threshold, and with this comfortable capital buffer catering for the macroeconomic dynamics as well as for strong growth in core business. Those factors, altogether, fed positively into the Bank's Return on Average Equity (ROAE), which recorded a healthy 24%, further reinstating Management attentiveness to preserving the interests of both, current and future shareholders.

Moving forward, and given the realization of the long-awaited flotation of the Egyptian Pound and the IMF Loan, prospects are generally expected to be further promising. Management thus remains optimistic, though cautiously so, about the expected dynamics, drawing largely on the Bank's healthy coverage and prudent risk management preserved over the years."

THIRD-QUARTER 2022 FINANCIAL HIGHLIGHTS

REVENUES

Third -quarter 2022 standalone revenues were EGP 8.41 billion, up 18% from third-quarter 2021. Nine-months 2022 standalone revenues were EGP 23.1 billion, up 17% from nine-months 2021, wholly driven by 20% increase in net interest income, partially offset by 15% decrease in non-interest income.

NET INTEREST INCOME

Nine-months 2022 standalone net interest income recorded EGP 21.7 billion, increasing by 20% YoY, generated at 5.95% Total NIM 1 , which increased by 28 basis points (bp) YoY, with Local Currency NIM 1 recording 7.46%, coming higher by 11bp YoY, and with Foreign Currency NIM 1 recording 1.89%, coming 93bp higher YoY.

NON-INTEREST INCOME

Nine-months 2022 standalone non-interest income recorded EGP 1.36 billion, coming 15% lower YoY. Upon adding back other provision charged, which is normally deducted from Non-Interest Income as part of Other Operating Expenses, recording EGP 1.53 billion for nine-months 2022 and EGP 211 million for nine-months 2021, standalone non-interest income grew by 60% YoY. Trade service fees were EGP 805 million, growing by 37% YoY, with outstanding balance of EGP 110 billion[3].

OPERATING EXPENSE

Nine-months 2022 standalone operating expense was EGP 5.02 billion, up 15% YoY. Cost-to-income recorded 20.4%, 158bp lower YoY[4], remaining comfortably below the desirable level of 30%.

LOANS

Gross loan portfolio recorded EGP 200 billion, growing by 22% Year-to-Date (YtD), with real growth of 14% net of the EGP devaluation impact , which added EGP 11.9 billion to the EGP equivalent balance. Growth was driven wholly by local currency loans, growing by 28% or EGP 32.3 billion, sufficiently counterbalancing net foreign currency loan repayments of 13% or USD 393 million. CIB's loan market share reached 5.40% as of July 2022.

DEPOSITS

Deposits recorded EGP 498 billion, of which EGP 20 billion pertained to an inward transfer that took place on September 29th, 2022, and which was withdrawn on October 2nd, 2022. Upon excluding the aforementioned amount, Deposits grew by 18% YtD, with real growth of 11% net of the EGP devaluation impact, which added EGP 23.0 billion to the EGP equivalent balance. Growth was driven by local currency deposits[5], growing by 14% or EGP 42.1 billion, coupled with foreign currency deposits adding 5% or USD 325 million. Upon normalizing for the aforementioned excess deposit amount as well, Loan-to-Deposit Ratio would record 41.9%, compared to the reported 40.2%. CIB's deposit market share recorded 5.84% as of July 2022, maintaining the highest deposit market share among all private-sector banks.

ASSET QUALITY

CIB maintained its resilient asset quality. Standalone non-performing loans represented 4.59% of the gross loan portfolio, covered 216% by the Bank's EGP 19.8 billion loan loss provision balance. Nine-months 2022 loan loss provision expense recorded EGP 263 million compared to EGP 1.33 billion in nine-months 2021 .

 

CAPITAL AND LIQUIDITY

Total tier capital recorded EGP 72.6 billion, or 26.7% of risk-weighted assets as of September 2022. Tier I capital reached EGP 63.3 billion, or 87% 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 63.2% as of September 2022, while CBE foreign currency liquidity ratio reached 66.9%, above the threshold of 25%. NSFR was 209% for local currency and 179% for foreign currency, and LCR was 798% for local currency and 260% 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 145 billion, 21% higher YtD, wholly backed by 29% growth in local currency loans.

End-of-period deposits were EGP 194 billion, 26% higher YtD, mostly driven by 26% growth in local currency deposits, besides 2% growth in foreign currency deposits. 

Gross outstanding contingent business reached EGP 114 billion, 20% higher YtD.

BUSINESS BANKING

End-of-period gross loans were EGP 6 billion, 72% higher YtD, solely on 73% growth in local currency loans.

End-of-period deposits were EGP 61 billion, 45% higher YtD, driven by 39% growth in local currency deposits along with 41% growth in foreign currency deposits. 

Gross outstanding contingent business reached EGP 3.4 billion, 25% higher YtD.

RETAIL INDIVIDUALS BANKING

End-of-period gross loans were EGP 49 billion, 22% higher YtD, wholly on 23% growth in local currency loans.

End-of-period deposits were EGP 243 billion, 7% higher YtD, mainly driven by 3% growth in foreign currency deposits and 1% growth in local currency deposits.

CIB continued to expand its network to reach a total of 190 branches and 23 units across Egypt, supported by a network of 1,293 ATMs.

 

 

 

 


 

CONSOLIDATED FINANCIAL HIGHLIGHTS





Income Statement

 3Q22

 2Q22

QoQ Change

 3Q21

 YoY Change

 9M22

9M21

 YoY Change 

 EGP million

 EGP million

(3Q22 vs. 2Q22)

 EGP million

(3Q22 vs. 3Q21)

 EGP million

 EGP million

(9M22 vs. 9M21)

Net Interest Income

8,089

7,011

15%

6,458

25%

21,818

18,155

20%

Non-Interest Income

363

(116)

NM

682

-47%

1,304

1,587

-18%

Net Operating Income

8,452

6,896

23%

7,140

18%

23,122

19,741

17%

Non-Interest Expense

(1,872)

(1,599)

17%

(1,492)

25%

(5,142)

(4,438)

16%

Loan Loss Provision

(224)

(113)

99%

(303)

-26%

(298)

(1,324)

-77%

Net Profit before Tax

6,357

5,183

23%

5,344

19%

17,682

13,979

26%

Income Tax

(1,872)

(1,642)

14%

(1,525)

23%

(4,886)

(4,116)

19%

Deferred Tax

(67)

(21)

214%

(7)

853%

(597)

12

NM

Net profit

4,419

3,521

26%

3,812

16%

12,199

9,875

24%

Minority Interest

10

10

5%

(0.2)

NM

26

(2)

NM

Net Profit After Minority

4,408

3,511

26%

3,812

16%

12,173

9,877

23%

 








 

Financial Indicators

 3Q22

 2Q22

 QoQ Change

 3Q21

 YoY Change

 9M22

9M21

 YoY Change 

 

 

(3Q22 vs. 2Q22)


(3Q22 vs. 3Q21)

 

 

(9M22 vs. 9M21)

Profitability









ROAE

27.1%

21.5%

26%

23.7%

15%

24.4%

21.0%

16%

ROAA

3.16%

2.68%

18%

3.17%

0%

2.98%

2.86%

4%

Efficiency



 


 



 

Cost-to-Income

21.4%

21.7%

-1%

21.4%

0%

20.9%

22.2%

-6%

Liquidity









Gross Loans-to-Deposits

40.3%

44.9%

-10%

39.1%

3%

40.3%

39.1%

3%

Asset Quality



 


 



 

NPLs-to-Gross Loans

4.61%

4.84%

-5%

5.42%

-15%

4.61%

5.42%

-15%

Capital Adequacy Ratio

26.7%

28.8%

-7%

32.1%

-17%

26.7%

32.1%

-17%

 

 

 

 

 


 

 

 

STANDALONE FINANCIAL HIGHLIGHTS 

 






Income Statement

 3Q22

 2Q22

 QoQ Change

 3Q21

 YoY Change

 9M22

9M21

 YoY Change 

 EGP million

 EGP million

(3Q22 vs. 2Q22)

 EGP million

(3Q22 vs. 3Q21)

 EGP million

 EGP million

(9M22 vs. 9M21)

Net Interest Income

7,093

13%

6,433

25%

18,106

20%

Non-Interest Income

(59)

NM

687

-42%

1,601

-15%

Net Operating Income

8,412

7,034

20%

7,119

18%

23,075

19,706

17%

Non-Interest Expense

(1,688)

6%

(1,464)

22%

(4,382)

15%

Loan loss provision

(248)

(55)

351%

(307)

-19%

(263)

(1,326)

-80%

Net Profit before Tax

6,372

5,291

20%

5,349

19%

17,787

13,998

27%

Income Tax

(1,735)

8%

(1,525)

23%

(4,115)

21%

Deferred Tax

(67)

(21)

215%

(7)

853%

(597)

12

NM

Net Profit

4,432

3,534

25%

3,817

16%

12,206

9,895

23%











 

Financial Indicators

 3Q22

 2Q22

 QoQ Change

 3Q21

 YoY Change

 9M22

9M21

 YoY Change 



(3Q22 vs. 2Q22)


(3Q22 vs. 3Q21)



(9M22 vs. 9M21)

Profitability









ROAE

27.3%

21.6%

26%

23.7%

15%

24.4%

21.0%

16%

ROAA

3.19%

2.71%

18%

3.19%

0%

2.99%

2.88%

4%

NIM*

6.24%

5.91%

6%

5.70%

9%

5.95%

5.67%

5%

Efficiency









Cost-to-Income

20.6%

22.5%

-8%

21.0%

-2%

20.4%

22.0%

-7%

Liquidity









Gross Loans-to-Deposits

40.2%

44.8%

-10%

39.0%

3%

40.2%

39.0%

3%

Asset Quality









NPLs-to-Gross Loans

4.59%

4.84%

-5%

5.43%

-15%

4.59%

5.43%

-15%

Direct Coverage Ratio

216%

209%

4%

206%

5%

216%

206%

5%

*NIM based on managerial accounts 

 

 

Consolidated

Standalone

BALANCE SHEET

Sep-22

Dec-21

YtD Change

Sep-22

Dec-21

YtD Change

 

 EGP million

 EGP million

(Sep-22 Vs. Dec-21)

 EGP million

 EGP million

(Sep-22 Vs. Dec-21)

Cash & Due from Central Bank

43,858

43,492

1%

43,777

43,385

1%

Due from Banks

90,458

80,142

13%

90,378

79,991

13%

Net Loans & Overdrafts

179,655

145,887

23%

178,614

145,078

23%

Financial Derivatives

951

225

322%

951

225

322%

Financial Investment Securities

263,678

213,987

23%

262,368

212,951

23%

Investments in Associates and Subsidiaries

187

205

-9%

1,074

1,014

6%

Other Assets

13,581

14,296

-5%

13,197

14,006

-6%

Total Assets

592,368

498,236

19%

590,360

496,651

19%

Due to Banks

1,747

866

102%

1,704

863

97%

Customer Deposits

499,020

407,242

23%

497,585

406,101

23%

Other Liabilities

26,591

20,826

28%

26,540

20,759

28%

Total Liabilities

527,358

428,933

23%

525,829

427,723

23%

Shareholders' Equity & Net Profit

64,464

68,848

-6%

64,531

68,928

-6%

Minority Interest

546

455

20%

0

0

NM

Total Liabilities & Shareholders' Equity

592,368

498,236

19%

590,360

496,651

19%

 

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[1] Based on managerial accounts.

[2] As of July 2022; latest available CBE data at time of publishing.

[3] Net of Collateral, Gross of Provisions.

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

[5] Excluding EGP 20 billion pertaining to an inward transfer, which took place on September 29th, 2022 and which was withdrawn on October 2nd, 2022.

[6] 1) Loan, deposit, and outstanding contingent balances are based on managerial accounts. 2) Growths in Total and LCY Institutional Banking Deposits are excluding EGP 20 billion pertaining to an inward transfer, which took place on September 29th, 2022, and which was withdrawn on October 2nd, 2022. 3) Growth in foreign currency balances is in real terms, excluding the effect of EGP devaluation by EGP 3.8 over nine-months 2022. 4) Outstanding contingent balances are gross of collateral and provisions.

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