CIB 1H 2010 Press Release

RNS Number : 8605Q

Commercial Intnl Bank (Egypt) SAE

11 August 2010

CIB, with consolidated total assets of EGP 69.6 billion, achieves record profits of EGP 1,023 million in the first half of 2010

CAIRO, August 10^th, 2010-Commercial International Bank (CIB), the leading financial institution in Egypt, today released its first half results. With its strong corporate franchise, rapidly-growing consumer business and disciplined risk management, CIB continues to deliver solid profit growth and high returns on assets and equity while maintaining strong asset quality and liquidity.

Business Highlights as of 1H 2010 - Consolidated Performance

• On a consolidated basis, CIB achieved EGP 1,023 million of Net Profit after Tax (NPAT)[1] as of 1H 2010.

• ROAE and ROAA remained healthy at 28.18% and 3.06% respectively.

• On a stand alone basis, Net Interest Margin in Q2 2010 improved to reach 3.65% as a result of both asset and liability management, which resulted in raising NIMs from 3.51% in Q1 2010 to 3.57 % for the full six months.

• The Bank's loans increased by 16% driven by an increase in corporate loans by 15.49% and retail loan portfolio by 22.18%. Furthermore, the increase in deposits by 9% reflects the growth momentum of the Bank's retail business.

• CIB's market shares in both loans and deposits increased to record a steady share of 7% and 7% respectively, as of May 2010.

• CIB continues to maintain strong liquidity ratios, with Gross Loans/Deposits of 56.48%, strong asset quality, with NPLs/Gross Loans of 2.9 %, and a prudent coverage ratio of 158.92%.

Key Operating Ratios (Consolidated)

	YTD Jun-10	YTD Jun-09
NIM (%)[2]	3.57%	3.87%
ROAA (%)	3.06%	3.37%
ROAE (%)	28.18%	33.53%
Cost/Income (%)	37.35%	36.29%

Summary of First Half 2010

The local macro-economic picture remains conducive to growth, with a clear trend of improving GDP growth, Real GDP growth registered 5.8% as of Q3 of FY 2009/2010 and the general consensus is that the Egyptian economy is likely to grow in the range of 5-6% in the fiscal year ending June 2010, with lower inflation attributed to the decline in the main drivers of headline inflation. Having the economy grow at such a healthy pace will benefit the entire banking sector and allow it to grow in terms of loans and profitability. In the first half of 2010, CIB produced consolidated net profits of EGP 1,023 million reflecting a Return on Average Equity of 28.18% and Return on Average Assets of 3.06%. CIB's loan portfolio grew 16% as of June 2010 compared to December 2009 while the overall market for loans grew by 5.73 % during the first five months of the year[3].

CIB's 2010 first half financial performance attests to the solid foundation of its business model, risk management culture, market position and strategy. Moreover, the initiatives undertaken by CIB that began over the past year, such as GTS (Transaction Banking), Bancassurance, Business banking, focus on Mid-cap as well as GCR (Global Customer Relations) will ensure the sustainability of said growth momentum. Throughout the course of the coming year several product offerings are expected to be launched. Launched offerings such as Hemaya Fund (a Capital protected fund launched in July 2010) will further deepen CIB's footprint on the Consumer Banking map, creating a one-stop-shop for banking services.

Having a strong management team and a unified culture where everyone speaks the same business language while continuously introducing innovative concepts rightfully places CIB as a market leader and a symbol of trust in the Egyptian Banking sector.

Summary Consolidated Income Statement

EGP millions	YTD	YTD	Variance
EGP millions	Jun-10	Jun-09	%
Net Interest Income	1,092	1,009	8
Non Interest Income	878	775	13
Operating Income	1,970	1,784	10
Less:
Operating Expenses	736	647	14
Provisions	(2)	(73)	-97
Operating Profit before taxes	1,236	1,209	2
Taxes	212	194	9
Net Profit After Taxes	1,024	1,016	1
Minority Interest	1	3	0
Net Profit After Taxes	1,023	1,013	1.02

Revenues

• During the first Half of 2010, consolidated revenues increased by 10.4%, driven by both a healthy rise of 13 % in non interest income and an 8% increase in net interest income.

• The contribution of non interest income to total revenues has been increasing YOY and now stands at 44.57% of total operating revenues, which demonstrates management's commitment to find alternative means of income generation to sustain the growth momentum moving forward.

• Income before provisions has grown by 8.61%, which when normalized for goodwill would record healthy growth of 10.37%.

• LCY loans grew 19.77% compared to December 2009, while FCY loans grew by 12.54%. Such growth reflects the return of market confidence in the economy, where Corporate Egypt wants to benefit from the expected favorable growth momentum of the economy.

Loans and Deposits by Currency

EGP million	Consolidated June.30,2010	Consolidated Dec. 31, 2009	% Change
LCY Gross Loans	17,177	14,341	19.77%
FCY Gross Loans	16,476	14,640	12.54%
LCY Deposits	35,226	32,417	8.66%
FCY Deposits	24,354	22,231	9.55%
LCY Loans/Deposits	48.76%	44.24%	10.22%
FCY Loans/Deposits	67.65%	65.85%	2.73%
Loans/Deposits	56.48%	53.03%	6.51%

Expenses

• Total expenses grew by 13.68% to record a cost to income ratio of 37.35% up from 36.29% in June 2009.

• The rise in expenses was mainly attributable to an increase in staff expenses, owing to an increase in headcount, in line with our plan to fuel our growth moving forward. It is worth mentioning that June 2010 figures include Good will amortization which was not shown in 2009 figures, when normalized for Good will expenses would reach EGP 716 million and cost: income would be 36.34%.

• Given that our branch network is already among the largest within the private banking sector, with 154 outlets and 506 ATMs.

Summary Consolidated Balance Sheet

EGP Million	Jun. 30, 2010	Dec. 31, 2009	Variance %

Cash and Due From Central Bank	4,444	4,179	6.3
Due from Banks	7,450	7,946	-6.2
Loans and overdrafts for Banks	172	201	-14.4
Loans and overdrafts for Customers	31,970	27,242	17.4
Treasuries & Investments	22,705	22,010	3.2
Intangibles	720	774	-6.9
Other Assets	2,151	1,893	13.6
Total Assets	69,612	64,245	8.4
Due to Banks	766	458	67.2
Customer Deposits	59,580	54,649	9
Other Liabilities	1,717	2,068	-16.9
Total Liabilities	62,063	57,175	8.5
Equity[4]	7,503	7,025	6.8
Minority Interest	46	45	2.2

Credit Quality and Capital Adequacy

• The Bank's NPLs/Loans ratio remained healthy at 2.9% as of June 2010.

• CIB provisions for the period dropped by 97.16% attributed to the implementation of the new IFRS standards, and thus reflecting the soundness and the solid quality of the Bank's loan portfolio

• CIB maintained its strong equity base with a conservative Capital Adequacy Ratio (CAR) of 15.11%, providing a solid cushion for adverse market movements.

Stand-alone Performance

• On a stand-alone basis, the Bank achieved an NPAT for 1H 2010 of EGP 1,101 million, an increase of 5.95% as compared to the same period of 2009.

• On the back of a competent management team, staff efficiency and prudent risk management policies, CIB has managed to realize a Return on Average Equity (ROAE) of 31.88% and a Return on Average Assets (ROAA) of 3.30% as of June 2010.

• Cost: income ratio stood at 31.80%, recording a 2.38% decrease over the same period last year, which is a testimony of the efficiency of the cost management policy applied by CIB.

Summary Unconsolidated Income Statement

EGP millions	YTD	YTD	Variance
EGP millions	Jun-10	Jun-09	%
Net Interest Income	1,091	1,006	8.44
Non Interest Income	822	703	16.87
Net Operating Income	1,913	1,709	11.91
Less:
Non interest Expense	(608)	(557)	9.25
Provisions	2	73	-97.16
Net Profit Before Taxes	1,307	1,226	6.62
Income Tax	(204)	(196)	4.16
Deferred Tax	(2)	9	-119.59
Net profit	1,101	1,039	5.95

Summary Unconsolidated Balance Sheet

EGP Million	Jun. 30, 2010	Dec. 31, 2009	Variance %

Cash and Due From Central Bank	4,443	4,179	6.3
Due from Banks	7,373	7,785	-5.3
Loans and overdrafts for Banks	172	201	-14.4
Loans and overdrafts for Customers	31,970	27,242	17.4
Treasuries & Investments	23,485	22,936	2.4
Other Assets	1,984	1,720	15.4
Total Assets	69,427	64,063	8.4

Due to Banks	766	458	67.2
Customer Deposits	59,633	54,843	8.7
Other Liabilities	1,517	1,816	-16.5
Total Liabilities	61,916	57,117	8.4
Equity	7,511	6,946	8.1