CIB 3rd Quarter Results Earnings Release

RNS Number : 7868O
Commercial Intnl Bank (Egypt) SAE
10 November 2016
 

News Release

9 November 2016

COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

THIRD QUARTER 2016 CONSOLIDATED REVENUE OF EGP 2.87 BILLION AND
RECORD NET INCOME OF EGP 1.70 BILLION, OR EGP 1.31 PER SHARE, UP 28% FROM THIRD QUARTER 2015

 

·     Record Third-Quarter 2016 Consolidated Financial Results

Record net income of EGP 1.70 billion, up 28% year-on-year (YoY)

Revenues of EGP 2.87 billion, up 11% YoY

Return on average equity of 37.4%

Return on average assets of 3.38%

Efficiency ratio of 19.8%

Standalone net interest margin of 5.75%

 

·     Record 9M16 Consolidated Financial Results

Record net income of EGP 4.46 billion, up 24% YoY

Revenues of EGP 8.20 billion, up 10% YoY

Return on average equity of 33.3%

Return on average assets of 3.07%

Efficiency ratio of 21.6%

Standalone net interest margin of 5.68%

 

·     Robust Balance Sheet

Total tier capital of EGP 14.95 billion, or 13.90% of risk-weighted assets, of which 92% is high quality Tier I capital

CBE local currency liquidity ratio of 58.0%, foreign currency of 47.0% (comfortably above CBE requirements of 20% and 25% respectively)

CIB is 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

Standalone non-performing loans coverage ratio of 158%

 

·     Supporting our Economy

Funding to businesses and individuals grew by 7% during 9M16 to reach EGP 61.2 billion, with a loan market share of 7.13% as of July 2016[1]

 

Deposits grew by 15% in 9M16 to EGP 178.2 billion, translating into a deposit market share of 8.07% as of July 2016

In third quarter of 2016, CIB's operations generated EGP 610.4 million in corporate, payroll and other taxes

 

·     Committed to our Community

CIB Foundation started with Gozour Foundation the implementation of 264 eye exam Caravans, providing free eye exams and care for primary school students in Upper Egypt governorates

CIB Foundation provided several donations throughout this quarter for "Magdi Yacoub Heart Foundation's Aswan Heart Center", the renovation and outfitting of "the Pediatric Critical Care Unit at the Sohag University Hospital" and "the Pediatric Catheter Lab at the Ain Shams University Hospital"

CIB Foundation started through the Magdi Yacoub Heart Foundation to fund fifty (50) children's open heart surgeries

CIB Foundation organized entertainment, edutainment, and sports events, in association with the Egyptian Red Crescent, and other foundations for children with special needs, including MOVE Foundation, the Advance Society for Autism, Right to Live Association and Logain Foundation

 

·     Awards & Rankings

EMEA Finance: "Best Cash Management Services in North Africa in 2016"​

EMEA Finance​: "Best FX Services in North Africa in 2016"​

EMEA Finance: "Best Bank in Egypt in 2016"

Global Finance: "Best Private Bank in Egypt in 2017"

 

CAIRO - Commercial International Bank (EGX: COMI) today reported third-quarter 2016 consolidated net income of EGP 1.7 billion, or EGP 1.31 per share, an increase of 28% over third-quarter 2015 net income of EGP 1.3 billion, or EGP 1.27 per share.

Management commented: "CIB maintained its record performance in the third-quarter, signaling a strong closure of the year despite the ambiguous macroeconomic environment, turning in record consolidated year-to-date top and bottom lines of EGP 8.20 billion and EGP 4.46 billion, up 10% and 24% from last year, respectively.

"Going back in time to the end of 2015, CIB Management has correctly foreseen the possible forthcoming macroeconomic and regulatory circumstances. Since then, CIB has been taking a cautious stance regarding its capital adequacy and foreign currency position towards the long-awaited increases in interest rates and exchange rates, both of which significantly materialized last week. By 2015 year-end, CIB underwent a cut in dividends in anticipation of a devaluation and interest rate hike along with higher regulatory capital requirements, such as the ICAAP and the Capital Conservation Buffer. Moving into second-quarter of 2016, and as the ambiguity of macroeconomic conditions continued, CIB took the lead in the decision to reclassify EGP 15bn of the available-for-sale sovereign bond portfolio as held-to-maturity, as a precautionary measure to minimize the impact of interest rate movements on the Bank's capital adequacy levels. CIB's Management also continued its focus on lowering the Bank's balance sheet duration, in order to maintain a proper balance sheet structure that would help boost the return to shareholders in light of an increasing interest rate environment, while maintaining its liquidity ratios comfortably above regulatory requirements. More impressively, and despite currently prevailing shortages in hard currency, CIB managed to exceed the minimum required liquidity ratios by Basel III in foreign currency, as Management has always been keeping an eye on international best practices together with CBE regulatory requirements."

 

 

 

 

THIRD-QUARTER FINANCIAL HIGHLIGHTS

 

REVENUES

Third-quarter standalone revenues were EGP 2.87 billion, up 12% from third-quarter 2015. Growth was driven by a 21% increase in net interest income.

Net Interest Income

Year-to-date standalone net interest margin (NIM)[2] was 5.68%, generating standalone net interest income of

EGP 7.07 billion, up 20% YoY.

Non-Interest Income

Standalone non-interest income for third quarter of 2016 was EGP 335 million (12% of revenues).

Trade service fees for the quarter recorded EGP 115 million. Trade service net outstanding balances stood at EGP 38 billion, up 25% YoY. Dealing room profits were EGP 101 million in the third quarter.

 

OPERATING EXPENSE        

Standalone operating expense for 9M16 was EGP 1.8 billion, up 27% YoY. Consequently, 9M16 cost-to-income reported 21.4% compared to 19.4% last year, comfortably below the desirable level of 30%.

 

LOANS

CIB's total standalone gross loan portfolio was EGP 68.2 billion, adding EGP 5.3 billion, or 8% YtD. CIB's loan market share reached 7.13% as of July 2016.

 

DEPOSITS

Standalone deposits were EGP 178.1 billion, adding EGP 23 billion, or 15% YtD. CIB's deposit market share was 8.07% as of July 2016, maintaining the highest deposit market share of all private sector banks.

 

ASSET QUALITY

CIB maintained its resilient asset quality. Standalone non-performing loans represented 5.26% of the gross loan portfolio, covered 158% by the bank's EGP 5.7 billion loan loss provision balance. Loan loss provision expenses were EGP 74 million in the third quarter as CIB continued its conservative and proactive risk management strategy to counter potential challenges in certain industries.

 

CAPITAL AND LIQUIDITY

Total tier capital was EGP 14.95 billion in September 2016, or 13.90% of risk-weighted assets. Tier I capital was EGP 13.8 billion, or 92% of total tier capital.

CIB maintained its comfortable liquidity position above CBE requirements and Basel III guidelines, which have been recently enforced by the CBE, in both local currency and foreign currency. LCY CBE liquidity ratio remained well above the regulator's 20% requirement, recording 58.0% as of Sep-16, FCY CBE liquidity ratio reached 47.0%, above the threshold of 25%. NSFR was 216% for local currency and 122% for foreign currency, and LCR was 1343% for local currency and 444% for foreign currency.

 

KEY METRICS AND BUSINESS UPDATES[3]

·     #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 52.5 billion, up 5% YtD

·     End-of-period deposits were EGP 46.2 billion, down 5% YtD

·     Gross outstanding contingent business reached EGP 39.6[4] billion, up 23% YtD

 

BUSINESS BANKING

·     End-of-period gross loans were EGP 1.8 billion, below 7% YtD

·     End-of-period deposits were EGP 42.3 billion, up 19% YtD

·     Gross outstanding contingent business reached EGP 1.54 billion, up 2% YtD

 

RETAIL INDIVIDUALS BANKING

·     End-of-period gross loans were EGP 13.9 billion, up 28% YtD

·     End-of-period deposits were EGP 89.6 billion, up 26% YtD

·     CIB continued to expand its network to reach a total of 163 branches and 24 units throughout Egypt, supported by a network of 719 ATMs

 

SECURITIES BROKERAGE, ASSET MANAGEMENT & INVESTMENT BANKING

·     CI Capital[5] recorded 9M16 revenues of EGP 654 million and net income of EGP 82 million

·     Brokerage[6] reached a market share of 9.0% and EGP 146 million in revenue

·     EIMA ranked CIB Amman Fund second by 9M16 return; Blom Bank money market and Al Thabet Funds ranked third

·     Investment Banking successfully closed four transactions in 9M16

 



 

CONSOLIDATED FINANCIAL HIGHLIGHTS

Income Statement

3Q16

2Q16

QoQ Change

3Q15

YoY Change

YtD Sep-16

YtD Sep-15

YoY change

EGP million

EGP million

(2Q16 vs. 1Q16)

EGP million

(2Q16 vs. 2Q15)

EGP million

EGP million

(1H16vs.1H15)

Net Interest Income

2,532

2,266

12%

2,099

21%

7,066

5,907

20%

Non-Interest Income

336

527

-36%

476

-29%

1,135

1,527

-26%

Net Operating Income

2,868

2,793

3%

2,575

11%

8,200

7,434

10%

Non-Interest Expense

(589)

(646)

-9%

(456)

29%

(1,794)

(1,409)

27%

Loan loss provision

(74)

(216)

-66%

(472)

-84%

(578)

(1,120)

-48%

Net Profit before Tax

2,205

1,930

14%

1,646

34%

5,829

4,905

19%

Income Tax

(496)

(475)

4%

(299)

66%

(1,453)

(1,430)

2%

Deferred Tax

(5)

(54)

-91%

(15)

-68%

(0)

86

NM

Net profit from continued operations

1,704

1,402

22%

1,332

28%

4,376

3,561

23%

CI Capital Profit (Net of Tax)

7

63

-88%

(4)

NM

96

23

319%

Net profit

1,711

1,464

17%

1,328

29%

4,472

3,584

25%

Minority Interest

9

0

NM

0

NM

14

0

NM

Net Profit After Minority

1,703

1,464

16%

1,328

28%

4,458

3,583

24%










Financial Indicators

2Q16

QoQ Change

3Q15

YoY Change

YtD Sep-16

YtD Sep-15

YoY change



(2Q16 vs. 1Q16)


(2Q16 vs. 2Q15)



(1H16vs.1H15)

Profitability









ROAE

37.4%

36.9%

1.4%

34.6%

7.9%

33.3%

31.3%

6.3%

ROAA

3.38%

3.02%

12.2%

3.1%

8.2%

3.07%

2.98%

3.0%

Efficiency









Cost-to-Income

19.8%

22.9%

-13.6%

18.2%

8.9%

21.6%

19.2%

12.1%

Liquidity









Gross Loans-to-Deposits

38.1%

39.6%

-3.9%

40.6%

-6.2%

38.1%

40.6%

-6.2%

Asset Quality









NPLs-to-Gross Loans

5.29%

4.95%

7.0%

4.45%

18.9%

5.29%

4.45%

18.9%

Capital Adequacy Ratio

13.9%

14.0%

-1.0%

14.0%

-1.0%

13.9%

14.0%

-1.0%

 

STANDALONE FINANCIAL HIGHLIGHTS







Income Statement

3Q16

2Q16

QoQ Change

3Q15

YoY Change

YtD Sep-16

YtD Sep-15

YoY change

EGP million

EGP million

(2Q16 vs. 1Q16)

EGP million

(2Q16 vs. 2Q15)

EGP million

EGP million

(1H16vs.1H15)

Net Interest Income

2,532

2,266

11.8%

2,099

20.6%

7,066

5,907

20%

Non-Interest Income

335

526

-36%

460

-27.3%

1,191

1,481

-20%

Net Operating Income

2,867

2,792

2.7%

2,559

12%

8,257

7,388

12%

Non-Interest Expense

(589)

(646)

-8.8%

(460)

28%

(1,794)

(1,413)

27%

Loan loss provision

(74)

(216)

-65.9%

(472)

-84.4%

(578)

(1,120)

-48%

Net Profit before Tax

2,204

1,929

14.2%

1,627

35.4%

5,886

4,855

21%

Income Tax

(496)

(475)

4.4%

(299)

65.5%

(1,453)

(1,430)

2%

Deferred Tax

(5)

(54)

NM

(15)

NM

(0)

86

NM

Net Profit

1,703

1,401

21.6%

1,312

29.8%

4,433

3,511

26%










Financial Indicators

3Q16

2Q16

QoQ Change

3Q15

YoY Change

YtD Sep-16

YtD Sep-15

YoY change



(2Q16 vs. 1Q16)


(2Q16 vs. 2Q15)



(1H16vs.1H15)

Profitability









ROAE

37.5%

35.3%

6.2%

34.3%

9.6%

33.1%

30.6%

8.3%

ROAA

3.44%

2.92%

17.6%

3.10%

10.9%

3.09%

2.93%

5.5%

NIM

5.75%

5.51%

4.3%

5.55%

3.7%

5.68%

5.58%

1.8%

Efficiency









Cost-to-Income

19.8%

23.0%

-13.6%

18.5%

7.3%

21.4%

19.4%

10.3%

Liquidity









Gross Loans-to-Deposits

38.3%

40.0%

-4.3%

40.9%

-6.3%

38.3%

40.9%

-6.3%

Asset Quality









NPLs-to-Gross Loans

5.26%

4.89%

7.5%

4.41%

19.1%

5.26%

4.41%

19.1%

Direct Coverage Ratio

158%

169%

-6.4%

155%

1.8%

158%

155%

1.8%

 

 

 

BALANCE SHEET








Consolidated

Standalone


Sep-16

Dec-15

YtD Change

Sep-16

Dec-15

YtD Change


EGP million

EGP million

(Sep-16 Vs. Dec-15)

EGP million

EGP million

(Sep-16 Vs.

Dec-15)

Cash & Due from Central Bank

12,435

9,849

26%

12,435

9,849

26%

Due from Banks

41,178

21,002

96%

41,178

21,002

96%

Treasury Bills & Governmental Notes

21,613

22,130

-2.3%

21,613

22,130

-2%

Trading Financial Assets

3,662

5,848

-37%

3,662

5,848

-37%

Available-for-Sale Investments

29,880

46,289

-35%

29,880

46,289

-35%

Financial assets held for sale

4,633

1,066

334%

428

503

-15%

Net Loans & Overdrafts

60,785

56,836

7%

61,235

57,211

7%

Financial Derivatives

66

81

-18%

66

81

-18%

Held-to-Maturity Investments

26,312

9,261

184%

26,312

9,261

184%

Financial Investment in Subsidiaries

35

160

-78%

11

13

-12%

Other Assets

6,540

6,977

-6%

6,569

7,006

-6%

Total Assets

207,139

179,500

15%

203,388

179,193

14%

Due to Banks

478

1,601

-70%

478

1,601

-70%

Customer Deposits

178,069

155,234

15%

178,170

155,370

15%

Other Liabilities

9,248

6,082

52%

5,592

5,711

-2%

Total Liabilities

187,794

162,918

15%

184,240

162,681

13%

Total Shareholders' Equity

14,754

11,806

25%

14,716

11,871

24%

Net Profit for the Period

4,458

4,729

-6%

4,433

4,641

-4%

Shareholders' Equity & Net Profit

19,212

16,535

16%

19,148

16,512

16%

Minority Interest

133

47

180%




Total Liabilities & Shareholders' Equity

207,139

179,500

15%

203,388

179,193

14%

 



[1] Latest available CBE data at time of print

[2] Based on managerial accounts

[3] Loan and deposit balances based on managerial accounts

[4] On gross basis; based on managerial accounts

[5] CI capital revenues and net profit after minority interest

[6] Brokerage includes CIBC and Dynamic


This information is provided by RNS
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