CIB First Half 2017 Earnings Release

RNS Number : 5449L
Commercial Intnl Bank (Egypt) SAE
20 July 2017
 

News Release

19 July 2017

COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

RECORD SECOND-QUARTER 2017 CONSOLIDATED REVENUE OF EGP 3.55 BILLION AND NET INCOME OF EGP 1.83 BILLION, OR EGP 1.39 PER SHARE, UP 25% FROM SECOND-QUARTER 2016

 

·     Record Second-Quarter 2017 Consolidated Financial Results

Net income of EGP 1.83 billion, up 25% year-on-year (YoY)

Revenues of EGP 3.55 billion, up 29% YoY

Return on average equity of 31.65%

Return on average assets of 2.66%

Efficiency ratio of 21.44%

Net interest margin of 4.72%

 

·     Record First-Half 2017 Consolidated Financial Results

Net income of EGP 3.56 billion, up 29% YoY

Revenues of EGP 6.88 billion, up 29% YoY

Return on average equity of 31.28%

Return on average assets of 2.61%

Efficiency ratio of 21.67%

Net interest margin of 4.66%

·     Robust Balance Sheet

Total tier capital recorded EGP 24.77 billion, or 15.61% of risk-weighted assets

CBE local currency liquidity ratio of 57.18%, foreign currency of 55.41% (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 97% of total liabilities

Non-performing loans coverage ratio of 148.41%

·     Supporting our Economy

Funding to businesses and individuals grew by 5% during second quarter of 2017 to reach EGP 104 billion, with a loan market share of 7.40%1

Deposits grew by 2% during second quarter of 2017 to reach EGP 245 billion, translating into a deposit market share of 8.36%1

In second-quarter 2017, CIB's operations generated EGP 1.01 billion in corporate, payroll and other taxes

·     Committed to our Community

CIB Foundation supported two Egyptian high school students completing their studies at the African Leadership Academy in South Africa

CIB Foundation conducted 6 blood donations campaigns for collecting 201 blood bags to cover the needs of more than 600 patients

CIB Foundation covered 120 eye surgeries through the Children's Right to Sight Program

CIB Foundation, in association with Gozour Foundation for Development, helped in providing more than 100,000 disadvantaged students enrolled at public schools in poor rural and urban areas in Egypt with free eye care services.

 

·     Awards & Rankings

Global Finance: Best Bank in Egypt 2017

Global Finance: Best Securities Services Providers in Egypt

Euromoney: Best Bank in Egypt

Euromoney: Best Bank in Middle East

Euromoney: World's Best Bank in the Emerging  Markets

CAIRO - Commercial International Bank (EGX: COMI) today reported second-quarter 2017 consolidated revenue of EGP 3.55 billion and net income of EGP 1.83 billion, or EGP 1.39 per share, up 25% from second-quarter 2016.

Management commented:  "As clearly stated in our last couple of releases, CIB's Management anticipated a forthcoming increase in corridor rates, despite a 300bp hike having already taken place towards the end of 2016 post the Egyptian Pound floatation. Responsively, Management started re-engineering the Bank's balance sheet beforehand, continuing to direct funds towards shorter-duration assets in order to make the most of any interest rate movements. Only a few months later, our expectation actually materialized, as the CBE took the decision to raise benchmark rates by 200bp during the second quarter of 2017. CIB, however, managed to deliver commendable results, achieving record top and bottom lines and impressively growing its loan portfolio, despite the backdrop of a shortage in local currency liquidity and subdued growth in lending, which adversely impacted margins in the Egyptian Banking sector.

Amid the current ambiguity of the situation, especially with regards to the CBE corridor rate movement decisions, we remain comfortable with the Bank's resilient fundamentals to withstand economic pressures and to continue to deliver market-leading performance while maintaining comfortable capital and liquidity positions, in accordance with both CBE regulations and international best practices, as the Bank's balance sheet has become more lenient to accommodate any up- or down-moves in both interest rates and currency exchange rates. We expect the second half of 2017 to be challenging and eventful, as the effects of the country's economic reforms continue to ripple through the economy.  Specifically, the road ahead is beset by challenges, ranging from current inflation rates to the more recent 200bp corridor rate hike." 

SECOND-QUARTER FINANCIAL HIGHLIGHTS

REVENUES

Second-quarter 2017 standalone revenues were EGP 3.55 billion, up 29% from second-quarter 2016, driven mainly by NII growth.

Net Interest Income

Year-to-date (YtD) net interest margin (NIM)2 was 4.66%, generating net interest income of EGP 5.74 billion, up 27% YoY.

 

Non-Interest Income

Standalone non-interest income for first half of 2017 was EGP 1.43 billion (20% of revenues).

Trade service fees were EGP 423 million. Trade service net outstanding balances stood at EGP 71.08 billion, 4% higher YtD.

OPERATING EXPENSE    

Standalone operating expense for first half of 2017 was EGP 1.5 billion, up 25% YoY. Cost-to-income reported 20.78% down from 22.29% in first-half 2016, comfortably below the desirable level of 30%.

LOANS

CIB's total consolidated gross loan portfolio was EGP 104 billion, adding EGP 7.01 billion, or 7% YtD. CIB's loan market share reached 7.40% as of March 2017. CIB witnessed 30% growth in its local currency gross loan portfolio in first half of the year adding EGP 13bn and outweighing foreign currency loan repayments by an equivalent of EGP 6bn.   

DEPOSITS

Deposits were EGP 245 billion, adding EGP 13.42 billion, or 6% YtD. CIB's deposit market share was 8.36% as of March 2017, maintaining the highest deposit market share among all private-sector banks.

ASSET QUALITY

CIB maintained its resilient asset quality. Standalone non-performing loans represented 6.81% of the gross loan portfolio, covered 148.41% by the Bank's EGP 10.56 billion loan loss provision balance. Loan loss provision expenses were EGP 303 million in the second quarter of 2017, as CIB continued its conservative risk management strategy to counter current and potential economic challenges in certain industries.

CAPITAL AND LIQUIDITY

Total tier capital was EGP 24.77 billion, or 15.61% of risk-weighted assets as of June 2017. Tier I capital was EGP 23.10 billion, or 93% 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 57.18% as of June 2017, while FCY CBE liquidity ratio reached 55.41%, above the threshold of 25%. NSFR was 195.92% for local currency and 144.93% for foreign currency, and LCR was 659.23% for local currency and 475.25% for foreign currency, comfortably above the 100% Basel III requirement.

 

 

 

 

 

 

KEY METRICS AND BUSINESS UPDATES3

·     #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 84.7 billion, 5% higher QoQ and 3% higher YtD.

·     End-of-period deposits were EGP 50.3 billion, 5% lower QoQ and 20% lower YtD.

·     Gross outstanding contingent business reached EGP 72.64 billion, 98% higher from last year and flat QoQ.

BUSINESS BANKING

·     End-of-period gross loans were EGP 2.2 billion, 4% higher QoQ and 8% higher YtD.

·     End-of-period deposits were EGP 59.3 billion, 1% higher QoQ and 12% higher YtD.

·     Gross outstanding contingent business reached EGP 1.84 billion, up 22% YoY and flat QoQ.

RETAIL INDIVIDUALS BANKING

·     End-of-period gross loans were EGP 17.5 billion, 5% higher QoQ and 24% higher YtD.

·     End-of-period deposits were EGP 135.5 billion, 6% higher QoQ and 17% higher YtD.

·     CIB continued to expand its network to reach a total of 172 branches and 23 units across Egypt, supported by a network of 807 ATMs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 CONSOLIDATED FINANCIAL HIGHLIGHTS









Income Statement

2Q17

1Q17

QoQ Change

2Q16

YoY Change

1H17

1H16

YoY change

EGP million

EGP million

(2Q17 vs. 1Q17)

EGP million

(2Q17 vs. 2Q16)

EGP million

EGP million

(1H17 vs. 1H16)

Net Interest Income

2,959

2,783

6%

2,266

31%

5,743

4,534

27%

Non-Interest Income

594

538

10%

484

23%

1,132

799

42%

Net Operating Income

3,554

3,322

7%

2,749

29%

6,875

5,333

29%

Non-Interest Expense

(754)

(746)

1%

(603)

25%

(1,501)

(1,204)

25%

Loan loss provision

(303)

(507)

-40%

(216)

40%

(809)

(504)

61%

Net Profit before Tax

2,497

2,069

21%

1,930

29%

4,565

3,624

26%

Income Tax

(651)

(599)

9%

(475)

37%

(1,250)

(957)

31%

Deferred Tax

(18)

15

NM

(54)

-67%

(3)

5

NM

Net profit from continued operations

1,828

1,485

23%

1,402

30%

3,313

2,672

24%

CI Capital Profit (Net of Tax)

-

273

NM

63

NM

273

88

208%

Net profit

1,828

1,757

4%

1,464

25%

3,585

2,760

30%

Minority Interest

24

NM

0.1

NM

24

5

396%

Net Profit After Minority

1,828

1,733

5%

1,464

25%

3,561

2,756

29%










Financial Indicators

1Q17

QoQ Change

2Q16

YoY Change

1H17

1H16

YoY change

EGP million

(2Q17 vs. 1Q17)

EGP million

(2Q17 vs. 2Q16)

EGP million

EGP million

(1H17 vs. 1H16)

Profitability









ROAE

31.94%

-1%

36.87%

-14%

31.28%

32.66%

-4%

ROAA

2.66%

2.57%

4%

3.02%

-12%

2.61%

2.94%

-11%

Efficiency









Cost-to-Income

21.44%

21.9%

-2%

21.74%

-1%

21.67%

22.53%

-4%

Liquidity









Gross Loans-to-Deposits

42.62%

41.5%

3%

39.61%

8%

42.62%

39.61%

8%

Asset Quality









NPLs-to-Gross Loans

6.81%

7.02%

-3%

4.95%

38%

6.81%

4.95%

38%

Capital Adequacy Ratio

15.61%

14.5%

8%

14.04%

11%

15.61%

14.04%

11%

 

STANDALONE FINANCIAL HIGHLIGHTS









Income Statement

1Q17

QoQ Change

2Q16

YoY Change

1H17

1H16

YoY change

EGP million

EGP million

(2Q17 vs. 1Q17)

EGP million

(2Q17 vs. 2Q16)

EGP million

EGP million

(1H17 vs. 1H16)

Net Interest Income

2,959

2,783

6%

2,266

31%

5,743

4,534

27%

Non-Interest Income

588

839

-30%

483

22%

1,427

856

67%

Net Operating Income

3,547

3,623

-2%

2,748

29%

7,170

5,390

33%

Non-Interest Expense

(754)

(746)

1%

(603)

25%

(1,501)

(1,204)

25%

Loan loss provision

(303)

(507)

-40%

(216)

40%

(809)

(504)

61%

Net Profit before Tax

2,490

2,370

5%

1,929

29%

4,860

3,682

32%

Income Tax

(651)

(599)

9%

(475)

37%

(1,250)

(957)

31%

Deferred Tax

(18)

15

NM

(54)

-67%

(3)

5

NM

Net Profit

1,821

1,785

2%

1,401

30%

3,607

2,729

32%










Financial Indicators

1Q17

QoQ Change

2Q16

YoY Change

1H17

1H16

YoY change

EGP million

EGP million

(2Q17 vs. 1Q17)

EGP million

(2Q17 vs. 2Q16)

EGP million

EGP million

1H17 vs. 1H16

Profitability









ROAE

31.59%

33.00%

-4%

35.35%

-11%

31.78%

32.43%

-2%

ROAA

2.65%

2.66%

-1%

2.92%

-9%

2.66%

2.93%

-9%

NIM*

4.72%

4.62%

2%

5.51%

-14%

4.66%

5.64%

-17%

Efficiency









Cost-to-Income

21.48%

20.13%

7%

21.75%

-1%

20.78%

22.29%

-7%

Liquidity









Gross Loans-to-Deposits

42.62%

41.47%

3%

40.01%

7%

42.62%

40.01%

7%

Asset Quality









NPLs-to-Gross Loans

6.81%

7.02%

-3%

4.89%

39%

6.81%

4.89%

39%

Direct Coverage Ratio

148.41%

147.07%

1%

169.12%

-12%

148.41%

169.12%

-12%

* NIM based on managerial accounts

BALANCE SHEET








Consolidated

Standalone


Jun-17

Dec-16

YtD Change

Jun-17

Dec-16

YtD Change


EGP million

EGP million

(Jun-17 Vs. Dec-16)

EGP million

EGP million

(Jun-17 Vs. Dec-16)

Cash & Due from Central Bank

19,498

10,522

85%

19,498

10,522

85%

Due from Banks

58,552

58,011

1%

58,552

58,011

1%

Treasury Bills & Governmental Notes

43,093

39,177

10%

43,093

39,177

10%

Trading Financial Assets

1,532

2,445

-37%

1,532

2,445

-37%

Available-for-Sale Investments

6,840

5,447

26%

6,840

5,447

26%

Financial assets held for sale

223

4,890

-95%

223

428

-48%

Net Loans & Overdrafts

91,222

85,384

7%

91,222

86,152

6%

Financial Derivatives

57

269

-79%

57

269

-79%

Held-to-Maturity Investments

48,489

53,925

-10%

48,489

53,925

-10%

Financial Investment in Subsidiaries

54

37

48%

10

11

-7%

Other Assets

8,118

7,436

9%

8,118

7,465

9%

Total Assets

277,678

267,544

4%

277,634

263,852

5%

Due to Banks

1,586

3,009

-47%

1,586

3,009

-47%

Customer Deposits

245,163

231,741

6%

245,163

231,965

6%

Other Liabilities

6,766

11,286

-40%

6,766

7,602

-11%

Total Liabilities

253,514

246,036

3%

253,514

242,576

5%

Total Shareholders' Equity

20,603

15,365

34%

20,513

15,325

34%

Net Profit for the Period

3,561

6,009

-41%

3,607

5,951

-39%

Shareholders' Equity & Net Profit

24,164

21,374

13%

24,120

21,276

13%

Minority Interest

-

133

NM

-

-


Total Liabilities & Shareholders' Equity

277,678

267,544

4%

277,634

263,852

5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 



1 As of March 2017; latest available CBE data at time of print

2 Based on managerial accounts

3 Loan and deposit balances based on managerial accounts
On gross basis; based on managerial accounts


This information is provided by RNS
The company news service from the London Stock Exchange
 
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