CIB FY 2016 Earnings Release

RNS Number : 6486V
Commercial Intnl Bank (Egypt) SAE
01 February 2017
 

News Release

01 February 2017

COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

RECORD FULL-YEAR 2016 CONSOLIDATED REVENUE OF EGP 11.3 BILLION AND
RECORD NET INCOME OF EGP 6.01 BILLION, OR EGP 4.56 PER SHARE, UP 27% FROM 2015

 

RECORD FOURTH-QUARTER 2016 CONSOLIDATED REVENUE OF EGP 3.12 BILLION AND NET INCOME OF EGP 1.55 BILLION, OR EGP 1.19 PER SHARE, UP 35% FROM FOURTH-QUARTER 2015

 

 

·     Record FY16 Consolidated Financial Results

Record net income of EGP 6.01 billion, up 27% YoY

Revenues of EGP 11.3 billion, up 11% YoY

Return on average equity of 34.2%[1]

Return on average assets of 2.71%1

Efficiency ratio of 21.4%

Standalone net interest margin of 5.47%

 

·     Strong Fourth-Quarter 2016 Consolidated Financial Results

Net income of EGP 1.55 billion, up 35% year-on-year (YoY)

Revenues of EGP 3.12 billion, up 13% YoY

Return on average equity of 30.6%

Return on average assets of 2.61%

Efficiency ratio of 20.8%

Standalone net interest margin of 4.98%

 

·     Robust Balance Sheet

Total tier capital of EGP 16.12 billion, or 10.74%[2] of risk-weighted assets, of which 90% is high

 

        quality Tier I capital. After 2016 profit appropriation, total tier capital would be EGP 20.97 billion, or 13.97% of risk-weighted assets.

CBE local currency liquidity ratio of 60.8%, foreign currency of 47.8% (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 96%[3] of total liabilities

 

Standalone non-performing loans coverage ratio of 149%

 

·     Supporting our Economy

Funding to businesses and individuals grew by 56% during FY16 to reach EGP 98.2billion, with a real loan growth of 5.4%[4] and a loan market share of 7.03% as of September 2016[5]

 

Deposits grew by 49% in FY16 to EGP 232 billion, with a real deposit growth of 12%4, translating into a deposit market share of 8.09% as of September 2016

In 2016, CIB's operations generated EGP 2.5 billion in corporate, payroll and other taxes

 

 

·     Committed to our Community

CIB Foundation organized a multiple sports days to children from the Egyptian Red Crescent, to offer equal opportunity to underprivileged children to explore and develop their athletic capabilities

CIB Foundation conducted blood donation campaigns in five governorates

CIB Foundation fulfilled the purchase of a pediatric Computed Tomographic (CT) scan machine for the Department of Radiology - National Cancer Institute to increase its efficacy in daily emergency intake and eliminate the pediatric waiting list

CIB Foundation fulfilled the purchase of an intraoperative MRI machine for the Children's Cancer Hospital 57357

 

·     Awards & Rankings

JP Morgan: MT 202 ELITE Quality Recognition Award with STP rate of 99.70%

JP Morgan: MT 103 Quality Recognition Award with STP rate of 98.22%

​The Asian Banker: Achievement in Liquidity Risk Management

The Asian Banker: Achievement in Operational Risk Management

CAIRO - Commercial International Bank (EGX: COMI) today reported fourth-quarter 2016 consolidated net income of EGP 1.55 billion, or EGP 1.19 per share, an increase of 35% over fourth-quarter 2015 net income of EGP 1.15 billion, or EGP 0.87 per share.

Management commented: "CIB posted another year of record performance, despite the unfavorable macroeconomic environment and increasingly challenging regulatory requirements, generating consolidated full-year revenues of EGP 11.3 billion and net income of EGP 6.01 billion, up 11% and 27% from 2015, respectively.

With the unprecedented decision by the CBE to allow the Egyptian Pound to trade freely by year-end after severe foreign currency shortages, three corridor rate hikes throughout the year, with the latest being for an aggressive 300bp, along with the enforcement of ICAAP and the Capital Conservation Buffer, 2016 turned out to be a truly challenging year for CIB and for the entire Egyptian banking sector. Notwithstanding these circumstances, CIB managed to meet minimum capital requirements and to deliver outstanding financial performance, attesting the Bank's resilience in the face of economic uncertainties.

During 2016, and even back in 2015, CIB Management has been proficient in foreseeing such macroeconomic and regulatory developments and has reacted accordingly to accommodate them. The decision to cut dividends in 2015, despite an overly comfortable CAR level back then, allowed CIB to absorb the interest rate hike and EGP devaluation that took place in the subsequent quarter and preserve its sufficient capital level. Not only had Management been successful in mitigating the interest rate risk on CAR, but has also managed to benefit from such an increasing interest rate environment by keeping its balance sheet at the shortest duration possible. We believe the outlook in 2017 still remains ambiguous given the impact of recent macroeconomic developments on the banking sector performance in general and the Banks' Capital Adequacy Ratios in particular. We remain, however, self-assured that our fortress balance sheet and robust fundamentals keep us well-positioned to withstand economic and regulatory pressures, should any arise."

 

FOURTH-QUARTER FINANCIAL HIGHLIGHTS

 

REVENUES

Fourth-quarter standalone revenues were EGP 3.11 billion, up 12% from fourth-quarter 2015. Growth was driven by a 34% increase in net interest income.

Full year standalone revenues were EGP 11.37 billion, up 12% from the EGP 10.17 billion achieved in the year ago period.

Net Interest Income

Year-to-date standalone net interest margin (NIM)[6] was 5.47%, generating standalone net interest income

of EGP 10.02 billion, up 23% YoY.

Non-Interest Income

Standalone non-interest income for fourth quarter of 2016 was EGP 161 million (5% of revenues).

Trade service fees for FY16 were EGP 548 million. Trade service net outstanding balances stood at EGP 68.6 billion, 2.2x last year.

OPERATING EXPENSE    

Standalone operating expense for FY16 was EGP 2.43 billion, up 20% YoY. Consequently, FY16 cost-to-income reported 21.3% compared to 19.7% last year, comfortably below the desirable level of 30%.

LOANS

CIB's total standalone gross loan portfolio was EGP 98.2 billion, adding EGP 35.3 billion, or 56% YoY, with real loan growth of 5.4%. CIB's loan market share reached 7.03% as of September 2016.

DEPOSITS

Standalone deposits were EGP 232 billion, adding EGP 76.6 billion, or 49% YoY, with real deposit growth of 12%. CIB's deposit market share was 8.09% as of September 2016, maintaining the highest deposit market share among all private sector banks.

ASSET QUALITY

CIB maintained its resilient asset quality. Standalone non-performing loans represented 6.70% (5.7% when normalized for the EGP devaluation) of the gross loan portfolio, covered 149% by the Bank's EGP 9.82 billion loan loss provision balance. Loan loss provision expenses were EGP 315 million in the fourth quarter to reach EGP 893 million for 2016 full year, as CIB continued its conservative and proactive risk management strategy to counter potential challenges in certain industries.

driven by potentially higher risk of default of corporate clients following the recent market macroeconomic developments.

 

 

CAPITAL AND LIQUIDITY

Total tier capital was EGP 16.1 billion in December 2016, or 10.74% of risk-weighted assets. Tier I capital was EGP 14.5 billion, or 90% of total tier capital. After 2016 profit appropriation, total tier capital would be EGP 20.97 billion, or 13.97% of risk-weighted assets.

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 60.8% as of Dec-16, FCY CBE liquidity ratio reached 47.8%, above the threshold of 25%. NSFR was 234% for local currency and 140% for foreign currency, and LCR was 1770% for local currency and 435% for foreign currency.

 

KEY METRICS AND BUSINESS UPDATES[7]

·     #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 80.8 billion, up 61% YoY

·     End-of-period deposits were EGP 58.6 billion, up 21% YoY

·     Gross outstanding contingent business reached EGP 70.95[8] billion, 2x 2015

 

BUSINESS BANKING

·     End-of-period gross loans were EGP 2.1 billion, up 7% YoY

·     End-of-period deposits were EGP 53.2 billion, up 49% YoY

·     Gross outstanding contingent business reached EGP 1.88 billion, up 30% YoY

 

RETAIL INDIVIDUALS BANKING

·     End-of-period gross loans were EGP 15.3 billion, up 41% YoY

·     End-of-period deposits were EGP 120.2 billion, up 69% YoY

·     CIB continued to expand its network to reach a total of 168 branches and 24 units across Egypt, supported by a network of 748 ATMs

 

SECURITIES BROKERAGE, ASSET MANAGEMENT & INVESTMENT BANKING

·     CI Capital recorded FY16 operating revenues of EGP 781 million and net income of EGP 113 million[9]

·     Brokerage[10] reached a market share of 9.65% and EGP 192 million in revenue

·     EIMA ranked CIB Amman and Rakhaa Funds first by 2016 return; Blom Bank money market and Istethmar Funds ranked second

 

 

·     Investment Banking successfully closed five transactions in 2016

CONSOLIDATED FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

 

Income Statement

4Q16

3Q16

QoQ Change

4Q15

YoY Change

YtD Dec-16

YtD Dec-15

YoY change

EGP million

EGP million

(4Q16 vs. 3Q16)

EGP million

(4Q16 vs. 4Q15)

EGP million

EGP million

(FY16 vs. FY15)

Net Interest Income

2,952

2,532

17%

2,208

34%

10,018

8,115

23%

Non-Interest Income

163

336

-51%

547

-70%

1,298

2,074

-37%

Net Operating Income

3,115

2,868

9%

2,755

13%

11,315

10,189

11.05%

Non-Interest Expense

(639)

(589)

8%

(616)

4%

(2,433)

(2,025)

20%

Loan loss provision

(315)

(74)

328%

(562)

-44%

(893)

(1,682)

-47%

Net Profit before Tax

2,161

2,205

-2%

1,577

37%

7,990

6,482

23%

Income Tax

(564)

(496)

14%

(520)

9%

(2,017)

(1,950)

3%

Deferred Tax

(77)

(5)

NM

50

NM

(77)

136

NM

Net profit from continued operations

1,520

1,704

-11%

1,108

37%

5,896

4,669

26%

CI Capital Profit (Net of Tax)

31

7

325%

38

-18%

127

61

108%

Net profit

1,551

1,711

-9%

1,146

35%

6,023

4,730

27%

Minority Interest

0.4

9

-95%

0.3

39%

14

1

NM

Net Profit After Minority

1,551

1,703

-9%

1,146

35%

6,009

4,729

27%

 

 

 

 

 

 

 

 

 

Profitability

 

 

 

 

 

 

 

 

ROAE1

30.6%

37.4%

-18.3%

28.3%

31.9%

34.2%

33.5%

2.3%

ROAA1

2.61%

3.4%

-22.8%

2.6%

31.4%

2.71%

2.95%

-8.4%

Efficiency

 

 

 

 

 

 

 

 

Cost-to-Income

20.8%

19.8%

5.0%

22.2%

-10.6%

21.4%

19.6%

8.9%

Liquidity

 

 

 

 

 

 

 

 

Gross Loans-to-Deposits

42.1%

38.1%

10.5%

40.3%

4.3%

42.1%

40.3%

4.3%

Asset Quality

 

 

 

 

 

 

 

 

NPLs-to-Gross Loans

6.76%

5.29%

27.7%

4.00%

68.8%

6.76%

4.00%

68.8%

Capital Adequacy Ratio2

10.7%

13.9%

-22.7%

12.7%

-15.6%

10.7%

12.7%

-15.6%

 

STANDALONE FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

Income Statement

4Q16

3Q16

QoQ Change

4Q15

YoY Change

YtD Dec-16

YtD Dec-15

YoY change

EGP million

EGP million

(4Q16 vs. 3Q16)

EGP million

(4Q16 vs. 4Q15)

EGP million

EGP million

(FY16 vs. FY15)

Net Interest Income

2,952

2,532

17%

2,208

34%

10,018

8,115

23%

Non-Interest Income

161

335

-52%

569

-72%

1,352

2,050

-34%

Net Operating Income

3,113

2,867

9%

2,777

12%

11,370

10,165

12%

Non-Interest Expense

(639)

(589)

8%

(616)

4%

(2,433)

(2,028)

20%

Loan loss provision

(315)

(74)

328%

(562)

-44%

(893)

(1,682)

-47%

Net Profit before Tax

2,159

2,204

-2%

1,599

35%

8,044

6,454

25%

Income Tax

(564)

(496)

14%

(520)

9%

(2,017)

(1,950)

3%

Deferred Tax

(77)

(5)

NM

50

NM

(77)

136

NM

Net Profit

1,518

1,703

-11%

1,130

34%

5,951

4,641

28%

 

 

 

 

 

 

 

 

 

 

 

(4Q16 vs. 3Q16)

 

(4Q16 vs. 4Q15)

 

 

(FY16 vs. FY15)

NIM3

4.98%

5.75%

-13.4%

5.74%

-13.2%

5.47%

5.74%

-4.7%

Cost-to-Income

20.8%

19.8%

5.0%

22.0%

-5.3%

21.3%

19.7%

8.0%

Gross Loans-to-Deposits

42.3%

38.3%

10.6%

40.5%

4.5%

42.3%

40.5%

4.5%

Direct Coverage Ratio

149%

158%

-5.8%

188%

-20.8%

149%

188%

-20.8%

1 Full year ROAE and ROAA after profit appropriation

2 CAR before profit appropriation

3 NIM based on managerial accounts

BALANCE SHEET

 

 

 

 

 

 

 

Consolidated

Standalone

 

Dec-16

Dec-15

YtD Change

Dec-16

Dec-15

YtD Change

 

EGP million

EGP million

(Dec-16 Vs. Dec-15)

EGP million

EGP million

(Dec-16 Vs. Dec-15)

Cash & Due from Central Bank

10,522

9,849

7%

10,522

9,849

7%

Due from Banks

58,011

21,002

176%

58,011

21,002

176%

Treasury Bills & Governmental Notes

39,177

22,130

77%

39,177

22,130

77%

Trading Financial Assets

2,445

5,848

-58%

2,445

5,848

-58%

Available-for-Sale Investments

5,447

46,289

-88%

5,447

46,289

-88%

Financial assets held for sale

4,890

1,066

359%

428

503

-15%

Net Loans & Overdrafts

85,384

56,836

50%

86,152

57,211

51%

Financial Derivatives

269

81

232%

269

81

232%

Held-to-Maturity Investments

53,925

9,261

482%

53,925

9,261

482%

Financial Investment in Subsidiaries

37

160

-77%

11

13

-17%

Other Assets

7,436

6,977

7%

7,465

7,005

7%

Total Assets

267,544

179,500

49%

263,852

179,193

47%

Due to Banks

3,009

1,601

88%

3,009

1,601

88%

Customer Deposits

231,741

155,234

49%

231,965

155,370

49%

Other Liabilities

11,286

6,082

86%

7,602

5,711

33%

Total Liabilities

246,036

162,918

51%

242,576

162,681

49%

Total Shareholders' Equity

15,365

11,806

30%

15,325

11,871

29%

Net Profit for the Period

6,009

4,729

27%

5,951

4,641

28%

Shareholders' Equity & Net Profit

21,374

16,535

29%

21,276

16,512

29%

Minority Interest

133

47.43

181%

 

 

 

Total Liabilities & Shareholders' Equity

267,544

179,500

49%

263,852

179,193

47%

 

 

[1] After 2016 profit appropriation

[2] Before 2016 profit appropriation

[3] On a Standalone basis

[4] Adjusted for the EGP devaluation

[5] Latest available CBE data at time of print

[6] Based on managerial accounts

[7] Loan and deposit balances based on managerial accounts

[8] On gross basis; based on managerial accounts

[9] CI capital net profit after minority interest

[10] Brokerage includes CIBC and Dynamic


This information is provided by RNS
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