4Q23 Earnings Release

Commercial Intnl Bank (Egypt) SAE
11 February 2024
 

 


News Release

11 February 2024

 

COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

FULL-YEAR 2023 CONSOLIDATED REVENUE OF EGP 56.0 BILLION AND NET INCOME OF

EGP 29.6 BILLION, OR EGP 8.59 PER SHARE, UP 84% FROM FULL-YEAR 2022                                                  FOURTH-QUARTER 2023 CONSOLIDATED REVENUE OF EGP 16.7 BILLION AND NET INCOME OF EGP 7.23 BILLION, UP 83% FROM FOURTH-QUARTER 2022

·    Fourth-Quarter 2023 Consolidated Financial Results

Net income of EGP 7.23 billion, up 83% year-on-year (YoY)

Revenues of EGP 16.7 billion, up 71% YoY

Return on average equity (ROAE) of 34.5%

Return on average assets (ROAA) of 3.51%

Efficiency ratio of 20.8%

Net interest margin (NIM)[1] of 8.05%

·    Full-Year 2023 Consolidated Financial Results

Net income of EGP 29.6 billion, up 84% YoY

Revenues of EGP 56.0 billion, up 70% YoY

ROAE[2] of 39.7%

ROAA2 of 4.06%

Efficiency ratio of 17.1%

NIM1 of 7.55%

·    Balance Sheet Performance

Total tier capital recorded EGP 100 billion, or 26.2% of risk-weighted assets.

CBE local currency liquidity ratio of 30.2%, foreign currency liquidity ratio of 45.3% (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 91% of total liabilities

Non-performing loans coverage ratio of 305%

·    Supporting our Economy

Funding to businesses and individuals recorded EGP 266 billion, growing by 20% over full-year 2023, or 12% net of the EGP devaluation impact, with a loan market share of 4.97%[3].

Deposits recorded EGP 675 billion, growing by 27% over full-year 2023, or 18% net of the EGP devaluation impact, with a deposit market share of 6.81%3.

Loan-to-Deposit Ratio recorded 39.4% by end of 2023.

In full-year 2023, CIB's operations generated EGP 15.3 billion in corporate, payroll, and other taxes.

·    Committed to our Community

CIB Foundation funded "Magdi Yacoub Heart Foundation" with the second installment for establishing Catheterization Laboratory, "The New Global Heart Centre in Cairo", in addition to the first installment for 100 pediatric open-heart surgeries and 100 catheterizations.

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

CIB Foundation endowed "Egyptian Clothing Bank" with the second installment to manufacture 120,000 training suits.

CIB Foundation financed "Yahiya Arafa Children's Charity Foundation" to cover their annual operating costs of 2023.

CIB Foundation funded "Shifa' Al-Omran Hospital" with the first installment to augment their Emergency Department with medication and equipment.

CIB Foundation joined forces with "The Awad Charity Foundation" to establish a Rehabilitation Center for children with special needs in "Beni Suef University".

 

·    Awards & Rankings

Global Finance:

§ Best Private Bank

§ Best Supply Chain Finance Bank in Africa 2023

§ Best Trade Finance Provider in Egypt

§ Best Bank for Cash Management in Egypt

§ Transaction Banking Award

§ Best Bank in Egypt 2023

§ World's Best Sub-Custodian Bank Award 2023

§ Best SME Bank Award 2024

§ World's Best Foreign Exchange Awards 2024 - Country Awards

EMEA Finance:

§ Best Mergers & Acquisitions Deal in MENA

§ Best Securitization House in Africa

§ Best Securitization Deal in Africa

§ Best Payment Services in North Africa

§ Best Cash Management Services in North Africa

§ Best Trade Finance Services in North Africa

§ Best Payment Services in Africa

§ Best Digital Bank - Pan Africa

§ Best Local Bank in Egypt

MEED:

§ Best Bank in Trade Finance

Euromoney:

§ Best Bank in Egypt

§ Best Bank for SMEs in Egypt

§ Best Bank for ESG in Egypt

§ Best Service for Cash Management

African Banker

§ Lifetime Achievement Award

The Banker

§ Bank of the Year in Egypt

CAIRO - Commercial International Bank (EGX: COMI) today reported fourth-quarter 2023 consolidated net income of EGP 7.23 billion, up by 83% from fourth-quarter 2022. Full-Year 2023 consolidated net income recorded EGP 29.6 billion, or EGP 8.59 per share, up by 84% from last year.

Management commented: "Despite adverse market conditions caused by the simultaneous and sequential global and local events, CIB has demonstrated the strength and sustainability of its business model by achieving yet another record year of financial performance, while maintaining industry-leading solvency levels in the market.  

Echoing an ambiguous macroeconomic outlook as certain challenges persisted since 2022, Management upheld its prudent and proactive risk management practices, accumulating EGP 3.5 billion of provisions in fourth-quarter 2023, accounting for any unexpected deterioration in asset quality, while safeguarding the Bank against any unsettling conditions. With that, CIB maintained its Coverage for Expected Losses in the Sector, with Loan Loss Provision Balance of EGP 29.2 billion, covering 11% of the Bank's Gross Loan Portfolio, and 16% of the unsecured portion.

Liquidity management also remained a priority for CIB. The Bank is committed to maintain sufficient liquidity levels, catering for potential market needs. As such, liquidity ratios remained comfortable, in both local and foreign currency, with ample room above both, the minimum regulatory requirements and Basel III requirements.

Capitalizing on CIB's flexible balance sheet structure, the Bank delivered strong profitability growth, with Full-Year 2023 Bottom Line recording EGP 29.6 billion, growing by 84% from last year, and with exceptional Top Line growth of 70%. Management continued to focus on the sustainable revenue stream, growing funds at a healthy pace, with an 18% real growth in deposits. This growth is sustained by the Bank's commitment to controlling its cost of funds, where CIB has successfully maintained its healthy share of Current and Saving Accounts (CASA) of 55% to Total Deposits. The year also saw robust lending activity, coupled with strong fee income growth, growing at a real growth rate of 11%, and 15% after accounting for Securitization Deals, to preserve its market position as the largest Lender-and-Securitizer among Private-Sector Banks.

This strong financial performance fed into a stronger Capital Base with Capital Adequacy Ratio (CAR) rebounding to 26.2%, after accounting for 2023 Proposed Profit Appropriation, despite the turbulent times. This came as Management continued to focus on growing the Bank's core business, while generating returns that would result in rapid growth in the Bank's Capital Base and preserve the CAR against adverse economic fluctuations.

Moreover, on the capital front, and in an effort to ensure a sustainable, comfortable Capital Base that is less vulnerable to external factors, this quarter, CIB managed to secure USD 150 million subordinated Tier II loan from The European Bank for Reconstruction and Development (EBRD), with 10-year maturity, following another Loan secured from the International Finance Corporation (IFC) in the second quarter of 2023. It is worthy to mention that the aforementioned capital position increased, while delivering a Return on Average Equity (ROAE) recording 39.7% - one of the highest in the Sector -, up by 15 percentage points from last year after accounting for 2023 Proposed Profit Appropriation.

Overall, despite the challenges faced throughout the year, which are expected to remain, Management remains optimistic about CIB's growth and profitability, with great confidence in the Bank's ability to efficiently navigate through challenging market conditions, capitalizing on its solid balance sheet fundamentals and well-founded solvency."

FOURTH-QUARTER 2023 FINANCIAL HIGHLIGHTS

REVENUES

Fourth-quarter 2023 standalone revenues were EGP 16.3 billion, up 69% from fourth-quarter 2022. Full-Year 2023 standalone revenues were EGP 54.6 billion, up 67% from full-year 2022, on the back of 71% increase in net interest income, while non-interest income had a marginal decrease by 4%.

NET INTEREST INCOME

Full-Year 2023 standalone net interest income recorded EGP 52.7 billion, increasing by 71% YoY, generated at 7.55% Total NIM1, which increased by 145 basis points (bp) YoY, with Local Currency NIM1 recording 9.37%, coming 181bp higher YoY, and Foreign Currency NIM1 recording 3.87%, coming 153bp higher YoY.

NON-INTEREST INCOME

Full-Year 2023 standalone non-interest income recorded EGP 1.83 billion, with Trade Service fees recording EGP 2.28 billion, growing by 96% YoY, with outstanding balance of EGP 174 billion[4].

OPERATING EXPENSE

Full-Year 2023 standalone operating expense was EGP 9.77 billion, up 36% YoY. Cost-to-income[5] reported 17.0%, coming 373bp lower YoY, and remaining comfortably below the desirable level of 30%.

LOANS

Gross loan portfolio recorded EGP 266 billion, growing by 20% over full-year 2023, with real growth of 12% net of the EGP devaluation impact, which added EGP 16.7 billion to the EGP equivalent balance. Growth was driven wholly by local currency loans, increasing by 24% or EGP 37.2 billion, sufficiently counterbalancing net foreign currency loan repayments of 11% or USD 310 million. CIB's loan market share reached 4.97% as of August 2023.

 

 

 

 

DEPOSITS

Deposits recorded EGP 675 billion, growing by 27% over full-year 2023, with real growth of 18% net of the EGP devaluation impact, which added EGP 40.0 billion to the EGP equivalent balance. Growth was driven by local currency deposits, increasing by 26% or EGP 94.3 billion, together with foreign currency deposits adding 5% or USD 352 million. CIB's deposit market share recorded 6.81% as of August 2023.

ASSET QUALITY

Standalone non-performing loans represented 3.54% of the gross loan portfolio, and were covered 309% by the Bank's EGP 29.1 billion loan loss provision balance. Full-year 2023 impairment charge for credit losses recorded EGP 4.29 billion, compared to EGP 1.51 billion in full-year 2022.

CAPITAL AND LIQUIDITY

Total tier capital recorded EGP 100 billion, or 26.2% of risk-weighted assets as of December 2023. Tier I capital reached EGP 83.8 billion, or 84% of total tier capital. CIB maintained its comfortable liquidity and funding position above CBE requirements and Basel III guidelines in both local currency and foreign currency. CBE liquidity ratios remained well above the regulator's requirements, with local currency liquidity ratio recording 30.2% by end of December 2023, compared to the regulator's threshold of 20%, and foreign currency liquidity ratio reaching 45.3%, above the threshold of 25%. NSFR was 264% for local currency and 229% for foreign currency, and LCR was 2250% for local currency and 175% 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 198 billion, 22% higher YoY, with real growth of 11% net of the EGP devaluation impact, predominantly on 30% growth in local currency loans.

End-of-period deposits were EGP 247 billion, 26% higher YoY, with real growth of 18% net of the EGP devaluation impact, mostly driven by 20% growth in local currency deposits, besides 13% growth in foreign currency deposits.

Gross outstanding contingent business reached EGP 180 billion, 28% higher YoY.

BUSINESS BANKING

End-of-period gross loans were EGP 9 billion, 26% higher YoY, wholly on 26% growth in local currency loans.

End-of-period deposits were EGP 60 billion, 11% lower YoY, with 17% decrease in local currency deposits and 15% decrease in foreign currency deposits.

Gross outstanding contingent business reached EGP 3.70 billion, coming flat YoY.

RETAIL INDIVIDUALS BANKING

End-of-period gross loans were EGP 59 billion, higher by 13% YoY, wholly on 13% increase in local currency loans.

End-of-period deposits were EGP 368 billion, 38% higher YoY, with real growth of 28% net of the EGP devaluation impact, driven by 42% growth in local currency deposits and 4% growth in foreign currency deposits.

CIB continued to expand its network to reach a total of 193 branches and 15 units across Egypt, supported by a network of 1,339 ATMs.

 

 

 

 

 

 

 

 

CONSOLIDATED FINANCIAL HIGHLIGHTS





Income Statement

4Q23

3Q23

QoQ Change

4Q22

YoY Change

FY23

FY22

YoY Change

EGP million

EGP million

(4Q23 vs. 3Q23)

EGP million

(4Q23 vs. 4Q22)

EGP million

EGP million

(FY23 vs. FY22)

Net Interest Income

15,199

13,838

10%

9,187

65%

52,930

31,005

71%

Non-Interest Income

1,476

11

NM

588

151%

3,070

1,893

62%

Net Operating Income

16,675

13,849

20%

9,776

71%

55,999

32,898

70%

Non-Interest Expense

(3,574)

(2,205)

62%

(2,230)

60%

(10,076)

(7,372)

37%

Impairment Charge for Credit Losses

(3,053)

(34)

NM

(1,287)

137%

(4,270)

(1,585)

169%

Net Profit before Tax

10,047

11,610

-13%

6,259

61%

41,653

23,941

74%

Income Tax

(3,560)

(3,792)

-6%

(1,459)

144%

(13,100)

(6,345)

106%

Deferred Tax

765

535

43%

(827)

NM

1,158

(1,424)

NM

Net Profit from Continued Operations

7,252

8,353

-13%

3,973

83%

29,711

16,172

84%

Net Profit from Discontinued Operations

7.6

(0.1)

NM

0

NM

(42)

0

NM

Net profit

7,260

8,353

-13%

3,973

83%

29,669

16,172

83%

Non-Controlling Interest

31

(0.1)

NM

23

37%

34

58

-41%

Bank's Shareholders

7,229

8,353

-13%

3,951

83%

29,635

16,114

84%

 








 

Financial Indicators

4Q23

3Q23

QoQ Change

4Q22

YoY Change

FY23

FY22

YoY Change

 

 

(4Q23 vs. 3Q23)


(4Q23 vs. 4Q22)

 

 

(FY23 vs. FY22)

Profitability









ROAE*

34.5%

45.8%

-25%

23.9%

44%

39.7%

25.1%

58%

ROAA*

3.51%

4.16%

-15%

2.57%

37%

4.06%

2.86%

42%

Efficiency



 


 



 

Cost-to-Income

20.8%

14.6%

42%

22.1%

-6%

17.1%

21.2%

-19%

Liquidity









Gross Loans-to-Deposits

39.5%

38.2%

3.1%

41.9%

-6%

39.5%

41.9%

-6%

Asset Quality



 


 



 

NPLs-to-Gross Loans

3.59%

5.08%

-29%

4.86%

-26%

3.59%

4.86%

-26%

Capital Adequacy Ratio

26.2%

21.4%

22%

22.7%

16%

26.2%

22.7%

16%

*Full-Year ROAE and ROAA after profit appropriation

 

STANDALONE FINANCIAL HIGHLIGHTS 

Income Statement

 4Q23

 3Q23

QoQ Change

 4Q22

 YoY Change

 FY23

FY22

 YoY Change 

 EGP million

 EGP

million

(4Q23 vs. 3Q23)

 EGP million

(4Q23 vs. 4Q22)

 EGP million

 EGP million

(FY23 vs. FY22)

Net Interest Income

15,160

13,797

10%

9,125

66%

52,747

30,836

71%

Non-Interest Income

1,184

(1,074)

NM

551

115%

1,831

1,916

-4%

Net Operating Income

16,344

12,723

28%

9,677

69%

54,578

32,752

67%

Non-Interest Expense

(3,462)

(2,133)

62%

(2,152)

61%

(9,766)

(7,177)

36%

Impairment Charge for Credit Losses

(3,038)

(36)

NM

(1,249)

143%

(4,287)

(1,512)

184%

Net Profit before Tax

9,844

10,554

-7%

6,275

57%

40,525

24,062

68%

Income Tax

(3,535)

(3,771)

-6%

(1,358)

160%

(13,076)

(6,342)

106%

Deferred Tax

728

805

-10%

(992)

NM

1,319

(1,590)

NM

Net Profit

7,036

7,589

-7%

3,924

79%

28,768

16,130

78%

 

Financial Indicators

4Q23

3Q23

QoQ Change

4Q22

YoY Change

FY23

FY22

YoY Change

 

 

(4Q23 vs. 3Q23)


(4Q23 vs. 4Q22)

 

 

(FY23 vs. FY22)

Profitability









ROAE*

33.6%

41.5%

-19%

23.7%

41%

38.6%

25.1%

54%

ROAA*

3.43%

3.79%

-9%

2.56%

34%

3.95%

2.87%

37%

NIM**

8.05%

7.46%

8%

6.49%

24%

7.55%

6.10%

24%

Efficiency









Cost-to-Income

15.3%

35%

21.5%

-4%

17.0%

20.7%

-18%

Liquidity









Gross Loans-to-Deposits

39.4%

38.2%

3.0%

41.8%

-6%

39.4%

41.8%

-6%

Asset Quality









NPLs-to-Gross Loans

3.54%

5.04%

-30%

4.81%

-26%

3.54%

4.81%

-26%

Direct Coverage Ratio

309%

233%

33%

229%

35%

309%

229%

35%

*Full-Year ROAE and ROAA after profit appropriation

**NIM based on managerial accounts

 

 

 

 

BALANCE SHEET

 

Consolidated

Standalone

 

Balance Sheet

Dec-23

Dec-22

YoY Change

Dec-23

Dec-22

YoY Change

 

 

 EGP million

 EGP million

(Dec-23 Vs.
Dec-22)

 EGP million

 EGP million

(Dec-23 Vs.
Dec-22)

 

Cash & Due from Central Bank

71,888

47,493

51%

71,747

47,385

51%

 

Due from Banks

231,085

133,857

73%

230,709

133,766

72%

 

Net Loans & Overdrafts

235,808

196,578

20%

234,647

195,599

20%

 

Financial Derivatives

1,105

1,940

-43%

1,102

1,940

-43%

 

Financial Investment Securities

271,466

238,545

14%

270,138

237,095

14%

 

Investments in Associates and Subsidiaries

116

186

-38%

672

1,074

-37%

 

Other Assets

23,397

17,233

36%

23,512

16,784

40%

 

Total Assets

834,866

635,832

31%

832,527

633,643

31%

 

Due to Banks

12,458

3,497

256%

12,427

3,476

258%

 

Customer Deposits

677,237

531,617

27%

675,310

530,125

27%

 

Other Liabilities

54,529

32,381

68%

54,490

32,322

69%

 

Total Liabilities

744,225

567,494

31%

742,227

565,922

31%

 

Shareholders' Equity & Net Profit

90,481

67,758

34%

90,300

67,721

33%

 

Non-Controlling Interest

160

580

-72%

0

0

NM

 

Total Liabilities & Shareholders' Equity

834,866

635,832

31%

832,527

633,643

31%

 

 

http://www.rns-pdf.londonstockexchange.com/rns/7295C_1-2024-2-11.pdf

[1] Based on standalone managerial accounts.

[2] After 2023 profit appropriation.

[3] As of Aug-23; latest published CBE Monthly Statistical Bulletin at time of publishing.

[4]Net of Collateral, Gross of Provisions.

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

[6]1) Loan, deposit, and outstanding contingent balances are based on managerial accounts. 2) Growth in foreign currency balances is in real terms, excluding the effect of EGP devaluation by EGP 6.15 YoY. 3) Outstanding contingent balances are gross of collateral and provisions.

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