Interim Management Statement

RNS Number : 2011B

Commercial Intnl Bank (Egypt) SAE

12 August 2008

 



CIB 2nd Quarter 2008 Results

CIB has released today its second quarter results with managements' following comments:

CIB enjoyed another successful quarter in Q2 and delivered strong financial and operational performance despite some of the most challenging market conditions. This was achieved through significant growth across all business lines.  In fact, the Half Yearly results exceed our analysts' expectations and reflect CIB's continued focus to deliver consistent and sustainable performance year on year. It also reflects the hard work, commitment and diligence of all CIB employees.

Profitability

·         On a consolidated basis, CIB and CICH achieved EGP 1,863 million and EGP 964 million of Net Operating Income and Net Profit After Tax (NPAT) respectively for YTD 2008 (whereby CICH contributed by EGP 25 million in net profits). The Bank, on a stand-alone basis, achieved an NPAT for YTD 2008 of EGP 939 million, up by 48% as compared to the same period of 2007. Regarding the period from April 1^st to June 30^th, 2008, NPAT reached EGP 516 million, up by 35% over same period in 2007.

·         It is worth mentioning that the NPAT comprises EGP 145 million that represents sale of a subsidiary (Contact) and provisions write back as previously communicated in Q1 08 press release. Also it is worth highlighting that the revenues include EGP 148 million of capital gains related to sale of investments.

·         On a stand-alone basis, Net Operating income marked EGP 1,786 million, an outstanding surge of 57% over the same period of last year. This remarkable performance was achieved on the back of a 55% increase in net interest resulting from a high quality loan portfolio. Moreover, banking fees and commissions also showed a steady growth of 29% over the same period of last year and Foreign exchange profits impressively surged up by 152% over same period.

·         Return on Average Equity and Return on Average Assets are on continuous improvement reaching 42.25% and 3.63% for YTD 2008 respectively, confirming our commitment to add maximum value to the shareholders and work for their best interest.

·         Furthermore, CIB’s equity base remained extremely solid, evidenced by a conservative Capital Adequacy Ratio of 12.78%. (not including profits for the year)

Asset quality, prudent credit culture and risk management best practice

·         Adapting with CBE general loan loss provisioning requirements, additional EGP 165 million were accumulated for YTD 2008, representing 11% growth over same period last year. In fact and as previously mentioned in the press release for Q1 2008, EGP 62 million of the loan loss provision represents conservative action to build provision for 50% of a client exposure with a pending license issue. This license issue has since been resolved.

·         The quality of our loan portfolio continues to improve demonstrated by the decrease in the NPL ratio reaching 2.8% down from 3% in FY 2007 and the ability to maintain a coverage ratio above 190%.

Asset efficiency and cost structure

·        Expenses grew by 46% over same period last year, which was due to salary and benefits adjustments for staff channels, inflation, along with headcount increase predominantly on the retail side (615 additional staff). In addition to significant investments in our distribution channels, we inaugurated 17 new outlets, and 49 new ATMs as well as 4,795 new POS. Despite all these enhancements, in addition to 65% y-o-y growth of new hires and staff, our competence and efficiency managed to maintain a cost to income ratio of 27.13% (a slight decrease of 0.66% over YTD June 2007).   

·         Inspite of the increasing competition in the market, CIB managed to increase its Net Interest Margin (NIM) by 21.54% compared to YTD June 2007 to reach 3.78%, which proves the management’s focus on efficiency and proficiency.

In EGP billions

 

END

 

 

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