CIB Q2 net profit falls less than expected

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CAIRO: Commercial International Bank reported an 11 percent dip in second-quarter net profit on Wednesday after political and economic turmoil dented foreign exchange income, banking fees and the value of investment sales.

Net income was LE 443 million ($74.3 million), down from LE 496 million in the same period a year earlier, the company said in a statement. It was higher than the average analyst forecast of LE 403 million in a Reuters poll.

Egypt’s business sector is struggling to recover from the disruption that followed president Hosni Mubarak’s overthrow in February, and banks have been hit further by a weak financial market and an exodus of foreign investors.

"In a challenging year filled with unprecedented circumstances, CIB managed to maintain a healthy liquidity position where the bank’s balance sheet grew by 3.43 percent over December 2010," CIB said.

Deposits and loans grew by 6.2 percent and 6.37 percent, respectively, in the first half, but net fee and commission income slipped to LE 216 million in the second quarter from 220 million a year earlier.

Quarterly net interest income grew to LE 630 million from LE 572 million.

Loan impairment losses totaled LE 78 million in the quarter, compared to a small gain a year earlier, and net trading income slipped to LE 65 million from 90 million.

Non-performing loans edged up to 2.93 percent of total loans at the end of June from 2.73 percent six months earlier.

Higher payroll costs and a tax bill that grew even as pretax profit fell also weighed on the bottom line.

CIB shares have fallen 48 percent this year, worse than a 35 percent drop by Egypt’s benchmark EGX30 index.

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