Commercial International Bank Sunday reported third-quarter (3Q) 2021 consolidated net income of EGP 3.81bn, or EGP 1.71 per share, up 62% from third-quarter 2020.
The bank’s management commented: “CIB hit a new record in 3Q 2021, with remarkable bottom line growth compared to last year. This exceptional performance is driven by both balance sheet fundamentals and resilient solvency, alongside continued progression during the interim.”
Moreover, CIB’s balance sheet growth sustained its momentum, especially in local currency, with local currency deposits growing by 7% over the quarter and 28% over the year, mainly concentrated on CASA gathering, in accordance with the management’s strategic focus on growing funds at controlled costs. This, alongside maintaining the bank’s flexible balance sheet structure that is necessary to accommodate for interest rate volatilities, led to liquidity management optimization, according to CIB.
Likewise, loan growth continued its upward momentum, with local currency loans striking record growth of 26% compared to last year, hence boosting top line, backed by increase in core fees and commissions. As a matter of fact, record loan growth was achieved without posing pressure on the bank’s credit risk requirements, thanks to CIB’s prudent risk management and healthy coverage, during 2020 and earlier, which paved the way for a significant slowdown in provision accumulations, in light of the gradual macroeconomic restoration. It remains noteworthy that this robust loan growth, coupled with moderated provisions, maintained CIB’s prime market position in terms of coverage for both expected and unexpected losses.
The bank’s management continued: “As we near the end of 2021, we remain positive about CIB’s capability to sustain its leading market position, drawing largely on its unique coverage and its adaptable balance sheet structure, which would allow for stable navigation through unforeseen market dynamics.”
CIB’s 3Q 2021 standalone revenues were EGP 7.12bn, up 6% from 3Q 2020. Nine-month 2021 standalone revenues were EGP 19.7bn, up 2% from nine-month 2020, wholly driven by non-interest income coming 3x higher y-o-y, partially pulled down by a 4% decrease in net interest income.
Nine-month 2021 standalone net interest income recorded EGP 18.1bn, decreasing by 4% y-o-y, with total NIM decreasing by 120 basis points (bp), due mainly to the maturities of exceptionally-high-yielding bonds previously purchased. Normalizing for the above-market-interest-rate-differential of the aforementioned bonds in nine-month 2020, net interest income grew by 12% y-o-y, generated at 5.67% total NIM1, down by 25bp y-o-y, with local currency NIM1 recording 7.35%, down 48bp, and foreign currency NIM1 recording 0.96%, down 39bp y-o-y.
Nine-month 2021 non-interest income recorded EGP 1.60bn, coming 3x higher y-o-y. Upon adding back contingent provision charges, which is normally deducted from non-interest income as part of other operating expenses, recording EGP 211m for nine-month 2021 and EGP 1.02bn for nine-month 2020, standalone non-interest income grew by 19% y-o-y. Trade service fees were EGP 586m, growing by 14% y-o-y, with an outstanding balance of EGP 92.3bn.
Nine-month 2021 standalone operating expense was EGP 4.38bn, up 5% y-o-y. Cost-to-income reported 22.0%, 145 bp higher y-o-y, while remaining comfortably below the desirable level of 30%. Normalized for the aforementioned 2020 bond yield-highs, the cost-to-income came 158 bp lower y-o-y.
Gross loan portfolio recorded EGP 157bn, growing by 15% or EGP 20.7bn Year-to-Date (YtD). Growth was driven wholly by local currency loans, which grew by 24% or EGP 21.6bn, sufficiently offsetting foreign currency net loan repayments of $52.9m or 2%. CIB’s loan market share reached 5.13% as of August 2021.
Deposits recorded EGP 403bn, growing by 19% or EGP 63bn YtD. Growth was driven mainly by local currency deposits, growing by 23% or EGP 57.0 billion, besides foreign currency deposits, adding 7% or $387m. CIB’s deposit market share recorded 6.63% as of August 2021, maintaining the highest deposit market share among all private-sector banks.
CIB maintained its resilient asset quality. Standalone non-performing loans represented 5.43% of the gross loan portfolio, covered 206% by the bank’s EGP 17.6bn loan loss provision balance. Nine-month 2021 loan loss provision expense recorded EGP 1.33bn, 66% lower y-o-y.
Total tier capital recorded EGP 71bn, or 32.1% of risk-weighted assets as of September 2021. Tier I capital reached EGP 64.1bn, or 90% of total tier capital.
CIB maintained its comfortable liquidity position above CBE requirements and Basel III guidelines in both local currency and foreign currency. CBE local currency liquidity ratio remained well above the regulator’s 20% requirement, recording 63.8% as of September 2021, while CBE foreign currency liquidity ratio reached 69.3%, above the threshold of 25%. NSFR was 230% for local currency and 165% for foreign currency, and LCR was 1039% for local currency and 296% for foreign currency, comfortably above the 100% Basel III requirement.