CIB net income records EGP 16.1bn in 2022

Hossam Mounir
8 Min Read

Commercial International Bank (CIB) reported a fourth-quarter 2022 consolidated net income of EGP 3.95bn, up 17% from fourth-quarter 2021. Full-Year 2022 consolidated net income recorded EGP 16.1bn, or EGP 4.83 per share, up by 21% from last year.

In a Monday press statement, the CIB Management commented: “Ending a year packed with extraordinary global and local challenges, CIB achieved another milestone in 2022, delivering record financial performance, while maintaining pioneer solvency.”

This came as management wittingly capitalized on the bank’s solid grounding and agile Balance Sheet structure, which came in largely accommodating for the unforeseen dynamics on most fronts.

On the funding side, and notwithstanding the fierce competition especially in the local currency deposit market, CIB managed to sustain its balance sheet growth momentum, growing its local currency deposit base by an impressive 18%, and its foreign currency deposit base by a genuine 8%, over the year, to maintain its highest market share among Private-Sector Banks.

This came at highly-rationalized costs, which, coupled with the Bank’s flexible Balance Sheet structure and proactive Treasury Management, reflected in expanded margins, despite the highly-competitive and highly-uncertain environment.

On the lending side, CIB continued its role in extending funding to Businesses and Individuals, delivering remarkable growth this year in local currency loans, which grew by a notable 35% or EGP 40bn, and by an even further-impressive 43% or EGP 53bn, upon accounting for Securitization Deals.

This coupled with a strong restoration in Trade Finance Business, generated a significant rebound in Core Fees and Commissions, hence further fueling-up top-line growth through the sustainable stream of non-interest income.

The latter came in particularly realisable as CIB has been sufficiently armed to cater for customer needs and to accommodate the outstanding backlog of Trade Finance requests, thanks to the Bank’s adept Foreign Currency Liquidity Management in light of the prevailing market volatility.

Furthermore, this robust loan growth came to pass while preserving the Bank’s top-notch solvency, maintaining the Highestin-Market Coverage for both Expected and Unexpected Losses.

This was reflected in a Loan Loss Provision Balance of EGP 24.4bn, covering 11% of the Bank’s Gross Loan Portfolio, and with the Bank’s Capital Adequacy Ratio (CAR) resting at 22.7%, with a comfortable capital buffer above minimum regulatory requirements, which shielded against unfavourable macroeconomic dynamics, as well as accommodated for genuine core business growth.

In addition, and despite having the highest capital buffer in the Market, the return to CIB shareholders remained, as well, amongst the highest in the Banking Sector, with Return on Average Equity (ROAE) recording 25.1%, after accounting for 2022 Proposed Profit Appropriation, up by 321 basis points from last year.

On another note, and further attesting to its sound fundamentals in face of uncertainties, CIB anchored its regional presence, kicking off 2023 with the acquisition of the remaining 49% stake in the Kenya-based Mayfair-CIB Bank, to become a fully-owned subsidiary of CIB.

Back in April 2020, CIB marked the first Egyptian Bank to establish a presence in Kenya, viewing a well-regulated market with potential opportunities for economic prosperity, through owning a 51% stake in Mayfair Bank, which turned in its first-time profit in 2021 since being licensed in 2017.

Now, the acquisition of the remaining stake further reaffirms the mutual confidence, with the aspiration of Mayfair-CIB playing the role of the African Digital Hub for CIB, extending the Bank’s leading role in Digital Transformation to new regions and verticals.

Overall, Management is content with CIB’s solid performance for the year. And, although the road ahead remains uncertain, Management yet holds a cautiously-optimistic view about future economic prospects, with great confidence in the Bank’s ability to efficiently navigate through unforeseen market dynamics, drawing on its resolute balance sheet fundamentals and firm coverage.”

Fourth-quarter 2022 standalone revenues were EGP 9.68bn, up 37% from fourth-quarter 2021. Full-Year 2022 standalone revenues were EGP 32.8bn, up 22% from full-year 2021, backed by a 24% increase in net interest income, alongside an increase in non-interest income by 3%.

Full-Year 2022 standalone net interest income recorded EGP 30.8bn, increasing by 24% Year-on-Year (YoY), generated at 6.10% Total NIM, which increased by 43 basis points (bp) YoY, with Local Currency NIM recording 7.56%, coming 31bp higher YoY, and Foreign Currency NIM recording 2.34%, coming 128bp higher YoY.

Moreover, full-Year 2022 standalone non-interest income recorded EGP 1.92bn, coming 3% higher YoY. Upon adding back other provisions charged, which is normally deducted from Non-Interest Income as part of Other Operating Expenses, recording EGP 1.86bn for full-year 2022 and EGP 411m for full-year 2021, standalone non-interest income grew by 66% YoY.

Trade service fees were EGP 1.16bn, growing by 46% YoY, with an outstanding balance of EGP EGP 135bn.

Full-Year 2022 standalone operating expense was EGP 7.18bn, up 18% YoY. Cost-to-income recorded 20.7%, coming 170bp lower YoY5 and comfortably below the desirable level of 30%.

Furthermore, the gross loan portfolio recorded EGP 222bn, growing by 36% YoY, with real growth of 16% net of the EGP devaluation impact, which added EGP 28.1bn to the EGP equivalent balance. Growth was driven wholly by local currency loans, increasing by 35% or EGP 40.1bn, sufficiently counterbalancing net foreign currency loan repayments of 13% or $401m.

CIB’s loan market share reached 5.41% as of September 2022.

Deposits recorded EGP 530bn, growing by 31% YoY, with real growth of 15% net of the EGP devaluation impact, which added EGP 54.2bn to the EGP equivalent balance. Growth was driven by local currency deposits, growing by 18% or EGP 57.3bn, coupled with foreign currency deposits adding 8% or $507m. CIB’s deposit market share recorded 6.10%3 as of September 2022, maintaining the highest deposit market share among all private-sector banks.

CIB maintained its sturdy asset quality. Standalone non-performing loans represented 4.81% of the gross loan portfolio, covered 229% by the Bank’s EGP 24.4bn loan loss provision balance.

Full-Year 2022 loan loss provision expense recorded EGP 1.51bn compared to EGP 1.68bn in full-year 2021.

Total tier capital recorded EGP 75bn or 22.7% of risk-weighted assets as of December 2022. Tier I capital reached EGP 63.4bn or 85% 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 liquidity ratios remained well above the regulator’s requirements, with the local currency liquidity ratio recording 48.0% as of December 2022, compared to the regulator’s threshold of 20%, and the foreign currency liquidity ratio reaching 68.1%, above the threshold of 25%. 

NSFR was 239% for local currency and 208% for foreign currency, and LCR was 1291% for local currency and 297% for foreign currency, comfortably above the 100% Basel III requirement.

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