The Commercial International Bank (CIB) Monday announced that its first-quarter 2023 consolidated net income reached EGP 6.06bn, or EGP 1.81 per share, up by 43% from last year.
Management commented: “Despite the ambiguity witnessed on a global, regional and local scale, CIB’s performance is nothing short of exemplary.
The Bank’s first-quarter results, delivering top and bottom line growth of 54% and 43%, compared to last year, respectively, set the stage for what promised to be a very strong 2023.
The Management continued to direct focus on sustaining the Bank’s balance sheet fundamentals and growth momentum, while simultaneously growing spreads and margins and not compromising on solvency. Specifically, CIB continued its deposit gathering momentum, growing its local currency deposit base by 20% or EGP 62bn over last year, while maintaining a share of Current and Saving Accounts (CASA) of 55% to Total Deposits, which helped confine the increase in Cost of Funds amidst the increasing-interest-rate and highly-competitive environment.
Together with Treasury Management placing due focus on maintaining a balance sheet structure that strikes the balance between liquidity and profitability, CIB managed to grow its NIM by 143 basis points compared to last year.
Further committed to its role in growing funding to businesses and individuals, CIB grew its local currency loan portfolio by 32% or EGP 40bn over last year, and by 40% or EGP 54bn upon considering the Securitization Portfolio, notwithstanding the tightening monetary policy environment. As a result, CIB marked the largest Lender-and-Securitizer among Private-Sector Banks by end of first-quarter 2023, while managing to meet the required minimum stipulated by CBE for funding to Small-and-Medium-Sized-Enterprises (SMEs). This growth in loans, coupled with a rebound in Trade Finance activities, reflected clearly in profitability, fueling-up top line growth through the sustainable stream of non-interest income, while not needing to accrue any special provisions.
That mentioned, Loan Loss Provision Expense recorded EGP 0.9bn for first quarter 2023, bringing the Loan Loss Provision Balance to EGP 29.6bn, which covers 12.1% of the Bank’s Gross Loan Portfolio, sustaining the highest coverage in the Egyptian Banking Sector. This came while recording a Capital Adequacy Ratio (CAR) of 19.3% by end of first-quarter 2023, comfortably above the minimum regulatory threshold.
All those factors collectively fed positively into the Bank’s Return on Average Equity (ROAE), which recorded 37.5%, further reiterating Management’s focus on preserving the interests of both, current and future shareholders.
Building on our confidence in the financial sector’s ability to navigate the uncertainty ahead, Management holds an optimistic outlook on future economic prospects, with greater confidence in the Bank’s ability to uphold its market-leading performance, on both profitability and solvency fronts, supported by its flexible balance sheet structure and prudent risk management, which would cement the Bank’s position against unforeseen market dynamics”.
First-quarter 2023 standalone revenues were EGP 12.0bn, up 58% from first-quarter 2022, backed by 64% increase in net interest income, alongside increase in non-interest income by 16%.
First-quarter 2023 standalone net interest income recorded EGP 10.8bn, increasing by 64% YoY, generated at 7.09% Total NIM , which increased by 143 basis points (bp) YoY, with Local Currency NIM recording 9.16%, coming 202bp higher YoY, and Foreign Currency NIM recording 3.52%, coming 223bp higher YoY.
First-quarter 2023 standalone non-interest income recorded EGP 1.19bn, coming 16% higher YoY. Trade service fees were EGP 545 million, growing by 2.3x YoY, with an outstanding balance of EGP 164bn.
First-quarter 2023 standalone operating expense was EGP 2.00bn, up 30% YoY. Cost-to-income recorded 16.1%, coming 237bp lower YoY4 and comfortably below the desirable level of 30%.
Gross loan portfolio recorded EGP 244bn, growing by 10% over first-quarter 2023, with real growth of 2% net of the EGP devaluation impact, which added EGP 16.7bn to the EGP equivalent balance. Growth was driven wholly by local currency loans, increasing by 6% or EGP 9.08bn, sufficiently counterbalancing net foreign currency loan repayments of 4% or $109m. CIB’s loan market share reached 5.41%2 as of December 2022.
Deposits recorded EGP 574bn, growing by 8% over first-quarter 2023, with real growth of 1% net of the EGP devaluation impact, which added EGP 40bn to the EGP equivalent balance. Growth was driven by local currency deposits, growing by 1% or EGP 2.75bn, coupled with foreign currency deposits adding 1% or $39m. CIB’s deposit market share recorded 6.18%2 as of December 2022, maintaining the highest deposit market share among all private-sector banks.
Standalone non-performing loans represented 5.20% of the gross loan portfolio, and were covered 233% by the Bank’s EGP 29.6bn loan loss provision balance. First-quarter 2023 loan loss provision expense recorded EGP 948m compared to loan loss provision reversal of EGP 41m in first-quarter 2022.
Total tier capital recorded EGP 75.5bn, or 19.3% of risk-weighted assets as of March 2023. Tier I capital reached EGP 61.7bn, or 82% 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 local currency liquidity ratio recording 43.1% by end of March 2023, compared to the regulator’s threshold of 20%, and foreign currency liquidity ratio reaching 69.9%, above the threshold of 25%. NSFR was 212% for local currency and 200% for foreign currency, and LCR was 1503% for local currency and 275% for foreign currency, comfortably above the 100% Basel III requirement.