The Commercial International Bank (CIB) reported, on Monday, that its full year 2020 consolidated net income recorded EGP 10.2bn, or EGP 6.21 per share, down by 13% from last year.
It also reported that it achieved a fourth quarter (Q4) of 2020 consolidated net income of EGP 2.89bn, or EGP 1.75 per share, down 11% from Q4 of 2019.
The bank’s Management said, “Ending a year beset with unprecedented dynamics on both macroeconomic and internal fronts, CIB achieved another milestone in financial performance, while maintaining top-notch solvency.”
As the second wave of the novel coronavirus (COVID-19) pandemic hit, and ambiguity inherent in the macroeconomic outlook and client creditworthiness persisted, CIB Management upheld its year-long strategy of prioritising solvency over short-term profitability.
This meant that the bank accumulated a further EGP 1.2bn of loan loss provisions in Q4 of the year. Cumulatively, loan loss provision expense for full-year 2020 recorded EGP 5.0bn, tripling from last year.
With that, CIB maintained its pioneer coverage in the banking sector, with a loan loss provision balance of EGP 16.4bn, covering 12% of its gross loan portfolio, and 16% of the unsecured portion.
This, alongside the bank’s comfortable capital position reflected in robust Capital Adequacy Ratio of 31.4%, provide further credence to its resolute solvency and coverage for both expected and unexpected credit losses.
On another note, the bank’s flexible balance sheet structure, racked-up over the years, has been pivotal to sharp performance. It has served well in special light of declining interest rates and reflects CIB’s Management farsightedness and adept strategic direction.
This became evident in pre-provision bottom line growing by a decent 15% over the last year, notwithstanding macroeconomic challenges, backed by competent balance sheet growth attained at improved margins.
Distinctly, the local currency balance sheet grew impressively, with deposits adding EGP 36.5bn at controlled cost, matched by notable growth in net loan bookings by EGP 12.8bn over the year.
Moving into 2021, the bank remains confident in CIB’s ability to endure any arising challenges, drawing on its resilient balance sheet fundamentals and robust solvency, Management said.
The standalone revenues in Q4 of 2020 were EGP 6.50bn, up 6% from Q4 of 2019. Full-year 2020 standalone revenues were EGP 25.8bn, up 12% year-on-year (y-o-y), on the back of net interest income growth.
Upon adding back contingent provision charges, which is normally deducted from Net Operating Income as part of Other Operating Expenses, full-year 2020 standalone revenues grew by 16% y-o-y.
Full-year 2020 standalone net interest income was EGP 25.1bn, up 16% y-o-y, generated at 6.75% Total NIM1, up 27 basis points (bp) y-o-y. Local Currency NIM1 recorded 9.01%, up 54bp y-o-y, while Foreign Currency NIM1 recorded 1.25%, down 115bp y-o-y.
Full-year 2020 standalone non-interest income recorded EGP 749m, representing 3% of total revenues. Adding back contingent provision charged amounting to EGP 1.29bn for full-year 2020, standalone non-interest income represented 8% of revenues. Trade service fees were EGP 699m, with an outstanding balance of EGP 82.5bn.
Full-year 2020 standalone operating expense was EGP 5.55bn, up 10% y-o-y, whilst cost-to-income was reported at 20.5%, 111bp lower y-o-y, and comfortably below the desirable level of 30%.
Gross loan portfolio recorded EGP 136bn, growing by 3% or EGP 4.52bn over 2020. Growth was driven wholly by local currency loans, which grew impressively by 17% or EGP 12.8bn, sufficiently offsetting foreign currency net loan repayments of $460m or 13%.
This ran along with the effect of the local currency appreciation of EGP 0.31 over 2020, which brought the foreign currency equivalent balance down further by EGP 0.94bn. CIB’s loan market share reached 5.63%, as of September 2020.
Deposits recorded EGP 340bn, adding EGP 35.6bn or 12% y-o-y. Growth was driven by local currency deposits, adding EGP 36.5bn, while foreign currency deposits came almost flat adding a modest $53m. At the same time, Egyptian pound appreciation over the year brought the foreign currency equivalent balance down by EGP 1.74bn.
CIB’s deposit market share recorded 6.56% as of September 2020, maintaining the highest deposit market share among all private-sector banks.
The bank maintained its resilient asset quality. Standalone non-performing loans represented 4.27% of the gross loan portfolio, covered 281% by the Bank’s EGP 16.4bn loan loss provision balance. Full-year 2020 loan loss provision expense recorded EGP 4.99bn, 3.5x higher y-o-y.
Total tier capital recorded EGP 63.0bn, or 31.4% of risk-weighted assets as of December 2020. Tier I capital reached EGP 56.3bn, or 89% of total tier capital.
CIB maintained its comfortable liquidity position above Central Bank of Egypt (CBE) requirements and Basel III guidelines in both local currency and foreign currency. The CBE local currency liquidity ratio remained well above the regulator’s 20% requirement, recording 56.8% as of December 2020.
Meanwhile, the CBE foreign currency liquidity ratio reached 67.6%, above the threshold of 25%. The Net Stable Funding Ratio (NSFR) was 301% for local currency and 168% for foreign currency, whilst the Liquidity Coverage Ratio (LCR) was 1,977% for local currency and 337% for foreign currency, comfortably above the 100% Basel III requirement.
