A $301m net profit for 2024 has been announced by the Arab African International Bank (AAIB), driven by its shift towards a liabilities-driven market approach.
Tamer Waheed, Vice Chairperson and Managing Director, said: “Our shift, towards a liabilities driven market approach, achieved its desired results, AAIB continued to deliver a strong performance for the year 2024.”
Despite a significant devaluation in the first quarter of 2024, the bank reported a rise in Net Interest Income to $580m, a 14.7% nominal increase, and Net Banking Income rose to $702m, an 18.4% nominal increase. The year closed with a net profit of $301m, with the bank maintaining elevated provisioning levels. This pushed the US dollar Return on average Equity up by 200 basis points to reach 12.3%.
AAIB’s balance sheet continued to grow, supported by a substantial increase in deposits, reaching a total asset base exceeding $18bn. The bank said it maintained key liquidity and risk metrics comfortably above regulatory thresholds, with a capital adequacy ratio above 21%.
AAIB highlighted its commitment to environmental, social, and governance (ESG) principles with the issuance of Egypt’s first $500m sustainability bond, underwritten by international financial institutions. This bond represents a statement of confidence in AAIB’s “exceptional financial standing amid economic and geopolitical headwinds in the region”.
Waheed said: “Nevertheless, we remain conscious to avoid irrational exuberance, as we acknowledge that an exceptionally high global interest rate environment had uplifting effects on the international and local banking sector’s financial performance – albeit limited for AAIB in comparison to EGP capital based local peers – while risk materialization remained limited.”
Waheed added that with the onset of monetary easing cycles and the stabilisation of local FX markets during 2024, the bank anticipates increased competition and potential pressure on net banking income. Operating costs are expected to remain high due to years of global inflation.
“As such we continue to observe the changing market dynamics and aggravated geopolitical developments, yet confident to continue delivering market leading performance,” Mr Waheed concluded.
