Commercial International Bank (CIB) has been named “Bank of the Year” for international commerce after fierce competition with National Bank of Egypt (NBE), according to Business News indicators.
Emirates NBD also sent a strong message, jumping to second place for fastest growing bank, rising from the penultimate spot.
HSBC dropped 13 places on the efficiency indicator as its profits declined, whereas Barclays took third place.
NBE surprised many by taking the award for “customer satisfaction” from CIB, thanks to its strong spending on technology and development.
CIB, the largest Egyptian international bank in terms of market value, took the title “Bank of the Year”, after a strong performance over the past year, according to a Business News index of the best Egyptian banks.
CIB’s success came only narrowly ahead of its closest competitor, NBE which is the largest bank in the market in terms of volume of assets, and which has 27 banks on the Egyptian market.
The title of “Bank of the Year” was ultimately decided by the efficiency index, which NBE was unable to achieve any improvement on.
The Ahli United Bank came in third on the Business News list for Best Banks based on its strong lending rates, which amounted to 71% of the volume of deposits, the second highest loan to deposit rate on the market after the Industrial Development Bank. Ahli United Bank was also helped by the asset quality, as it holds the lowest rate of non-performing loans among banks on Business News’ list of most efficient banks. This comes in addition to the bank’s strong spending on information technology, which was 30% of total investment spending.
The Business News Index for Best Bank consists of four key indicators, which are in turn composed of a large number of sub-indices, which measure Egyptian banks’ performance in terms of speed and strength, as well as the customer satisfaction for the services provided.
The sub-indices include those for the most efficient, fastest-growing, highest customer satisfaction, and social responsibility in the banking sector.
CIB came in first place for the second consecutive year, topping the index for most efficient banks, benefiting from the strength of its return on average equity, which was the highest in the sector over the past year at 2.9%. It also benefited from the highest return on equity, at 33%, in addition to a strong net rate of return on total assets.
Qatar National Bank reprised its position as runner-up on the list of the most efficient banks, despite a decline in its rate of lending from 66.5% in 2012 to 57.5% in the past year. The bank ranked fourth overall for Best Bank.
The list for most efficient bank saw a surprise with the sudden retreat of HSBC, ranked third last year, to 16 on the current list, with profits falling at a rate of 24%, negatively impacting return on average equity and rate of return on equity.
On the same index Barclays Bank jumped from thirteenth place last year to third place this year as a result of return on average equity of 2.4%.
Abu Dhabi Islamic Bank took the lead in terms of growth rate, becoming the fasted growing bank in the market over the past year, thanks to its transformation from chronic losses to profitability for the first time since it was acquired six years ago. The Bank achieved strong growth in net revenue, profitability and loans.
The Emirates NBD sent a strong message to the market’s key players, jumping on the Business News index for growth, reaching second place in the first year after its transfer of ownership to the UAE after occupying the penultimate position the year before, and which was the result of BNP Paribas policy in Egypt in earlier years.
The Egyptian Gulf Bank, which held first place on the same index, declined to second place, whereas foreign banks occupied five of the final six ranks on the growth index, an indication of the caution followed by foreign banks in Egypt. The foreign banks include Credit Agricole, HSBC, Barclays, Barclays Alexandria and Piraeus.
The National Bank of Egypt performed well on the Customer Satisfaction Index thanks to strong spending on information technology and its huge network of corporate clients, which boosted the bank’s position after taking into account corporate satisfaction in their dealings with the bank.
NBE spent 38% of its total investment expenditure in the last fiscal year on information technology. The next best bank on the index for customer satisfaction was CIB, beating Ahli United Bank, which finished third.
In terms of the social responsibility index, NBE finished on top of all banks for percentage of spending on community service in terms of net income. The bank set aside just less than 1% of its net income during the last financial year the Bank has set aside a little less than 1% of its net income during the last financial year has for this purpose.
The surprise of the year was the Industrial Development Bank, which improved in terms of both growth and customer satisfaction, thanks to its strong growth in net revenues, which was 125%, and total asset growth of 28%. It also benefited from spending on modernising its technology, which was 46% of its total investment spending, which was the highest in the banking sector.
The number of banks covered by Business News index this year rose to 27, the highest since its launch. The larger number is attributed to a relative improvement in disclosure and greater cooperation in attaining data not included in financial statements.
