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Egypt's CIB 9-month profit drops 25 per cent Country's biggest private bank sees its income fall far short of analyst forecasts, in a sign of the troubles facing Egypt's financial market
Egypt's Commercial International Bank (CIB), the country's largest listed bank, reported a consolidated bottom line of LE1.065 Billion in the first nine month of 2011, a drop of 25 per cent on the same period in 2010. The fall in profits is mainly due to a surge in booked provisions along with a significant drop in net investment. Egypt's banks have been hurt by a weak financial market and an exodus of foreign investors in the wake of the uprising that led to President Hosni Mubarak's overthrow early this year. Standalone profits for the third quarter of 2011 reached LE314 million, a 29 per cent drop on the previous quarter. Four analysts polled by Reuters had forecast on average that the bank would report a net income for the quarter of LE371.33 million. CIB said loans to customers after provisions had risen 7.88 per cent to LE37.78 billion in the nine months to end-September, while deposits had increased 10.1 per cent to LE69.77 billion The bank's asset quality experienced marginal deterioration on a quarterly basis, and its loans ratio remained stable. CIB's non performing loans (NPLs) increased by 2 per cent on a quarterly basis, and remained stable at 2.9 per cent in September 2011. Provisions coverage remained high at 142 per cent. The bulk of NPLs was booked in 1Q2011. Egyptian investment bank Beltone said in a note Wednesday that the surge in provisions in the third quarter “raises some concerns” given the bank's high coverage ratio. Return on average assets dropped in Sep 2011 to 1.81 per cent from 2.79 per cent in September 2010. Return on average equity also dropped to 16.6 per cent from 25.19 per cent last year.
