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Egypt's CIB says Q2 net income up 18 pct Country's biggest privately owned bank sees marked climb in revenues, seemingly on higher yields on government debt
Egypt's Commercial International Bank reported an 18 per cent increase in second-quarter net income on Tuesday, above the expectations of analysts who say the country's lenders are benefiting from soaring yields on government debt. Net profit at the country's biggest privately owned bank by assets was LE523 million($86.17 million), above the LE443 million it reported for the same period a year earlier and an analyst consensus forecast of LE505 million. Egypt's business sector has been struggling to recover from the disruption that followed President Hosni Mubarak's overthrow last year. Banks such as CIB kept their bottom line growing thanks partly to record-high interest rates paid by the state this year for its short-term borrowing. Consolidated revenues at CIB grew 23 per cent to LE1.23 billion, above the average forecast of LE1.09 billion in the Reuters poll of analysts. State borrowing costs have soared as foreign investors exited the local treasury market, tax receipts suffered from a weak economy and the government boosted spending to meet popular demands for better living standards after Mubarak's overthrow. "We already saw other banks reporting top-line growth on the higher yields from treasury bills," Beltone Financial Sara Boutros said earlier on Tuesday ahead of CIB's results. She said banks' retail loan books have also been growing, partially compensating for the decline in corporate lending. CIB's gross loans grew 9.6 per cent to LE42.83 billion at the end of the quarter from a year earlier. Net interest income was LE1.80 billion for the first half, up 43 per cent from a year earlier. CIB said higher loan loss provisions meant they now covered 134.8 per cent of non-performing loans, up from 120.6 per cent at the end of 2011. "Even with the higher cost of risk resulting from Egypt's prolonged economic recovery, CIB is well on course to achieving outstanding full-year results," the bank said in its statement. CIB shares have gained 52 per cent this year, tracking the wider market higher on optimism that the worst of the economic turmoil sparked by Mubarak's overthrow may be over. Much of the gain came since late June when a new president was propelled in office with the strongest popular mandate in the country's history.
