Business News, Daily News Egypt's parent company, has revealed the results of its annual index for Bank of the Year 2020 in Egypt, awarding the Commercial International Bank – Egypt (CIB) top spot. The bank has gained the first rank due to its balanced performance in terms of profitability, banking safety, and expansion especially in an environment characterised by pressures resulting from the reduction of interest rates. This comes against the backdrop of easing monetary policy with the decline in inflation during the past year. The Business News Composite Index consists of four main indicators that address safety standards, rapid growth, customer satisfaction, and social responsibility. These four indicators are, in turn, based on a set of 16 sub-indicators. The CIB scored the most points across the four indicators, outperforming other banks operating in Egypt that were able to lead one or more of these indicators. The bank came in second place on the main customer satisfaction index, also coming in second place on the main efficiency index. It benefited from having the lowest cost rate compared to income in the banking sector at 21.6%, and the second-highest ratio of tier 1 capital to risk-weighted assets. This is the highest ratio among the 10 largest banks in Egypt, at a rate of 23.6%, with CIB able to expand its market share last year whilst other banks' shrunk. CIB was also the second biggest spending bank on IT systems and technological capabilities. Credit Agricole topped the Business News Index for most efficient banks, which measures the balance between performance integrity and profitability. This followed on from its recording the best return on average equity (ROAE) across all 24 banks measured by the index. It reported the second-best return on average assets (ROAA) after the Housing and Development Bank (HDB), and the second in terms of the best interest margin. These come in addition to an adequacy ratio of 15.87%, and one of the best non-performing loans (NPL) rates at 2.9%. Credit Agricole's cost of income rate was reported at less than 30%. QNB Alahli came in third place on the most efficient index, as a result of its strong lending performance. The bank reported the highest rate of loans to deposits (LTD) in the banking sector at 74%, while the average LTD stands at about 42%. This year's index saw a surprise for the fastest growing bank, with Banque Misr topping the list for its performance last year. It benefited from the huge growth in its income off the back of interest, after stopping its high-return certificates which it had borne, along with the National Bank of Egypt (NBE), between 2016 and 2018. The step to put an end to the high-return certificates was taken before the beginning of its last fiscal year. Banque Misr scored an income growth of 190%, outperforming the NBE that scored 137%. This strong growth in income was reflected on the bank's profitability, which doubled to EGP 8.6bn, with a growth rate of 111.7%. This figure reflects the second-highest growth rate of profits in the market, after saib bank. Banque Misr also registered the second-highest growth rate of net operating income after the NBE, reporting 54.2 %. The Industrial Development Bank (IDB) came in second place, reporting the highest growth in assets by 27% and market share at 31%. The Abu Dhabi Islamic Bank ranked third. Moreover, the year 2019 saw an increase in the number of banks whose financial positions shrank, with seven out of 29 banks on the growth index reporting a decline in their finances. This compared to only three out of 30 banks in 2018. For the second year in a row, Banque Misr topped the Business News index of social responsibility in the banking sector, after spending 8.8% of its profits during the past year in supporting local communities. It has also invested in plans to develop unsafe areas, as well as in the education and health sectors, alongside other necessary community activities. The NBE came in second place, with a rate of 7.5%. In the Business News Index for customer satisfaction in the banking sector, the NBE has continued to dominate the index since its launch, and despite the competition from CIB. The NBE reported the largest number of channels of communication with customers along with Banque Misr and the United Bank. CIB ranked second on this index, slightly ahead of Union National Bank, which allocated the largest portion of investment spending on technology in the sector. With the exception of the profitability boom in the two major government banks, the NBE and Banque Misr, the performance of banks in general during the past year came free of big developments. The past year witnessed a noticeable improvement in the tier 1 capital adequacy as a result of the measures taken by banks by increasing their capitals and the structure of their loan portfolios. This comes in addition to the weak growth rates of loans during the past year that did not exceed 3.5% in the sector as a whole.
