The Commercial International Bank (CIB) reported on Monday a consolidated net income of EGP 3.51bn — or EGP 1.58 per share — in the second quarter (2Q) of 2022 — up by 9% from 2Q 2021. "The CIB concluded the first half (1H) of 2022 with remarkable performance, drawing on a resilient Egyptian economy that was able to control inflationary pressures and pave the way for encouraging local consumption and a recovery in investment despite a much fluid global macroeconomic environment," the CIB's management commented. Throughout 1H 2022, the CIB recorded top- and bottom-line growth of 16% and 28%, respectively, y-o-y. On the lending side, the CIB managed to grow its local currency loan book by 20% or EGP 23bn over 1H 2022, with around 60% of this amount booked in 2Q 2022, signalling a gradual pickup in short-term working capital loan demand following a period of justified slow borrowing appetite. Catering to trade finance activities, the bank was well-positioned to avail sufficient foreign currency, assisted in this by the flexible balance sheet structure its management has been building over the years and proactive treasury management, which consequently allowed for efficient allocation of funds in light of interest rate and foreign exchange dynamics. Moreover, the CIB managed to preserve its margins at 5.79% despite the competitive environment, a further testament to the management's focus on safeguarding the returns of both current and future shareholders. The CIB also continued its deposit gathering momentum, which came in stronger in 2Q 2022, recording a healthy 11% growth y-o-y with a healthy share of current and saving accounts (CASA) amounting to 56% of total deposits as per the bank's funding strategy. Furthermore, the bank's coverage levels for both expected and unexpected losses remain reassuring, with loan loss provisions covering 10% of the bank's gross loan portfolio and with a capital adequacy ratio (CAR) resting comfortably at 29%. This further affirms the bank's healthy coverage and prudent risk management maintained over the years. The CIB's 2Q 2022 standalone revenues were EGP 7.03bn, up by 11% from 2Q 2021. Moreover, its 1H 2022 standalone revenues recorded EGP 14.7 billion, up 16% from 1H 2021, mostly driven by a 17% increase in net interest income coupled with a 6% increase in non-interest income. Additionally, 1H 2022's standalone net interest income recorded EGP 13.7bn, increasing by 17% y-o-y, generated at 5.79% total NIM1, increasing by 14 basis points (bp) y-o-y, with foreign currency NIM1 recording 1.43%, coming 54 bp higher y-o-y, and local currency NIM1 recording 7.41%, coming in flat y-o-y. It also recorded a non-interest income of EGP 968m, increasing by 6% y-o-y. Upon adding back other provisions charged, which is normally deducted from non-interest income as part of other operating expenses, recording EGP 1.24bn in 1H 2022 and EGP 367m in 1H 2021. Meanwhile, standalone non-interest income grew by 72% y-o-y, and trade service fees were EGP 470m, growing by 20% y-o-y with an outstanding balance of EGP 112bn. Furthermore, 1H 2022's standalone operating expense recorded EGP 3.23bn — up by 11% y-o-y. The bank also recorded a cost-to-income of 20.3%, 220bp lower y-o-y, remaining comfortably below the desirable level of 30%. The gross loan portfolio recorded EGP 191bn, growing by 17% year-to-date (YtD), with a real net growth of 11% of the EGP devaluation's impact, which added EGP 9.6bn to the EGP equivalent balance. Growth was driven wholly by local currency loans, growing by 20% or EGP 23.5bn, sufficiently counterbalancing net foreign currency loan repayments by 9% or $265m. The CIB's loan market share reached 5.19% as of March 2022. Additionally, deposits recorded EGP 428bn, growing by 5% YtD, with real growth of 1% net of the EGP devaluation impact, which added EGP 18.5bn to the EGP equivalent balance. Growth was driven wholly by foreign currency deposits adding 4% or $249m, covering net local currency deposit outflows by 1% or EGP 1.74bn. The CIB's deposit market share recorded 6.13% as of March 2022, maintaining the highest deposit market share among all private-sector banks. The CIB also maintained its resilient asset quality. Standalone non-performing loans represented 4.84% of the gross loan portfolio and are 209% covered by the bank's EGP 19.3bn loan loss provision balance. Furthermore, 1H 2022's loan loss provision expense recorded EGP 14.4m, compared to a loan loss provision expense of EGP 1.02bn in 1H 2021. Total tier capital also recorded EGP 73.6bn, or 28.8% of risk-weighted assets as of June 2022. Tier I capital reached EGP 64.7bn, or 88% of total tier capital. Additionally, the CIB maintained its comfortable liquidity position above the Central Bank of Egypt's (CBE) requirements and Basel III guidelines in both local currency and foreign currency. The CBE local currency liquidity ratio remained well above the regulator's 20% requirement, recording 62.8% as of June 2022, while its foreign currency liquidity ratio reached 66.2% — above the threshold of 25%. The NSFR was 223% for local currency and 200% for foreign currency, and LCR was 857% for local currency and 292% for foreign currency — comfortably above the 100% Basel III requirement.
