Commercial International Bank (CIB) reported impressive financial results for the second quarter 2024. Consolidated net income reached EGP 15.6bn, representing a remarkable 96% increase compared to the same period in 2023. Earnings per share stood at EGP 4.59. Building on a strong start to the year, CIB delivered another record set of financial results in the second quarter of 2024, ending the first half of the year with all-time-high top and bottom lines of EGP 46.3bn and EGP 27.5bn, growing by 82% and 96%, respectively, over last year. This further reinstates that the previous quarter's financial performance primarily represents genuine growth rather than the result of currency depreciation and inflation. Even though the external landscape came partially conducive to the financial results for CIB, as it certainly did across the Banking Sector and as is typical in inflationary environments, Management remains keen on continuously operating a health-check engine that portrays and places a scrutinized eye on genuine growth. In accordance, it is worth highlighting that as steep as macroeconomic developments have been, with special regard to year-round 900 basis-point policy-rate hikes and the 55% currency depreciation compared to last year, genuine growth contributed more than half of the year-on-year top-line growth. Moreover, and specifically for international investors, year-on-year bottom line growth for CIB in US Dollar terms recorded 26%. With the highly competitive and increasing interest rate environment, CIB was able to achieve the aforementioned results guided by Management's focus on sustaining the Bank's balance sheet growth momentum while simultaneously controlling the cost of deposits. Notably, CIB grew its local currency deposit base by 15% or EGP 65.9bn, and its foreign currency deposit base by 6% or $414m, over last year, yet at highly rationalised costs, aided by maintaining a share of Current and Saving Accounts (CASA) of 54% to total deposits. This, coupled with capitalizing on the Bank's resilient balance sheet structure and proactive treasury management, which together allowed for the efficient allocation of funds in light of interest rate and foreign exchange dynamics, translated into a record Net Interest Margin (NIM) of 9.52%, expanding by 222 basis points over last year. Additionally, lending growth for CIB came robust, with the Bank's gross loan portfolio showing a real growth rate of 12% over last year, and 14% when accounting for Securitization Deals worth EGP 29.1bn, preserving its market position as the largest Lender-and-Securitizer among Private-Sector Banks. This fed into net fee and commission income growth of 33% over last year, mirroring Management's focus on a sustainable, rather than transient, stream of non-interest income. Positively, foreign currency liquidity for CIB strengthened over the past quarter, with the Foreign Currency CBE Liquidity Ratio coming up from 46.3% in the last quarter to a record 68.3% this quarter, in line with the improvement witnessed on the Egyptian Banking Sector level. Business growth took place without compromising the underlying healthy asset quality and top-notch coverage for expected losses for CIB, as reflected in normalized provision accumulations compared to last quarter, in light of relatively stabilizing economic conditions. As such, Non-Performing Loans (NPLs) represented 4.13% of gross loans, down from 5.07% last year, and loan loss provision balance recorded EGP 42.6bn, covering 12.8% of the Bank's gross loan Portfolio, and 18.4% of the unsecured portion therein. Return on Average Equity (ROAE) surpassed 50%, recording 52.5%, which comes while yet remaining well-capitalized, as displayed in a healthy Capital Adequacy Ratio (CAR) of 26.2%, further reiterating the uncompromised focus of the Bank's Management on preserving the interests of both current and future shareholders. Looking forward, and in light of relatively stabilizing economic conditions, Management remains cautiously optimistic with confidence in the agility of the Egyptian banking sector to sail through current economic developments, and in the ability of CIB to safeguard its market-leading financial performance, while maintaining its robust coverage and healthy solvency intact. Second-quarter 2024 standalone revenues were EGP 24.4bn, up 81% from second-quarter 2023. First-half 2024 standalone revenues were EGP 46.2bn, up 81% from first-half 2023, on the back of a 74% increase in net interest income, coupled with a 3x increase in non-interest income. The first-half 2024 standalone net interest income recorded EGP 41.4bn, increasing by 74% YoY, generated at 9.52% Total NIM1, which increased by 222 basis points (bp) YoY, with Local Currency NIM1 recording 12.5%, coming 334bp higher YoY, and Foreign Currency NIM1 recording 3.85%, coming 6bp higher YoY. The first-half 2024 standalone non-interest income recorded EGP 4.75bn, coming 3x higher YoY. Trade service fees recorded EGP 1.65bn, growing by 40% YoY, with an outstanding balance of EGP 266bn. The first-half 2024 standalone operating expense recorded EGP 5.57bn, up 34% YoY. Cost-to-income4 reported 12.0%, coming to 364bp lower YoY, and remaining comfortably below the desirable level of 30%. The gross loan portfolio recorded EGP 331bn, growing by 24% over the first half of 2024, with real growth of 8% net of the EGP devaluation impact, which added EGP 41.1bn to the EGP equivalent balance. Growth was driven wholly by local currency loans, increasing by 14% or EGP 26.4bn, sufficiently counterbalancing net foreign currency loan repayments of 2% or $51m. CIB's loan market share reached 4.68% as of February 2024. Deposits recorded EGP 858bn, growing by 27% over first-half 2024, with real growth of 8% net of the EGP devaluation impact, which added EGP 118bn to the EGP equivalent balance. Growth was driven by local currency deposits, increasing by 11% or EGP 49.3bn, together with foreign currency deposits adding 5% or $325m. CIB's deposit market share recorded 6.47% as of February 2024. Standalone non-performing loans represented 4.08% of the gross loan portfolio and were covered 314% by the Bank's EGP 42.4bn loan loss provision balance. The first-half 2024 impairment charge for credit losses recorded EGP 2.06bn compared to EGP 1.21bn in the first half of 2023. Total tier capital recorded EGP 142bn, or 26.2% of risk-weighted assets as of June 2024. Tier I capital reached EGP 117bn or 82% of total tier capital. CIB maintained its comfortable liquidity position above CBE requirements and Basel III guidelines in both local currency and foreign currency. CBE liquidity ratios remained well above the regulator's requirements, with the local currency liquidity ratio recording 36.8% in June 2024, compared to the regulator's threshold of 20%, and the foreign currency liquidity ratio reaching 68.3%, above the threshold of 25%. NSFR was 212% for local currency and 188% for foreign currency, and LCR was 1140% for local currency and 332% for foreign currency, comfortably above the 100% Basel III requirement.
