11 November 2021

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COMMERCIAL INTERNATIONAL BANK ("CIB") REPORTS

THIRD-QUARTER 2021 CONSOLIDATED REVENUE OF EGP 7.14 BILLION AND NET INCOME OF EGP 3.81 BILLION, OR EGP 1.71 PER SHARE, UP 62% FROM THIRD-QUARTER 2020

·    Third-Quarter 2021 Consolidated Financial Results

o  Net income of EGP 3.81 billion, up 62% year-on-year (YoY)

o  Revenues of EGP 7.14 billion, up 7% YoY

o  Return on average equity of 23.7%

o  Return on average assets of 3.17%

o  Efficiency ratio of 21.4%

o  Net interest margin (NIM)[1] of 5.70%

·    Nine-Month 2021 Consolidated Financial Results

o  Net income of EGP 9.88 billion, up 34% YoY

o  Revenues of EGP 19.7 billion, up 2% YoY

o  Return on average equity of 21.0%

o  Return on average assets of 2.86%

o  Efficiency ratio of 22.2%

o  Net interest margin (NIM)¹ of 5.67%

·    Resilient Balance Sheet

o  Total tier capital recorded EGP 71.0 billion, or 32.1% of risk-weighted assets

o  CBE local currency liquidity ratio of 63.8%, foreign currency liquidity ratio of 69.3% (comfortably above CBE requirements of 20% and 25%, respectively)

o  CIB remains well above the 100% requirement in the Basel III NSFR and LCR ratios

o  High quality of funding, with customer deposits comprising 95% of total liabilities

o  Non-performing loans coverage ratio of 206%

·    Supporting our Economy

o  Funding to businesses and individuals grew by 15% over nine-month 2021 to record EGP 157 billion, with a loan market share of 5.13%^[2].

o  Deposits grew by 19% over nine-month 2021 to record EGP 403 billion, with a deposit market share of 6.63%².

o  Loan-to-Deposit Ratio recorded 39.0% by end of nine-month 2021.

o  In third-quarter 2021, CIB's operations generated EGP 1.78 billion in corporate, payroll, and other taxes.

·    Committed to our Community

o  CIB Foundation subsidized "Children Cancer Hospital 57357" to establish digital pathology lab.

o  CIB Foundation funded "Cairo University Hospitals" with the final installment for purchasing 128-Slices-CT Scanner.

o  CIB Foundation financed "The Egyptian Naval Forces New Children's Hospital in Alexandria" with the final installment to purchase the medical equipment and furniture needed for the Hospital outfitting.

o  CIB Foundation supported "Ibrahim A. Badran Foundation" with the medical convoys that provide examinations for children.

o  CIB Foundation sponsored "Raie Masr Foundation" with the final installment to outfit and operate 2 mobile clinics.

·    Awards & Rankings

o  Global Finance: Best Consumer Digital Bank 2021

o  Global Finance: Best Institutional Bank 2021

o  Global Finance: Best Treasury and Cash Management Providers in Egypt

o  Global Finance: Best Trade Finance Provider in Egypt

o  Global Finance: Best Bank in Egypt

o  Global Finance: Financial Leadership in Sustaining Communities in the Middle East

o  The Digital Banker: Best Financial Chain Initiative in Egypt

o  The Digital Banker: Best Supplier Financing Initiative

o  The Digital Banker: Best Bank for Cash Management

o  The Digital Banker: Best Bank for Payment Services

o  The Digital Banker: Best Transaction Banking

o  African Banker: Sustainable Bank of the Year

o  Euromoney: Best Bank in Egypt

o  The Banker: Best Digital Bank in Africa

o  Asiamoney: Best Domestic Bank in Egypt

o  MEED: Best CSR Initiative in Asia and Middle East

o  EMEA Finance: Most Innovative Bank in Pan-Africa

CAIRO - Commercial International Bank (EGX: COMI) today reported third-quarter 2021 consolidated net income of EGP 3.81 billion, or EGP 1.71 per share, up 62% from third-quarter 2020.

Management Commented: "CIB hit a new record in the third quarter of 2021, with remarkable bottom line growth compared to last year. This exceptional performance is driven by both balance sheet fundamentals and resilient solvency, alongside continued progression during the interim.

Balance sheet growth sustained its momentum, especially in local currency, with local currency deposits growing by 7% over the quarter and 28% over the year, mainly concentrated on CASA gathering, in accordance with the Management's strategic focus on growing funds at controlled costs. This, alongside maintaining the Bank's flexible balance sheet structure that is necessary to accommodate for interest rate volatilities, led to liquidity management optimization.

Likewise, loan growth continued its upward momentum, with local currency loans striking record growth of 26% compared to last year, hence boosting top line, backed by increase in core fees and commissions. As a matter of fact, record loan growth was achieved without posing pressure on the Bank's credit risk requirements, thanks to CIB's prudent risk management and healthy coverage, during 2020 and earlier, which paved the way for a significant slow-down in provision accumulations, in light of the gradual macroeconomic restoration. It remains noteworthy that this robust loan growth, coupled with moderated provisions, maintained CIB's prime market position in terms of coverage for both expected and unexpected losses.

As we near the end of 2021, Management remains positive about CIB's capability to sustain its leading market position, drawing largely on its unique coverage and its adaptable balance sheet structure, which would allow for stable navigation through unforeseen market dynamics."

THIRD-QUARTER 2021 FINANCIAL HIGHLIGHTS

REVENUES

Third-quarter 2021 standalone revenues were EGP 7.12 billion, up 6% from third-quarter 2020. Nine-month 2021 standalone revenues were EGP 19.7 billion, up 2% from nine-month 2020, wholly driven by non-interest income coming 3x higher YoY, partially pulled down by 4% decrease in net interest income.

NET INTEREST INCOME 

Nine-month 2021 standalone net interest income recorded EGP 18.1 billion, decreasing by 4% YoY, with Total NIM decreasing by 120 basis points (bp), due mainly to the maturities of exceptionally-high-yielding bonds previously purchased. Normalizing for the above-market-interest-rate-differential of the aforementioned bonds in nine-month 2020, net interest income grew by 12% YoY, generated at 5.67% Total NIM¹, down by 25bp YoY, with Local Currency NIM¹ recording 7.35%, down 48bp, and Foreign Currency NIM¹ recording 0.96%, down 39bp YoY.

NON-INTEREST INCOME

Nine-month 2021 non-interest income recorded EGP 1.60 billion, coming 3x higher YoY. Upon adding back contingent provision charged, which is normally deducted from Non-Interest Income as part of Other Operating Expenses, recording EGP 211 million for nine-month 2021 and EGP 1.02 billion for nine-month 2020, standalone non-interest income grew by 19% YoY. Trade service fees were EGP 586 million, growing by 14% YoY, with outstanding balance of EGP 92.3 billion[3].

OPERATING EXPENSE

Nine-month 2021 standalone operating expense was EGP 4.38 billion, up 5% YoY. Cost-to-income[4] reported 22.0%, 145bp higher YoY, while remaining comfortably below the desirable level of 30%. Normalized for the aforementioned 2020 bond yield-highs, cost-to-income came 158bp lower YoY.

LOANS

Gross loan portfolio recorded EGP 157 billion, growing by 15% or EGP 20.7 billion Year-to-Date (YtD). Growth was driven wholly by local currency loans, which grew by 24% or EGP 21.6 billion, sufficiently offsetting foreign currency net loan repayments of USD 52.9 million or 2%. CIB's loan market share reached 5.13% as of August 2021.

DEPOSITS

Deposits recorded EGP 403 billion, growing by 19% or EGP 63.0 billion YtD. Growth was driven mainly by local currency deposits, growing by 23% or EGP 57.0 billion, besides foreign currency deposits, adding 7% or USD 387 million. CIB's deposit market share recorded 6.63% as of August 2021, maintaining the highest deposit market share among all private-sector banks.

ASSET QUALITY

CIB maintained its resilient asset quality. Standalone non-performing loans represented 5.43% of the gross loan portfolio, covered 206% by the Bank's EGP 17.6 billion loan loss provision balance. Nine-month 2021 loan loss provision expense recorded EGP 1.33 billion, 66% lower YoY.

CAPITAL AND LIQUIDITY

Total tier capital recorded EGP 71.0 billion, or 32.1% of risk-weighted assets as of September 2021. Tier I capital reached EGP 64.1 billion, or 90% 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 local currency liquidity ratio remained well above the regulator's 20% requirement, recording 63.8% as of September 2021, while CBE foreign currency liquidity ratio reached 69.3%, above the threshold of 25%. NSFR was 230% for local currency and 165% for foreign currency, and LCR was 1039% for local currency and 296% for foreign currency, comfortably above the 100% Basel III requirement.

KEY METRICS AND BUSINESS UPDATES^[5]

·    #1 private-sector bank in Egypt in terms of revenues, net income, deposits, and total assets

INSTITUTIONAL BANKING

·    End-of-period gross loans were EGP 116.6 billion, 17% higher YtD, solely on 32% growth in local currency loans.

·    End-of-period deposits were EGP 146.2 billion, 31% higher YtD, on 36% growth in local currency deposits and 16% growth in foreign currency deposits.

·    Gross outstanding contingent business reached EGP 95.6 billion, 11% higher YtD.

BUSINESS BANKING

·    End-of-period gross loans were EGP 2.5 billion, 48% higher YtD, solely in local currency.

·    End-of-period deposits were EGP 38.8 billion, 31% higher YtD, mostly on local currency deposit growth of 34%, besides foreign currency deposit growth of 20%.

·    Gross outstanding contingent business reached EGP 2.5 billion, 35% higher YtD.

RETAIL INDIVIDUALS BANKING

·    End-of-period gross loans were EGP 38.0 billion, 8% higher YtD, wholly on 10% growth in local currency loans.

·    End-of-period deposits were EGP 218.1 billion, 10% higher YtD, driven by local currency deposit growth of 13%.

·    CIB continued to expand its network to reach a total of 187 branches and 28 units across Egypt, supported by a network of 1,284 ATMs.