Abu Dhabi-backed Egyptian bank doubles profits

Reuters/Mohamed Abd El Ghany

• Net income at CIB hits $253m
• Revenue up 82%
• Non-interest income triples

Commercial International Bank, the Egyptian lender backed by Abu Dhabi, has doubled its consolidated net profits for the first quarter of this year, compared with the same period in 2023.

In an earnings release published on Sunday, CIB posted a net income of EGP11.9 billion ($253 million) at the start of this year, up from EGP6 billion ($194.5 million according to the old exchange rate of EGP31 to the dollar) in Q1 2023.

Revenues for the quarter rose 82 percent over 2023 to reach EGP21.8 billion.

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The bank said it was able to increase its profits over a challenging 12 months thanks to its “flexible balance sheet structure and proactive treasury management”.

CIB is 18 percent owned by a subsidiary of the Emirati sovereign wealth fund ADQ. It grew its local currency deposit base by 26 percent and its foreign currency deposit base by 5 percent over the past year.

The growth in profits was led by the bank’s net interest income, which surged 73 percent year on year to EGP18.7 billion, and was up 24 percent compared with the last quarter of 2023.

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However, CIB’s non-interest income, which is primarily derived from deposit and transaction fees, almost trebled compared with Q4 2023, having remained low for more than a year.

In a sign of foreign currency flowing back into the formal banking sector, non-interest income reached EGP3 billion, against EGP1.2 billion at the end of last year.

In March the Central Bank of Egypt decided to devalue the Egyptian pound against the dollar, closing a widening gap between the official currency exchange and a black market that was attracting an increasingly large proportion of foreign currency. 

Egypt’s state statistics agency Capmas also announced on Sunday that annual urban inflation cooled slightly to 32.5 percent in April, down from the 33.3 percent recorded for March.

The drop was driven by a slowdown of price increases on food and beverages. Prices were around 40 percent higher in April 2024 over April 2023, compared with a year-on-year increase of 45 percent in March.

Despite fears that the currency devaluation would fuel yet further inflation, the recent readings suggest what many had argued: that increases in the cost of many goods in Egyptian pounds had already been priced in via the black market.

Speaking in Washington last month Egypt’s finance minister Mohamed Maait said that tackling inflation was the government’s top priority.