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|08 November, 2018

Egypt's CIB share price rises on the back of higher Q3 earnings

Commercial International Bank Egypt reported a 23.9 percent year-on-year rise in Q3 earnings, beating estimates

Egypt's CIB share price rises on the back of higher Q3 earnings

Shares in Commercial International Bank Egypt (CIB) rose during Thursday’s trading as the bank reported a 23.9 percent year-on-year increase in third quarter (Q3) net profit for 2018, beating analysts’ forecasts.

Q3 2018 consolidated net profit attributable to shareholders amounted to 2.59 billion Egyptian pounds ($144.6 million) compared to 2.09 billion Egyptian pounds last year. EFG Hermes had forecast CIB would post a net profit of 2.381 billion Egyptian pounds.

Elena Sanchez, MENA banks analyst at EFG Hermes told Zawya by email that the bank reported “a good set of results”.

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“The earnings beat was driven by higher than expected net interest income, which increased 53 percent year-on-year and 19 percent quarter-on-quarter,” Sanchez said.

Q3 2018 consolidated net interest income amounted to 5.46 billion Egyptian pounds versus 3.57 billion Egyptian pounds last year. Q2 2018 net interest income amounted to 4.59 billion Egyptian pounds.

“Similarly to Q2 2018, net interest income in Q3 2018 included a one-off of EGP 1.06 billion (one-offs were EGP 760 million in Q2 2018), as a result of a transfer from the unearned interest account to interest income. The same amount was booked as a provision and hence it had no impact on CIB’s Q3 2018 bottom line.”

EFG’s Sanchez also added that if we exclude one-offs, net interest income growth would have been still strong, up 23 percent year-on-year (15 percent quarter-on-quarter) and would have also been better than expected (14 percent ahead of EFG Hermes’ estimate).

The bank’s stock price rose 2.02 percent on Thursday, helping Egypt’s blue chip index finish 0.86 percent higher.

The bank has added 5.96 percent so far this year, largely outperforming Egypt’s blue chip index EGX30 which has dropped 8.57 percent since the start of 2018.

According to data from Eikon, three analysts rated CIB’s stock as “Strong Buy”, while four analysts rated the stock as “Buy” and four analyst rated the stock as “Hold”.

Late in September, the bank’s chief digital officer Mohamed Farag told Zawya on the sidelines of an event in Dubai that CIB is pressing ahead with plans to create a digital bank. (Read more).

Elsewhere in the region, Saudi Arabia’s index retreated 0.63 percent, Dubai’s index dropped 0.12 percent on Thursday, Abu Dhabi’s index edged closed 0.25 percent higher, Qatar’s index gained 1.13 percent, Oman’s index added 0.98 percent, Bahrain’s index edged down 0.02 percent and Kuwait’s index edged 0.03 percent lower.

(Reporting by Gerard Aoun; Editing by Shane McGinley)

(gerard.aoun@refinitiv.com)


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