Commercial International Bank (CIB) Egypt Annual Report 2013

FY2013 Annual Report · Commercial International Bank (CIB) Egypt

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Annual Report 2013

Helping a Nation Realize its
True PoTenTial

AnnuAl RepoRt 2013

The Alexandria Stock Exchange,
established in 1883, served
as a hub of the city’s financial
community and has been an
engine of economic growth ever
since.

Contents

CIB: An IntroduCtIon
Our History
What We Do
A Snapshot Of Our Businesses
Key Financial Highlights
Key Facts
A Strategy that Delivers
Chairman’s Note
Board of Directors’ Report

2013 In revIew
Institutional Banking
Global Customer Relations
Consumer and Business Banking
COO Area
Risk Group
Compliance
Internal Audit

StrAtegIC SuBSIdIArIeS
CI Capital Holding
Egypt Factors
Commercial International Life
Insurance Company
CORPLEASE
Falcon Group

CorporAte governAnCe

exeCutIve mAnAgement

CommunIty development
CIB Foundation
Sustainability at CIB

fInAnCIAl StAtementS

02
02
03
04
05
06
08
10

22
30
32
38
44
52
53

56
58

59
59
60

72
76

AnnuAl RepoRt 2013

CIB: An IntRoDuCtIon

A master-planned city, Port Said
was—and is—home to beautifully
designed buildings and grand
promenades, lending an air of
respectability to the commercial
activity that allowed the city to
thrive.

ouR HiStoRy

WHAt We Do

A SNApSHot of ouR BuSiNeSSeS

CIB was established in 1975 as Chase National Bank, a joint
venture between Chase Manhattan Bank and National Bank
of Egypt (NBE). In 1987, Chase divested its ownership stake
due to a shift in international strategy, and the stake was ac-
quired by NBE, at which point the Bank adopted the name
Commercial International Bank.

Over time, NBE decreased its participation in CIB, which
eventually dropped to 19% in 2006, when a consortium led by
Ripplewood Holdings acquired NBE’s remaining stake. In July
2009, Actis, an emerging market private equity specialist, ac-
quired 50% of the stake held by the Ripplewood Consortium.
Five months later, in December 2009, Actis became the single
largest shareholder in CIB with a 9.09% stake after Ripplewood
sold its remaining share of 4.7% on the open market. The emer-
gence of Actis as the predominant shareholder marked a suc-
cessful transition in the Bank’s strategic partnership.

Commercial International Bank (CIB) is the leading private
sector bank in Egypt, offering a broad range of financial
products and services to its customers, which include en-
terprises of all sizes, institutions, households and high-net-
worth (HNW) individuals.

In addition to traditional asset and liability products, CIB of-
fers wealth management, securitization, direct investment and
treasury services, all delivered through client-centric teams.

The Bank also owns a number of subsidiaries, including CI
Capital (which offers asset management, investment bank-
ing, brokerage and research services), Commercial Interna-
tional Life Insurance Company, the Falcon Group, Egypt Fac-
tors, and CORPLEASE.

CIB strives to provide clients with superior financial so-
lutions to meet all of their financial needs. This enables the
Bank to maintain its leadership position in the market, while
providing a stimulating work environment for staff and gen-
erating outstanding value for shareholders.

Corporate Banking
Widely recognized as the preeminent corporate bank in
Egypt, CIB aspires to become one of the best banks in the
region, serving industry-leading corporate clients as well as
small and medium-sized businesses.

Debt Capital Markets
CIB’s global product knowledge, local expertise and capital re-
sources make the Bank an industry leader in project finance,
syndicated loans and structured finance in Egypt. CIB’s project
finance and syndicated loans teams provide large borrowers with
better market access and greater ease and speed of execution.

Global transactional Services (GtS)
The Global Transactional Services (GTS) Group serves as a
key group within CIB and oversees cash management, trade
and global securities services.

treasury and Capital Markets Services
CIB delivers world class service in the areas of cash and
liquidity management, capital markets, foreign exchange
and derivatives.

Direct Investment
CIB actively participates in select direct investment opportu-
nities in Egypt and across the region.

Consumer Banking
CIB recorded considerable growth in 2013 as it continued to
build a full-service, world-class consumer bank, as under-
scored by the ability to serve clients in a challenging environ-

ment last year. We offer a wide array of consumer banking
products, including:
• Personal Loans: Focusing on employees of our corpo-
rate banking clients and offering secured overdrafts and
trade products.

• Auto Loans: Positioned to actively support this growing

market in the coming years.

• Deposit Accounts: Offering a wide range of account types
to serve our clients’ deposit and savings needs, including
tailored accounts for minors, youth and senior citizens,
as well as certificates of deposit and care accounts. This is
in addition to our standard range of current, savings and
time deposit accounts.

• Residential Property Finance: Providing loans to fi-
nance home purchases, residential construction and re-
furbishment and finishing.

• Credit and Debit Cards: Offering a broad range of credit,

debit and prepaid cards.

Wealth Management
CIB offers a wide array of investment products and services
to the largest number of affluent clients in Egypt.

Investment Banking Services
Through CI Capital, CIB offers existing and prospective cli-
ents a full suite of investment banking products and services,
including investment banking, advisory and execution, asset
management, brokerage and equity research. CI Capital of-
fers both deep and broad market knowledge and expertise;
the firm is consistently ranked as a leading brokerage house
serving local and international clients in Egypt.

AnnuAl RepoRt 2013

CIB: An IntRoDuCtIon

Key fiNANciAl HigHligHtS

Key fActS

FY 13
Consoli-
dated

FY 12
Consoli-
dated

FY 11
Consoli-
dated

FY 10
Consoli-
dated

FY 13

FY 12

FY 11

FY 10

FY 09

FY 08

FY 07

FY 06

FY 05

Common Share
Information Per Share

Earning Per Share (EPS) *

Dividends (DPS)

Book Value (BV/No of Share)

Share Price (EGP)**

High

Low

Closing
Shares Outstanding

(millions)

Market Capitalization

(EGP millions)
Value Measures

Price to Earnings Multiple (P/E)
Dividend Yield

(based on closing share price)

Dividend Payout Ratio

Market Value to Book Value Ratio
Financial Results
(EGP millions)

Net Operating Income
Provision for Credit Losses -

Specific

Provision for Credit Losses -

General

Total Provisions

Non Interest Expense

Net Profits
Financial Measures

Cost : Income
Return on Average Common

Equity (ROAE)***

Net Interest Margin (NII/average

interest earning assets)

Return on Average Assets (ROAA)

Regular Workforce Headcount
Balance Sheet and Off Balance
Sheet Information (EGP millions)
Cash Resources and Securities

(Non Governmental)

Net Loans and Acceptances

Assets

Deposits

2.76

1.0

3.53

1.25

2.43

2.63

1.5

4.89

3.73

3.64

2.77

13.46

18.94

15.03

14.59

23.75

19.25

20.93

15.59

19.44

45.4

27.4

32.6

39.8

21.1

34.6

47.4

18.5

18.7

79.49

33.75

59.7

29.5

47.4

54.68

93.4

27.87

37.2

53.61

91.77

42.11

57.87

63.5

39.91

58.68

900.2

597.2

593.5

590.1

292.5

195

130

29,330

20,646 11,098 27,973 15,994 10,881 17,895 11,285

7,628

11.8

9.8

7.7

15.8

20.8

7.6

24.6

15.9

21.2

3.07% 3.62% 5.35% 2.11% 2.74% 2.69% 1.09% 1.73% 2.60%

34.4% 31.36% 33.90% 27.60% 24.60% 18.10% 15.80% 27.50% 21.30%

2.42

1.83

1.24

3.25

2.3

1.93

4.39

3.71

3.02

6,976

5,344

3,934

3,952

6,482

5,108

3,837

3,727

3,173

3,200

2,288

1,741

1,450

916

610

321

916

1,884

3,006

610

1,653

2,226

321

1,557

1,615

1,562

2,021

916

610

321

916

1,727

2,615

610

1,445

2,203

321

1,337

1,749

1,188

2,141

1,041

1,784

346

193

176

197

395

950

250

636

1,615

1,233

193

668

802

167

364

474

610

26.52% 30.93% 39.58% 39.52% 26.11% 28.29% 34.84% 31.87% 32.80% 29.69% 27.82% 38.38% 32.72%

26.46% 22.79% 18.69% 28.66% 22.33% 21.77% 20.96% 30.47% 31.18% 36.31% 37.95% 31.58% 29.30%

5.36% 4.74% 3.71% 3.62% 3.81% 3.54% 3.12% 3.06% 3.50%

2.89% 2.48% 2.01% 2.89% 2.51% 2.45% 2.18% 3.08% 2.94% 3.08% 2.90% 2.37% 2.09%

5,490

5,181

4,867

4,755

5,193

4,867

4,517

4,360

4,162

3,809

3,132

2,477

2,301

16,413 16,140

18,990

16,325 16,646

16,764 19,821 16,854 16,125 14,473 21,573 13,061 10,537

41,866 41,877

41,065

35,175 41,970

41,877 41,065 35,175 27,443 26,330 20,479 17,465 14,039

113,607 94,014

85,506

75,425 113,752

94,405 85,628 75,093 64,063 57,128 47,664 37,422 30,390

96,846 78,729

71,468

63,364 96,940

78,835 71,574 63,480 54,843 48,938 39,515 31,600 24,870

Common Shareholders Equity

11,960 10,822

8,712

8,567 12,115

11,311

8,921

8,609

6,946

5,631

4,081

3,040

2,527

Average Assets

Average Interest Earning Assets
Average Common Shareholders

Equity

Balance Sheet Quality Measures

Equity to Risk-Weighted Assets

Risk-Weighted Assets (EGP billions)

103,782 89,760

80,480

69,840 104,079

90,017 80,361 69,578 60,595 52,396 42,543 33,906 29,183

94,672 80,063

70,913

62,007 94,605

79,834 70,549 61,624 53,431 44,602 36,603 29,277 25,619

11,362

9,767

8,640

7,800 11,713

10,116

8,765

7,777

6,288

4,856

3,560

2,784

2,325

17.07% 16.50% 15.79% 17.63% 17.29% 17.30% 16.11% 17.71% 17.01% 15.19% 13.70% 14.14% 13.83%

12.46% 12.20% 12.53% 15.66% 12.46% 12.18% 12.53% 15.66% 15.28% 13.74% 10.17% 9.59% 9.78%
Tier 1 Capital Ratio
Adjusted Capital Adequacy Ratio**** 13.55% 13.59% 15.40% 16.92% 13.55% 13.59% 15.40% 16.92% 16.53% 14.99% 14.70% 13.60% 13.10%

*
**
***
****

Based on net profit available to distribution (after deducting staff profit share and board bonus)
Unadjusted to stock dividends
As per Basel II regulations before profit appropriation
2013 and 2012 as per Basel II regulations before profit appropriation

our

#1 Bank in terms of:

5,490

employees serve some
571,407 active customers

EGP

113.8bn

in total assets

90,725

internet banking subscribers

over

500

of Egypt’s largest corporations
bank with cib

ProfiTAbiliTy
achieving
EGP 3 billion in net
income

rEvENuE
among all Egyptian private
sector banks with EGP 6.98
billion in total revenues

NET worTh
among all
Egyptian private
sector banks

MArkET
cAPiTAlizATioN
in the Egyptian banking
sector

loAN ANd dEPoSiT
MArkET ShArE
among all Egyptian
private sector banks

AnnuAl RepoRt 2013

CIB: An IntRoDuCtIon

one of three key streets leading
out of Place de l’opera, beautiful
kamel Street served as a hub for
high-end shopping in khedivial
cairo.

A StRAtegy tHAt DeliveRS

CIB’s outstanding performance over the past three years
reveals that at CIB, our customers are our top priority.
Our continued success depends not only on our ability to
satisfy their evolving needs, but also to have them served
in prime time. CIB prides itself on its remarkable perfor-
mance in standing hand-in-hand with our clients during
these unstable times. Our unwavering commitment to our
clients is the basis on which we will continue to provide
our shareholders with consistent and high-quality returns.
We believe a key component of our success is our highly
skilled staff. CIB’s ability to offer our employees an attrac-
tive work environment, myriad career opportunities and
comprehensive training and feedback, allows us to attract
and retain the strongest banking professionals in Egypt. Our
employees reciprocate with dedication to our customers, and
the wider CIB community.

An outstanding track Record

our Vision
To be the leading and most trusted financial institution in Egypt,
admired for our people, strong core values and performance.

our Mission
To create outstanding stakeholder value by providing best-
in-class financial solutions to the individuals and enter-
prises that drive Egypt’s economy. Through our innovative
products, focus on superior customer service, development
of staff and commitment to our community, we will realize
our ambitions and pave the landscape of banking in Egypt
for years to come.

our objective
To grow and help others grow.

our Values
A number of core values embody the way in which CIB em-
ployees work together to deliver effective results for our cus-
tomers and community.

Integrity:
• Exemplify the highest standards of personal and professional

ethics in all aspects of our business.

• Be honest and open at all times.
• Stand up for one’s convictions and accept responsibility for

one’s own mistakes.

• Comply fully with the letter and spirit of the laws, rules and
practices that govern CIB’s business in Egypt and abroad.

• Say what we do and do what we say.

Client Focus:
• Our clients are at the center of our activities and their satis-

faction is our ultimate objective.

• Our success is dependent upon our ability to provide the
best products and services to our clients; we are committed
to helping our clients achieve their goals and be the best at
what they do.

Innovation:
• Since our inception as the first joint venture bank in Egypt,
CIB has been a pioneer in the financial services industry. We
believe innovation is a core competitive advantage and pro-
mote it accordingly.

• We strive to lead the Egyptian financial services industry to
a higher level of performance in serving the millions of Egyp-
tians who remain underserved or unbanked.

Hard Work:
• Discipline and perseverance govern our actions so as to
achieve outstanding results for our clients and outstanding
returns for our stakeholders.

• Seeking service excellence guides our commitment to

our clients.

• We work with our clients to reach their current goals while

anticipating and planning for their future objectives.

teamwork:
• We collaborate, listen and share information openly within

CIB and with our partners, clients and shareholders.

• Each one of us consistently represents CIB’s total corporate

image.

• There is only one CIB in the eyes of our clients.
• We value and respect one another’s cultural backgrounds

and unique perspectives.

Respect to the Individual:
• We respect the individual, whether an employee, a client, a
shareholder or a member of the communities in which we live
and operate.

• We treat one another with dignity and respect and take time

to answer questions and respond to concerns.

• We firmly believe each individual must feel free to make sug-

gestions and offer constructive criticism.

• CIB is a meritocracy, where all employees have equal op-
portunity for development and advancement based only
on their merits.

AnnuAl RepoRt 2013

CIB: An IntRoDuCtIon

cHAiRmAN’S
Note

A WoRD FRoM ouR CHAIRMAn

our democracy will be judged
not merely by the ease with which
citizens cast ballots, but by our
ability to help those same citizens
secure the means to earn a livable
wage that feeds their families
— knowing that they will be well-
educated and well cared for when
they become sick.

Although we all share an optimistic outlook for the future of
our nation, it would be naïve not to acknowledge the impact
a lack of focus had on our economy. Real GDP growth, while
stable at 2.1% year-on-year, was still below pre-2011 levels. Do-
mestic investment as a percentage of GDP has fallen, the Egyp-
tian pound depreciated a further 12% against the US dollar.

These are serious issues, and they command our attention
no less than the shape of our constitution. With the signifi-
cant heavy political lifting of this “founding phase” of the
new Egyptian republic now behind us, we need to shift our
attention to laying the foundation for an equally durable eco-
nomic vision that will withstand the test of both time and
shifting political priorities.

Our democracy will be judged not merely by the ease with
which citizens cast ballots, but by our ability to help those
same citizens secure the means to earn a livable wage that
feeds their families — knowing that they will be well-educat-
ed and well cared for when they become sick.

It is, I would argue, time that Egypt establishes a National
Economic Council that will create the economic DNA for this
nation, setting a strategy that will allow us to channel invest-
ment into the sectors where it will have the most impact. Ex-
amples are all around us, not least of which is the most re-
cent: The success of Dubai in winning the Expo 2020 on the
back of a clear economic development strategy.

Our nation is blessed with significant opportunities — op-
portunities that may only be captured if we are prepared.
The transformation of grants, loans and deposits from our
national allies in the Gulf into substantial stimulus spend-
ing was an outstanding first step, but further efforts must be
channeled into priorities identified by an economic blueprint.

No blueprint will cure all that which ails us — not as an
economy, and not as a nation. But as Martin Luther King Jr.
suggested a half-century ago, re-imagining our nation’s fu-
ture begins with a dream.

The power of a dream to transform an economy when there
is a clear blueprint is on display here in present-day Egypt:
Mohamed Said Pasha dared to dream more than 160 years
ago when, as Khedive, he granted Ferdinand de Lesseps the
first of two concessions for land that became the Suez Canal,
a mega-project that transformed not just our nation, but the
global economy. Subsequent generations of Egyptians have
certainly dared to dream, but no project to-date has had the
transformative impact of the Suez Canal. It revolutionized
not just our position in the modern global economy, but laid
the foundation for our trading patterns, banking system, in-
frastructure networks — even our pride as a vibrant nation.

Make no mistake: We are at an inflection point in history,
and our future lies not in a single Suez Canal, but in a multi-
plicity of national megaprojects with multiplier effects that
will not merely put our nation back on its feet economically,
but remind us of the amazing things Egyptians can accom-
plish when they put their minds to it.

Since January 2011, many experts — real and self-appoint-
ed — have appeared in public forums and on television, in

print and online, talking about the desperate need to rein-
vigorate the nation through a megaproject. A few have even
had specific suggestions, but not one has become a reality.
We have the knowledge base, we have the human and natural
resources, and we have the hunger to change. What we have
so far lacked is leadership, a catalyst for change.

We aspire to being part of that solution at CIB: Putting
capital in the hands of those who can grow the economy is
why we come to work each and every day, at all levels of the
bank. We may not be able to single-handedly lead change, but
we are closer to a wide cross-section of the economy than are
many, a fact that gives us a certain level of insight.

Based on that point of view — and on my decades of experi-
ence in the industry — I would suggest that we do not need
a single national-level mega-project. No Suez Canal or High
Dam would, by itself, have the scale necessary to move for-
ward an economy as large and diversified as Egypt’s. Instead,
I believe we need a Megaproject of Megaprojects: Multiple
large, impactful investments across a broad spectrum of in-
dustries that will drive us forward in energy, transportation,
healthcare, food, public infrastructure, information technol-
ogy. The list is as bounded only by our ability to dream.

This is why the era of the Suez Canal’s building and rise to
global importance underpins our annual report this year: It
was a pivotal project that catalyzed the building of our na-
tion’s modern infrastructure, banking and trade position —
and which continues to pay dividends to this day.

As we look to put capital to work across the economy, we
have taken a critical look not just at how we will weight our
effort, but also at where we can do better as an institution.
That is why we have continued since 2011 with our ambitious

plans for hiring, investing in critical infrastructure, opening
new branches, renewing our information technology systems
and, above all, training our people.

The fruit of this investment is clear in our 2013 perfor-
mance: Despite broad-based challenges to the economy and
three successive downgrades in credit ratings during the
first half of the year, we posted an outstanding operational
and financial performance with improvement across all key
metrics, from margins and spreads to average return on eq-
uity, return on average assets and cost-to-income, where our
ratio is now the lowest it has been in five years.

In the last year, we have begun implementing ambitious
programs to innovate across the board, from the product
side of the house to new training initiatives and, in particu-
lar, our first-ever Sustainable Development Department.
The latter, which falls directly under the umbrella of the
COO Area, is now advised by one of our prominent board
members. The department will help ensure CIB not only
minimizes its environmental footprint, but also makes a
meaningful contribution to the improvement of our nation’s
socio-economic interests.

While still in its infancy, we are convinced the Department
will have an outsized impact within the Bank — and on the
world around us. It’s another example of how CIB looks to
lead by example, starting a process that will change our DNA
just as we look forward to a National Economic Council es-
tablishing the economic DNA of this great nation.

Hisham ezz el-Arab
Chairman and Managing Director

AnnuAl RepoRt 2013

BoARD oF DIReCtoRS’ RepoRt

cairo railway Station: built in
1892 on the site of the original
station (est. 1856) connecting
cairo to Alexandria, the ramses
railway Station has long
served as a vital link in Egypt’s
transportation network.

BoARD of DiRectoRS’ RepoRt

Macroeconomic overview
The year 2013 has been quite eventful for Egypt. Our
country has made several strides towards a more stable
political landscape. The 30 of June Revolution resulted in
a change in direction to focus more on economic stabil-
ity and return to growth. Despite the general optimism
shared by many with regards to the country’s future out-
look, acknowledging the harsh realities of the state of the
country’s economy is paramount to moving forward.

Real GDP growth remained stable at its previous level
of 2.1%. Domestic investment as a percentage of GDP
dropped from 16% to 14% and unemployment recorded a
high of 13.4%. The government’s budget deficit increased
to 13.7%. Public debt reached 83% of GDP in June 2013,

while sovereign yields also peaked in June 2013. The
Egyptian pound depreciated 12% against the dollar dur-
ing the year and annual inf lation1 picked up to 11.7%.

The Egyptian economy, and accordingly all Egyptian
banks, had three successive downgrades in credit ratings
during the first half of the year followed by an upgrade in
the second half of 2013. Such downgrades inevitably re-
sulted in a drop in the creditworthiness of the country in
the eyes of the outside world and subsequently negatively
impacted the institutions operating in Egypt.

The optimism shared by many for the future of the
Egyptian economy is not unwarranted. The budget def-
icit is expected to drop to 11% in 2014, while sovereign
yields had witnessed a rapid decline during the second

half of the year. Moreover, the continued f low of aid and
investments into the country should further avail Egypt
of its foreign currency supply. The CBE’s international
reserves recovered to USD 17 billion by the end of 2013
also as a result of the aid. Furthermore, CDS on the gov-
ernment’s Eurobonds declined to reach 579 bp since June
2013 on greater clarity of the country’s future direction
and roadmap.

The banking system remained resilient in the face of
unfavorable economic conditions. Average loan-to-depos-
it ratio fell from 48% in 2012 to 44% in 2013. As demand for
credit remains muted, banks continued to allocate large
portions of their excess liquidity to sovereign portfolio.
Total market loans grew by 6% YTD October 2013, while

deposits increased by 14%. The rate of deposit dollariza-
tion2 remained steady at 24% during the year. In 2013, the
CBE undertook four changes in the corridor rates during
the year: 50bp increase in Q1 followed by two successive
cuts in Q3 of 50bp each and a further 50bp cut in Q4. This
represents a net decrease of 100bp in corridor rates from
2012 mainly aiming at accelerating the pace of growth in
investment and credit to the private sector.

The interim government implemented a EGP 30 billion
stimulus spending package in August 2013 aimed at in-
frastructure projects, with another planned for early 2014
that will boost the economy in the short term. Such initia-
tives are the driving force behind the optimism among the
vast majority of Egyptians today.

1. As measured by Consumer Price Index (Published by CBE)

2. The ratio of foreign currency deposits to total deposits with the banking system excluding deposits held at CBE.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 11

BoARD oF DIReCtoRS’ RepoRt

2013 Financial position
CIB produced yet another record financial performance in
2013. Consolidated net income for full year 2013 was EGP 3
billion, 35% over 2012. Standalone net income reached EGP
2.6 billion, 19% over 2012. Standalone revenues grew 27% over
2012 to reach EGP 6.8 billion.

CIB recorded net interest income of EGP 5.1 billion, 29%
over 2012. Non-interest income was key to 2013’s perfor-
mance, with on-going foreign currency illiquidity translating
into record trade finance and dealing room fees. Non-inter-
est income achieved the highest annual growth in the last 4
years reaching EGP 1.4 billion. Net fees and commission in-
come grew 42% year-on-year to reach EGP 1.2 billion.

Despite a declining rate environment, CIB improved mar-
gins, spreads and performance across all indicators. Consoli-
dated ROAE was 26.5% (before appropriation) up from 22.9%
in 2012. Consolidated ROAA recorded 2.9% up from 2.5% in
2012, Net interest margin increased by 62bp to reach 5.36% as
management increased minimum lending rates to better re-
flect risk. CIB improved its efficiency, cost-to-income record-
ed 26% compared to 28% in 2012; the lowest cost to income
ratio in the last 5 years.

Gross loans grew by 3%, adding EGP 1.2 billion during
the year to reach EGP 45.6 billion, on slower than expected
economic recovery. CIB continued its focus on maintaining
margins and had the highest increase in loan yields of 94bp
among its peers3. CIB market share reached 8.27% in October
2013 compared to 8.58% in December 2012 as management
focused on efficiency and loan portfolio quality.

CIB grew deposits strongly during the year, adding EGP
18.1 billion to reach EGP 96.9 billion (23% increase over 2012).
The Bank had the highest growth in deposits among its peers,
driven by growth in local currency time deposits, demand
deposits and savings accounts. Deposit market share grew
40bp during 2013 to reach 7.63% in October 2013.

2013 saw the introduction and management approval of
Risk-Adjusted Return on Capital (RAROC)4 as a standardized
performance measuring tool. RAROC provides a more repre-
sentative return on the true cost of capital to the bank based
on the amount of capital allocated, helping to maximize re-
turn on capital and ensure best capital allocation.

CIB maintained its strong and resilient balance sheet and
capital base, reflected in a comfortable capital adequacy level5
(13.55%) and CBE liquidity ratios; these place the bank in a flex-
ible position to deal with an uncertain economic environment.
CIB maintained its lead over main competitors, achieving
the highest year-on-year growth in revenues on strong fee
and commissions, deposit and balance sheet growth. Over-
all, CIB had a strong financial performance exceeding P&L
targets in 2013. 2014 is expected to mark the beginning of a
return to core business growth as the country stabilises.

prudent Risk Management and preservation of
Asset Quality
Understanding and assessing risk is a trait known to CIB’s
culture which has helped us navigate through several storms

3. Comparison based on September 2013 data
4. RAROC is calculated as the net contribution divided by the capital charge
5. CAR based on Basel II as modified by CBE before profit appropriation

in the past. Management’s view is that a provision is only a
provision when it is not needed, hence, f a provision is need-
ed then it is no longer a provision, but rather a write-off. As
such and in light of the present state of the economy and the
impact that the political landscape and disturbances have
had over the last three years on several industries, manage-
ment found it prudent to take the necessary measures that
would adequately reflect prevailing economic conditions by
taking the necessary downgrades on some sectors. To that
end, CIB took loan loss provision expense of EGP 915 million
to hedge against any event of a prolonged recovery process
in these sectors. As the bank’s loan portfolio continues to be
dominated by top tier clients with low leverage, a marginal
increase of 33bp in NPL’s brought the ratio up to reach 3.96%.
The loan loss provision balance reached EGP 2,864 million,
covering non-performing loans by an assuring 1.6x at the end
of 2013. CIB’s best in sector asset quality and its strong corpo-
rate loan book is a testament to the success of management’s
prudent approach to lending.

Institutional Banking
Institutional Banking net income increased by 89% over last
year to reach EGP 2.2 billion, mainly on higher net interest
income, foreign exchange gains and strong trade services
performance and controlled expense growth. Institutional
banking contributed 69% to CIB’s gross profitability. Cor-
porate Banking management focused on efficiency in 2013,
improving net interest margin on an increase in minimum
lending rates that raised loan yields by 38bp. Expense growth
was held at 6%.

Consumer Banking
Consumer Banking net income rose 11% over last year to
reach EGP 900 million, contributing 31% to CIB’s gross prof-
itability. Consumer Banking gathered EGP 11.9 billion in de-
posits aided by innovative new saving product.

The new Save and Safe product was launched in 2013 and
offers bundled insurance benefits along with savings, in
addition to a competitive interest structure and other ben-
efits. With the support of a strong mass media advertising
campaign, Save and Safe attracted EGP 2.3 billion in seven
months.

Income Appropriation
CIB aims at maximizing its shareholders’ and customers’
value. In 2013, the bank increased its issued capital to reach
EGP 9 billion by capitalizing on portion of its general reserve
by issuing free stocks (one stock for every two outstanding
stocks) as per the approval of the Ordinary General Assem-
bly in July 1st, 2013. Accordingly, the Board of Directors pro-
posed the distribution of a EGP 1.0 dividend per share (21%
higher than 2012). According to the profit appropriation pro-
posal, the legal reserve balance will add EGP 131 million to
reach EGP 621 million and the general reserve balance will
add EGP 1.3 billion to reach EGP 1.7 billion. This appropria-
tion will further enforce CIB’s financial position. The bank’s
capital adequacy ratio will record 16.32% (after profit appro-
priation) compared to 15.71% in 2012.

cib has continued to receive
global recognition and international
awards for its outstanding
performance and reputation.

Subsidiaries
CI Capital generated consolidated revenue of EGP 121 mil-
lion, 33% over 2012. Brokerage revenue increased 13% over
last year to reach EGP 69 million and was the second ranked
brokerage house in 2013 (up from third in 2012) recording a
market share of 11.3%. CI Asset Management maintained its
market share at 10.5% and had the best performing Egyp-
tian equity funds of 2013.

Thanks to a number of landmark investment banking
transactions, CI Capital was recognized as the “Best In-
vestment Bank” of 2013 by the Arab Investment Summit,
and ranked third in terms of announced Middle Eastern
Target M&A deals in first-half 2013 by Thomson Reuters
and Dealogic.

Awards and Recognitions
CIB has continued to receive global recognition and inter-
national awards for its outstanding performance and repu-
tation. Such accolades further cement CIB’s position as the
number one private sector bank in Egypt. Notable awards
include:
• Global Finance Magazine recognized CIB with six awards:
“Best Bank in Egypt” for the 17th year, “Best Sub-Custodian
Bank in Egypt” for the 5th consecutive year, “Best Foreign Ex-
change Provider Bank in Egypt” for the 10th year, “Best Trade
Finance Bank in Egypt” for the 7th year, “Best Internet Bank”
and “World’s Best Emerging Market Bank in the Middle East.”
• The Banker magazine recognized CIB with two awards “Bank
of the Year - Egypt” and “Deal of the Year Best Restructuring
Deal.”

• Euromoney Excellence Award 2013 acknowledged CIB as “Best

Bank in Egypt.”

• CIB was Global Investor ISF’s “Best Asset Manager in Egypt”

for the fourth consecutive year.

• EMEA Finance recognized CIB as “Best Foreign Exchange in

North Africa”

• CIB was “Top Ranked bank in North Africa” by FTSE Finan-

cial Times Stock Exchange.

Corporate Governance
We believe that good governance is a cornerstone of our
success at CIB and we are proud of CIB’s leadership posi-
tion in board governance. The Board remains committed
to continuous improvement where we regularly review and
update our practices.

The overall corporate governance framework of CIB is di-
rected by the Board and its sub-committees: Audit Commit-
tee, Corporate Governance and Compensation Committee,
Risk Committee, Management Committee, High Lending
and Investment Committee, Affiliate Committee, Sustain-
ability Advisory Board, Operations and IT Committee.

The Board and its committees are governed by well-defined
charters and are tasked with assisting directors in fulfilling
their responsibilities and obligations with respect to their
decision-making roles.

Such task is further facilitated by the wide array of estab-
lished internal policies and manuals covering all business as-
pects such as credit and investment, operational procedures,
staff hiring and promotion.

CIB’s Board consists of nine members who collectively pos-
sess a wide range of industry expertise. CIB’s Board met eight
times over the course of 2013. Among its defined set of respon-
sibilities, CIB’s Board constantly monitors the Bank’s adher-
ence to well-defined, stringently enforced and fully transpar-
ent corporate governance standards. The Board is able to
do this through its various committees whose membership
is formed entirely of non-executive directors. Through the
the Audit, Risk, Governance & Compensation, Operations &
Technology and Sustainability Advisory Board, the Board is
able to fulfil its obligations in the following manner:
• Ensuring that Board Members have a clear understanding
of their roles in corporate governance. Annually reviews
the size and overall composition of the Board and ensures
it respects its independence criteria.

• Establishing appropriate review and selection mecha-
nisms for new Board member nominees through the Gov-
ernance and Compensation Committee.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 13

BoARD oF DIReCtoRS’ RepoRt

The elegant continental hotel on
opera Square hosted dignitaries
visiting cairo for the festivities
surrounding the opening of the
Suez canal, a key event in world
maritime trade.

• Establishing the strategic objectives and ethical standards
that will direct the on-going activities of the Bank, while
taking into account the interests of all stakeholders.

• Establishing internal control mechanisms which com-
prise systems, policies, procedures and processes that are
in compliance with regulatory requirements. These con-
trol measures safeguard Bank assets and limit risks as the
Board, management and other employees work to achieve
the Bank’s objectives.

• Ensuring that senior management implements policies to
identify, prevent, manage and disclose potential conflicts
of interest. The Board also oversees the performance of the
Bank, its Managing Director, Chief Executive Officers and
senior management to ensure that Bank affairs are con-
ducted in an ethical and moral manner and in alignment
with Board policies.

• Reviewing and approving material related to disclosures
and other transparency documents in accordance with

regulatory requirements or as may be determined by the
Board from time to time.

• Overseeing a code of conduct to govern the behaviour of
directors, officers and employees through an independent
Compliance function reporting directly to the Audit Com-
mittee. The code of conduct sets CIBs core values as integ-
rity, client focus, innovation, hard work, and respect for
the individual. These values encompass CIB’s commitment
to create a culture that adopts ethical business practices,
good corporate citizenship, and an equal and fair working
environment. At the same time, it promotes a culture of
transparency, encourages a whistle-blowing environment
and provides protection to the whistle-blower.

The Central Bank of Egypt’s auditors and controllers conduct
regular audit assignments and review reports submitted to
them periodically. During CBE audit missions, CIB’s manage-
ment ensures that the auditors are provided with all necessary

documents to fully perform their audits. CIB’s Internal Audit
team closely follows up with the Bank’s management to take
all corrective measures with regards to CBE’s audit comments.
Moreover, given the utmost attention to maintaining the
highest levels of corporate governance, CIB’s investor rela-
tions team is committed to consistently sharing high quality
information with all stakeholders regarding the Bank’s ac-
tivities with emphasis on transparency.

operations platform with International Standards
During 2013, the COO Area has focused on several strategic
objectives, including the improvement of customer experi-
ence, infrastructure development, enhancing the controls
environment, effective cost management and people agenda.
The COO Area implemented a number of key initiatives in
2013 as part of its strategic agenda:

The Business Process Orchestration (BPO), a key project
for the Bank, kicked off with the hiring of a dedicated expe-

rienced project director. BPO will streamline key business
and operations processes by integrating analytics into busi-
ness processes. BPO will reduce operational process turn-
around time with better resources allocation. Additionally,
BPO will provide a reporting tool on major processes relat-
ed key performance indicators i.e. execution time, related
costs, etc.

Substantial efforts were made this year in support of the
Bank’s Business Continuity and Crisis Management in light
of the political and security situation. The Bank managed to
successfully operate our head office multiple times from al-
ternate locations, and also managed to sustain very high ser-
vice levels for customers through our diverse branch network
and alternate channels.

Sustainability Development
Environmental sustainability is becoming a fundamental
component of the strategy of leading multinationals, inves-

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 15

BoARD oF DIReCtoRS’ RepoRt

Key figuReS
fRom 2013

BALANCE SHEEt (IN EGP BN)
A. StAnDAlone CIB

Total Assets

Contingent Liabilities and
Commitments
Loans and Advances to
Banks and Customers

Investments

Treasury Bills and Other
Governmental Notes

Due to Customers

Other Provisions

Total Equity

Balance as of
31/12/2013

Balance as of
31/12/2012

%
Change

113.8

94.4

20.50%

16.2

42.0

30.5

23.7

96.9

0.5

12.1

14.9

8.62%

41.9

0.17%

27.9

9.26%

8.0

196.50%

78.8

23.02%

0.3

45.58%

11.3

7.11%

B. ConSolIDAteD CIB AnD CI-CH
Balance as of
31/12/2013

Balance as of
31/12/2011

%
Change

Total Assets

Contingent Liabilities and
Commitments
Loans and Advances to
Banks and Customers

Investments

Treasury Bills and Other
Governmental Notes

Due to Customers

Other Provisions

Total Equity

113.8

94.0

21.07%

16.2

41.9

30.2

23.7

96.8

0.5

12.0

14.9

8.62%

41.9

-0.03%

27.2

10.83%

8.0

195.16%

78.8

23.06%

0.3

44.35%

10.8

11.10%

INCOME StAtEMENt (IN EGP MN)
A. StAnDAlone CIB

Jan.1, 2012
to
Dec.31, 2013

Jan.1, 2011
to
Dec.31, 2011

%
Change

Interest and Similar Income

Interest and Similar Expense

Net Income from Fee and
Commission

Net Profit After Tax

9,510

-4,460

1,189

2,615

7,846

21.21%

-3,945

13.05%

836

42.30%

2,203

18.72%

B. ConSolIDAteD CIB AnD CI-CH
Jan.1, 2012
to
Dec.31, 2013

Jan.1, 2011
to
Dec.31, 2011

%
Change

Interest and Similar Income

Interest and Similar Expense

Net Income from Fee and
Commission

Net Profit After Tax
Net Profit After Tax and
Minority Interest

9,521

-4,467

1307

3,006

7,859

21.14%

-3,946

13.21%

926

41.14%

2,227

35.00%

2,226

35.05%

tors and fund managers around the globe. It was in this for-
ward thinking spirit that CIB decided to move ahead with a
robust Corporate Sustainability initiative in July 2012. To this
end, the Bank will ensure that it achieves its twin objectives
of serving Egypt’s socio-economic interests and protecting
the environment, as well as attaining durable financial safety
and soundness for the Bank.

CIB approved the establishment of a dedicated Sustain-
ability Development Department, which falls directly under
the umbrella of the COO area. Dr. Nadia Makram Ebeid (ex.
Minister of Environmental affairs and CIB Board of Directors
member) was nominated to guide this initiative in coopera-
tion with a competent dedicated team. The Sustainability
Development Department was initiated in January 2013 with
a mandate to ensure the development, management and re-
porting of CIB’s sustainability efforts (strategies, policies,
systems, initiatives, quick wins including ongoing third par-
ty liaising, branding and training efforts).

In March, CIB’s sustainability governance structure and
framework were approved by the Sustainability Advisory
board. Green Teams were nominated to act as Environmen-
tal Champions within the organization.

The department worked with different internal and ex-
ternal stakeholders on a number of going green quick win
projects, including the Rooftop Garden, Green Wall, energy
conservation initiatives, landscaping, photography compe-
titions, non-smoking campaigns and double-sided printing
(paper conservation), in cooperation with the Premises Proj-
ects, Corporate Services and Branding departments. The Sus-
tainability Development Department also began work on the
development of a solid waste management system through
a phased approach with the contribution of the Corporate
Services department. Furthermore, the department worked
with the Learning and Development department to focus on
raising employee awareness on sustainability, through 35
Sustainability Staff Awareness sessions which were held in
CIB Head offices and branches across Egypt.

Our long-term initiatives include conducting a social and
environmental assessment of our business practices and
drawing up a sustainability framework and roadmap. An-
other initiative is working towards identifying the necessary
steps to acquire the Leadership for Energy and Environmen-
tal Design Certification (LEED).

Innovative Financial Solutions
Among our strongest attributes at CIB is being nimble by rec-
ognizing and capitalizing on opportunities and service gaps
and by being among the first to satisfy and fill these gaps.
Customer service remains among the bank’s top priorities.
To that end, focus on availing an electronic system suscep-
tible to the needs of the clients while maintaining the high-
est levels of accuracy and turnaround time saw CIB focus on
expanding our GTS platform. Global Transaction Services
(GTS) expanded the network of dedicated trade hubs to 29
hubs. 89% of bank wide trade services transactions have
now been migrated to online portal and service hubs which
helped in off-loading regular branches. Another initiative
that targeted branch-offloading, was Business Banking “pilot
ATM deposit cards” for smaller cash deposits. The initiative

BoARD oF DIReCtoRS’ RepoRt

our long-term initiatives include
conducting a social and
environmental assessment of our
business practices and to draw
up a sustainability framework and
roadmap.

aims at reducing branch load by 20%, helping to improve the
customer experience.

In the fourth quarter, CIB launched the first interactive
smart branch in Egypt in Black Ball mall (New Cairo), lead-
ing the banking sector in introducing innovative financial
services. This initiative enhances customers’ banking expe-
rience through interactive screens demonstrating CIB prod-
ucts and services, video call communication with the call
center and digital tablets to execute E-banking transactions
at the branch with minimum staffing levels.

CIB continued its branch network expansion strategy in
2013, adding 17 new branches, as well as enhancing its im-
age and customer experience through the renovation and
replacement of five other branches. CIB was one of the few
banks to grow its network significantly in 2013.

The fourth quarter also saw the issuance of the first FIFA-
branded Visa cards as well as the free dedicated Travel Desk
service for all cardholders.

Focus on people
Human capital management has been and remains of the ut-
most priority. One of the main goals of the Bank’s Human Re-
sources department in 2013 was attracting the right caliber
of people and contributing to the development and success
of existing employees. Focusing on improving our staff satis-
faction and compensation strategy has led to an increase in
talent retention.

Recruitment
On the recruitment side, the focus was placed on promot-
ing from within for middle and upper management posi-
tions, while efforts to build entry level talent were directed
towards visiting campuses and having a presence at em-
ployment fairs. One of our main sources for summer and

for-credit interns came from on-campus outreach efforts,
including employment fairs, our winter training initiative,
and events such as AUC Career day and Top Employer. We
conducted a very successful round of summer internships
this year with a carefully selected group of summer interns
from reputed universities. Our for-credit internships also
witnessed further development, maintaining its reputation
for quality education.

Learning and Development
The role of Learning and Development has evolved in 2013, with
an increased focus on investing in our staff’s development. The
Learning and Development department has supported mul-
tiple initiatives of the People agenda. This included sponsor-
ing overseas MBAs and the enrolment of a number of our staff
members in the Graduate School of Banking (GSB) Program at
the University of Wisconsin in Madison, USA, throughout the
year and into next year. These initiatives also include financ-
ing higher education opportunities locally at reputable institu-
tions as well as funding attendance at overseas conferences.

As developing quality management for the Bank is a fun-
damental strategy, 2013 saw a continued investment in our
leadership development programs, namely the Leadership and
Management Program (LAMP) for CIB’s directors and higher
positions, a program covering 100% of its target group. Anoth-
er initiative is the Leadership and Development Program for
Consumer Banking (LDP) which this year targeted consumer
banking zone and branch heads.

As the leading private bank in Egypt and one with a
heightened sense of social responsibility, CIB has success-
fully sponsored the creation of the position of Professorship
in Banking at the American University in Cairo, allocating
USD 2 million to educate and train young graduates in the
field of retail banking.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 17

BoARD oF DIReCtoRS’ RepoRt

The breakthrough Job Family Project, which introduces a
number of programs in Trade Finance and Operations tar-
geting Consumer Banking and which was initiated in 2013,
will be implemented on a wider scale in 2014. This should
bring the learning and development scope into a more stra-
tegic perspective.

Talent Management
A major focus of the Bank in 2013 was Talent Management.
CIB initiated an all-round, comprehensive assessment of
leadership competencies for executive and senior directors
conducted by SHL, one of the world’s leading leadership con-
sulting firms. The assessment is used to identify and evaluate
the competence of CIB’s senior management against a set of
managerial behaviours that impact their work performance,
leadership style and ultimately CIB’s organizational culture
and business performance.

On the Performance Management side, standardized ob-
jectives throughout the Bank were reviewed and updated to
maintain a robust performance management system that
ensures the Bank’s strategy reaches all staff levels and that
each staff member clearly understands what is expected
from them for the year.

Corporate Social Responsibility
Our commitment to the country in which we live and oper-
ate in is an integral part of our business culture. It has al-
ways been among CIB’s top priorities and responsibilities to
contribute to our country’s prosperity and welfare. CIB turns
commitments into actions through its corporate social re-
sponsibility programs. The CIB team is firmly dedicated to
supporting Egypt during these turbulent times and is proud
of the impact our investment of time, effort and resources has
had on our community.

CIB Foundation
In this, its fourth year in operation, the CIB Foundation ex-
panded its activities in 2013. Following the 2013 Annual Share-
holders’ General Assembly meeting, the CIB Foundation was
allocated roughly EGP 35 million, representing 1.5% of CIB’s
net annual profit. The CIB Foundation continued to support
major projects in the field of pediatric healthcare through vari-
ous multi-faceted initiatives including renovating and upgrad-
ing hospital infrastructure, purchasing medical equipment
and providing surgical and medicinal treatment to underpriv-
ileged children.

Over the course of 2013, the Foundation’s partnerships and

initiatives included:

Children’s Cancer Hospital 57357
• In January 2013, the Foundation continued its commitment
to the hospital by funding general operating costs amount-
ing to EGP 2 million.

• In late 2013, the CIB Foundation renewed its partnership
with the 57357 Hospital, raising the annual donation from
EGP 2 million to EGP 3.5 million. In the first year of the re-
newed partnership, the donation will be used to fund pa-
tient care as well as construction costs of the hospital’s 60-
bed expansion project.

Friends of Abou El Reesh Children’s Hospitals Organization
• In March 2013, the CIB Foundation’s Board of Trustees ap-
proved an EGP 10 million initiative to renovate and upgrade
the Abou El Reesh El Mounira Children’s Hospital’s Emergen-
cy Ward and Reception Area. This initiative proved critical in
allowing the hospital to provide top quality services and care
to incoming patients.

• In November 2013, the CIB Foundation donated an additional
EGP 2 million to the Friends of Abou El Reesh Children’s Hos-
pitals Organization to support staff compensation, medical
and administrative supplies, infection control, and much
needed ICU equipment.

Magdi Yacoub Heart Foundation
The CIB and CIB Foundation have been ardent supporters of the
Magdi Yacoub Heart Foundation since its inception, and have
been committed to enabling the Foundation to provide world-
class medical care to the less privileged for free.
• In July 2013, the CIB Foundation donated EGP 1.1 million to
the Magdi Yacoub Foundation to exclusively sponsor the Pe-
diatric Outpatient Room in the Aswan Heart Centre’s Outpa-
tient Clinic.

• In September 2013, the CIB Foundation’s Board of Trustees
approved the roughly EGP 14 million exclusive sponsorship
of the Second Pediatric Floor of the Aswan Heart Centre,
complementing its earlier sponsorship of the first floor ICU.
• In 2013, the Foundation sponsored open heart surgeries for
50 children on the waiting list for EGP 3 million. By this
donation, CIB Foundation has helped in saving the lives of
200 children.

Children’s Right to Sight Program
Through the Rotary Kasr El Nile organization, the CIB Founda-
tion has committed EGP 1.5 million to fund 1,000 eye surgeries
for children through the Children’s Right to Sight (CRTS) pro-
gram. The surgeries have been conducted at Al Nour Eye Hospi-
tal and Eye Care Centre.

Gozour Foundation for Development: 6/6 Eye Exam Caravans
In July 2013, the CIB Foundation reaffirmed its partnership with
the Gozour Foundation for Development to fund 12 eye exam
caravans in public elementary schools across Egypt.

The CIB Foundation allocated roughly EGP 700,000 to fund
caravans in Giza, Qalioubeya, Minya, Beni Suef and Fayoum.
Through a partnership with Alnoor Magrabi Foundation each
one-day caravan targets 450 students, with a total of 5,400 stu-
dents receiving free eye exams and care by the end of the project.
The caravans also presented valuable opportunities for volun-
teers from CIB’s staff to engage with the local community and
spend quality time with the less privileged.

Yahiya Arafa Children’s Charity Foundation
The Yahiya Arafa Children’s Charity Foundation is a long-stand-
ing partner of the CIB Foundation. In late December 2013, the
CIB Foundation’s Board of Trustees approved an increase in
the annual donation to the Yahiya Arafa Foundation to EGP 2
million for the upkeep of three previously-supported Pediatric
Units at the Ain Shams University Hospital, as well as the partial
operation of a second neonatal unit.

BoARD oF DIReCtoRS’ RepoRt

our commitment to the country
in which we live and operate is
an integral part of our business
culture. it has always been
among cib’s top priorities and
responsibilities to contribute to our
country’s prosperity and welfare.

Maxillo-Facial Center in the Pediatric Prosthodontics
Department in the Cairo University Faculty of Dentistry
In July 2013, the CIB Foundation’s Board of Trustees ap-
proved the development of a EGP 300,000 Maxillo-Facial
Center in the Pediatric Prosthodontics Department in the
Cairo University Faculty of Dentistry. The highly special-
ized center offers treatment for oral and nasal cavity de-
formities in the facial palette, congenital deformities in
newborn babies, and various facial deformities caused by
cancer. With the establishment of the center, expected to
open in the first quarter of 2014, the Pediatric Prosthodon-
tics Department will be able to provide treatment to chil-
dren from across the country as one of the sole providers
of the specialized procedures.

One Million Blankets Campaign
In December 2013, the CIB Foundation made a contribution
of EGP 1 million to the One Million Blanket National Cam-
paign through Bank El Kessa.

Blood Donation Campaigns
In 2013, the CIB Foundation hosted 12 blood donation cam-
paigns in six of its corporate offices in Cairo and Alexan-
dria. Roughly 800 CIB employees donated their blood over
the 12 days.

Social Development
Throughout 2013, CIB upheld the core principles of its Cor-
porate Social Responsibility (CSR) activities and its contri-
butions to the community through a diverse range of CSR
endeavors including the following:
• Considering the vital role of the Egyptian Banking Indus-
try in boosting the economy and their strong commitment
to fulfill their CSR mission and responsibility towards
their country especially in tough times. Under the aus-
pices of the Federation of Egyptian Banks, all Egyptian
Banks had agreed to contribute 2% of their net profit to
be directed towards developing slum areas and the most

needy areas in Egypt and provide them with basic neces-
sitates such as electricity, water, sewerage and other vi-
tal services. The funds will be managed according to an
agreed upon plan by the Federation of Egyptian Banks in
collaboration with the Ministry of National Local Devel-
opment and the Governors.

• One of CIB’s most promising Community Development
initiatives in 2013 involved a partnership with the Ameri-
can University in Cairo (AUC) to develop the CIB En-
dowed Professorship in Banking program. The program’s
objective is to design and implement a strong banking
curriculum in different educational institutions and en-
hance education in banking throughout Egypt by offering
research and service courses. This partnership with AUC
is a major step toward bringing practical knowledge of
industry trends into the classroom. Through the Profes-
sorship Program, students will be exposed to the various
aspects of Banking that will challenge their thinking and
encourage their application of creative new practices. It
will also serve as a link between the University’s School
of Business and key members of the Banking community,
including regulators, boards, executives and other.

• In an effort to expose children to the Banking industry,
and specifically to the CIB brand, as well as to encourage
career exploration at an early age, CIB entered into a five-
year partnership with KidZania. KidZania Cairo offers
children a variety of fun and interesting role-playing ac-
tivities in a realistic city setting. CIB is proud to be part of
such an experience and taking part in enhancing commu-
nity development through instilling sound financial skills
and experiences. CIB’s on premises mini-branch will al-
low the children to cash checks, get debit cards, and de-
posit or withdraw KidZos from ATMs around KidZania.
• As part of its community outreach efforts CIB began
sponsoring a program, in association with IMAX Cinema
located in Americana Plaza, which will allow underprivi-
leged children to attend 10 pre-booked and dubbed educa-
tional films shown in IMAX theaters.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 19

2013 iN RevieW

AnnuAl RepoRt 2013

Established in 1859 to serve the
workers building the Suez canal, Port
Said quickly became a major hub of
economic activity for the country.

AnnuAl RepoRt 2013 21

2013 In ReVIeW

iNStitutioNAl BANKiNg

Corporate Banking Group
Recognized across the Egyptian market for its strong credit
culture, the Corporate Banking Group is CIB’s financing arm,
providing world-class financial structures and superior advi-
sory services to its clients. The Group caters to the financing
needs of large companies with an annual turnover exceeding
EGP 150 million. Furthermore, in recognition of the important
role of medium-size companies, the Group has broadened its
scope over the past few years to provide services for these com-
panies as well.

The group’s mission is to enhance its position as the top
corporate bank in the Egyptian market while maximizing
value for its shareholders, employees and the community.

2014 Forward Strategy
The Corporate Banking Group aims to achieve the following
in 2014:
• Maximizing share of wallet with multinationals, initially
with limited or no relations with CIB as well as with exist-
ing corporate clients.

• Increase customer loyalty and boost CIB’s market share in
all sectors through cross-selling Global Transaction Ser-
vices (GTS) products.

• Expand CIB’s loan portfolio with special emphasis on fi-

nancing medium-sized projects.

• Enhance the bank’s fee income stream through increasing

trade business services.

The Corporate Banking Group’s competitive
advantages include:
• A strong corporate business model.
• Highly experienced staff reinforced by continuous train-
ing to keep pace with the latest industry and technical
know-how.

• Strong customer base with a healthy and diversified port-
folio that is well-positioned in primary growth industries,
including but not limited to: Oil and Gas, Power, Petro-
chemicals Infrastructure, Food and Agribusiness, Tour-
ism, Shipping and Ports, and Real Estate.

• Ability to provide a wide and innovative array of financial

schemes.

• Expanded scope of corporate banking to include compa-
nies with sales revenues above EGP 50 million, creating
potential future growth opportunities for the group.

2013 Accomplishments
• Continued to be the major contributor to Institutional
Banking profitability, generating almost 50% of the Insti-
tutional Banking Group’s profits.

• Captured approximately an 80% market share of the ship-
ping activities related to Suez Canal payments through
facilitating financial solutions for the shipping sector, in-
cluding Shipping Agencies, Shipping Service Providers,
Container Terminals, Ports and Ship Owners.

• Focused on supporting the import of necessary grains and

food staples.

• Acted as a mandated lead arranger in financing a new

project aiming to improve public transportation.

• Ensured proper monitoring of the corporate accounts to

maintain the sound asset quality of CIB.

• Enhanced the utilization of corporate customers to differ-
ent online channels such as e-Banking and e-Trade, result-
ing in a current market penetration rate of 75%.

• Full roll-out of the Business Enhancement Unit to ensure
the extension of excellent quality operational services to
our corporate clients.

Financial Institutions Group
The Financial Institutions Group offers a variety of quality
products and services through three divisions: Correspon-
dent Banking Division (CBD), Non-Banking Financial Insti-
tutions Division (NBFI) and Finance Programs & Interna-
tional Donor Funds Division (FP & IDF).

Correspondent Banking Division (CBD)
The Correspondent Banking Division (CBD) is the point of
contact for local and foreign banks working with CIB. The di-
vision is responsible for:
• Securing outgoing business for CIB.
• Monitoring and directing business to banks.
• Attracting trade business and handling related negotiations.
• Marketing and cross-selling CIB products.
• Acting as liaison for solving problems (if any) between
banks worldwide and CIB’s departments in order to facili-
tate and improve workflow.

• Offering support and new solutions to CIB clients through
strategic alliances with various correspondents under
trade finance and cash services.

• Supporting other departments through our role as Rela-

tionship Officers for banks.

• Searching for new business opportunities.

2013 Achievements:
• Achieved higher trade finance volumes.
• Explored new markets in Asia, Africa and Latin America.
• Maintained a well-diversified trade and forfeiting portfo-
lio and continued expanding risk participations on both
direct and contingent business focusing more on CIB and
its clients.

2014 Strategy:
• Continue to explore and penetrate new markets.
• Identify new quality bank relationships focusing on Asia.
• Maintain our focus on supporting the local economy.
• Introduce new revenue-generating products.

A key competitive advantage for
the corporate banking Group is
our strong customer base with a
healthy and diversified portfolio
that is well-positioned in primary
growth industries, among them oil
and Gas, Power, Petrochemicals
infrastructure, food and
Agribusiness, Tourism, Shipping
and Ports, and real Estate.

Non-Banking Financial Institutions Division
(NBFI)
NBFI is a credit-lending division under the Financial Insti-
tutions Group. It provides credit facilities, liability products
and services to all types of non-bank financial institutions.

Targeted clients include companies involved in: leasing, in-
surance, securities brokerage, car finance, factoring, credit
insurance and investment companies as well as non-govern-
mental organizations (NGOs).

while targeting growth in leasing, credit insurance and
brokerage (clearing & settlements accounts) both in terms
of volume and number of accounts with leading market
players upon market stability.

• Focus on the liability side through aggressive marketing of
the Bank’s attractive liability products in addition to rein-
forcing our cross selling strategy to provide CIB’s innova-
tive product mix.

• Growing existing contingent businesses and attracting in-

Activities:
• Identifying customer needs and associating such needs
with relevant facilities such as short-term lending, long-
term lending, contingent business, and securitization
transactions, etc.

• Focusing on key market players with relatively moderate risk.

2013 Achievements:
• Succeeded in controlling and maintaining moderate lev-
els of portfolio risk and managed an effective collection of
loan portfolio payments through the application of a well-
controlled credit policy.

• Established new limits for existing credit insurance com-
panies and identified new accounts to accommodate con-
tingent business targeted in 2014.

• Increased cross-selling of CIB retail products.
• Engaged in securitization transactions with the Debt Cap-

ital Markets Team.

2014 Strategy:
• Maintain our market share with existing relationships

surance companies.

Finance programs & International Donor Funds
Division (Fp & IDF)
The Finance Programs and International Donor Funds (FP &
IDF) Division is uniquely specialized in managing sustain-
able development funds and credit lines provided by govern-
mental entities and international agencies that positively
impact our community and environment. Since its inception
in the 1990s and with the collaboration of the Ministry of Ag-
riculture and Land Reclamation, FP & IDF has played a role
in the country’s agrarian development by encouraging pri-
vate sector involvement in the Egyptian Agrifoods market.
The Division is also engaged in various environmental and
pollution abatement projects that aim to assist companies
in making their operations more eco-friendly. More recently,
in 2005, FP & IDF penetrated Egypt’s microfinance sector in
collaboration with the Spanish government.

Main Functions:
• Agency Function: Handles agency functions for many
funds, grants and credit lines by providing an array of

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2013 In ReVIeW

upon its opening in 1869, the
Suez canal firmly established
Egypt as a central hub for
international shipping and trade.

services and tailored operational mechanisms such as
structuring new grants and concessional loans, creat-
ing disbursement and repayment mechanisms, securing
investment of uncommitted funds, promoting funds to
potential target groups, offering technical pre-loan assess-
ment and post-loan monitoring.

• Participating Bank Function: Participates in conces-
sional financing with clients, giving CIB a competitive
edge among its peers. CIB also participates in guarantee
mechanisms to increase SME accessibility to credit lines.
• Microfinance: Manages CIB’s direct microfinance portfolio
through a microfinance service company that interacts di-
rectly with end-users. Recently, an indirect model was adopted
with some microfinance institutions (MFIs) in collaboration
with the Non-Bank Financial Institutions (NBFI) Division.
• Technical Assistance and Consulting Services: Offers
an array of integrated and competitive consultancy ser-
vices targeting development programs.

2013 Achievements:
• Agency Function: FP & IDF succeeded in maintaining its
position as the leading agent bank in the market and dis-
bursed a total of cumulative EGP 3.4 billion in loans to the
agricultural sector through a network of 12 participating
banks.

• Participating Function: A total of EGP 200 million was dis-
bursed to CIB customers through development programs in
2013.

• Microfinance: The Division secured EGP 109 mil-
lion for 31,233 active customers. While for Wholesale
Microfinance,CIB started the utilization of EGP 100 million
line signed with the Social Fund for Development (SFD) to
reloan to MFIs with the assistance of NBFI division.

• Cross-Selling: The Division contributed to cross-selling
CIB’s various retail products, including credit cards, consum-
er loans, and other consumer and corporate bank products.
The Division coordinated the signing of a USD 250 million

agreement with a leading international government agency
in order to guarantee financing for Egyptian SME companies.

2014 Strategy:
• Maintain our lead position as agent bank dominating do-

nor funds.

• Attract funds and participate in new developmental pro-

grams.

• Increase CIB’s direct and indirect microfinance market

share.

• Focus on offering advisory services.

Debt Capital Markets Division (DCM)
The Debt Capital Markets (DCM) Division has an unprec-
edented track record and unparalleled experience in un-
derwriting, structuring and arranging large-scale project
finance, syndicated loans, bond issues and securitization
transactions, all of which are supported by a dedicated agen-

cy desk. The Division achieves its objectives by leveraging on
CIBs substantive underwriting capabilities and established
relationships with international financial institutions and
export credit agencies, placing capabilities in the local mar-
ket with banks, insurance companies, money market and
fixed income funds.

Despite the continued slow down witnessed across the
market in 2013 in terms of new projects initiation, the Debt
Capital Markets division successfully executed deals worth
over EGP 14.5 billion — up from EGP 12.4 billion in 2012. The
2013 financing deals were primarily in the Petrochemicals
and Heavy Equipment sectors. Building on its reputation for
excellence in the field of structuring and arranging deals, CIB
played key roles as Initial Mandated Lead Arranger (IMLA),
Agent, Security Agent and/or Bookrunner in these transac-
tions. In recognition of its role as an IMLA, CIB was awarded
both Project Finance’s African Petrochemicals Deal of the
Year and EMEA Finance’s Project Finance Awards for Best

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 25

2013 In ReVIeW

Chemicals Deal in Africa. Furthermore, the Debt Capital
Markets Division has laid the foundation for future income
generation with a substantial deal pipeline.

The Division also continues to be the leader in the debt
capital markets by playing a unique role in the local mar-
ket through structuring and placing complex securitization
structures. CIB won the Best Structured Finance Deal in Af-
rica 2013 from EMEA Finance for its launch of an EGP 158
million securitization originated by Mansour Auto. The Divi-
sion is looking to close deals totaling EGP 700 million before
year-end and has a solid deal pipeline for 2014.

As an ongoing strategy, Debt Capital Markets
aims to:
• Continue playing a vital role in economic development by
mobilizing funds for large ticket project finance deals and
syndication transactions.

• Position itself to raise the required debt to fund Egypt’s sub-
stantial Infrastructure and Power investments, whether
implemented by public sector companies, or via IPP or PPP
programs.

• Introduce new financial tools to lead the development of

capital markets in Egypt.

• Continue to support client needs for diversified funding
sources through innovation in asset-backed securities.

treasury & Capital Markets (tCM)
CIB’s Treasury & Capital Markets Division is the Bank’s pri-
mary pricing arm for all its foreign exchange and interest
rate products. TCM engages in a number of money market
trading activities, such as primary and secondary govern-
ment debt trading, and management of interest rate gaps
(with associated hedging). Fixed income Eurobonds are
also traded with clients covering sovereign fixed income
bonds, whose price and interest rate are usually denomi-
nated in US dollars.

Foreign exchange products are used by our customers
for both investment and hedging. Our investment-related
products include dual currency deposits (DCD) and dual one
touch deposits. The DCDs provide clients with a much high-
er yield on their USD and EUR purchases than the Central
Banks’ announced rates on these currencies. Our latest prod-
uct is third counterparty trading, where CIB allows its clients
to purchase almost any currency they require, while simul-
taneously transferring the currency to its country of origin
to make payments abroad. Other products covered are direct
forwards and simple/plain vanilla options, in addition to a
wide array of option structures such as premium embedded
options, participating forwards, zero-cost cylinders, boosted
call / put spread, interest rate swaps, and interest rate caps /
floors / structured products.

The Division’s Primary Dealers team provides clients with
transparent advice on their investments in treasury bills and
treasury bonds, on both primary and secondary markets,
with very competitive prices on the secondary market offers.
The team has been one of the most influential players in the
local debt market.

The Division’s Treasury team provides the Bank’s clients
with an incomparable quality of service around-the-clock,

including weekends and holidays, with daily market com-
mentary, weekly technical analysis and an SMS service that
displays rates of our main currencies and sovereign bonds.
TCM promptly accommodates customer requests to help cli-
ents avoid market fluctuations.

The TCM Division deals with almost all of the Bank’s clients
ranging from large corporate clients, Global Customer Rela-
tions & Business Banking clients, Retail, Wealth clients, and
the Bank’s Strategic Relations clients. TCM also deals with
financial institutions, including funds, insurance companies
and others. To enhance TCM’s service offerings, the Division
was internally re-organized into two main components: One
covering corporate banking clients & GCR, while the other
is responsible for the Business Banking, Retail, Wealth and
the Strategic Relations Department. Within each area, every
trader is responsible for handling specific clients to enhance
specialization and customer price sensitivity in an attempt
to promote customer value added in the Treasury arena.

2013 Accomplishments
In 2013, CIB’s TCM Division won the Best FX Service Award
from EMEA Finance. During the first half of 2013, CIB has
achieved the highest Net Trading Income amongst all private
Egyptian Banks.

CIB was ranked as the second best performing bank on the
Primary Market for Treasury Bills and Bonds, achieving the
same ranking on the Secondary Market for Treasury Bonds
for the first three quarters of 2013.

Asset and Liability Management (ALM)
A key part of the Treasury Group, the Asset and Liability
Management Department is responsible for managing the
Bank’s liquidity and interest rate risk within external and
internal parameters, while complying with the Central
Bank of Egypt’s (CBE) regulatory ratios and guidelines.
The department is also responsible for managing the
Bank’s Nostro accounts, overseeing its proprietary book
and setting loan and deposit prices. ALM’s main objec-
tives are liquidity management, maximizing profitability
and product development.

2013 Performance
Despite the volatile market conditions witnessed following the
events of 30 June — as well as volatility in international mar-
kets — ALM was able to preserve its sound liquidity and inter-
est rate levels. This allowed the department to seize market op-
portunities in order to enhance the Bank’s Net Interest Income
(NII) and Net Interest Margin (NIM) all while maintaining
healthy regulatory ratios as well as internal and Basel III mea-
sures. ALM actively encouraged and participated in aggressive
deposit-gathering measures, which resulted in the growth of
the Bank’s total deposit base and overall profitability.

2014 Strategy
ALM maintains a positive outlook for 2014, despite the eco-
nomic and social upheavals of 2013, due to anticipated
changes in the political and economic landscape of Egypt.
The new government plans to implement a policy of econom-
ic expansion through public works projects worth over USD

in 2013, cib’s TcM division won
the best fX Service Award from
EMEA finance. during the first half
of 2013, cib achieved the highest
Net Trading income amongst all
private Egyptian banks.

3 billion, a move that is expected to create jobs and allow for
greater financing opportunities.

This commitment is supported by our unique value proposi-
tion and experienced team.

Accordingly, ALM’s strategic initiatives will continue to
include prudent and sound management of liquidity and in-
terest rates through the diversification of funding options, as
well as through the introduction of new products and invest-
ments. Furthermore, ALM has the ability to provide sufficient
liquidity for potential lending growth purposes. Further ini-
tiatives will include enhancing the Bank’s performance and
capital management framework.

Direct Investment Group (DIG)
The Direct Investment Group (DIG) is CIB’s investment arm,
introducing equity finance as an additional solution to exist-
ing and potential clients. DIG’s main focus is to identify, evalu-
ate, acquire, monitor, administer and exit minority equity
investments in privately owned companies that possess com-
mercial value for CIB.

Invested funds are sourced from CIB’s own balance sheet,
whereby the investment process is governed by a clear and
strict set of parameters and guidelines.

Our primary objectives encompass generating attractive,
risk-adjusted financial returns for our institution through divi-
dend income and capital appreciation, as well as enabling CIB
to offer a broad spectrum of funding alternatives to support
clients’ growth.

We commit to excellence by adopting industry best prac-
tices and creating a win-win situation for all stakeholders.

Highlights and Accomplishments
The investment climate in Egypt remained challenging in
2013. Significant political changes had a direct effect on the
country’s economic performance and, in turn, on the Group’s
investment activities, especially during the first nine months
on the year. Despite the turbulence, DIG maintained its fo-
cus on seizing opportunities for growth while upholding its
belief in the promising recovery of Egypt. Accordingly, DIG
has successfully added one sizable investment in the Textiles
industry to its portfolio.

In terms of portfolio management, DIG continued its on-
going support to its portfolio companies at all levels. DIG
maintained the capital increase plans for two of CIB’s affili-
ates in order to augment existing growth strategies. A prime
example of this is DIG’s support of one of its Oil sector portfo-
lio companies by participating in a shareholders loan, which
increased the company’s liquidity and financial positions
during these turbulent times.

On the growth front, DIG has managed to maintain its
strong deal pipeline leveraging on continuous market screen-
ing and on CIB’s brand equity. Accordingly, DIG has assessed
the viability of several investment opportunities in multiple
sectors. Currently, DIG is in the final stages of locking down a
sizable deal in the Foods sector and is in the Letter of Intent
stage in the Building Materials industry.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 27

2013 In ReVIeW

DIG has also made arrangements to exit two of its portfo-
lio investments in the Automotive and Power industries. Full
exit is expected to materialize within the coming months.

Strategy Going Forward
DIG plans to continue providing support to existing portfolio
companies, in addition to maintaining a positive long-term
outlook grounded on a true belief in Egypt’s solid fundamen-
tals. Accordingly, DIG plans to pursue growth in defensive
sectors showing relative resilience to economic instability.

Strategic Relations Group (SRG)
Over the years, the Strategic Relations Group (SRG) has
built a reputation of excellence and high standard services
among its client base. As relationships continue to be nur-
tured with global donor and development organizations,
supported by their sovereign diplomatic missions, SRG
boasts yet another year of achievement in 2013, despite the
challenges our country faced.

Catering to almost 70 of the world’s most renowned
and prestigious entities, SRG remains a unique function
among its peers in the banking industry. With our small
team of dedicated professionals, SRG was able to accom-
modate the unique operational needs of its client base
during times of stress and insecurity. Working closely
with our donor clients, allowing them further outreach
to their customers resulted in an almost 50% increase in
the SRG portfolio from share of wallet. This was achieved
due to our responsiveness, our creative solutions and our
customer-centric approach.

CIB remains committed to providing its SRG Prime cli-
ents with the highest-quality banking services, fulfilling
their unique needs while ensuring client satisfaction as
well as shareholder value.

Global transaction Services Group (GtS)
The Global Transaction Services Group was formed to en-
sure that the ever-changing technological demands of our
clients are addressed efficiently. The Group’s primary objec-
tives are to facilitate and minimize the turnaround time for
executing transactions, as well as providing transparency,
efficiency and value-added services to clients by offering a
comprehensive range of transactional banking products
and services, with a key focus on superior customer service
and efficient transaction processing capabilities.

In 2013, the focus of the GTS group has increasingly
shifted from reactive, cost optimization aiming at enhanc-
ing customer experience to becoming a fully integrated
revenue generating engine targeting broader and deeper
customer relationships.

These collaborative, value-based partnerships with cus-
tomers, which are directly driven by their evolving needs,
resulted in the introduction of unique financial solutions
tailored to the needs of major multinational companies.

Tailor-Made Financial Solutions
• Bolero Integration Application: Provides the client with
a one stop view of all bank guarantees. By reducing the re-
quirement for working capital, the application offers the

user a better position from which work with their banks to
manage credit lines and improve cash positions.

• Payment Gateway: Enables our clients’ customers to
make online payments via Visa and MasterCard gateways.
• CIB / Earthport ACH Integration: Enables internation-
al payments (global ACH) capability using an innovative
payments framework specifically designed for high vol-
umes of low-value cross-border payments. This provides
CIB customers with access to local clearing schemes in
over 50 countries.

GTS Information Suite
While continuing to enhance the reporting features available
on our Cash On-Line and Trade On-Line platforms, GTS has
developed a Corporate Download Portal aiming to improve
customer visibility into their working capital

A reporting portal that enables self-managed report de-
sign and download; availing accurate and comprehensive fi-
nancial data- live and archived. This corporate online portal
serves as an effective tool supporting strategic, operational
and transactional cash management.

Incorporating Voice of Customer in Early Stage
Product Development
Throughout 2011 and 2012, the main focus of GTS was on auto-
mating and enhancing operational efficiency. Since early 2013,
as the GTS Division heads towards a more customer-centric
business model and away from the prevailing product-centric
one, incorporating voice of customer in the early stages of prod-
uct development has been a key priority for the Division.

To drive GTS to a consumer-centric model, the Division
established the GTS Business Development department,
ensuring relationship officers have adequate knowledge
of GTS product offerings through (a) structured training,
(b) jointly examining customer profiles with GTS Product
Heads to decide on the right products to cross-sell to each
customer, and (c) defining metrics to track cross-selling,
penetration, and officers referral.

GTS established the GDR Desk in Q1 2013 with the purpose
of supporting issuers who are broadening and diversifying
their shareholder base with potentially greater liquidity, ben-
efitting share valuations in addition to expanding our com-
mitment globally.

CIB continues to be the sole provider for the securitiza-
tion trustee services, maintaining our leading position in
the market.

For the fifth consecutive year, GTS was awarded the Best Sub-
Custodian Award from Global Finance Magazine. GTS also re-
ceived both the Best Trade Finance Provider in Egypt Award
and the Best Online Cash Management – Regional Award by
Global Finance in 2013, ensuring CIB’s leadership position in
Global Transaction Services in the Egyptian market.

In a joint effort by the GSS and the Investor Relations depart-
ments, CIB ADR (American Depository Receipts) was regis-
tered to be traded on OTCQX International Premier-A segment
of the OTCQX marketplace reserved for world-leading non-U.S.
companies that are listed on a qualified international exchange
and provide their home country disclosure to U.S. investors.
CIB is the first ever Egyptian issuer to join the platform.

As relationships continue to be
nurtured with global donors
and development organizations,
supported by their sovereign
diplomatic missions, SrG boasts
yet another year of achievement in
2013, despite the challenges our
country faced.

GTS continues to enhance customer experience and efficient transaction processing capabilities

Product Segment Performance Indicator

Percentage of Bank-wide Trade transactions processed electronically via Misys
Trade Portal (MTP)

Trade

Percentage of Bank-wide Trade transactions processed Via Trade Hubs

Percentage of Bank-wide Trade transactions migrated from branches (MTP +
Service Hubs)

Dec-12

Dec-13

12%

15%

67%

71%

79%

86%

Cash Management Percentage of Bank-wide Cash transactions processed electronically

13.26%

34%

Global Securities
Services

Percentage of assets under custody market share

35.19% 35.72%

2014 Strategic Areas of Focus
• Product bundling to supply key components of value prop-
ositions attending to different customer needs. Providing
a more integrated set of services to achieve “stickiness” in
our customer relationships.

• Seamless customer experience across all GTS service de-
livery channels, with a continued focus on TAT improve-
ment, error rates and governing SLAs.

• Enhance user interface providing single sign-on, and
consistent look and feel across all products and admin-
istrative functions.

• Single point of access across all customer segments for all

online platforms.

• Introducing innovative products / services across all
GTS segments to ultimately offer an integrated work-
ing capital management solution that facilitates cus-
tomer business growth rather than products developed
in silos.

• Engaging customers through surveys and benchmarking

initiatives.

• Broaden and deepen customer relationships through vari-

ous cross-selling and up-selling initiatives.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 29

2013 In ReVIeW

gloBAl cuStomeR
RelAtioNS

2013 In ReVIeW

The Gcr business model also
expanded in line with our Strategic
roadmap in 2013. organizational
and strategic objectives were
prioritized and addressed, and
the required resources and staff
recruitments were deployed while
adhering to our strategic objective
of focusing on overall profitability
rather than profit-per-product.

Despite Egypt’s ongoing turbulent post-revolution environment,
the Global Customer Relations (GCR) Group remains bullish in
its outlook as it seeks to capitalize on opportunities brought
about by economic and political change. GCR, therefore, con-
centrated its efforts this year on responding to these changes
and taking full advantage of the accompanying opportunities.
As a result, and owing to its pivotal role across all of CIB’s busi-
ness lines, we are proud to announce that 2013 marked another
period of successful achievements for the GCR Group.

The GCR business model also expanded in line with our Stra-
tegic Roadmap in 2013. Organizational and strategic objectives
were prioritized and addressed, and the required resources and
staff recruitments were deployed while adhering to our stra-
tegic objective of focusing on overall profitability rather than
profit-per-product.

In line with GCR’s strategic goals and KPI’s, special focus
was directed toward our facilitative interdepartmental role
within the Bank to align objectives across all areas to imple-
ment our overall profitability model for groups and clients
under coverage.

GCR also made diligent efforts this year to provide advisory
services to support specific industries adversely affected by the
current economic climate, especially Real Estate, Tourism, Con-
struction and Building Materials.

We also took a more active role in designing and developing
tailor-made solutions to enhance, facilitate and improve bank-
wide products and services. Initiatives were undertaken to
improve product offerings to better meet client expectations,
deepening the Bank’s relationship with existing clients and en-
hancing both growth and profits.

Driven by ownership and accountability over accounts under

management, special focus was directed towards:

1. Business development and portfolio enhancement through
growth in the existing portfolio in addition to new commit-
ments.

2. Aggressive efforts towards recovering questionable and Non-
Performing Loans to safeguard the quality of CIB’s asset port-
folio.

3. Proactively solving potential client problems and identifying

new business needs.

2013 Achievements:
• Contributed to the growth of the corporate portfolio by EGP
420 million by increasing CIB share of wallet with 297 exist-
ing clients and 39 new-to-bank clients.

• Contributed to the growth of corporate profitability by 34.7%,
reaching EGP 774 million as of December 31, 2013 up from
EGP 574 million as of December 31, 2012.

• Corporate Liabilities: Increase in liabilities worth EGP 1.9 bil-
lion (Existing clients for EGP 1.6 billion and New Clients for
EGP 0.3 billion).

Collaborated with other departments to
introduce new products:
Bolero Application: CIB is the first Bank in Egypt to apply the
Bolero Online solution for its clients for Letters of Guarantee.
The Bolero Application is a clear example of a customized so-
lution that meets client needs and requires changes to stan-
dard operating procedures across a number of departments
being one of the GCR’s core competencies and primary busi-
ness objectives. ABB Group adopted the Bolero Trade system
globally.

Whereby all ABB subsidiaries should start utilizing this
reporting System to enable the Parent Company in Switzer-

land to monitor online the daily banking utilization of all its
subsidiaries.
• New Cash Deposit Portal
• New e-payment Gateway

2013 Achievements in Consumer Banking:
• A 35.3% increase in the number of payroll accounts.
• A 9.1% increase in the amount of personal loans.
• A 12.9% increase in the amount of personal deposits.
• Signing contracts of 4 new CIB Branches - Americana Pla-
za, CFC Mall, Palm Hills Promenade Mall and DP World

2013 Achievements in Merchant Acquiring
Services
Merchant Acquiring Services expanded, with GCR’s help, to
cover all GCR clients that require them. The Bank is proud-
ly the exclusive provider of Point of Sale (POS) terminals
throughout the new IKEA Store in Cairo Festival City Mall
& Americana Plaza in October & New Cairo. In addition to,
Etisalat Misr, Edrak, Mobinil, Travco, Blue Sky and Vodafone
to bring the total of 192 POS installed in 2013.

2013 Achievements in Custody Services
This department contributed to the growth of CIB’s custody
portfolio by attracting shares worth EGP 37.6 million from
two leading corporations in Egypt (Orascom Hotels and De-
velopment and Consukorra).

2013 Achievements in Global Transaction
Services
GTS successfully completed a total of 13 deals across the CIB
Cash Online, E-Trade and ACH platforms.

CIB Affiliates:
• Egypt Factors: Receivables factoring services increased by

EGP 5,000.

• CIL: Issued two insurance policies: A Group Life Insurance
Policy for Americana Group including five companies cover-
ing 14,000 of its employees. An Individual Insurance Policy in
the name of Consukorra Company’s Chief Executive Officer.
• Falcon: Falcon carried out Cash Transit Services for EDRAK
for Edutainment Projects Company and Nestlé. Falcon also
signed an exclusive security contract with Sofitel Group.

• CI Capital: Ratifying mandates for the execution of Port Ghal-

ib’s sell down transaction.

Going Forward — GCR Strategy 2014
• Develop, explore and extend relations with new selected ac-
counts in accordance with GCR approved selection criteria.
• In line with the announced government expansion policies
and directives, special focus will be directed to mega projects,
specifically in the Energy, Transportation and Ports sectors.
• Focus is directed towards marketing CIB banking service in

ports other than Ain El Sokhna.

• Aggressive effort will be directed towards expanding all retail

banking products and services.

• Focus on fortifying and expanding inbound Gulf investments.
• Special efforts will be directed toward recovering question-
able and problematic exposure to safeguard the quality of
CIB’s asset portfolio.

• Strategic collaboration with the entire CI family, with specific
focus on CI Capital and GTS to provide a well rounded solution
to the client.

• Constant market screening to spot new opportunities with

existing clients and expand with new to bank clients.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 31

2013 In ReVIeW

coNSumeR AND
BuSiNeSS BANKiNg

2013 In ReVIeW

despite political and
socioeconomic unrest in 2013,
cib wealth maintained its market
leadership by continuing to provide
our most valued clients with
superior financial solutions to meet
their financial needs.

liabilities
The success of CIB consumer banking is clearly demonstrat-
ed by the remarkable growth in customer deposits, which
reached EGP 70.7 billion in December 2013, an impressive
20% growth over EGP 59.1 billion in 2012.

In October 2013, CIB’s total liabilities reached EGP 94.7
billion, which translates to a 7.63% market share for CIB
compared to 7.23% in 2012, as total liabilities of all Egyp-
tian banks reached EGP 1.2 trillion as of October 2013. This
growth is an outstanding achievement in our highly-compet-
itive market of 40 banks.

Wealth
At CIB Wealth, we achieve excellence by adopting industry
best practices and fostering a win-win environment for all
stakeholders. Despite political and socioeconomic unrest
in 2013, CIB Wealth maintained its market leadership by
continuing to provide our most valued clients with superior
financial solutions to meet their financial needs. This was
reflected by the solid and growing relationships through pro-
fessional Wealth Managers who continuously strive to build
service quality and adequate financial advice. Wealth seg-
ment deposit grew 22% year-on-year as of end-2013.

In 2014, CIB will continue to make service excellence a cor-

nerstone of its proposition tailored to HNWI.

payroll
The Payroll business saw continued growth in 2013 with a pay-
roll net sales acquisition of 33,267 accounts as of year-end.

As a major channel for liabilities and assets x-sell, payroll
recorded a significant rise in deposits and assets penetration
with total deposits recording EGP 3.7 billion in 2013, 37% in-
crease from 2012. Total assets portfolio reached EGP 0.874
million in 2013, representing a 44% increase from 2012.

Given the prominent role of CIB Payroll business in the
market, focusing on quality assurance was solidified by es-
tablishing a team to provide around the clock qualitative ser-
vice calls to payroll clients. This resulted in reducing monthly
payroll complaints from 57% to 9% and updating a database
of over 10,000 customer accounts.

Business Banking
The Business Banking segment has been one of CIB’s stra-
tegic initiatives in the past couple of years, handling and
managing SMEs within the Banking sector. The segment was
launched on a pilot basis in 2011 and then went live in 2012,
covering a limited number of branches. Finally in 2013, the
Business Banking segment was aggressively introduced to
the market with a number of financial products and service
offerings that were specifically created for the targeted de-
mographic.

plus
CIB Plus was introduced in 2013 as a new segment that caters
to medium-net-worth individuals. Strategy is to build a solid
and profitable business that is purely customer-driven. By us-
ing simplified products, fast track service and personalized
service offerings through a network of Plus Bankers, CIB Plus
is designed to help customers grow their savings and product
portfolio en route to becoming Wealth.

Financials & Achievements:
The Business Banking Segment had an impressive year with
achievements and figures that encouraged upper manage-
ment to put more focus on this segment and allocate more
resources by end of 2013. The segment’s performance figures
in 2013 measured against 2012 results are presented below:
• Assets portfolio grew by EGP 95 million representing a year-

on-year (Y-o-Y) increase of 20%.

• Deposits portfolio grew by an impressive EGP 3.7 billion
with a growth of EGP 1.7 billion in Current Accounts and
EGP 2 billion in Term Deposits, which is a total Y-o-Y in-
crease of 49%.

• Revenue to the Bank grew by 56% Y-o-Y to EGP 354 million,
derived mainly from a growth of EGP 80 million in Fees &
EGP 46 million in NII

• Business Banking new clients acquisition in 2013 reached 644
company which is an average of 54 companies per month.
• Average Revenue per Officer recorded a remarkable 28% in-
crease, showcasing a productivity improvement by the dedi-
cated Business Banking Relationship Manager.

Performance Indicator

2012

2013

Increase

Total Assets: (ENR)

479,941

574,600

20%

Secured Facilities

479,941

550,763

15%

Unsecured Direct
Loans

Unsecured Facilities

Customer Deposits
(ENR)

DDAs

Term

22,001

43,554

7,645,462 11,424,084

49%

3,238,894

4,978,526

54%

4,406,568

6,445,558

46%

Deposits end net Result, 2013

14%

86%

Business Banking

Total CIB

trade Volume, 2013

26%

Total Revenue

233,303

354,330

52%

60%

14%

Net Interest Income

161,907

202,779

25%

Non-Interest Income

71,396

151,551

112%

Gross Contribution

218,652

321,191

47%

Business Banking

Retail

Corporate

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 33

2013 In ReVIeW

A real entrepreneur, tobacco
plantation owner Simon Arzt
produced cigarettes in Egypt to
benefit from the favorable tax
regime, while his department
store was famous for importing
the “right brand” of European
goods to serve Egyptian and
expat elites living in Port Said.

The Business Banking segment has undergone continu-
al growth since its launch in 2011, a success attributed
to several factors, including our efforts to develop a re-
lationship based on trust with our clients, our experi-
enced and dedicated management team, the hard work
and dedication of our Relationship Managers (RMs) who
work to establish solid relationships between our clients
and CIB, and finally to our enthusiasm to serve the SME
sector in Egypt.

In order to assist in the development of SMEs — the backbone
of the Egyptian economy — it is important to provide them
with access to integrated financial solutions and off-the-shelf
financing programs, in addition to working with these com-
panies to help them better manage their cash cycles while
meeting their needs and expectations.

Our support for SME clients also includes conducting busi-
ness workshops and seminars designed to help them run
their companies efficiently under the current circumstances

by offering lectures and courses on business planning and
crisis management.

Last but not least in 2013, we have graduated 25 Relationship
Managers from the first “Business Banking Academy” which
aimed to ensure that our Relationship Managers are the best
in the Egyptian Market. The Business Banking Segment was
proud to honor our first Business Banking Academy Graduates
The purpose of the Business Banking Academy is to create
strong and ambitious calibers that are the key players and the

image of our segment by attending extensive training on soft
skills, essential selling tools, technical knowledge on impor-
tant subjects such as Trade Finance business and finally an
on the job training to put all of the acquired knowledge into
implementation.

To further extend our lines of services to SMEs, the Bank
aims to expand its distribution channels to more locations
across the country, with a particular focus on industrial zones.

Cards
CIB Cards is a robust, full-fledged and profitable business of-
fering a full product suite of credit, debit, prepaid and POS,
serving over 630,000 customers in retail and business seg-
ments across Egypt. Our mission is to become the leader in
processing non-cash financial transactions in Egypt, as well
as to be a key enabler of the Egyptian economy.

Overall, 2013 was a strong year for the CIB Cards Business.
On the Credit Cards line, we achieved sales growth of 22.8%
over 2012, for a total of EGP 2.9 billion.

In the Acquiring segment, CIB maintained its leadership
position despite new and strong competition by offering Dy-
namic Currency Conversion (DCC) services. That in addition
to a high level of customer service resulted in the processing
of over 9.6 million transactions worth EGP 5.9 billion.

CIB plans to introduce in 2014 several new cards and pro-
grams such as airlines co-branded cards and an installment
facility and loyalty program by investing in more core con-
sumer cards issuances, in order to gain a greater market
share, rebalancing towards high-return business payments
and continuing to lead in payment innovations to meet
evolving customer needs.

Alternative Distribution Channels
At CIB, one of our core beliefs is in the importance of excel-
ling at fundamental business lines, as these are the founda-
tion upon which innovative capabilities that address diver-
sified, sophisticated and dynamic customer demands are
built. Accordingly, the strategic direction of the Alternative
Distribution Channels is to focus on providing customers
with round-the-clock value-added services through simpli-
fied accessibility banking.

Online Banking: The new online platform, launched in Q1
2013 succeeded in increasing the number of users by more
than 42% compared to 2012, serving 18% of the bank’s cus-
tomer base. The platform proved successful at getting cus-
tomers better acquainted with online products, in addition to
simplifying the process of performing recurring transactions
and fund transfers to external beneficiaries. The platform is
also making headway in establishing more value-added ser-
vices in 2014, such as Bill Payment as well as customization
of service offerings.

ATM Network: CIB continues to capitalize on its well-es-
tablished ATM network to release new value-added servic-
es. A new type of machine capable of accepting bulk notes
was introduced in Egypt. This will enable real-time depos-
its by plastic cards for SME and Corporate clients. Other
key technological innovations included the small ticket

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 35

2013 In ReVIeW

card-less deposit mechanism, which helped increase de-
posit migration rates by 103% year-on-year. This year also
witnessed the release of the Bill Payment service on the
ATM network which allows clients to pay their mobile, in-
ternet, and utility bills at CIB ATMs. The Bank will contin-
ue this strategic direction of offering new value-added ser-
vices to help customers conduct transactions effortlessly
at all hours at more than 555 ATMs across Egypt.

Call Center: CIB’s 24/7 Call Center is the main interac-
tion hub for our current and prospective customers. The
Center supports inquiries, transactions, requests and
complaints through more than 3 million self-service and
agent calls per year. The Center increased its workforce by
22% in 2013 to a total of 178 officers, in an effort to widen
its customer base. In 2013, the Call Center has been at the
epicenter of CIB’s customer-focused strategy by establish-
ing a unit to evaluate the new customer experience. Fol-
lowing its mandated role to offer one-on-one treatment
for every customer, the Center added two new segments,
one for the Plus segment and one for the Business Bank-
ing segment. The Call Center introduced for the first time
in Egypt an interactive multimedia platform in Q4 2013,
offering customers the option of interacting with agents
over video calls.

E-Payments: CIB remains the leading bank in collect-
ing government e-payments with a market share of 47%.
CIB continues to expand its payment services to cover all
Egyptian ports of entry, with this year’s addition being the
Cairo International Airport. Fees generated from such ser-
vices increased by 6% compared to 2012. The Bank has also
launched its new Corporate Payment Services (CPS), which
provides government e-payment services for key corporate
clients through secured portals that are accessible around
the clock without the need to visit a CIB branch.

Branch of the Future: CIB launched the first interactive
smart branch in Egypt and affirmed its market leadership
by introducing innovative financial services to the local
market. The new branch, located on Road 90 in New Cairo,
offers a unique experience using interactive screens to
demonstrate the Bank’s latest products and services, with
the ability to send more information to the client via email.
The branch also offers the first video call channel during
and after official working hours, a unique service among
banks in Egypt. The branch is also equipped with the lat-
est digital tablets, offering a chance for clients to carry out
e-banking transactions at the branch, in addition to the
newest line of ATMs in the self-service area. The launch of
these fully interactive tools completely revolutionizes the
customer banking experience, reflecting CIB’s strategy
and its vision towards the future.

Consumer loans
Consumer Loans portfolios recorded positive trends dur-
ing 2013. These trends were evident during Q1 and Q2,
which were attributed to the application of new business
initiatives across all loan product lines. As the political

scene dramatically changed in mid-2013, these trends were
impacted during the months of July and August. However,
these were reversed by September as the business climate
steadily normalized.

The Personal Loans portfolio grew by 24% recording
EGP 3.33 billion by year-end 2013 as opposed to EGP 2.68
billion in 2012. This growth was achieved as a result of an
increase in the scope of unsecured personal loans pro-
grams which was expanded to focus on high yield target-
ing programs. Moreover, this led to a shift in the sourc-
ing mix towards high yield segments and an increase Net
Interest Margins of 10% to reach 2.9% at year-end 2013 as
opposed to 2.63% at year-end 2012.

Sales-wise, the applied business initiatives have led to
an increase in single customer profitability by applying
a multiple product sales model and increasing the unse-
cured loans average ticket size by 46% to reach EGP 41,000
as opposed to EGP 28,000 in 2012. Personal Loans revenues
recorded a growth rate of 36%, achieving EGP 134 million
in 2013 in contrast to EGP 98 million in 2012.

In 2014, the Personal Loans Business will focus on in-
creasing overall portfolio Net Interest Margin and gross
contribution by prioritizing sourcing from high yield pro-
grams as well as increasing assets penetration to payroll
customers. The Personal Loans Business will target sales
of multi-tiered products and cross selling options to im-
prove average customer profitability.

The Auto Loans Business saw a rebound in its mar-
ket position towards the end of 2013 by doubling monthly
unsecured sourcing in order to raise CIB auto loans mar-
ket share from 9% in Q1 and Q2 to 14% at year-end. This
hike in sales performance resulted from applying several
business initiatives such as introducing marketing activi-
ties and offering new dealer incentive schemes. This no-
table improvement in unsecured Auto lending led to 19%
a growth in revenue to reach EGP 24 million in 2013, an
EGP 4 million increase over 2012. Sourcing from Secured
Auto loans was halted in the beginning of 2013, as the
sales focus shifted towards unsecured lending. This led
to a growth in the Consumer Assets Unsecured portfolio,
which shortened the breakeven period to early 2014. Sus-
taining product proposition enhancement contributed to
this achievement and served to grow CIB’s market share.
The Secured Overdraft portfolio reached EGP 1.9 bil-
lion in 2013, as its strategy was centered on changing the
portfolio mix towards Local Currency lending which also
contributed to increasing the NIM to 1.84% in 2013 com-
pared to 1.69% in 2012. The portfolio will witness the in-
troduction of unsecured overdraft programs to capitalize
on payroll relations in 2014.

Insurance Business
Life Insurance:
The CIB Insurance Business provides Life and General In-
surance programs that generate non-interest revenues in
the form of fees for CIB Consumer Banking.

In 2000, CIB began promoting life insurance programs
such as protection packages as well as savings packages.
These programs were introduced to address a wide vari-

cib’s 24/7 call center is the main
interaction hub for our current and
prospective customers. The center
supports inquiries, transactions,
requests and complaints through
more than 3 million self-service and
agent calls per year.

• Continued to provide a wide array of insurance plans to

meet the needs of all consumers.

General Insurance:
• Increased Credit Shield administrative fees by EGP 11
million in 2013 compared to EGP 6 million in 2012.
• Launched ‘Save & Safe,’ the first insurance product

with a savings account in Egypt.

• Monitored and managed all insurance group policies
related to assets and portfolios to assure an optimum
coverage at the best rates and a smooth process.

• Improved Bank Risk Management by reviewing the
Bank’s insurance policies related to financed assets,
with the goal of reviewing all policies by the end of 2013.
• Focused on creating bundled insurance consumer
products packages in 2014, such as travel insurance for
cards, auto insurance, payroll insurance, CD’s insur-
ance, and medical insurance for the Wealth segment.

ety of consumer needs in Egypt through the Commercial
Insurance Life Company.

The department began offering General Insurance in
2011, capitalizing on its strong links to the best insurance
providers in Egypt.

Target Segment:
Due to the nature of insurance products, periodic premi-
ums are paid to cover unfortunate events. Our business
targets different client segments based on consumer in-
come, health condition and need analysis.

To secure our valued customers, a number of new life
insurance programs were introduced in 2012, with up-
graded benefits, to better satisfy most of customer needs.

Strategic Goals:
• Insurance Business’ strategic goal is to increase its rev-
enue contribution to Consumer Banking to 10% by 2016.
• Increase market penetration by expanding CIB’s cus-

tomer base.

• Lead the market by introducing a wide range of prod-

ucts from the best insurance providers.

2013 Achievements:
Life Insurance:
• Achieved a remarkable net growth in fee income to
reach 36 % YTD [EGP 51 million in 2013 compared to
EGP 38 million in 2012].

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 37

2013 In ReVIeW

coo AReA

2013 In ReVIeW

In 2013, the COO Area continued to sponsor and implement
key initiatives from the Bank’s strategic agenda, despite the
fact that this year presented a very challenging operating
environment. Egypt’s political and security situation caused
heightened tensions after the first half of 2013, resulting in
a number of challenges and a good deal of focus on Busi-
ness Continuity Management. In addition, a challenging FX
environment in the country and local currency devaluation
affected our projects, contracts, payments and operating ex-
penses. To offset these externalities, as well as to strengthen
the CIB brand, the COO Area has focused on several strategic
objectives, including the improvement of customer experi-
ence, infrastructure development, enhancing the controls
environment, effective cost management and people agenda.
We were able to boost our distribution network, adding
more than 20 new branches — a real accomplishment under
the circumstances — bringing our total network to more
than 153 branches. We also acquired a new head office at the
Smart Village business park, enlarging our presence there to
two buildings with facilities covering a total area of 15,000
square meters and hosting more than 1,000 staff members.

This year, the COO Area has actively taken ownership of a
number of key strategic projects and initiatives for the Bank.
Our Sustainability Initiative was one such effort, with a sig-
nificant amount of work done in support of its implementa-
tion. The COO Area created the proper framework and gov-
ernance for the Initiative, and implemented key ‘quick wins,’
including turning our head offices into non-smoking build-
ings and raising staff awareness in regards to environmental
considerations and corporate social responsibility.

Another key project was the move towards compliance
with the new US tax regulation, the Foreign Accounts Tax
Compliance Act(FATCA). We have hired one of the Big Four
to conduct the required consultancy services for the CIB
Group in order to understand our responsibilities and our
situation to mobilize our resources accordingly.

The COO Area continued in its efforts to enact effective
cost management as well as positively contributing to the
Bank’s revenue generation. Through our staff’s Cross Sell ini-

The first cairo hotel to be
built on the banks of the river
Nile, the original Semiramis
was completed in 1907 and
immediately became an
institution in the bustling city.

tiative, the COO Area has generated significant revenue for
the Bank this year.

Further focus was placed on evolving the COO Area organi-
zation in terms of people and functions to increase the value
added to CIB. This year, separation of key functions such as
the Finance Group has taken place after developing signifi-
cantly to act now as a more important player in the Bank’s
strategy and decision-making. Consolidation of the Premises
& Services Division under one enlarged operations group a
in creating further synergies and better end-to-end manage-
ment of our operational activities. Increased focus on the CIB
brand image and equity will be realized through the separa-
tion of the Marketing and the Brand & Corporate Communi-
cations Divisions that took place at the beginning of the year.
In terms of human resources, we hired promising fresh gradu-
ates through successful employment fairs at reputable univer-
sities. We also enriched our management line up with experi-
enced talent to manage key positions in the COO Area to align
with the Bank’s strategic aspirations and market position.

operations Group
In 2013, the Operations Group enlarged its footprint in the
COO Area to manage the Premises Projects & Corporate Ser-
vices function in addition to its responsibility for the Cen-
tralized Operations, Internal Controls and Service Quality
& Business Continuity. This consolidation was done with the
aim of creating more synergies with those areas and stream-
lining the process flow.

The Operations Group kick-started key projects this year
which were designed to augment the Bank’s strategic agen-
da. This included a major Business Process Orchestration
project that will be implemented over three years’ time to
centralize and streamline key business process flows from
an end-to-end perspective while building up internal capa-
bilities through a fully integrated Center of Excellence. Au-
tomation of the current Custody Operations has also been
one of the priorities this year through introducing a fully-
fledged Automated Custody system that is expected to go
live by the end of 2014.

In support of the business agenda, the Operations Group
implemented multiple projects related to the alternate
channels that contributed to offloading our branch net-
work and improving our customer experience by introduc-
ing a number of alternatives for customer transactions.
This included an expansion of our ATM network to 550
machines, as well as the addition of new features. We also
launched our new online banking portal, raising the level
of service provided to our customers and improving their
experience with CIB – a key focus area of the Bank’s stra-
tegic agenda.

Substantial efforts were made this year in support of the
Bank’s Business Continuity & Crisis Management in light
of the political and security situation. The Bank managed
to successfully operate our head office multiple times from
alternate locations, accommodating a capacity of 100+
staff, and also managed to sustain very high service levels
for customers through our diverse branches network and
alternate channels.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 39

2013 In ReVIeW

premises projects
The challenges of 2013 highly impacted the Premises Proj-
ects department, with the local currency devaluation and the
unavailability of labor negatively affecting our contractual
obligations and timelines. However, the Premises Projects
department was able to successfully deliver a number of key
milestones this year that involve key strategic parameters.

We increased our reach through establishing more than
22 new branches and our ATMs network has grown to reach
560 ATMs. We completed the renovation/uplifting of 10
branches and 16 wealth lounges. We also increased our head
office space by acquiring another building in Smart Village,
expanding our Smart Village presence to more than 15,000
square meters and accommodating a total of 450 staff.

New branch designs are underway, with CIB ushering in a
new prototype branch at Black Ball Mall. Widely regarded as
the first interactive branch in Egypt, the facility incorporates
high-tech elements implemented for the first time at a CIB
location. This is the model that we will be replicating across
all our new branches starting in 2014.

Emphasizing our responsibility towards CIB’s sister com-
panies, we completed CICH’s new head office rearrange-
ments as well as the foundation phase of Falcon Group’s head
office in New Cairo.

Finance Group
During 2013, the Finance Group continued its transforma-
tion into a strategic partner, working closely with the busi-
ness and the Board of Directors to assist in decision-making,
results analysis and driving performance in the service of
shareholders’ interests.

A good example of this new strategic focus was the intro-
duction of Risk-Adjusted Return on Capital (RAROC) as a key
performance indicator for the Bank. RAROC will help align
relationship managers’ and shareholders’ interests to maxi-
mize returns based on the true capital cost to shareholders.
RAROC will be rolled out to CIB’s clients and across product
lines throughout 2014 and 2015, making it an integral factor
in the Bank’s future decision-making process.

2013 was the year of IT Capital in Finance. Marked improve-
ments were made in our management information systems,
including the implementation of an advanced enterprise per-
formance management application, budgeting and reporting
systems, as well as a new IFRS reporting module. All this was
accomplished alongside a major upgrade of the Bank’s core
banking system. Execution of the upgrades, including the
new and more comprehensive automation of ledger control
and reconcilement, will continue in 2014.

Corporate Services
Corporate Services had an extremely busy agenda this year,
with a heavy focus placed on enhancing our security. We
significantly tightened security measures across all our
branches and head offices, including implementation of ac-
cess control systems, as well as increasing safety measures
in our warehouses based on international safety practices
and supported by training our staff on safety and security.
Additionally, we provided our drivers with defensive driving
training to better ensure the safety of our employees.

We introduced a more robust supply chain management
function, which involves looking over procurement, tender-
ing, contracts and warehouses, and introducing enhanced
vendor management capabilities.

In support of Business Continuity, we upgraded our
branch network generators and UPS supplies to increase
our resiliency.

A number of initiatives planned for in 2014 began in
earnest this year. This included applying a new preventive
maintenance strategy for proactive maintenance of our as-
sets and buildings.

Finally, and in support of the Bank’s sustainability initia-
tive, Corporate Services has implemented various projects
including planting a roof top garden, creating the green wall,
and planting a native plants garden. Furthermore, we imple-
mented a non-smoking policy in our head offices, with fur-
ther projects expected to take shape in 2014.

Human Resources
One of the main goals of the Human Resources department in
2013 was to focus on attracting employees of the right caliber
as well as to contribute to the development and success of ex-
isting employees. Human capital management has been and
remains of the utmost priority, and we increased our focus on
improving our staff satisfaction and compensation strategy
to retain key talent within the organization.

Recruitment
On the recruitment side, the focus was on promoting from
within for middle and upper management positions, while ef-
forts to build entry level talent were directed towards visiting
campuses and having a presence at employment fairs. One
of our main sources for summer and for-credit interns came
from on-campus outreach, including employment fairs, our
winter training initiative, and events such as AUC Career day
and Top Employer. We conducted a very successful round of
summer internships this year with a carefully selected group
of 50 summer interns from reputed universities. Our credit
internships also evolved this year and we were able to select
60 external candidates to sit for the GMAT exam for the next
credit course in 2014. We also maintain a very low turnover
rate of 1% below the market benchmark.

talent Management
A major focus of the COO Area is Talent Management. For the
first time, CIB initiated an all-round, comprehensive assess-
ment of leadership competencies for executive and senior di-
rectors conducted by SHL, one of the world’s leading leader-
ship consulting firms. The assessment is used to identify and
evaluate the competence of CIB’s senior management against
a set of managerial behaviors that impact their work perfor-
mance, leadership style and ultimately CIB’s organizational
culture and business performance.

On the Performance Management side, standardized ob-
jectives Bank-wide were reviewed and updated to maintain
a robust performance management system that ensures the
Bank’s strategy reaches all staff levels and that each staff
member clearly understands what is expected from them
for the year.

2013 In ReVIeW

Marked improvements were
made in our management
information systems, including
the implementation of an
advanced enterprise performance
management application,
budgeting and reporting systems,
as well as a new ifrS reporting
module.

learning & Development
The role of learning and development has evolved in 2013,
with an increased focus on investing in our staff’s develop-
ment. The L&D department has supported multiple initia-
tives of the People Agenda. This included sponsoring overseas
MBAs for two of our staff and enrollment of eight employees
in the Graduate School of Banking (GSB) Program at the Uni-
versity of Wisconsin in Madison, USA throughout this year
and next year. These initiatives also include financing higher
education opportunities locally at reputable institutions as
well as funding attendance at overseas conferences.

As developing quality management for the Bank is a fun-
damental strategy, 2013 saw a continued investment in our
leadership development programs, namely the Leadership
and Management Program (LAMP) for CIB’s directors and
higher positions, a program covering 100% of the target pop-
ulation. Another program is the Leadership & Development
Program for Consumer Banking (LDP) which this year tar-
geted consumer banking zones and branch heads.

The breakthrough Job Family Project, which introduces a
number of programs in Trade Finance and Operations targeting
Consumer Banking, and which was initiated in 2013, will be im-
plemented on a wider scale in 2014. This should bring the learn-
ing and development scope into a more strategic perspective.

Compensation and Benefits
In terms of employee compensation benefits, we participated
in local salary surveys to ensure effective reward benchmark-
ing and analysis to maintain CIB’s competitive position. We
also streamlined the CIB salary structure to ensure our staff
are paid on par with the market (external equity) and also
ensure that similar jobs with similar performance standards
are compensated similarly (internal equity).

We enhanced our pay policy including salary adjust-
ments for certain positions based on market practices,
and changed our merit increase policy to be on a monthly
take home basis rather than relying solely on base salary.
We also enhanced our staff benefits policy regarding staff
loans, mortgage loans and car loans. The Department has
also improved our medical insurance policy and limits by
changing the vendor to provide more benefits to our staff
and raise the bar of satisfaction.

Sustainability Development
Sustainability from an environmental perspective is becom-
ing a fundamental component of the strategy of leading mul-
tinationals, investors and fund managers around the globe. It
was in this forward thinking spirit that CIB decided to move
forward with a robust Corporate Sustainability initiative in
July 2012. To this end, the Bank will ensure that it achieves its
twin objectives of serving Egypt’s socio-economic interests
and protecting the environment, as well as attaining durable
financial safety and soundness for the Bank.

CIB approved the establishment of a dedicated Sustain-
ability Development Department, which falls directly under
the umbrella of the COO area. Dr. Nadia Makram Ebeid (ex.
Minister of Environmental affairs and CIB Board of Director
member) was nominated to guide this initiative in coopera-
tion with a competent dedicated team. The Sustainability
Development Department was initiated in January 2013 with
a mandate to ensure the development, management and re-
porting of CIB’s sustainability efforts (strategies, policies,
systems, initiatives, quick wins including ongoing third par-
ty liaising, branding and training efforts).

In March, CIB’s sustainability governance structure and
framework were approved by a Sustainability Advisory
board. Green Teams were nominated to act as Environmen-
tal Champions within the organization.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 41

2013 In ReVIeW

titions, non-smoking campaigns and double-sided print-
ing (paper conservation), in cooperation with the Premises
Projects, Corporate Services and Branding departments.
The Sustainability Development Department also began
work on the development of a solid waste management sys-
tem through a phased approach with the contribution of the
Corporate Services department. The Sustainability Develop-
ment department also worked with the Learning and Devel-
opment department to focus on raising employee awareness
on sustainability, through 35 Sustainability Staff Awareness
sessions which were held in CIB Head offices and branches
across Egypt.

Our long-term initiatives include conducting a social
and environmental assessment of our business practices
and to draw up a sustainability framework and roadmap.
Another initiative is working towards identifying the nec-
essary steps towards acquiring the Leadership for Energy
and Environmental Design Certification (LEED). An exter-
nal LEED expert was identified to assess the possibility of
converting our new Smart Village building into a LEED cer-
tified building.

CIB Brand and Corporate Communication
Department
In 2013, and in order to cope with the Bank’s brand position-
ing strategy and placing added focus on brand equity and
brand image, the Marketing and Communication depart-
ment was split into CIB Brand and Corporate Communica-
tion department under COO Area and Consumer Market-
ing, both within the purview of the Consumer Bank. Their
objective is to concentrate on Brand Marketing through
managing sponsorships, events, creativity, production and
public relations.

The Department has made key efforts throughout the
year to expand CIB’s image, brand loyalty, brand position-
ing, and exposure, keeping in mind external and internal
customers.

Once again CIB has maintained its position in Cairo’s In-
ternational Airport. The airport branding initiative creates
the utmost exposure, attracting foreign investors, while cre-
ating top-of-mind awareness to all potential clients, while
representing a strong and solid position for CIB compared to
other Banks.

Continuing last year’s Branches Rebranding Project, we are
proud to say that all CIB branches were finalized with the new
branding materials. All our branches now contain a standard-
ized look and feel, and we added more that 20 new locations to
our network this year. The CIB Black Ball Branch was launched
with a recently approved concept and design, and is expected
to be implemented with new 2014 branches. New brand and
branches design guidelines have been established in order to
support and improve the new brand position.

The concept of the new Wealth Easy branches was also
launched in a number of high-end residential compounds,
such as Gardenia, Arabella, and City View. A strong branding
strategy was rolled out in these compounds to promote the
concept of easier-to-use branches to our customers.

As the CIB website is one of the most important commu-
nications tools between the Bank and its clients, the Brand-
ing & Corporate Communication Department implemented
a new and enhanced CIB website. We completely redesigned
our layout with simplicity in mind, and made the site more
user-friendly, with a strong focus on content delivery. The
improved website offers features such as support for both
English and Arabic, a loan calculator, social media platform,
online forms, a mobile application, an investor relations web-
site, and an audio / video gallery.

Moving forward this year, CIB entered into a number of
sponsorships to enhance its brand image, relating to themes
of quality lifestyle, CSR, art, culture and sports. CIB is now
a proud sponsor of Platform Marina & Maadi, Americana
Plaza, Zamalek Club, Le Pacha, Red Sea Festival, Euromoney,
Kidzania, the Egyptian Squash Association, Youth Salon, IIF,
Employment Fairs, and many more.

The Montaza district of Alexandria
is famous for both its open-air
promenade and as the heart of
the city’s commercial district.

CIB Awards
CIB has continued to receive global recognition for the Bank’s
outstanding performance and reputation. Some such notable
awards include:
• Best Bank in Egypt for the 17th year, Global Finance

magazine

• Best Sub-Custodian Bank in Egypt for the 5th consecutive

year, Global Finance magazine

• Best Foreign Exchange Provider Bank in Egypt for the 10th

year, Global Finance magazine

• Best Bank in Egypt, Euromoney Excellence Award 2013
• Best Trade Finance Bank in Egypt for the 7th year, Global

Finance magazine

• Best Asset Manager in Egypt, Global Investor ISF
• Best Internet Bank, Global Finance magazine
• Bank of the Year, The Banker magazine
• World’s Best Emerging Market Bank, Global Finance

magazine

• Best Foreign Exchange in North Africa, EMEA Finance
• Deal of the Year Best Restructuring Deal, The Banker

magazine

• Top Ranked Bank in North Africa, FTSE

Information technology
A number of key milestones were achieved in 2013 in the IT
Department’s ongoing efforts to create an optimal techno-
logical base upon which the Bank can build its innovative
business solutions. Overall, this year has been one of major
technological achievement.

In the technology arena, CIB successfully managed change
across the board. From the physical infrastructure, to key
systems within the Bank’s IT platform, as well as other IT
services, improvements were made in each area.

Of the many technology initiatives completed during 2013,

some of the major achievements of the year included:
• Completion of the move to the new Core Banking
System: CIB has successfully replaced its old system.

The new system, in addition to adding significant new
capability for the business, is also well aligned with our
strategic direction, and has the ability to grow along
with our business.

• Creation and move to a new Data Center: The creation
of a new state-of-the-art data center, and transferring our
production center to the new premises, was also complet-
ed this year. This new data center houses the Bank’s com-
plete infrastructure and is the center of our IT operations.
• Compliance and Regulatory Activities: The Bank has
continued to make investments in systems for address-
ing compliance and regulatory requirements. A number of
projects were completed in 2013 to specifically address all
regulatory requirements.

• Completion of our move to a new Online Banking Sys-
tem: In line with our strategy to upgrade the technology
behind our alternate channels, CIB also rolled out a new
Retail Online Banking system. The system introduces a
number of new functions and capabilities, including user-
friendly security options.

• Ongoing expansion of our Analytics and Information
Processing: CIB’s data warehouse capabilities continued
to grow in 2013, with additional tools, dashboards, and
analytic capabilities being added throughout the year.
• Business Process Orchestration project: With a techno-
logical base in place, and the completion of the core bank-
ing replacement and implementation of other key systems,
the Bank has focused its efforts on building on this base
to gain a significant advantage. The BPO project is going
forward, and is focused on providing process automation
capabilities across the Bank

Throughout 2013, we upgraded our infrastructure and tech-
nical services. By having added critical new functionality,
additional capacity and working on streamlining our techni-
cal environment, CIB remains steadfast in providing a better
experience to our customers.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 43

2013 In ReVIeW

As the most important waterway
connecting East with west, the
Suez canal ended the 9,654
km circumnavigation of Africa,
cutting average travel time from
20 days to 13 hours.

RiSK gRoup

Risk Framework
Overview
In 2013, our strong, disciplined framework in managing risk
was integral to withstanding the turbulent challenges of
Egypt’s transitional period and allowed the bank to maintain
its solid reputation as a market leader, serve our clients and
deliver strong results. Our robust framework provides assess-
ments of the following risk types: credit, market, operational,
interest rate, liquidity, funding as well as social and envi-
ronmental. All elements for the framework are integrated to
achieve an appropriate balance between risk and return.

Culture
CIB’s risk culture encourages risk transparency and effective
communication to facilitate alignment of business strategies
and promote an understanding of the prevailing risks through-

out the organization. CIB continues to add learning opportu-
nities and expand risk training across the organization.

Principles
CIB’s take on risk is directed by the following principles:
• Decision making is based on a clear understanding of the
given risk, accompanied by robust analysis to be approved
within the applied risk management framework.

• Continuous monitoring, managing and maintaining our de-

fined risk appetite.

• Business activities are conducted within established risk

categories which are further cascaded down to limits.

Risk Appetite
Risk appetite is the maximum level of risk that the Bank
is prepared to accept in order to accomplish its business

objectives. It is annually determined and reviewed by the
Board of Directors, taking into account strategic and
business planning and enforced by a detailed framework.
CIB’s risk appetite statement is defined in both qualita-
tive and quantitative terms and is integrated into our
strategic planning processes and the lines of business.
CIB’s risk appetite framework is guided by the following
principles:
• Ensure strong capital adequacy.
• Sound management of liquidity and funding risks.
• Maintain stability of earnings.
• Address social and environmental risks.

Risk Limits
CIB’s risk limits are guided by our risk principles and risk ap-
petite which are linked to business decisions and strategies.

These limits are reviewed and approved by the Board of Di-
rectors and include the following:
• Credit and Counterparty risks (country, industry, products,

segments, clients and groups).

• Market risk (foreign exchange and equity risks).
• Liquidity and funding risks.
• Interest rate risk.
• Operational risk.

Risk Group
The Risk Group (RG) provides independent oversight and
supports in the enforcement of the enterprise risk manage-
ment (ERM) framework across the organization. RG proac-
tively assists in recognizing potential adverse events and
establishes appropriate risk responses. This reduces costs
or losses associated with unexpected business disruptions.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 45

2013 In ReVIeW

The Group works to identify, measure, monitor, control and
report risk exposure against limits and tolerance levels and
reports to senior management and the Board of Directors.

operating guidelines that are approved by the Board of Direc-
tors. Our risk management framework is governed through a
hierarchy of committees and individual responsibilities.

objectives
• Implement a robust enterprise risk management (ERM)
framework that meets regulatory requirements and interna-
tional best practices.

• Work closely with business and support groups to monitor
portfolios and operations in order to provide independent
risk analysis.

• Work on raising efficiency to reduce expected losses, while

maintaining adequate impairments coverage.

• Review business decisions, adjusted for risk, in order to opti-
mize capital utilization and return on shareholders' value, as
well as social responsibility and sustainable business growth.

Organization
The Chief Risk Officer (CRO) manages the Risk Group and is
responsible for the day-to-day management of the following
key areas: credit and investment exposure management, con-
sumer and business banking credit risk, credit and investment
administration, credit information and risk management. The
CRO reports directly to the Chairman and has oversight of the
enterprise risk management framework and fosters a strong
risk management culture throughout the organization.

Governance
CIB’s risk governance structure includes a robust committee
structure and a comprehensive set of corporate policies and

The CRO and other risk officers are key members of all
credit, consumer, asset and liability management, and op-
erational risk committees. Management and the Board of
Directors have established key committees to review credit,
liquidity, interest rate, market and operational risks.

• The High Lending and Investment Committee (HLIC) is
composed of senior executives of the Bank. The primary man-
date is to manage the asset side of the balance sheet, while
ensuring compliance with the Bank’s credit policies and CBE
directives and guidelines. The HLIC reviews and approves the
Bank’s credit facilities and equity investments, in addition to
focusing on the quality, allocation and development of assets
and the adequacy of provisions coverage.

• Asset & Liability Committee (ALCO) is designated to
optimize the allocation of assets and liabilities, given the
expectations of future and potential impact of interest rate
movements, liquidity constraints, and foreign exchange ex-
posures. ALCO monitors the Bank’s liquidity and market
risks, economic developments, market fluctuations and risk
profile to ensure ongoing activities are compatible with the
risk/reward guidelines approved by the Board of Directors.
• Consumer Risk Committee (CRC)’s overall responsibility is
managing, approving, and monitoring all aspects related to the
quality and growth of the consumer and business banking port-
folio. CRC decisions are guided first and foremost by the cur-
rent risk appetite of the Bank, as well as the prevailing market

Chief Risk Officer
[CRO]

Risk
Management

Consumer &
Business Banking
Risk

Credit &
Investment
Exposure
Management

Credit Exposure
Management

Non-Performing
Exposure
Management &
Provisioning

Investment
Exposure
Management

Credit &
Investment
Administration &
Credit Information

Credit &
Investment
Administration

ALM Risk

Credit Information

Market Risk

Credit Risk
Analytics

Consumer Credit
Policy, Application
Fraud & Quality
Assurance

Strategic
Analytics

Credit
Assessment &
Fulfillment Unit

Operational Risk

Business Banking

Collection &
Recovery

trends, while ensuring compliance with the stipulated guide-
lines set by the Consumer Credit Policy Guide, as approved by
the Board of Directors.

• Operational Risk Committee (ORC) supports the Bank in
fulfilling its responsibility to oversee the operational risk man-
agement functions and processes. The objective of the ORC is
to oversee, approve and monitor all aspects pertaining to the
Bank’s compliance with the operational risk framework and
regulatory requirements.

Credit & Investment Exposure Management
Group - Institutional Banking (IB)

High Lending
& Investment
Committee
(HLIC)

Asset &
Liability
Committee
(ALCO)

Consumer
Risk
Committee
(CRC)

Operational
Risk
Committee
(ORC)

Chief Risk
Officer
(CRO)

Credit risk arises from all transactions where actual, contin-
gent or potential claims are measured against any counter-
party, borrower or obligor.

CIB distinguishes between five kinds of credit risk:

• Default risk is the failure of meeting contractual payment

obligations by the customer or counterparty.

• Country risk is suffering a loss in any given country due to
the probability of the following events occurring: a possible
deterioration of economic conditions, political and social up-
heaval, nationalization and expropriation of assets, govern-
ment repudiation of indebtedness, exchange controls and
disruptive currency depreciation or devaluation.

• Business risk is the possible changes in overall business
conditions, such as market environment, client behavior and
technological progress.

• Reputational risk is related to the publicity concerning a
business practice, counterparty or transaction, involving a
client that will negatively affect the trust in the organization.
• Concentration risk is the risk within and across counterpar-
ties, businesses, regions / countries, legal entities, industries,
currencies, exposure duration and products.

Under the Risk Group, credit risk is managed by the Credit
and Investment Exposure Management and Consumer
Credit Risk. These groups actively monitor and review
exposure to ensure a well-diversified portfolio in terms of
customer base, geography, industry, tenor, currency and
product.

At CIB, our management of credit risk focuses on keeping
a balanced view of each of the five aforementioned types of
risk, using analysis to properly build a diversified portfolio.
This is achieved through performing due diligence of clients
as well as regular performance assessments to identify po-
tential causes of concern or deterioration and to formulate
remedies for mitigation.

The following philosophy and principles are applied to

measure and manage credit risk:
• Credit risk management function is independent from busi-

ness divisions.

• Client due diligence and prudent selection is achieved in col-

laboration with business divisions.

• Working to prevent undue concentration and long tail-risks
by ensuring a diversified portfolio. Client, industry, country
and product-specific concentrations are actively assessed
and managed against the risk appetite.

• Extension of credit or material change to any counterparty

requires approval at the appropriate authority levels.

• Measuring and consolidating exposures to each obligor on a

group basis.

• Specialized teams derive internal client ratings, analyze and

approve transactions, and monitor the portfolio.

It is CIB’s adherence to these guidelines which aided in the
containment of loan losses and enabled the Bank to emerge
from a volatile macro-economic credit environment in 2013
stronger than before. Furthermore, the successful navigation
through the pitfalls of the 2013 credit crunch could not have
been achieved without the application of our existing philos-
ophy of conservatism, diversification and mitigation strate-
gies including collateral and credit support arrangements.
The above measures, backed by the high IB portfolio qual-
ity, enabled the Bank to maneuver safely through a difficult
period, reflected in a slight increase in default ratio to 3.96%
in December 2013 as compared to 3.63% in December 2012,
coupled with a total coverage ratio (direct and contingent) of
175.69% in December 2013 as compared to 134.4% in Decem-
ber 2012, confirming the Bank’s solid financial position.

On the Correspondent Banking side, challenges across Eu-
rope continue. However, the Bank continues to adopt a strat-
egy of limiting exposure to counterparties in the affected
countries, while confining exposure to financially strong and
stable institutions.

Credit & Investment Administration / Credit
Information Group
The Credit and Investment Administration function ensures
administrative control over institutional and investment ex-
posures as well as compliance with both the Credit Policy
Guidelines and CBE directives. The Credit and Investment Ad-
ministration Department represents a strong back-up to the
Institutional Banking Group by maintaining a quality control
system that ensures CIB seniority, protection and control, which
is processed through verification of assigned collateral related
to approved facilities prior to disbursement of funds, in addition
to robust reporting that facilitates effective decision-making.

The Credit Information Department compiles comprehen-
sive client-specific market information reports, from various
sources, for all corporate, mid-cap and business banking cli-
ents, and is responsible for extracting all regulatory reports,
in order to assist in the approval decision.

Consumer Credit Risk Group
Consumer Credit Risk Group, while being an integral pillar of
the consumer banking framework, functions as an independent

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 47

2013 In ReVIeW

governance group that manages the centralized risk function
for all consumer and business banking asset products. The over-
all objective is to maintain a quality portfolio while partnering
with the business in ensuring portfolio growth and to take a
leadership position in the asset business. The purview of this
unit extends across the entire consumer credit cycle, including
a) policy formulation b) underwriting and credit assignment c)
collection and repayment d) portfolio monitoring and analyt-
ics and e) application fraud. The group also ensures compliance
with the Consumer and Business Banking Policies guidelines
and Central Bank of Egypt directives.

The Bank’s consumer asset portfolio consists primarily of
credit cards, auto loans, personal loans, collateralized cash
loans, secured and unsecured overdrafts and residential prop-
erty finance. The business banking segment product suite has
also been enhanced to include the entire range of contingent
business and direct facilities. The Bank has now assumed a
market leadership position in the consumer asset business. The
asset portfolio has exhibited relatively strong growth through-
out the year with an increase of EGP 0.5 billion, representing a
growth rate of 7.7% in the direct facilities and reached EGP 0.9
billion, in the contingent facilities

This growth can be attributed to the introduction of new
programs and policy changes that give the Bank a definite com-
petitive edge in the market, with the focus being on growing our
higher yield unsecured portfolio. Consumer credit risk, in con-
junction with the business units, have deepened the product line
by rolling out multiple surrogate programs, tests and product
variants to attract new target segments envisaged to facilitate
growth. The Bank is a pioneer in the launch of innovative prod-
uct propositions revolving around the bureau score. Over the
past five years, CIB has built a sizeable consumer asset portfolio
of more than EGP 7.2 billion with an enviable portfolio quality
carrying a loss rate of 0.5 %. This portfolio size and quality con-
tinues to provide a high loss-absorption capacity, thus facilitat-
ing the launch of multiple programs to attract high-yield seg-
ments to further enhance profitability.

Furthermore, there has been significant progress in the busi-
ness banking segment with focus being to increase our cus-
tomer base and deepen existing relationships. A dedicated risk
structure with the required skill-set and expertise has been
instrumental in facilitating the Bank’s foray into new product
variants while ensuring adequate controls to mitigate the dis-
tinctive risks to this segment.

There has been a continued drive to excel in processing
efficiencies at our underwriting and collection functions.
Various restructuring and re-engineering initiatives have
helped effectively address the increasing demands of an
ever-growing portfolio without any increase in capacity,
while positively driving the key indicators of productivity,
effectiveness and efficiency.

The aggressive portfolio growth over the years and the mid-
year disruptive events notwithstanding, the portfolio qual-
ity has been sustained at levels that ensure the consumer
and business banking asset portfolio aggressively grows in
hitherto untapped segments, while pioneering new products
within the market. The portfolio has exhibited a healthy trend
with non-performing assets at (non performing: 90+ days past
due) 0.3% (compared to 0.3% in 2012 and 0.5% in 2011) and

designed by belgian architect
Ernest Jaspar, the grand
heliopolis Palace hotel was
touted as Africa’s most luxurious
hotel when it opened its doors in
1910. Today, this building serves
as the Presidential Palace.

loss rates of 0.5% (compared to 0.4% in 2012 and 0.6% in 2011).
The portfolio quality has been sustained by ensuring the right
portfolio mix (with concentration caps across comparatively
riskier segments) and a very rigorous portfolio management
approach that identifies opportunities for growth and defines
corrective actions that are then executed subsequently.

There are multiple coincident and lagged indicators insti-
tuted across the consumer credit life cycle to monitor and

maintain the optimal portfolio quality. Portfolio monitoring
begins with a rigorous review of all early warning indicators,
such as through-the-door (TTD) analysis, first payment de-
faults (FPD) and non-starters coupled with key coincident in-
dicators, such as delinquencies, bucket movements and con-
sequent flow rates, and Was-Is analysis across key segments.
Segmented vintages and month-on-book (MOB) analysis are
also employed to identify different customer repayment pat-

terns and provide the fundamental base for all policy formu-
lations and collection strategies.

We have introduced new early warning triggers, heat maps
and tripwires in keeping with the increased focus on tapping
new segments and introducing product variants, ensuring
adequate monitoring and pro-active launch of mitigating ac-
tions. Loss recognition and provisioning methodologies have
been implemented along IFRS guidelines, which ensure that

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 49

2013 In ReVIeW

cib has a comprehensive liquidity
Policy and contingency funding
Plan that supports the diversity
of funding sources and maintains
an adequate liquidity buffer with
a substantial pool of liquid assets,
and no reliance on wholesale
funding.

the Bank is pragmatic in its current risk assessment and fore-
casting of future potential losses.

status is regularly reported to management and the Board
of Directors.

Consolidated portfolio Quality & provisioning
Total IFRS based impairment charges reached EGP 2.86 bil-
lion in December 2013, as opposed to EGP 1.93 billion in De-
cember 2012, despite a write-off of EGP 98 million in 2013.
The Bank’s general ratio for direct exposure increased from
2.32% as of December 2012 to 3.72% as of December 2013. The
Bank’s Coverage Ratio increased from 119.91% as of Decem-
ber 2012 to 158.82% as of December 2013.

Risk Management Department
The Risk Management Department (RMD) identifies,
measures, monitors and controls Asset and Liability Man-
agement (ALM) and market and operational risk via the
Bank’s policies, and ensures that the Basel II and risk ana-
lytics requirements are adequately managed and that the

Liquidity Risk is the risk that the Bank would find itself un-
able to meet its normal business obligations and regulatory
liquidity requirements. CIB has a comprehensive Liquidity
Policy and Contingency Funding Plan that supports the di-
versity of funding sources and maintains an adequate liquid-
ity buffer with a substantial pool of liquid assets, and no reli-
ance on wholesale funding. To measure and control liquidity,
CIB uses gaps, stress testing, net stable funding and liquidity
coverage ratios, and regulatory and internal liquidity ratios.
In 2013, the Bank maintained strong liquidity ratios and
there was no need to execute the Contingency Funding Plan.

Interest Rate Risk is defined as the potential loss from unex-
pected changes in interest rates, which can significantly alter
the Bank’s profitability and economic value of equity. Inter-

Consolidated Portfolio
Quality & Provisioning

2010

2011

2012

2013

Gross Loans (000’s of EGP)

36,716,652

42,933,133

44,350,975

45,549,651

NPL (%)

General Ratio (Direct Exposure only)

Coverage Ratio

Charge Offs to Date (000’s of EGP)

Recoveries to Date (000’s of EGP)

Recoveries to Date /
Charge-offs to Date

2.73%

2.19%

125.42%

1,714,960

368,095

2.82%

1.77%

120.55%

1,870,898

383,835

21.46%

20.52%

3.63%

2.32%

119.91%

2,057,209

403,031

19.59%

3.96%

3.72%

158.82%

2,155,455

454,070

21.07%

est Rate Risk primarily arises from the re-pricing maturity
structure of interest-sensitive assets and liabilities and off-
balance sheet instruments. CIB uses a range of complemen-
tary technical approaches to measure and control interest
rate risk including: interest rate gaps, duration, duration of
equity, and earnings-at-risk (EaR). In 2013, the balance sheet
was strategically positioned to benefit from the interest rate
environment and CIB proactively managed this sensitivity to
safeguard against adverse shocks.

Market Risk loss results from adverse movements in the val-
ue of financial instruments arising from changes in the level
or volatility of interest rates, foreign exchange rates, com-
modities, equities and other securities, including derivatives.
The Bank classifies market risk exposure into traded and
non-traded activities. The Bank uses various measurement
techniques including value-at-risk (VaR), stress testing and
non-technical measures, such as asset cap and profit and loss
versus stop loss limits to monitor and control market risks.
Despite the volatility in 2013, CIB maintained adequate mar-
ket risk appetite levels.

Operational Risk loss results from inadequate or failed in-
ternal processes, people and systems or from external events.
CIB maintains a comprehensive Operational Risk Framework
and policies and processes designed to provide a sound and
well-controlled environment. The Framework uses the fol-
lowing approaches to measure and control Operational Risk:
loss database, risk control self-assessment (RCSA), and key
risk indicators (KRIs). In 2013, Operational Risk losses were
at minimum tolerance levels and were proactively monitored
and managed.

Basel II
As per the Central Bank of Egypt mandates of December
2012, CIB successfully satisfied all the requirements and re-
ports Basel II capital adequacy results on a quarterly basis.

2013 Accomplishments
• Commenced the enterprise risk management framework ini-
tiative with objective to monitor risks in an integrated and
holistic view regarding governance, risk strategy, capital al-
location, and infrastructure.

• Established the risk strategy policy and risk appetite

framework.

• Diligently monitored action plans that led to preserva-
tion of portfolio quality, evidenced by the NPL ratio of
3.96% and a total coverage ratio (direct and contingent) of
175.69% in 2013.

• Set the industry prudential limits, based on a comprehen-

sive coverage and reporting capability.

• Enhanced controls and portfolio management tech-
niques to ensure quality given the increasing complexi-
ties in the portfolio.

• Re-engineered initiatives to improve processing efficien-

cies, productivity and turn-around-time (TAT).

• Participated in setting the road map for developing the
social and environmental management system, under the
Bank’s overall sustainability initiative.

• Spread awareness and understanding through extensive
training spanning consumer credit, business banking and
operational risk.

• Encouraged continuous learning led by our Risk Group
professionals by designing and offering educational train-
ing programs.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 51

2013 In ReVIeW

compliANce

The bank’s internal Audit function
is adequately equipped to
produce an independent and
objective assurance to evaluate
the adequacy and effectiveness of
Governance, risk Management,
and the internal control System.

iNteRNAl AuDit

2013 In ReVIeW

our internal Audit team adds
value by aggressively following
up on and ensuring that Audit
recommendations are properly
considered and closed to mitigate
risk-raised gaps.

CIB’s Compliance Department was established in March 2007
as an independent entity guarding the Bank and its stakehold-
ers against a full spectrum of compliance risks, including reg-
ulatory, governance, legal, fraud, reputation, money launder-
ing and terrorism financing. The Department works diligently
to achieve the highest possible standard of compliance.

The Compliance Department includes four divisions:

policies and procedures
This Division ensures the bank’s compliance with policies,
regulations, laws and procedures to manage the Bank‘s regu-
latory risk, avoiding penalties from the regulator, the Central
Bank of Egypt (CBE).

It also assesses the compliance risks, including fraud and

recommends necessary controls to close any related gaps.

In 2013, the Division focused on enhancing the compli-
ance process as well as tightening controls in light of the
current situation in the country.

In 2014, the Division will continue to coordinate with In-
ternal Audit and Risk Management to align control effec-
tiveness together with the business in order to achieve the
Bank’s strategy within the agreed upon risk appetite.

Anti-Money laundering and terrorism Financing
The AML Division is directly involved in monitoring trans-
actions, customer account behaviour, and screening trans-
actions. Screened transactions include incoming and outgo-
ing payments for individuals and entities that are negatively
listed or those involving sanctioned countries to avoid Bank
involvement in such crimes.

During 2013, the Chief Compliance Officer began reviewing

the FATCA (Foreign Account Tax Compliance Act) require-
ment with different bank stakeholders where CIB has signed
an agreement with PwC to walk the Bank through the prepa-
ration and implementation for U.S persons / entities through
the use of offshore accounts. This will be in effect by June 2014
as per the US Internal Revenue Services (IRS) announcement.

In 2014, enhancing staff AML awareness is our focus. This
will also include training for different levels and areas. E-
learning will be introduced for that purpose to complement
classroom training.

Corporate Governance and Code of Conduct
The Corporate Governance and Code of Conduct Division’s
main focus this year was to ensure the setting of clear, well-
defined reporting lines in different areas of the Bank together
with highlighting any potential conflict of interest.

Several channels for staff issues / code of conduct and pe-

titions have been introduced and announced to employees.

Complaints Investigation
The Complaints Division was established in 2010 and is re-
sponsible for investigating inquiries and complaints received
from the CBE and the Chairman’s Office. It coordinates with
the Customer Care Unit, which is in charge of all customer
complaints, to investigate the root causes of such complaints
and client dissatisfaction, and to initiate remedial action.

Our main aim in 2013 was to minimize customer com-
plaints in order to mitigate any damage to our reputation and
increase customer satisfaction.

Going forward we shall continue doing so together with en-
suring system development and implementation of new pro-
cesses to raise efficiency and provide quality service.

dit has a solid reporting line to the Board’s Audit Committee.
The Committee reviews the efficiency of the Internal Con-
trol System to mitigate risks that threaten the achievement
of the Bank’s objectives and to ensure conformity with best
practice and Institute of Internal Auditors (IIA) standards.
The Committee also ensures the coordination between Au-
dit, Risk Management, Internal Control and the Compliance
department thus creating synergies and cost effectiveness.

Our Internal Audit team adds value by aggressively fol-
lowing up on and ensuring that Audit recommendations are
properly considered and closed to mitigate risk-raised gaps.
As for the fiscal year 2013, Internal Audit made 198 recom-
mendations, of which 147 (74%) were properly resolved.
The remaining 51 (26%) are in the pipeline waiting to be
resolved by target dates that are coordinated with related
business partners.

Internal Audit is concerned with the continuous education
of its members, providing them with the support they need
to qualify for certifications such as the CIA, CBA, CPA, CISA,
and our in-house CIB Credit Course. Currently 30% of Inter-
nal Audit Staff are certified auditors with the remainder in
the process of obtaining their respective certifications.

Fiscal year 2013 was a period of productivity and major
achievement for our Internal Audit function. We appreci-
ate the strong and continuous support of the Board of Di-
rectors (BOD), Board Audit Committee and management
team of CIB.

The Internal Audit Group (IAG) performs assurance engage-
ments as a means of adding value, influencing changes that en-
hance Governance, Risk Management and Internal Control, as
well as improving accountability for results. In 2013, IAG con-
ducted 18 audit reports that covered several businesses units
through an end-to-end process. These reports were presented
to the BOD Audit Committee and CIB Management.

The Bank’s Internal Audit function is adequately equipped
to produce an independent and objective assurance to evalu-
ate the adequacy and effectiveness of Governance, Risk Man-
agement, and Internal Control System. The IAG regularly
tracks implementation of audit recommendations to ensure
effectiveness.

Internal Audit undertakes a comprehensive risk-based au-
dit approach over all of its audited business units, which is
reflected in the three-year Audit Plan linked to CIB’s strat-
egy that covers the banking segments. The risk profile of each
business function determines and identifies the number of
internal audit visits to each business unit during the three-
year plan cycle.

The Internal Audit function adopts the approach of busi-
ness partners serving the BOD, Bank management and staff
through providing consulting activities and participating as
a non-voting member in most of the Bank’s strategic commit-
tees without infringing on its independence.

To ensure the independence of the Audit function and in
line with best corporate governance practices, Internal Au-

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 53

StRAtegic
SuBSiDiARieS

AnnuAl RepoRt 2013

originally built in the 1840s, the
luxurious, elegant Shepheard’s hotel
was among the most famous hotels in
the world until it was destroyed by fire
in 1952.

AnnuAl RepoRt 2013 55

StRAteGIC SuBSIDIARIeS

ci capital Holding

CI Capital is a full-fledged investment bank wholly-owned
by CIB. CI Capital operates across its different platforms of-
fering securities brokerage, equities research, asset manage-
ment and investment banking advisory, all supported by a
strong research arm.

Securities Brokerage
CI Capital Securities Brokerage is
Egypt’s top-ranked brokerage house
by market share of executions in Q3
2013 and offers unparalleled reach and placement power
both regionally and internationally. The company offers its
services through two fully-owned brokerage companies serv-
ing a wide range of global clients: Commercial International
Brokerage Company (CIBC) caters to institutions and high-
net-worth individuals, while Dynamic Securities Brokerage
focuses on retail clients.

2013 Accomplishments:
• Ranking: CI Capital Securities Brokerage has success-
fully propelled both of its brokerage arms into the upper
echelons of the Egyptian securities market. In 2013, CIBC
was the second-ranked brokerage firm in Egypt by execu-
tion market share, with traded value of EGP 30.1 billion.
Dynamic Securities made steady progress throughout the
year, moving up strongly from the top 30 to secure a place
as one of the top 20 brokers in the country.

• Market Share: By the end of 2013, CI Capital Securities
Brokerage increased market share to 12.1% (up from 8.9%
in 2012) across both brokerage firms. Total executions in
2013 stood at EGP 32.7 billion.

• Executed the EGP 12.2 billion Orascom Construction In-

dustries Mandatory Tender Offer.

• Organized a notable Egypt-focused investor conference

with CI Capital Research in London and New York.

Asset Management
CI Asset Management is a leading in-
stitutional asset management firm in
Egypt, with total assets under man-
agement amounting to EGP 7.9 billion. The company offers a
full range of fixed income, money market and equities prod-
ucts, and is a noted pioneer in product innovation, including
Egypt’s first one-year open-ended capital protected fund and
its first shari’ah-compliant fund.

The division manages eight diverse funds and provides
portfolio management services for a wide array of CIB and
CI Capital clients, offering discretionary services to high-
net-worth individuals and institutional investors. Clients are
provided with comprehensive personalized services tailored
to their investment and reporting requirements.

Fund name

Fund type

Inception
Date

AUM

Osoul

Money Market April 2005 EGP 5.2 bn

Istethmar

Equity

April 2006 EGP 160 mn

Al Aman

Islamic Equity

Blom MM Fund Money Market

Hemaya

Capital Pro-
tected

Thabat

Fixed Income

October
2006
September
2009
August
2010
September
2011

EGP 33 mn

EGP 432 mn

EGP 18 mn

EGP 91 mn

Rakhaa

Islamic MM

May 2012

EGP 683 mn

Banque Du Caire Fixed Income

February
2013

EGP 92 mn

2013 Accomplishments:
• Blom Money Market Fund was the best-performing money

market fund in Egypt for the third year in a row.

• Osoul Money Market Fund remains the best-performing

money market fund relative to its peers in size.
• Launch of Banque du Caire Fixed Income Fund.
• Acquired a new CIB equity portfolio, adding EGP 50 mil-

lion to our assets under management.

• Launched a new money market fund for Arope Insurance,
the first money market fund issued by an insurance com-
pany in Egypt.

• CIAM was named “Best Asset Manager in Egypt” by Global

Investor for the fourth consecutive year.

Investment Banking
Building on an investment banking
tradition that dates back to 1991, CI
Capital Investment Banking offers
some of the most focused, experienced and professional ad-
visory and execution capabilities in Egypt. With more than

EGP 68 billion in transactions executed since 2008, the IB
team has a proven ability to structure and execute landmark
M&A, equity capital markets, debt capital markets and cor-
porate finance transactions, including complex cross-border
deals, in challenging conditions.

As CIB’s investment banking arm, the Division enjoys a
unique position in terms of access to deal flow, unparalleled
sector, industry and company knowledge, and the ability to
access, raise and structure equity and debt capital. The com-
pany’s powerful distribution platform includes leading glob-
al institutional investors on four continents and thousands of
regional HNWI and retail investors.

2013 Accomplishments:
• CIIB has established itself as the #1 investment bank in
Egypt in 2013. Despite challenging market conditions due to
political events, CIIB had a landmark year during which it
was successful in executing 6 deals with an aggregate trans-
action value exceeding EGP 55 billion.

• CIIB acted as sole local financial advisor on OCI N.V.’s USD
7.3 billion acquisition of Orascom Construction Indus-
tries S.A.E. in what stands as one the largest M&A deals
executed in the Middle East and North Africa region this
year and one of the largest in Egypt’s history. The team also
completed several transactions involving prominent cor-
porates including Bechtel, El Sewedy Cables, Al Hokair and
Al Arafa Group.

• CIIB’s success was recognized for the first time on an inter-
national scale, ranking in the top ten of all of the prominent
Middle East and North Africa M&A league tables, including
Wall Street Journal, Thomson Reuters, and Dealogic. CIIB
also earned one of the most prestigious awards in the indus-
try: the EMEA Finance Best Local Investment Bank in Egypt
2013, as well as the best investment bank in MENA award by
the Arab Investment Summit.

• Meanwhile, CIIB proudly launched its full time Analyst
Training Program — the only program of its kind currently
offered in Egypt — which trained 25 promising young grad-
uates in the fundamentals of corporate finance over a 12-
week period.

• CIIB’s restructuring effort that began in mid-2012 has trans-
formed the business from a mid-market player into a top-
tier advisor catering to large corporate and institutional
clients. The firm has developed a solid track record in exe-
cuting complex transactions while offering its clients a com-
prehensive advisory platform that fully serves their strategic

StRAteGIC SuBSIDIARIeS

development and growth objectives. The team in place to-
day is comprised of 18 leading-class bankers with a unique
combination of international, regional and local experience,
coupled with a strong execution track record.

• For 2014, CIIB aims to maintain its market leadership posi-
tion in the local market, where it stands to benefit from an
anticipated rebound in capital markets and M&A activity.
The firm also continues to target mandates that add to its
franchise value, particularly ones that involve international
blue chip corporates and cross-border transactions. It’s cur-
rent pipeline of transactions include several global offerings
across various industries which are scheduled to come to
market in 2014, as well as a number of high quality M&A
transactions in Egypt and the region.

CI Capital Research
CI Capital Research is the leading
Egyptian research house offering in-
ternational quality research products,
and thanks to its large local presence, with local know-how too.
It is also unique in the region for its exclusive leadership make-
up of Extel-ranked analysts. The Research team comprises a
macro and equity strategy team which tracks, analyzes and
forecasts macro-economic indicators, in addition to some
of the most experienced equity analysts in the region, with
48 years of cumulative experience in MENA equity research.
Bottom-up, the Research product is multi-sector, covering: fi-
nancials, real estate, industrials and construction, telecoms,
and consumer for equities listed in Egypt and across the GCC
markets. CI Capital Research is also developing a small and
midcap research product, in response to strong client interest.
Cumulatively, the team plans to have 120 MENA stocks under
coverage in two years’ time.

2013 Accomplishments:
• Brought its coverage universe up to close to 50 companies in
Egypt, the UAE, Saudi Arabia, Qatar, Oman and Jordan-- a
cumulative market cap of USD 85 billion.

• Increased regional coverage, with MENA equities now rep-
resenting 30% of CI Capital Research’s coverage universe.
• Successfully hosted an Egypt Investor Conference in London
and New York, the largest event of its kind to be held abroad.
• Was among the few research houses selected to help the
Egyptian government’s General Authority for Investment
presentation to potential investors bringing in much desired
FDI to Egypt.

Concrete

Al Hokair
group

oriental
petrochemicals
Company

orascom
Construction

el Sewedy
electric

egp 158 mn

undisclosed

uSd 7.345 mn

undisclosed

Sale of 38% stake to
CIB Direct Investment

Debt
Restructuring

Sale of 33% stake to
Carbon Holdings

Sell-Side Advisor

January 2013

May 2013

July 2013

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 57

StRAteGIC SuBSIDIARIeS

egypt factors

profile
Egypt Factors (EGF) is a joint venture between Commercial
International Bank (CIB) and Malta-based FIMBank plc.
Each entity owns 40% of the joint venture, with the Interna-
tional Finance Corporation (IFC) — a member of the World
Bank Group — holding the remaining 20%. EGF is the first
non-banking financial institution in Egypt to purely special-
ize in factoring, and is the first registered company on the
Egyptian Register for Factoring Companies.

product type
With a clear focus on non-traditional trade finance instru-
ments, Egypt Factors is committed to supporting and pro-
moting cross-border and domestic trade in Egypt. To that
end, Egypt Factors provides a comprehensive package of re-
ceivables management services that consist of the following:
• Administration & Commercial Collection
EGF will undertake all debtor bookkeeping and collection
measures, as well as monitoring and following up on all
outstanding invoices. With the company’s coverage ex-
tending to over 85 countries around the world, including
Egypt, EGF is able to bridge differences in culture, lan-
guage, market habits and legal environment through a
comprehensive network of more than 400 correspondents
worldwide.

• Funding
EGF will advance up to 90% of all covered receivables. This
turns sales on credit terms into cash sales. As cash flows
improve, client flexibility increases.

• Debt Protection
EGF guarantees 100% payment up to a limit established for
each buyer, and will settle covered undisputed receivables
if not paid after a defined period from the due date. Buyers
are under periodic evaluation to make sure that upcoming
risks are recognized on time.

target Market
The company targets producers/manufacturers, traders and
service providers who conduct transactions based on short-
term deferred payments. EGF also offers services to domestic
buyers from local or foreign sources, which benefit from the
increased purchasing power without tying up banking facili-
ties.

For large corporations, factoring is advantageous in that it
provides value added services and non-recourse funding to
improve risk position, business efficiency and financial ra-
tios. Factoring is also considered highly beneficial to mid-cap
companies in terms of liquidity and growth.

2013 Accomplishments
Despite the turbulence that rocked both the global markets
in general and Egypt’s economy in particular over the past
three years, Egypt Factors has succeeded in penetrating new
business sectors while maintaining its business portfolio and
achieving substantial growth during FY13.

According to Factors Chain International (FCI) statistics,
EGF has, for the fifth consecutive year, achieved the high-
est volume of international trade handled through the FCI
network among all Egyptian factoring companies and was
ranked third in the MENA region.

ongoing forward strategy
With a positive outlook for domestic growth, stability and a
more congenial global environment expected over the com-
ing year, Egypt Factors has ambitious growth plans and
aims to boost its growth pace while focusing on providing
value-added services to its clients. Long-term, Egypt Fac-
tors aims to become the leading commercial finance hub in
the MENA region.

commercial international
life insurance company

StRAteGIC SuBSIDIARIeS

Commercial International Life Insurance Company (CIL)
seeks to meet the savings and protection needs of individual
and corporate customers in Egypt with insurance products
that offer excellent value-for-money. CIL was a pioneer in in-
troducing unit-linked products to the Egyptian market and
remains the leader in this segment today.

Leveraging on the combined strength of its two respected
shareholders, UK’s Legal & General and Egypt’s Commercial
International Bank, CIL delivers a successful banc-assurance
sales model. The company has risen to become one of the
largest players in the Egyptian life insurance industry.

2013 performance
Despite challenging conditions and distressed circumstanc-
es in the Egyptian market, CIL successfully met its annual
targets thanks to the positive enhancements in efficiency,
productivity and quality measures applied by CIL.

CIL currently insures the lives of and provides retirement
savings programs for more than 350,000 and 56,000 individu-
als, respectively.

Forward Strategy
Going forward, CIL is determined to maintain its strategy to:
• Build a strong and vibrant company through sustained
growth in the sale of profitable products to individual and
corporate customers.

• Deliver innovative value-for-money protection and savings

products aimed at satisfying the needs of clients.

• Provide exceptional customer service, professional growth

and fulfillment of employees.

• Improve quality of life in our community.
• Contribute materially to CIB’s revenue base with strong
sales growth, high policy persistency and maximization of
synergies with CIB affiliate companies.

corporate leasing company
(egypt) SAe – coRpleASe

CORPLEASE is one of the top three financial leasing com-
panies in Egypt. Established in 2004, the company provides
finance lease and operating lease products to the SME sector
and the corporate sector at large. CORPLEASE also provides
fleet management and vendor finance products as well as
structured leasing products. The company covers all of Egypt
through its offices in Cairo, Alexandria, Mansoura, Assiut,
Hurghada and Suez. In addition, the company established a
fully-owned subsidiary incorporated in the Dubai Interna-
tional Financial Center (DIFC).

In 2013, CORPLEASE achieved robust new lease bookings
as volumes more than doubled compared to 2012. The eco-
nomic environment in Egypt remains fast-changing, a factor
which directly impacts credit risk and demand levels for me-

dium and long term financing. Despite the difficult business
environment, CORPLEASE retained a robust and healthy
portfolio by placing significant emphasis on the soundness of
each individual credit story and overall portfolio risk diversi-
fication measures. The company continues to enjoy a strong
financial position with favorable coverage, liquidity, capital-
ization and funding ratios.

CORPLEASE continues to place significant emphasis on
developing its automation, risk and internal controls. The
company continuously invests in the development and train-
ing of its professional staff through dedicated in-house and
external training activities. The company believes that the
quality of its people, operating practices and controls are the
best in the industry.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 59

StRAteGIC SuBSIDIARIeS

falcon group

StRAteGIC SuBSIDIARIeS

falcon for General Services and
Properties Management, despite
being a newly established entity,
has expanded to 318 sites in
a number of different regions
throughout Egypt, capturing an
estimated 14% market share.

Falcon Group was established in 2006, and has grown into
a full-fledged security services company. Falcon Group is a
joint venture between CIB, the CIB Employees Fund, Al Ahly
for Marketing and Services and other private entities. CIB
owns 40%, the Employees Fund 20%, Al Ahly for Marketing
and Services 5%, while other shareholders own the remaining
35%. The Group’s five main lines of business operate as sepa-
rate legal entities: Security, Cash In Transit, Technical Ser-
vices, General Services and Properties Management, Falcon
Blue for Touristic Services. As of December 2013, the group
achieved consolidated revenues of EGP 164 million.

Falcon was established with a paid-in capital of EGP 10
million, and by 2010 the company had distributed dividends

Shareholders

Capital Structure 2013

CIB
CIB Fund
Al Ahly for Marketing & Services
Others
Total

40%
19.59%
5.46%
35%
100%

CIB

CIB Fund

Al Ahly for Marketing
& Services

Others

35%

40%

5.46%

19.59%

amounting to 175% of the paid-in capital and realized an av-
erage return on equity of more than 30% as of 2013.

Falcon increased its issued capital from EGP 10 million
to EGP 30 million in 2013; currently the paid-in capital
amounts to EGP 15 million. The capital increase should be
finalized in 2014.

Business lines
Falcon for Security Services:
• Properties and Premises Protection
• Public Event Security
• Personal Protection
• Security Dogs
• Corporate Security Training Courses
• Female Guards
• Safety Training
• Industrial Security

Falcon Tech:
• Security surveillance equipment
• Fire systems
• Counter-surveillance equipment
• Safety Equipment
• Access control equipment
• We provide professional training for all technicians to ensure

high quality services

Falcon for Money Transfer Services
• Cash Management and Transit
• ATM Services
• Money Processing
• Valuables Transfer

Falcon Blue for Touristic Services
• Booking International and Domestic Flights and Hotels
• Visa Handling
• Meet and Assist
• Medical Insurance for Travel
• Assistance in Recovering Lost Baggage
• Tour Arrangement for Groups and Individuals
• Hajj and Omrah

Falcon for General Services and Properties
Management
• Cleaning and Housekeeping
• Pest Control
• Planting and Trimming
• Maintenance

expanded Market presence
Falcon Security Services has grown its share of the market
to 42%, and continues to be a trustworthy provider to cli-
ents in 496 locations.

Falcon for General Services and Properties Management,
despite being a newly established entity, has expanded to 318
sites in a number of different regions throughout Egypt, cap-
turing an estimated 14% market share.

Falcon for Money Transfer Services Falcon fleet increased to
100 armored vehicles, and installed GPS tracking systems and
monitoring cameras in its fleet. The company also opened its Is-
mailia branch, which increased market share to 33%.

In 2013, Falcon commenced construction of its new headquar-
ters located in New Cairo. The first phase includes 2 basements
and a ground floor with an expected cost of EGP 15 million.

In our efforts to further institutionalize the group and en-

able the company to grow efficiently, Falcon established a
Compliance Department and enhanced its corporate gover-
nance oversight at the board level.

new products, Services and expansions
Following the 25th of January revolution and the political and
economic turmoil that followed, the security market’s dy-
namics shifted as corporations and individuals alike altered
their perspective, with security becoming an issue of para-
mount importance. Furthermore, many businesses began to
outsource their security needs in order to avoid strikes and
employee demonstrations, which hindered operations. These
developments led to an influx in demand for efficient and re-
liable security solutions that include cash in transit services
and electronic security solutions.

2013 Group Accomplishments:
• Inaugurated a new Cash Center in the Fifth Settlement, which
will enable Falcon to provide vault management services, fea-
turing a more secure location, state of the art armored vault.

• Established Security Emergency unit and backup services
• Received the 2013 Knight award by the ISO association

in the UAE

Strategy Going Forward:
• Opening a new branch in Mansoura in 2014, and 4 branches

during the coming three years.

• Adding 22 cars to our fleet during 2014, with a target of 160

vehicles by 2016.

• Establishing a showroom for electronic solutions that
will afford Falcon Tech the ability to better present prod-
ucts to clients.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 61

coRpoRAte
goveRNANce

AnnuAl RepoRt 2013

connecting the heart of cairo to the
upscale Gezira island and zamalek,
the kasr El Nil bridge is guarded by
large stone lions created in the late 19th
century by french sculptor henri Alfred
Jacquemart.

AnnuAl RepoRt 2013 63

CoRpoRAte GoVeRnAnCe

coRpoRAte goveRNANce

We at CIB firmly believe that good governance is a cornerstone
of our success as it assures the alignment of the interests of
shareholders and managers and the monitoring of management
through the dissemination of information and transparent re-
porting. Corporate governance is the underlying framework
within which our five-year plan is being implemented. As such,
we have developed a sound reporting system that guarantees
timely, transparent and accurate disclosure of material matters
regarding the Bank, its ownership, operations and financial per-
formance. The Bank also advocates the equal treatment of all
shareholders and the protection of their voting rights.

We take pride in our strong corporate governance structures,
which include an experienced team of professional executive
directors and senior management, competent board commit-
tees, as well as a distinguished group of non-executive directors
who truly believe that while business requires mandated laws
and rules, these can never substitute for ethical behaviour and
voluntary compliance.

CIB’s highly qualified Board of Directors is supported by in-
ternal and external auditors, as well as other internal control
functions (Risk, Compliance, and Internal Audit), and effectively
utilizes the work carried out by those functions to ensure that
the Bank adheres to international best practices in corporate
governance. CIB also changes auditors every five years to ensure
objectivity and exposure to new practices.

the Board of Directors
One of our key strengths is our distinguished Board of Directors,
the ultimate decision-making body of the Bank. The Board is
composed of nine members: with a diverse knowledge base and
a balanced skill set that gives CIB a distinct competitive edge.
The Board primarily focuses on long-term financial returns and
the best interest of all CIB’s stakeholders: customers, sharehold-
ers and employees of the Bank, as well as the communities in
which the Bank operates. Moreover, the Board’s role is to set the
Bank’s values, strategy and key policies, along with pursuing
and maintaining its long-term success. Such a role is accom-
plished through providing entrepreneurial leadership, sound
strategies and risk management oversight to ensure that risks
are assessed and properly managed.

The Directors meet at least six times per year for discussions
on matters that are important to shareholders. Over the course
of 2013, CIB’s Board met eight times. Being the single largest
shareholder in CIB, Actis — an emerging market private equity
specialist — currently owns 9.09% of CIB’s shares and has a rep-
resentative on the Board.

Mr. Hisham Ezz Al-Arab
Chairman and Managing Director
Mr. Hisham Ezz Al-Arab has been leading CIB since 2002 as
Chairman and Managing Director. Under his leadership, CIB
expanded its leading position, grew its market capitalization
from USD 200 million to USD 4 billion, and developed from a

wholesale lender into the full-fledged financial institution it is
today. His vision transcended financial performance to include
the adoption of best practice in corporate governance, and risk
management and the buildup of a modern banking culture.
With that effort CIB stock is now viewed by the international in-
vestment community as a proxy stock for Egypt and the bench-
mark for its banking industry.

Mr. Ezz Al-Arab is the Chairman of the Board of Trustees of
CIB Foundation. He is also a Director in MasterCard Middle
East & Africa’s Regional Advisory Board since June 2007 and a
principal member of the American Chamber of Commerce. For
his distinguished work, he was elected as a member of the Board
of Trustees of the American University in Cairo (AUC) in Novem-
ber 2012. In March 2013, Mr. Ezz Al-Arab was also elected as
Chairman of the Federation of Egyptian Banks.

Prior to joining CIB, Mr. Ezz Al-Arab led a distinguished
banking career as Managing Director in international invest-
ment banks in London (Deutsche Bank, JP Morgan and Merrill
Lynch), Bahrain, New York and Cairo.

Mr. Jawaid Mirza
Non-Executive Board Member
Mr. Jawaid Mirza is a senior advisor and banking executive with
a solid record of accomplishments in all facets of financial, tech-
nology, risk and operations management. After successfully
serving as a Group COO at CIB, Mr. Mirza acted as Board Mem-
ber and Managing Director since April 2013. Starting January
2014, Mr. Mirza will serve as non-executive board member of the
CIB Board.

Mr. Mirza brings with him over 30 years of diversified expe-
rience, working with global institutions like Citicorp and ABN
AMRO Bank. He started his career in Citibank as a Financial
Controller in Pakistan, subsequently serving in various senior
regional positions in ABN-AMRO in Central Eastern Europe,
European Region, Central Asia, Middle East and Africa. He later
moved to Hong Kong as Corporate Executive Vice President and
CFO responsible for the Asian region and Australia/New Zea-
land. He has led successful due diligences for acquiring banks
in Hungary, Taiwan, Thailand, Germany, France and Pakistan.
Mr. Mirza is a successful leader with demonstrated abilities in
directing operations and staff, managing financial performance
and streamlining system across the board to deliver cost sav-
ings, enhance efficiency, and improve bottom line profitability.
His core competencies extend to Strategic Business Planning,
Performance Management, Operation Risk Management, Off-
shore and Shared Services, Audit, Compliance and Central Con-
trols, Change Management, Operation Efficiency, M&A, Due
Diligence and IT Services & Operations.

Mr. Mirza has been a member of the Top Executive Group of
ABN AMRO bank, bestowed to only 120 out of 160,000 mem-
bers of staff and was also a member of the ABN AMRO Group
Finance Board as well as the Group COO Board, and also served
in Board of Directors with ABN AMRO Pakistan Ltd. He has at-

CoRpoRAte GoVeRnAnCe

cib’s board of directors is
supported by auditors, internal
control functions (risk, compliance,
and internal Audit), and effectively
utilizes the work carried out by
those functions to ensure that the
bank adheres to international best
practices in corporate governance.

tended various business management courses at reputable in-
stitutions including the Queens Business School and the Whar-
ton Business School.

Dr. William Mikhail
Non-Executive Board Member
Dr. Mikhail is a professor of Econometrics at the American Uni-
versity in Cairo (AUC). He obtained his PhD from the London
School of Economics, in 1969. He served as an associate professor
of Statistics and Econometrics at Cairo University in the 1970s.

In addition to his academic career, Dr. Mikhail worked at the
Ministry of Planning, London School of Economics, Dar Al-Han-
dasah Consultants in Rabat, Morocco and in Amman, Jordan,
Techno-Economics Division of Kuwait Institute for Scientific
Research, UN Development Program, and UNDESD. Dr. Mikhail
has published extensively on econometric theory and applied
econometrics in international journals, and supervised many
PhD and MA theses both at Cairo University and AUC.

Mr. Mahmoud Fahmy
Non-Executive Board Member
Counsellor Fahmy is a renowned Egyptian lawyer, an interna-
tional arbitrator and an Attorney at Law admitted to Egypt’s
Bar of Civil, Commercial and Criminal Cassation Courts, the
Supreme Administrative Court and the Supreme Constitutional
Court. He is also a member of the General Assembly of Public
Sector Banks at the Central Bank of Egypt, a member of the
Egyptian Businessmen’s Association and head of its Investment
and Economic Legislation Committee, Chairman of the Egyp-
tian Legal Association, Chairman of Corporate Leasing Co.
Egypt (CORPLEASE) and Chairman of The Egyptian Leasing
Association. He previously served as the Chairman of the Capi-
tal Market Authority.

Mr. Fahmy is the founder of the Fahmy Law Office for Legal

Consultation, Arbitration, Investment and Capital Markets.

Dr. Nadia Makram Ebeid
Non-Executive Board Member
Dr. Nadia Makram Ebeid is the Executive Director of the Centre
for Environment and Development for the Arab Region and Eu-
rope (CEDARE), an international diplomatic position that she has
held since January 2004. For a period of five years beginning in
1997, Dr. Ebeid served as Egypt’s first Minister of Environment,
the first woman to assume this position in the Arab World.

Early in her career, Dr. Ebeid held several managerial posts
with the United Nations Development Program (UNDP), the

United Nations Food and Agriculture Organization’s Regional
Office for the Near East, and the Council for Environment and
Development Research. In recognition of her role in environ-
mental policy and advocacy, Dr. Ebeid has been awarded nu-
merous awards and distinctions from local and international
NGOs, leading institutions and associations.

Dr. Medhat Hassanein
Non-Executive Board Member
Dr. Medhat Hassanein, Egypt’s former Minister of Finance
(1999-2004), is a professor of Banking and Finance with the
Management Department of the School of Business, Eco-
nomics & Communication at the American University in
Cairo.

Dr. Hassanein is a senior policy analyst with long experi-
ence in institutional building, macro-policy analysis, finan-
cial economics, corporate finance and international finan-
cial management. He has previously served as advisor to
government, high-level advisory bodies and the donor com-
munity. During his term as Minister of Finance, he devel-
oped and instituted the second generation of fiscal public
policy reforms for the Government of Egypt.

Dr. Hassanein has also served as Chairman and Board Mem-
ber in public holding companies, private corporations and
many respected banks in Egypt, last of which was HSBC Egypt
(2004-May 2009) where he chaired its Audit Committee.

Dr. Hassanein obtained his BA in Economics from Cairo
University (with Honors), an MBA from New York University
(with Distinction) and a PhD from Wharton School of Busi-
ness, University of Pennsylvania, USA.

Mr. Paul Fletcher
Non-Executive Board Member
Mr. Fletcher is a Senior Partner of Actis, leading the firm,
which he joined in 2000, from its London headquarters.
Originally a banker with Cargill, Banker’s Trust and Swiss
Bank Corporation, Mr. Fletcher transitioned into corporate
finance in the early 1990s with a role at Citibank.

At Citibank, he led the East African operations, be-
coming Head of Emerging Markets Strategic Planning.
With two decades of experience in emerging markets, Mr.
Fletcher’s career has spanned Kenya, Tokyo, New York and
London.

Mr. Fletcher is a Founding Director of the Emerging Mar-
kets Private Equity Association (EMPEA). He holds a Mas-
ters in Geography from Oxford University.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 65

CoRpoRAte GoVeRnAnCe

Mr. Yasser Hashem
Non-Executive Board Member
Mr. Hashem began his career as a Partner at Zaki Hasherm
& Partners after his graduation from the Faculty of Law,
Cairo University in 1989.

In 1996, He became the Managing Partner of Zaki Hash-
em & Partners, Attorneys at Law, where he became respon-
sible for managing the day-to-day business of the firm and
representing the firm with major clients and international
law firms. Mr. Hashem has specialized knowledge of Corpo-
rate, Capital Market, Mergers & Acquisitions and Telecom
Law matters. Mr. Hashem has participated in a number of
restructurings and incorporations of foreign and domestic
companies, in addition to providing advisory services to
many local and foreign investors on aspects of doing busi-
ness in Egypt.

Mr. Hashem handled all IPOs that took place during the
past seven years in Egypt, as well as represented acquirers
in major M&A transactions and tender offers. Moreover, he
participated in drafting and negotiating all major telecom
licenses (public payphones, mobiles, private data networks,
marine cables, satellite, etc.) since the inception of private
provision of telecom services in Egypt.

Mr. Hashem was admitted to the Egyptian Bar Association
(in 1989), as well as the Supreme Court of Egypt (in 2007). He
is also a member of the Egyptian Society of International Law
and the Licensing Executive Society (LES). He is also an Hon-
orary Counsel to the British Ambassador in Egypt.

Dr. Sherif H Kamel
Non-Executive Board Member
Dr. Kamel is the founding Dean of the School of Business at the
American University in Cairo from September 2009 through the
present and is a professor of Management Information Systems.

Dr. Kamel served as associate dean for executive edu-
cation (2008-2009), where he led the establishment of the
school’s International Executive Education Institute. Be-
tween 2002 and 2008, he was director of the school’s pri-
mary professional development department, and during the
period 2002-2006, he was director of the Institute of Man-
agement Development.

Before joining AUC, Dr. Kamel was director of the Regional
IT Institute (1992-2001) and for the period 1987-1992, helped
establish and manage the training department of the Cabinet
of Egypt Information and Decision Support Center.

Dr. Kamel holds a PhD in Information Systems from Lon-
don School of Economics and Political Science (1994), an
MBA (1990), and a BA in Business Administration (1987)
from AUC, and a MA in Islamic Art and Architecture.

Dr. Kamel is a member of many renowned organizations,
including: the World Bank Knowledge Advisory Commis-
sion, the American Chamber of Commerce in Egypt, the US-
Egypt Business Council, the Association of African Business
Schools, the Egyptian Council for Foreign Affairs, and the Ro-
tary Organization. Dr. Kamel has received a number of orga-
nizational leadership awards for serving the IT community,
including accolades in 1999 (IRMA, USA), 2000 (BIT World,
Mexico), 2009 and the AUC School of Business, Economics
and Communication Excellence in Research Award in 2005.

the Board of Directors’ Committees
CIB’s Board of Directors has eight standing committees
that assist the Board in fulfilling its responsibilities. Ac-
cordingly, the Board is provided with all necessary re-
sources to enable them to carry out their duties in an ef-
fective manner. Each committee operates under a written
charter that sets out its responsibilities and composition
requirements.

Committee

Members

Key Responsibilities

Audit Committee
Supervising the quality and
integrity of CIB’s financial
reporting

Chair:
Dr. Medhat Has-
sanein

Members:
Dr. Sherif Kamel
Mr. Yasser Hashem

The Committee’s mandate is to ensure compliance with the highest
levels of professional conduct, reporting practices, internal processes
and controls. Consistent with the interests of all stakeholders, the
Audit Committee also insists on high standards of transparency and
strict adherence to internal policies and procedures. In performing
its critical functions, the Committee is cognizant of the important
role CIB plays in the Egyptian financial sector as a leader in all of the
aforementioned areas. The Audit Committee met six times in 2013.

The Governance and
Compensation Committee
Responsibility for corporate
governance of CIB as well as
Responsibility for the Board’s
performance evaluation,
compensation and succession
planning

Chair:
Dr. Nadia Makram
Ebeid

Members:
All other Non-
Executive Board
Members

The Governance and Compensation Committee (GCC) is an integral
part of the overall responsibilities of the Board of Directors. As such,
and in line with CIB’s corporate governance framework, the GCC is
responsible for establishing corporate governance standards, provid-
ing assessment of Board effectiveness and determining the compen-
sation of members of the Board. The Committee also determines the
appropriate compensation levels for the Bank’s senior executives and
ensures that compensation is consistent with the Bank’s objectives,
performance, and strategy and control environment. The Governance
and Compensation Committee (GCC) met two times in 2013.

Committee

Members

Key Responsibilities

The Risk Committee
Supervising the management
of risk of CIB

Chair:
Mr. Jawaid Mirza

Members:
Mr. Mark Richards
Mr. Paul Fletcher

The primary mission of the Risk Committee is to assist the Board in
fulfilling its oversight risk responsibilities by establishing, monitor-
ing and reviewing internal control and risk management systems to
ensure the Bank has the proper focus on risk. It also recommends to
the Board the Bank’s risk strategy with all its associated limits. The
Risk Committee met four times in 2013.

The Management Committee
Responsibility for execution of
the Bank’s strategy

The High Lending and
Investment Committee
Responsibility for assets’ al-
location, quality and develop-
ment

The Affiliates Committee
Responsibility for steering and
managing CIB’s affiliates

Chair:
Mr. Hisham Ezz
Al-Arab

Members:
Mr. Hussein Abaza
along with other
senior and executive
CIB staff

Chair:
Mr. Hisham Ezz
Al-Arab

Members:
Mr. Hussein Abaza
Along with other
senior and executive
CIB staff.

Chair:
Mr. Hisham Ezz
Al-Arab

Members:
Mr. Hussein Abaza
along with other
senior and executive
CIB staff.

The Management Committee is an Executive committee chaired by the
Chairman and Managing Director and is composed of the Vice Chair-
man and Managing Director, CEO of Institutional Banking, CEO of
Consumer Banking and the COO. The Management Committee is re-
sponsible for executing the Bank’s strategy as approved by the Board.
It manages the day-to-day functions of the Bank to ensure alignment
with strategy, effective controls, risk assessment and efficient use of re-
sources in the Bank. The committee adheres to high ethical standards
and ensures compliance with regulatory and internal CIB policies. The
committee also provides the Board with regular updates regarding the
Bank’s financial and business activity reports as well as any key issues.
The Management Committee met twelve times in 2013.

This committee is an Executive Committee chaired by the Vice Chair-
man and Managing Director and members of the Bank’s key senior
executives. The High Lending and Investment Committee is respon-
sible for managing the assets side of the balance sheet; keeping an eye
over assets allocation, quality and development. Per its mandate, the
High Lending and Investment Committee convened weekly through-
out 2013.

The Affiliates Committee is a committee reporting to the Board of
Directors, responsible for steering and managing CIB’s affiliates, and
acts as a think-tank for the setting and initiation of all strategic goals
related to the Bank’s affiliates.The affiliates committee met five times
throughout 2013.

The Sustainability Advisory
Board
Concentrating on long-term
value drivers that advance the
twin objective of sustained
success of the Bank as well as
the well being and betterment
of society as a whole

Chair:
Dr. Nadia Makram
Ebeid

Members:
Dr. Medhat Has-
sanein
Mr. Jawaid Mirza

The Sustainability Committee is a committee delegated by the Board
of Directors to oversee, approve and monitor all sustainability strate-
gies, initiatives and projects. It concentrates on long-term value driv-
ers that advance the twin objective of sustained success of the Bank
as well as the well-being and betterment of society as a whole. The
committee has met three times over the course of 2013.

The Operations and
IT Committee
Assisting the Board in over-
seeing Bank operations and
technology strategy as well as
Operations and Technology Risk

Chair:
Mr. Jawaid Mirza

Members:
Dr. Sherif H. Kamel

The Committee is appointed by the Board of Directors to assist the
Board in its oversight of the Bank’s operations and technology strat-
egy and significant investments in support of such strategy as well as
Operations and Technology Risk. It is a newly formed committee to be
operative first of January 2014.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 67

exeCutIVe MAnAGeMent

cHief executive
officeRS

exeCutIVe MAnAGeMent

Mr. Hisham ezz Al-Arab
Chairman and Managing Director
Mr. Hisham Ezz Al-Arab has been leading CIB since 2002
as Chairman and Managing Director. Under his leader-
ship, CIB expanded its leading position, grew its market
capitalization from USD 200 million to USD 4 billion, and
developed from a wholesale lender into the full-fledged fi-
nancial institution it is today. His vision transcended fi-
nancial performance to include the adoption of best prac-
tice in corporate governance, and risk management and
the buildup of a modern banking culture. With that effort
CIB stock is now viewed by the international investment
community as a proxy stock for Egypt and the benchmark
for its banking industry.

Mr. Ezz Al-Arab is the Chairman of the Board of Trust-
ees of CIB Foundation. He is also a Director in MasterCard
Middle East & Africa Regional Advisory Board since June
2007 and a principal member of the American Chamber of
Commerce. For his distinguished work, He was elected as a
member of the Board of Trustees of the American University
in Cairo (AUC) in November 2012. In March 2013, Mr. Ezz
Al-Arab was also elected as Chairman of the Federation of
Egyptian Banks.

Prior to joining CIB, Mr. Ezz Al-Arab led a distinguished
banking career as Managing Director in international in-
vestment banks in London (Deutsche Bank, JP Morgan and
Merrill Lynch), Bahrain, New York and Cairo.

Mr. Ahmed Maher Abdel Wahed
CEO Consumer Banking and Operations
Mr. Ahmed Maher Abdel Wahed joined CIB in December
2013, bringing over 25 years of experience in international

banks across the Middle East, and strong track records in
diversified banking structures.

Before joining CIB, Mr. Abdel Wahed spent 11 years at
HSBC in multiple senior executive assignments across the
Middle East. In his most recent assignment, he was the Re-
gional Chief Operating Officer for the Middle East and North
Africa, and a member of the HSBC Group COO Strategy and
Decision Making Executive Committees. In this capacity, he
represented the region to drive global strategy, standards
and organizational effectiveness. As a result, he ensured
streamlined processes, technology and diversified culture
within the institution, hence supporting business growth,
quality of service and customer experience within a strong
risk and control framework.

Mr. Abdel Wahed began his career in 1988 at CIB, after
graduating from Cairo University. Now with more than 25
years of experience and international exposure, he has re-
turned to his home country, Egypt, and his extended CIB
family. He brings with him a wealth of knowledge and expe-
rience, and seeks to be part of the change and great future of
Egypt in general, and CIB in specific.

Mr. Mohamed Abdel Aziz el toukhy
Head of Retail and Business Banking
Mr. Mohamed Abdel Aziz El Toukhy is leading the transfor-
mation of the organization into a modern consumer bank-
ing franchise.

Mr. Touhky began his career with CIB’s Trade Finance
Department in 1979. He has risen through the ranks, as-
suming positions in Operations, Branch Management and
Corporate Banking. In July 2006, he was promoted to Gen-
eral Manager of Consumer Banking and has since led the

CIB Branch Network and Retail Banking areas to unprec-
edented success.

During his tenure, CIB branches have grown in number
to 145, covering all key governorates in Egypt. Moreover,
all of the Bank’s Asset and Liabilities businesses are on
solid growth trajectories, with CIB taking leadership po-
sitions in credit cards, auto loans, personal loans, current
and savings accounts, time deposits, certificates of deposit
and investment / insurance products. In terms of profit-
ability, the Consumer Bank has increased its share of the
Bank’s net income from only 10% in 2006 to 39% in 2012.
Under Mr. Toukhy’s leadership, CIB’s Branch Network and
Retail Banking Group grew its 2013 Consumer Banking bal-
ance sheet (B/E) to over EGP 74 billion in customer deposits.

to managing the business, launching innovative products
and services, optimizing channels for sales and service
and effective marketing and communication. Mr. Khan
has worked in a number of key areas in consumer banking
during his career, including heading Alternate channels,
Non-resident programs, Wealth segment, Credit Cards and
Branch Distribution. Burhan also specializes in customer
experience in consumer banking and has worked in a num-
ber of regions to enhance customer loyalty across distribu-
tion channels.

Mr. Khan also worked in Corporate and Treasury Opera-
tions in his early years of banking, where he worked on pro-
cess reengineering, enhancement of controls and productiv-
ity gains.

Mr. Burhan Khan
Senior Advisor For Consumer Banking
Mr. Burhan Khan joined CIB in November 2012 as Senior
Advisor for Consumer Banking. Mr. Khan brings with him
extensive experience of more than 30 years in global insti-
tutions like Citibank, Standard Chartered, ABN AMRO and
the Royal bank of Scotland and across various geographies,
including Pakistan, Australia, the United Arab Emirates
and Kazakhstan.

Mr. Khan has worked in all facets of the consumer busi-
ness at different stages of evolution across various cultures
and markets. He has been responsible for the formation of
consumer banking divisions that became leading consum-
er franchises as well as the turnaround of consumer busi-
nesses in other geographies in a short period of time. All of
this included coming up with a strategic vision and agenda
as well as the implementation of the segmented approach

Mr. Hussein Abaza
Chief Executive Officer, Institutional Banking
Mr. Hussein Abaza assumed his duties as CEO of Institu-
tional Banking in October 2011. Prior to his current role, Mr.
Abaza was CIB’s Chief Operating Officer, Chairman of CIAM
and a member of the High Lending and Investment Commit-
tee, and the Management Committe, The affiliates Commit-
tee and the Board of the CI Capital Holding Company.

In addition to these positions, he has a long history with
CIB where, as General Manager and Chief Risk Officer, he
was responsible for Bank-wide Credit, Market and Opera-
tional Risk, and Investor Relations. Outside CIB, Mr. Abaza
worked as Head of Research at EFG Hermes Asset Manage-
ment from March 1995 until October 1999. He began his ca-
reer at Chase National Bank of Egypt, the forerunner to CIB.
He holds a BA in Business Administration from the Ameri-
can University in Cairo.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 69

commuNity
DevelopmeNt

AnnuAl RepoRt 2013

upon its completion in 1902, the Aswan
dam, which provides storage for annual
floodwaters in support of irrigation
development, was the largest masonry
dam in the world and one of the largest
infrastructure projects in the region.
AnnuAl RepoRt 2013 71

CoMMunIty DeVelopMent

ciB fouNDAtioN

CoMMunIty DeVelopMent

As issues of corporate sustainability and commitment to lo-
cal communities continue to gain importance in Egypt, the
CIB Foundation has been a solid contributor to the coun-
try’s public health sector. Established in 2010 as a non-profit
organization dedicated to enhancing health and nutrition
services for underprivileged children in Egypt, and regis-
tered under the Ministry of Social Solidarity as per the Min-
istry’s Decree No. 588 of 2010, the Foundation focuses on
sustainable development initiatives that result in positive
long-term outcomes.

the CIB Foundation is governed by a seven-
member Board of trustees:

Mr. Hisham Ezz Al-Arab
Chairman

Mr. Rafik Madkour
Treasurer

Ms. Maha El-Shahed
Secretary General

Dr. Nadia Makram Ebeid
Member

Mr. Essam El Wakil
Member

Mr. Hossam Abou Moussa
Member

Ms. Pakinam Essam El Din Mahmoud
Member

AnnuAl RepoRt 2013

Following the annual shareholder’s General Assembly meet-
ing in early 2013, the CIB Foundation was allocated roughly
EGP 35 million, representing 1.5% of CIB’s net annual profit.
With this funding, the CIB Foundation continued to support
major projects in the field of pediatric healthcare through
various multi-faceted initiatives, including renovating and
upgrading hospital
infrastructure, purchasing medical
equipment and providing surgical and medicinal treatment
to underprivileged children.

Over the course of 2013, the Foundation’s partnerships and ini-
tiatives included:

Children’s Cancer Hospital 57357: Annual
Donation
In 2009, CIB entered into a five-year partnership with the Chil-
dren’s Cancer Hospital Foundation 57357, through which EGP 2
million was donated to the hospital each year. In January 2013,
the Foundation fulfilled its fifth year commitment to the hospi-
tal. The funds have been used for general operational purposes.
In late 2013, the CIB Foundation renewed its partnership
with the 57357 Hospital, raising the annual donation from EGP
2 million to EGP 3.5 million. In the first year of the renewed
partnership, the donation will be used to fund patient care as
well as construction costs of the hospital’s 60-bed expansion.

Friends of Abou el Reesh Children’s Hospitals
organization: operating Costs for the Intensive
Care unit
In February 2012, the CIB Foundation celebrated the official
opening of the Foundation-funded Intensive Care Unit (ICU)
at the Abou El Reesh El Mounira Children’s Hospital. The
ICU holds 11 beds, doubling the hospital’s capacity to serve
critical patients. The new ICU operates alongside the existing

ICU, and provides quality service and care to patients from
across the country.

In August 2012, an EGP 2 million protocol of cooperation
was signed with the Friends of Abou El Reesh Children’s Hos-
pitals Organization to cover the annual operating expenses of
the Foundation-funded ICU. In November 2013, the CIB Foun-
dation donated an additional EGP 2 million to the Organiza-
tion to support staff compensation, medical and administra-
tive supplies, infection control, and needed ICU equipment.

Magdi yacoub Heart Foundation: 100 open-
Heart Surgeries
The Magdi Yacoub Heart Foundation has been a long-standing
partner of both CIB and the CIB Foundation. In August 2012, the
CIB Foundation allocated EGP 6 million to the Magdi Yacoub
Heart Foundation to cover the costs associated with the open-
heart surgeries of 100 children. Through this donation, the CIB
Foundation was able to cover the costs for almost all children
that had been on the open-heart surgery waiting list. The dona-
tion was disbursed in two equal tranches, with the first tranche
of EGP 3 million distributed in September 2012, and the second
tranche of EGP 3 million distributed in April 2013.

Magdi yacoub Heart Foundation: pediatric
outpatient Room
In July 2013, the CIB Foundation donated EGP 1,150,000 to
the Magdi Yacoub Foundation to exclusively sponsor the Pe-
diatric Outpatient Room in the Aswan Heart Centre’s Outpa-
tient Clinic.

The Outpatient Clinic is the most visited and utilized fa-
cility at the Aswan Heart Centre, averaging 500 patients per
month. Furthermore, all children diagnosed or treated at
the Aswan Heart Centre are first received in this Outpatient
Room. Besides increasing the volume of diagnosed patients,

the Outpatient Clinic greatly enhances the quality of service
delivered. The facility, which came into service in 2012, has
a reception area, four examination rooms, one preparation
room, one echocardiography room, and one room dedicated
to medical secretariat.

By supporting this project, the CIB Foundation became the
main sponsor of all pediatric facilities at the Aswan Heart Centre.

Magdi yacoub Heart Foundation: Second
pediatric Floor
In September 2013, the CIB Foundation’s Board of Trustees ap-
proved the roughly EGP 14 million exclusive sponsorship of the
Second Pediatric Floor of the Aswan Heart Centre. The second
floor was opened in early 2013, and in addition to the CIB Foun-
dation-sponsored Children’s Play Room, the floor contains 10
patient rooms, 14 beds, 3 storage rooms, 3 lavatories, a house-
keeping room, 1 deputy doctor room, and 1 head nurse room.

The CIB Foundation has been an ardent supporter of the
Magdi Yacoub Heart Foundation since its inception, and has
been committed to enabling the Foundation to provide world-
class medical care to the less privileged at zero cost. The Aswan
Heart Centre has allowed for the training of young Egyptian
doctors at international standards, and has given due atten-
tion to scientific research seeking to transfer knowledge, skills
and experience across the region and beyond.

With the CIB Foundation’s support, the Aswan Heart Cen-
tre has become a major referral center for cardiac patients in
Egypt and the region.

Friends of Abou el Reesh Children’s Hospitals
organization: emergency Ward and Reception
Area
In March 2013, the CIB Foundation’s Board of Trustees ap-
proved an EGP 10 million initiative to renovate and upgrade

AnnuAl RepoRt 2013 73

CoMMunIty DeVelopMent

The cib foundation has been an
ardent supporter of the Magdi
yacoub heart foundation since its
inception, and has been committed
to enabling the foundation to
provide world-class medical care
to the less privileged at zero cost.

the Abou El Reesh El Mounira Children’s Hospital’s Emergency
Ward and Reception Area.

The renovation and upgrade of the Emergency Ward was
critical to allow the hospital to provide top quality services
and care to incoming patients. The expected 10-month reno-
vation period included restructuring the areas to streamline
movement and operations, providing services such as lab
work, x-rays, and blood transfusions at high speed and efficien-
cy, establishing reporting mechanisms to facilitate accurate
diagnoses, fully equipping the unit to handle high-risk cases,
and providing intensive care areas in the emergency ward.

The EGP 10 million donation will be distributed to the
Friends of Abou El Reesh Children’s Hospitals Organization
in five equal installments. The first and second installments,
totaling EGP 4 million, were distributed in April 2013 and Sep-
tember 2013, respectively.

Rotary Kasr el nile: one thousand eye Surgeries
Through the Rotary Kasr El Nile organization, the CIB Founda-
tion has committed EGP 1.5 million to fund 1,000 eye surgeries
for children through the Children’s Right to Sight (CRTS) pro-
gram. Operational for the past six years, CRTS is dedicated to
eradicating blindness by supporting children and infants re-
quiring immediate eye surgery. Through partnerships with El
Nour Eye Hospital in Mohandiseen and the Eye Care Hospital
in Maadi, the CRTS team will oversee between 750 and 1,000
various ophthalmological operations for underprivileged chil-
dren. Payments for nine rounds of surgeries were completed in
2013 for a total of EGP 683,379.

Gozour Foundation for Development: eye exam
Caravans
In July 2013, the CIB Foundation reaffirmed its partnership
with the Gozour Foundation for Development to fund 12 eye

exam caravans in public elementary schools across Egypt. The
Gozour Foundation for Development is the non-governmental
arm of the Center for Development Services (CDS).

The CIB Foundation allocated EGP 683,760 in two tranches
to fund caravans in Giza, Qalioubeya, Minya, Beni Suef and
Fayoum through the 6/6 Eye Exam Caravan Program. Through
a partnership with Alnoor Magrabi Foundation, the caravans
are designed to provide public school students with eye exams,
eyeglass frames and lenses, eye medication and in-depth eye-
exams and referrals at private hospitals for complex cases.
Each caravan included 15-20 doctors, nurses, and coordina-
tors, and is fully equipped with eye exam machines, a fully
stocked pharmacy and an eyeglass shop. Each one-day cara-
van targeted 450 children, with a total of 5,400 children receiv-
ing free eye exams and care by the end of the project.

In August 2013, the first tranche of EGP 350,460 was distrib-
uted to the Gozour Foundation. The second tranche of 333,300
will be distributed in early 2014.

The caravans also presented valuable opportunities for volun-
teers from the CIB family to engage with the local community
and spend quality time with the less privileged. In November
and December 2013, volunteers from head offices, regional of-
fices and branches across the governorates actively participated
in six caravan days in two schools in Giza and Qalioubeya.

yahiya Arafa Children’s Charity Foundation:
Annual Donation
The Yahiya Arafa Children’s Charity Foundation is a long-
standing partner of the CIB Foundation. In late December
2013, the CIB Foundation’s Board of Trustees approved an
increase in the annual donation to the Yahiya Arafa Founda-
tion from EGP 1 million to EGP 2 million for the upkeep of
three previously-supported Pediatric Units at the Ain Shams
University Hospital, as well as the partial operation of a sec-

sleep cold. In December 2013, the CIB Foundation made a con-
tribution of EGP 1 million to the national campaign through
Bank Al Kesaa, a trusted organization with lengthy experience
and success working in Upper Egypt. An internal announce-
ment was also made to CIB staff, encouraging their participa-
tion in the national campaign.

Blood Donation Campaigns
In 2013, the CIB Foundation hosted 12 blood donation cam-
paigns in six of its corporate offices in Cairo and Alexandria.
The first six campaigns, which took place in April, May and
June 2013, were held in collaboration with the Takatof Founda-
tion, a PricewaterhouseCoopers initiative, as part of the Triple
Effect initiative. Through the initiative, the Foundation seeks
to triple the number of voluntary blood donors in Egypt. Over
the course of the first six days, a total of 495 bags of blood were
collected, placing CIB in the number one position for the high-
est number of blood donors in a corporate office in a single-day
campaign. The second round of campaigns were held in Octo-
ber and November 2013 in the same corporate offices, with the
donated blood going to patients in the National Cancer Insti-
tute and Children’s Cancer Hospital 57357.

To read more about the projects that the CIB Foundation has
helped support and ways in which you can contribute, please
visit www.cibfoundationegypt.org or www.facebook.com/
cibfoundation.

ond neonatal unit. The Yahiya Arafa Foundation has been in-
strumental in purchasing high-end equipment for the units,
as well as training the nurses and doctors working in these
units. The CIB Foundation strongly believes in ensuring the
sustainability of its projects, and believes that supporting the
operations of the Yahiya Arafa Foundation will ensure the
smooth running of the other supported units. The donation
will be used to cover human resources, equipment mainte-
nance, operating costs and academic research.

Rotary Club of Zamalek: Maxillo-Facial Center in
the pediatric prosthodontics Department in the
Cairo university Faculty of Dentistry
In July 2013, the CIB Foundation’s Board of Trustees approved
the development of a roughly EGP 300,000 Maxillo-Facial Cen-
ter in the Pediatric Prosthodontics Department in the Cairo
University Faculty of Dentistry. The highly specialized center of-
fers treatment for oral and nasal cavity deformities in the facial
palette, congenital deformities in newborn babies, and various
facial deformities caused by cancer. Previously, children were
treated in the 60-unit prosthodontics area, with adults of all
ages. The set up in the prosthodontics area was neither suitable
for the children themselves, nor for the doctors in the Faculty.

With the establishment of the center, expected to open in
the first quarter of 2014, the Pediatric Prosthodontics De-
partment will be able to provide treatment to children from
across the country as one of the sole providers of the spe-
cialized procedures.

Bank Al-Kesaa: one Million Blankets Campaign
The One Million Blankets Campaign was initiated in 2012 in
collaboration with Amr Adib’s ‘Cairo Today’ talk show, Bank
Al-Kesaa (Clothing Bank), Dar El Orman, and the Misr El Khair
Foundation, in order to ensure that no Upper Egyptian went to

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CoMMunIty DeVelopMent

SuStAiNABility At ciB

The year 2013 marked the launch of CIB’s strategic initia-
tive aimed at promoting sustainability throughout its lines
of business. This novel approach, an all-too-rare and much-
needed development in Egypt, aspires to imprint CIB’s core
belief in the importance of sustainable development on the
landscape of the Egyptian business community.

This approach focuses on the Bank’s impact on wider society.
The products offered to our customers, the great value the Bank
places on its employees and how CIB invests in our communities
all have a social impact. While the tax duties paid to the govern-
ment, the pension funds the Bank commits to and the dividends
it pays to shareholders all have an economic impact. Further-
more, the business activities we back in addition to our own op-
erations can have a profound environmental impact.

It is for these reasons that a socially responsible Bank must
be run with a long-term view. It must be consistently profit-
able, but not solely concerned with making a profit. Only then
would it have a sustainable business, able to attract and retain
the capital it needs from shareholders to continue to operate.
The following sections discuss CIB’s approach to sustain-
ability; a strategy rooted in six key pillars as identified in
the above chart, which when taken together can serve as a
model for other businesses. In addition to looking at how the
Bank incorporates sustainability into its business model, the
report explores what tangible results were achieved since it
began this initiative early in 2013.

Strategy
CIB’s sustainability strategy is based on the Bank’s vision,
values and purpose. We enable people, businesses and soci-
ety to grow in a way that is sustainable in the long-term.

CIB’s responsibility for sustainable development starts
with helping our clients work on achieving economic success
through ensuring clean, responsible and inclusive growth. CIB
not only contributes to creating a place where our employees
can learn, grow, and be fulfilled in their work, we also make the
communities in which we operate better places to live.

To preserve CIB’s distinct leadership and trusted reputa-
tion and to make Egypt a better place, sustainability is in-
tegrated in our business model and consists of three main
areas: Financial sustainability, Social sustainability and
Environmental sustainability. We thereby assure the Bank’s
fundamental capacity to contribute to economically-, envi-
ronmentally- and socially-sustainable development in mar-
kets where we operate and in society as a whole.

cial lending. We recognize that a Bank’s major environmen-
tal impact tends to be indirect, arising from the provision of
financial services to business customers operating in sensi-
tive sectors. We also believe that taking due account of our
environmental and social impact is not only the right thing
to do, but also makes good business sense.

CIB is currently in the process of establishing a Social & Envi-
ronmental Management System (SEMS) with the backing of an
external consultant, in order to manage our direct and indirect
environmental impact in an efficient and systematic manner.

SEMS is a comprehensive, systematic, planned, and docu-
mented set of processes and practices, that allow financial
institutions to identify, appraise, manage, monitor and miti-
gate risks associated with environmental and social impli-
cations of operations and investments. Once tested and ap-
proved, the SEMS will become an integral part of the Bank’s
internal credit management processes. We realize that de-
veloping and institutionalizing SEMS is the key requirement
for a financial institution to abide by the Equator Principles,
and therefore be recognized as a Green Bank. The Equator
Principles comprise a risk management framework to which
financial institutions may voluntarily accede.

Following training and the testing of the SEMS applica-
tion, CIB will also be looking at the adoption of the Equa-
tor Principles for determining, assessing and managing
social and environmental risk in project finance loans and
investments. The Equator Principles are based on IFC per-
formance standards on social and environmental sustain-
ability and on the World Bank’s general environmental and
health and safety guidelines.

Sustainable operations
CIB believes that a meaningful commitment to protecting
the environment must begin with a commitment to conduct
our internal operations in an environmentally responsible
manner. We have begun to further analyze our in-house op-
erations, with a particular focus on their direct impact on the
environment. We believe the concrete actions we take in or-
der to manage this impact will raise the awareness of a wider
group by inspiring our 5,600 employees.

In order to improve its environmental performance, CIB will
take the necessary steps to measure and reduce its resource
consumption, raise the awareness of employees and collabo-
rate with suppliers. Areas of development will include resourc-
es such as paper, energy, water and solid waste management.

Risk Management
CIB has a strong and longstanding commitment to managing
the environmental and social risks associated with commer-

Measures taken in 2013
Solid Waste Management: To set a strategy for waste man-
agement, a number of high-level meetings were conducted

Sustainable
operations
ensuring that facilities adopt
cutting-edge environmen-
tal safeguards in activities
related to buildings, opera-
tions, procurement, use and
disposal of supplies, water,
paper and energy consump-
tion and waste. manage-
ment.

CSr
Investing in community
development projects to cre-
ate sustainable communities
through the activities and
efforts of CIB Foundation
and other social initiatives.
throughout its history, CIB
has sought to play a role
in the development of all
aspects of society, ultimately
leading to the betterment of
our community.

Strategy
Sustainability at CIB:
Clean, efficient and inclusive
growth.

Sustaining CIB for

the long-term

employees
engaging staff in sustain-
ability efforts, labor and
working conditions, human
resource policies and life /
work balance. Commitment
to attracting, retaining and
developing the best talent in
the market.

risk management
Aiming to help clients
avoid and mitigate adverse
impacts and manage risk
as a way of doing business
sustainability.

Customers
Including environmental and
social considerations in the
development and offering
of products and services
to meet the needs of our
customers.

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 77

CoMMunIty DeVelopMent

The Nag hammadi railroad bridge
in upper Egypt was constructed
as part of the national railroad
expansion plan southwards from
Assiut, reaching Girga in 1892,
Nag hammadi in 1896, Qena in
1897 and luxor and Aswan in
1898.

with both private and public waste entities, including one
conducted with representatives of the Ministry of the Envi-
ronment in October of 2013.

CIB is in the process of developing a solid waste manage-
ment system, which will begin with the Nile Tower Corporate
Office in 2014 as a pilot phase, and expand gradually.

Paper Consumption: Since June 2013, double sided printing
was set as default on all Xerox photocopiers in CIB’s corpo-
rate offices; these printers represent 80% of our paper con-
sumption and waste.

Energy Consumption: Beginning in June 2013, the Bank im-
plemented a PC Sleep Mode initiative proposed by the Green
Team. The benefits include a reduction in depreciation for
computers in the long-run, and reduction in computer kilo-
watts consumption by a minimum of 25% and an estimated
40% maximum rate of reduction. CIB has adopted the use of

power saving bulbs in some corporate office premises and
some branches.

Water Consumption: Water restrictors were installed in the
Mobtadian premises and the Tiba head offices. Lavatory toi-
let flushers were adjusted to flush 6 liters of water instead of
9 liters. We are now preparing to install these restrictors to
the Nile Tower facilities, other corporate office buildings and
branches. This action will reduce water consumption by an
estimated 20% – 30%.

employees:
Employee Engagement:
Staff Awareness Sessions: The Learning and Development
department is working closely with the Sustainability De-
velopment department in raising awareness on the initia-
tives that CIB has undertaken towards achieving its goal
of becoming the No. 1 Bank Going Green. By June 2014 it is

expected that all CIB employees would have participated in
these sessions and will be completely aware of the direction
towards sustainability adopted by CIB.

Green Ideas: Through the aforementioned Sustainability
Awareness sessions, management has received 28 new rec-
ommendations for Quick Win ideas from 18 staff members,
with some having already been actualized, while others are
being taken into consideration.

Photography Competition: In October 2013, CIB an-
nounced its inaugural Photography Competition aimed at
promoting environmental awareness, in addition to rep-
resenting Egypt’s natural heritage through photographs
reflecting the country’s diverse environment and ecology
in all its forms. The winning photograph will be used by
CIB’s Branding Department to promote the ‘CIB Going
Green Program.’

Human Resources: CIB’s recruitment strategy throughout
2013 emphasized greater gender diversification whereby the
percentage of females hired reached 37% of the total number
of hires for the year.

On the Organizational Development side, the HR de-
partment followed through with implementing the de-
partmental action plans set by each department head and
those recommended by the second HR Employee Engage-
ment survey held in 2012. Enforcing the recommendations
of the survey will serve to establish it as a continuous ex-
ercise which will reflect the Bank’s leadership ability to
consistently improve staff engagement regardless of the
challenges involved.

CIB has always believed in creating an equal opportunity
atmosphere for all Bank employees, which is very clear in our
Code of Conduct. In addition to encouraging non-discrimina-
tory practices, our policies are also highly protective against
any form of harassment and intimidation. This is evident in

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 79

CoMMunIty DeVelopMent

our adoption of a whistle-blowing policy that provides the
highest levels of confidentiality and indemnity when raising
concerns about any irregularities.

Corporate Social Responsibility
Community Development
Throughout 2013, CIB upheld the core principles of its Cor-
porate Social Responsibility (CSR) activities and its contri-
butions to the community. A commitment that is evident by
the diverse range of CSR endeavors that the Bank has under-
taken for the year, which are separate from initiatives under-
taken by the CIB Foundation, which are discussed beginning
on page 72 of this report.

CIB Endowed Professorship in Banking
One of CIB’s most promising Community Development ini-
tiatives in 2013 involved a partnership with the American
University in Cairo (AUC) to develop the CIB Endowed Pro-
fessorship in Banking program. The program’s objective is
to design and implement a strong banking curriculum in
different educational institutions and enhance education
in banking throughout Egypt by offering research and ser-
vice courses.

This partnership with AUC is a major step toward bring-
ing practical knowledge of industry trends into the class-
room. Through the Professorship Program, students will be
exposed to the various aspects of Banking that will chal-
lenge their thinking and encourage their application of
creative new practices. It will also serve as a link between
the University’s School of Business and key members of the
Banking community, including regulators, boards, execu-
tives and other.

KidZania
In an effort to expose children to the Banking industry, and
specifically to the CIB brand, as well as to encourage career
exploration at an early age, CIB entered into a five-year part-
nership with KidZania. The pilot program will allow children
to perform tasks associated with real life careers such as fire-
fighters, doctors, police officers, and journalists, and are re-
warded with either KidZos — the official currency of KidZa-
nia — or credit at Kidzania’s games and concessions. CIB’s on
premises mini-branch will allow the children to cash checks,
get debit cards, and deposit or withdraw KidZos from ATMs
around KidZania.

KidZania Cairo offers children a variety of fun and inter-
esting role-playing activities in a realistic city setting. The
simulation allows children to create and learn the implica-
tion of their tasks in the real world. CIB is proud to be part of
such an experience and taking part in enhancing commu-
nity development through instilling sound financial skills
and experiences.

IMAX Cinemas
As part of its community outreach efforts CIB began spon-
soring a program, in association with IMAX Cinema located
in Americana Plaza, which will allow underprivileged chil-
dren to attend 10 pre-booked and dubbed educational films
shown in IMAX theaters.

Sponsoring Talent
In 2013, CIB expanded its commitment as a promoter of
cultural development in Egypt and a champion of talented
Egyptians in all fields of artistic expression and athletics. To
that end, CIB engages with numerous associations and gov-
ernment agencies, such as collaborating with the Fine Arts
Division at the Egyptian Ministry of Culture to support a new
generation of aspiring and gifted young artists.

As a committed patron of the arts, CIB was a major con-
tributor to the annual National Art Competition, which ex-
hibits the work of promising young artists. Furthermore, CIB
sponsored Egypt’s first symposium showcasing artwork de-
vised from scrap metal by local artists, in an effort to encour-
age the proliferation of art by Egyptians from all walks of life.
CIB is proud to be among the sponsors of the Egyptian
Squash Association and the world champions, the Egyptian
national team, as part of its efforts to encourage youth de-
velopment in competitive sports in the international arena.

Community Health
Via the CIB Foundation, the Bank is very active in promoting
health initiatives for the under-privileged in Egypt. You can
learn more about this in the CIB Foundation text that begins
on page 72.

Code of Conduct
CIB has always believed in creating an equal opportunity
atmosphere for all bank employees, as we make clear in our
Code of Conduct, which is provided to all employees. In ad-
dition to encouraging non-discriminatory practices our
policies are also highly protective against any form of ha-
rassment and intimidation in the workplace. This is evident
in our adoption of a whistle-blowing policy that provides the
highest levels of confidentiality and indemnity when raising
concerns about any irregularities.

Meeting Shareholder expectations
CIB’s Board is composed of eight non-executives and two
executive directors. The diversity of backgrounds and expe-
rience among members presents distinct added value and
characterizes the bank’s culture.

The Board is regularly updated on bank activities and fre-
quently assesses its performance against set strategic objec-
tives to reinforce its commitment towards CIB’s sharehold-
ers, customers, employees and socially responsible practices,
prompt disclosure of financial and non-financial data is pro-
vided on regular basis.

CIB’s well-established corporate governance policies, which
ensure the independence of its compliance and risk functions,
have demonstrated high levels of conformity with the new CBE
Corporate Governance Guidelines for Egyptian Banks issued
in 2011. You can read more about our Corporate Governance
policies beginning on page 64 of this report.

Customers
CIB aims to achieve sustainability throughout the entire cus-
tomer service cycle. Sustainability will be adopted in a num-
ber of products and services in various business lines, rang-
ing from Microfinance to SME and Corporate Banking.

cib’s well-established corporate
governance policies, which
ensure the independence of its
compliance and risk functions,
have demonstrated high levels
of conformity with the new cbE
corporate Governance Guidelines
for Egyptian banks issued in 2011.

In order to offer the best service experience to its custom-
ers, who are at the heart of its business, and to ensure their
continuous satisfaction, CIB will continue to maintain sus-
tainability and generate added value in the long term.

Customer Experience Management
Enhancing customer’s journey continues to be our key driver
in managing customer experience across all channels. Syner-
gies are built to achieve success and excellence with focus on:
• Increasing Operational Excellence and Efficiency
• Customer Experience Management
• Capabilities Development

Our initiatives to integrate channels and back end operations
has led to optimizing our services and improve customer sat-
isfaction. Various processes are being re-engineered to exceed
and improve processing efficiency and customer expectations.
Service indicators and measurement tools are developed to
advance our service delivery standards. Efficiency and indica-
tors are being tracked to channelize our efforts in right areas
to meet customer expectations. On-boarding unit is developed
as part of strengthening our relationships with customers and
improve customers journey. Staff capabilities are developed
through tailored training programs to meet and address cus-
tomer requirements and departmental level efficiency.

At CIB our key priority remains to ensure seamless and
finest customer experience and journey for all services and
interactions.

Corporate Banking
CIB is committed to continuously and significantly increase
its facilities to a number of environmental friendly projects
such as:

Water Waste Management: CIB supported Orasqualia, a
joint venture established by OCI and Aqualia, with a 15-year
Syndicate MTL amounting to USD 74 million to develop a
Waste Water Treatment Plant in New Cairo.

The Bank also provided Green Valley Oil Services with an
MTL amounting to USD 3 million to refinance machines

purchased to perform water waste treatment services for the
Rashid Petroleum Company, with a total investment cost of
USD 8.7 million.

Agriculture Waste Management: CIB granted ENTAG with
short-term financing amounting to EGP 55 million for the
company’s agricultural waste management projects and its
supply of Biomass (used as an alternative fuel) project, with a
total investment cost of USD 8.2 million.

Solar Energy: The Bank supplied Middle East Engineering
& Telecommunications (MEET) with a short-term facility in
the form of an EGP 15 million MPL, with a total investment
cost of USD 2.3 million, to aid in its environmental sustain-
ability projects.

CIB is also collaborating on Emaar Misr for Development’s
Mividia project, an initiative aimed at applying the use of
solar energy for public street lighting in the suburb of New
Cairo, as well as looking at ways to reduce carbon-dioxide
emissions.

Electricity: CIB granted several of the electric utility com-
panies’ credit facilities to partially finance the construction
of their thermal power plants. These transactions were co-
financed by the World Bank and therefore conform to envi-
ronmental regulations.

Petrochemical: CIB financed the construction and op-
erations of several petrochemical projects, noting that
customary financing terms include satisfaction of environ-
mental regulations in addition to the appointment of an en-
vironmental consultant. Several petrochemical clients com-
menced social responsibility programs and comprehensively
contributed to their respective local communities.

Business Banking
In recognition of the importance of developing the SME seg-
ment as a key pillar in sustainability, CIB is keen that the
development of this sector takes place in an inclusive way.
CIB Business Banking, which serves 2,675 enrolled compa-

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AnnuAl RepoRt 2013 81

CoMMunIty DeVelopMent

Sustainability progress 2013

nies with assets totaling EGP 714 million and a total of EGP
12 billion in liabilities as of September 2013, offered these
companies both long-term and short term financing options
through secured and unsecured lending products, in addi-
tion to helping them better manage their cash cycle.

In 2013, the department also conducted several deals
with credit guarantee companies such as the Overseas Pri-
vate Investment Corporation (OPIC). OPIC supports U.S.
foreign policy objectives by encouraging development in
regions that have experienced instability or conflict, yet
offer promising growth opportunities. Moreover, they aim
to improve the performance of SMEs in Egypt by providing
medium to long term credit guarantee solutions to eligible
investment projects.

This year also saw CIB Business Banking conduct two
workshop events in both Cairo and Alexandria which were
attended by CIB clients, the Business Banking team and sev-
eral media agencies and outlets. These workshops were con-
ducted to give CIB clients a chance to learn how to better rep-
resent themselves and their companies to banks and traverse
the two-year socio-economic crisis here in Egypt. The crisis
management sessions and business plan were presented by
the Frankfurt School of Business and were well-received by
CIB clients.

Going forward, many more projects and plans are being
laid down for the coming year to support the SME sector and
the country’s economy.

Finance programs and International Donor
funds
CIB’s positive impact on our community is evident in its sup-
port of continuous improvement of environment protection
projects through its Finance Programs and International Do-
nor Funds Division. This division manages agricultural de-
velopment funds and credit lines provided by government en-
tities and international agencies to small, medium and large
scale agrarian businesses. It also manages a microfinance
portfolio as well as environmentally friendly projects.

To date, CIB has disbursed 179,000 microfinance loans

with a total outstanding portfolio of EGP 107 million.

environmentally-friendly and Socially-conscious
projects
Agricultural Development Program (ADP)
The Agricultural Development Program plays a major role
in improving and supporting Egypt’s agricultural sector
and the associated supply chain. ADP also aims to raise
awareness and improve access to finance for SMEs working
in the agricultural business. The program looks to estab-

lish, expand and modernize these businesses primarily in
the fields of post harvest activities, agricultural input sup-
ply and marketing.

Veterinary Service Program (VSP)
The Ministry of Agriculture and the European Commission
(EC) collaborated in a program to improve the productivity
of the livestock sector in Egypt. This program mainly aims
to assist the Government of Egypt in improving the quality
of animal health services and to encourage veterinarians to
open their own businesses.

Buffalo Fattening Program (BFP)
This program is among the most important livestock pro-
grams in Egypt, as it plays an important role in improving
the production and supply of red meat to the market. The
program is a result of a joint effort between the Ministry of
Agriculture and the USAID.

Environment Protection with KfW (Public Private Sector
Project – PPSI)
CIB was among the first banks to participate in the environ-
ment protection program with the German Development
Bank (KfW). The program targets both public and private
enterprises and SMEs. Its main objective is to ensure that
industrial firms and business enterprises have the proper
technical assistance related to industrial pollution abate-
ment technologies. This helps in reducing the emission loads
in accordance with national standards.

Environmental Compliance Office Project (ECO)
This program — which comes under the purview of CIBs
environmental compliance office project (ECO) — is funded
through the Danish government and with coordination ef-
forts being led by the Government of Egypt. This project helps
firms and business enterprises in financing the purchasing
of machines, equipment, construction works and designs re-
quired for projects which focus on environmental protection
and energy efficiency.

Egyptian Pollution Abatement Project (EPAP II)
CIB also participates in the second pollution abatement proj-
ect (EPAP II). This project provides a financial package to sup-
port public and private industries to improve their environ-
mental status. This project is co-sponsored by the World Bank
(WB), the European Investment Bank (EIB), the Japanese Bank
for International Cooperation (JBIC), the French Development
Agency (AFD), the European Commission (EC), the Govern-
ment of Finland in addition to the Government of Egypt.

The Sustainability development
department started in January
2013 with an official charter
approved on 1 March 2013.
The department acts as the
organizational focal point with
various departments to understand
the needs of the bank and ensure
the integration of sustainable
principles into cib’s business
practices.

Sustainability Governance

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Sustainability Advisory Board

Sustainability Steering Committee

Sustainability Green team

Sustainability Advisory Board:
The Sustainability Advisory Board, which was chartered in
14th of March 2013, acts on behalf of the Board in all sustain-
ability-related efforts and concentrates on long-term value
drivers that advance the twin objective of sustained suc-
cess of the Bank. It approves CIB’s sustainability framework,
strategies, policies, international affiliations and member-
ships, and initiatives.

Sustainability Steering Committee:
The Sustainability Steering Committee is chaired by Dr. Na-
dia Makram Ebeid, and is composed of senior heads from var-
ious Bank departments. The committee meets at least once
every quarter and as often as deemed necessary. Its main
responsibilities are prioritization and review in addition to

monitoring the implementation of sustainability initiatives
consistent with CIB’s corporate sustainability strategy.

Sustainability Development Department:
The Sustainability Development Department started in
January 2013 with an official charter approved 1st March,
2013. The department acts as the organizational focal point
with various departments to understand the needs of the
Bank and ensure the integration of sustainable principles
into CIB’s business practices. The department is responsible
for the development, monitoring and coordination of CIB’s
sustainability efforts including strategies, policies, systems,
initiatives, quick wins including ongoing branding, training
and reporting efforts.

Sustainability Green Teams:
At the first Steering Committee meeting in April 2013, 26
Green Team members were assigned and 11 more have since
volunteered. Green Team members aspire to be CIB’s envi-
ronmental champions, ensuring Going Green awareness,
recommendation of Quick Win ideas, and implementation of
various sustainability initiatives across the Bank, as it relates
to their existing jobs.

Social and environmental Assessment phase
In April 2013, CIB appointed an external consultant to assess
the current social and environmental practices across the or-
ganization, and to assess CIB’s current sustainability perfor-
mance and building blocks. The Sustainability Department
coordinated and managed 22 meetings for the consultant with
16 departments from all over the Bank, where the consultant

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 83

CoMMunIty DeVelopMent

in April 2013, cib appointed an
external consultant to assess the
current social and environmental
practices across the organization,
and to assess cib’s current
sustainability performance and
building blocks.

came up with an assessment report and main strengths and
gaps were identified. A Sustainability Assessment Report, in-
cluding suggested steps for action, was prepared in July 2013.
These findings form the basis on which CIB’s Sustainability
Framework Report and Roadmap were prepared.

Sustainability Framework
The framework represents the sustainability guideline for
CIB. It articulates the Bank’s strategic commitment to sus-
tainable development, sets the foundation for the Bank’s
social and environmental risk management and is designed
to ensure that sustainability is fully integrated across CIB’s
policies, processes and operations.

Sustainability Roadmap
The Roadmap identifies the necessary steps and milestones
that have been set for the coming years to achieve CIB’s short
and long-term sustainability objectives. It highlights what
needs to be implemented on the ground, including the devel-
opment, monitoring, implementation responsibilities, and
estimated time frames for key pillars namely, the Social and
Environmental Management Systems (SEMS), the Direct Im-
pact Management Plan (DIMP), Leadership for Energy and
Environmental Design (LEED), alongside a sustainability Stra-
tegic Plan, Branding initiatives and Sustainability Reporting.

leeD
Leadership in Energy & Environmental Design (LEED) is a
third-party certification program and an internationally ac-
cepted benchmark for the design, construction and opera-
tion of high performance green buildings.

Developed by the U.S. Green Building Council (USGBC),
LEED is intended to help building owners and operators find
and implement ways to be environmentally responsible and
resource-efficient.

Since October 2013, an external LEED Expert is mandat-
ed to assess the possibility of turning the new smart village
building into a LEED EBOM (Existing Buildings Operations
and Maintenance ) certified facility.

Sustainability training
An ongoing training strategy is being prepared to institu-
tionalize sustainability training at CIB. Raising awareness
on sustainability will be included as an integral part of all
ongoing training programs in the Bank. Several Sustainabil-
ity Training sessions have been conducted since May by the
Green Teams to raise awareness on Sustainability. Also, two
Training of Trainers (ToT) sessions were conducted in June
and September, where 20 instructors from various depart-
ments were trained on how to conduct the awareness ses-
sions across the organization.

The development of social and environmental risk skills
will be ensured through the selection of a specialized con-
sultant of relevant experience to build, develop and deliver
this training to cover all Credit and Risk staff. A total of 18
selected members from Business and Risk Groups attended
a two-day workshop in September. It is anticipated that the
attendees will play a pivotal role in the upcoming develop-
ment of SEMS.

Beginning in October, 24 staff sustainability awareness
sessions were conducted, covering the Strategic Relations,
Operations, IT, Human Resource and Call Center depart-

work environment where employees could take breaks and
host events while promoting CIB’s green image.

Smoke Free Environment: The Smart Village building has
been fully non-smoking since October. Almost all corporate
office buildings in Cairo were designated as non-smoking
buildings beginning in early November 2013.

Green Wall: A 21-square-meter living green wall has been
fully developed in the new Smart Village building lobby
in August 2013. The initiative improves air quality in the
building, uses water-efficient technology and reduces the
amount of energy used to maintain a cool temperature
within the building.

Awareness and Communication
Sustainability at CIB is communicated internally through
a periodic Sustainability Newsletter and an organizational
intranet site. The site will act as a communication platform
to inform staff about the sustainability initiative, the roles
of the sustainability development department and the green
teams, green news, and eco-facts.

ments within the two Smart Village buildings. Also, nine
awareness sessions were conducted targeting employees in
the Delta and Alexandria region. To date, 780 employees have
participated in these sessions.

Quick Wins
Our exciting sustainability journey inspired us to identify
a number of Quick Win projects that were shared with and
approved by the Sustainability Steering Committee. Some
of these are internal Quick Wins, engaging several depart-
ments, namely Corporate Services, Premises Projects and
Branding. Others represent full-fledged projects undertaken
through external vendors after tendering processes.

Implementation of these projects ensures active staff in-
volvement and green teams participation in sustainabil-
ity initiatives. These pragmatic activities bring sustain-
ability into focus on the individual level by connecting the
impact of everyday actions at work with sustainability at
home and vice versa and encourage employees to bring
their positive personal sustainability behaviors into the
workplace.

Landscaping: In July, the front green area of the Smart Vil-
lage building was planted with low-water consumption
plants to provide an appealing sustainable landscape, and to
contribute to building environmental awareness.

Rooftop Garden: In June 2013 the rooftop garden was de-
veloped on the top floor of the new Smart Village building,
where fresh and organic vegetables and fruits are grown for
home use. The rationale is to create a relaxing and healthy

AnnuAl RepoRt 2013

AnnuAl RepoRt 2013 85

constructed by the Ptolomies
the mid-third century bc, the
original lighthouse of Alexandria
guided merchant ships safely
into harbor for centuries before
it was damaged by a series of
earthquakes and abandoned in
the 14th century of our era.

fiNANciAl
StAtemeNtS

Separate financials
Auditors’ Report
Balance Sheet
Income Statement
Cash Flow
Changes in Shareholder’s Equity
Notes

Consolidated financials
Auditors’ Report
Balance Sheet
Income Statement
Cash Flow
Shareholder’s Equity
Notes

AnnuAl RepoRt 2013

88
90
91
92
94
96

140
142
143
144
146
148

AnnuAl RepoRt 2013 87

Financial StatementS: Separate

annual report 2013

annual report 2013 89

Financial StatementS: Separate

commercial international Bank (egypt) S.a.e
Separate balance sheet as at December 31, 2013

commercial international Bank (egypt) S.a.e
Separate income statement for the year ended
December 31, 2013

Cash and balances with Central Bank
Due from banks
Treasury bills and other governmental notes
Trading financial assets
Loans and advances to banks
Loans and advances to customers
Derivative financial instruments
Financial investments
- Available for sale
- Held to maturity
Investments in subsidiary and associates
Investment property
Other assets
Deferred tax
Property, plant and equipment
Total assets
Liabilities and equity
Liabilities
Due to banks
Due to customers
Derivative financial instruments
Other liabilities
Long term loans
Other provisions
Total liabilities
Equity
Issued and paid in capital
Reserves
Reserve for employee stock ownership plan (ESOP)
Retained earnings (losses)
Total equity
Net profit for the year after tax
Total equity and net profit for year
Total liabilities and equity

Notes

15
16
17
18
19
20
21

22
22
23
24
25
33
26

27
28
21
30
29
31

32
32

Dec. 31, 2013
EGP
4,796,240,354
8,893,670,965
23,654,812,174
2,246,347,806
132,422,732
41,837,951,712
103,085,538

23,363,501,695
4,187,173,991
599,276,660
9,695,686
2,879,794,496
83,755,441
964,538,516
113,752,267,766

1,373,410,040
96,940,270,000
114,878,583
2,625,755,491
132,153,227
450,755,558
101,637,222,899

9,002,435,690
307,223,285
190,260,457
-
9,499,919,432
2,615,125,435
12,115,044,867
113,752,267,766

Dec. 31, 2012
EGP
5,393,974,124
7,957,710,034
7,978,030,413
1,472,281,763
1,178,867,739
40,698,313,773
137,459,761

21,161,884,032
4,205,753,328
938,033,700
10,395,686
2,459,025,844
129,133,209
684,527,896
94,405,391,302

1,714,862,716
78,834,726,890
119,099,260
2,034,351,571
80,495,238
310,648,113
83,094,183,788

5,972,275,410
2,970,458,093
164,761,121
1,001,979
9,108,496,603
2,202,710,911
11,311,207,514
94,405,391,302

Contingent liabilities and commitments
Letters of credit, guarantees and other commitments

The accompanying notes are an integral part of these financial statements.

16,182,489,160

14,897,789,005

Interest and similar income
Interest and similar expense
Net interest income

Fee and commission income
Fee and commission expense
Net fee and commission income

Dividend income
Net trading income
Profit (Losses) from financial investments
Administrative expenses
Other operating (expenses) income
Impairment (charge) release for credit losses
Profit before income tax

Income tax expense
Deferred tax
Net profit for the year

Earning per share
Basic
Diluted

Notes

8
9
22
10
11
12

13
33 & 13

Dec. 31, 2013
EGP
9,509,874,663
(4,460,113,281)
5,049,761,382

1,316,916,389
(127,965,091)
1,188,951,298

19,803,451
759,972,323
(381,156,748)
(1,726,520,973)
(155,016,845)
(915,581,874)
3,840,212,014

(1,179,708,811)
(45,377,768)
2,615,125,435

Dec. 31, 2012
EGP
7,845,913,494
(3,945,237,550)
3,900,675,944

942,867,320
(107,365,742)
835,501,578

32,234,196
565,727,965
(116,514,246)
(1,444,645,467)
(109,790,791)
(609,971,077)
3,053,218,102

(884,498,673)
33,991,482
2,202,710,911

2.67
2.63

2.34
2.31

Hisham Ezz El-Arab
Chairman and Managing Director

annual report 2013

annual report 2013 91

Hisham Ezz El-Arab
Chairman and Managing Director

Financial StatementS: Separate

commercial international Bank (egypt) S.a.e
Separate cash flow for the year ended December 31, 2013
(Cont.)

Cash and cash equivalent at the end of the year

Cash and cash equivalent comprise:
Cash and balances with Central Bank
Due from banks
Treasury bills and other governmental notes
Obligatory reserve balance with CBE
Due from banks (time deposits) more than three months
Treasury bills with maturity more than three months
Total cash and cash equivalent

Dec. 31, 2013
EGP
11,758,996,230

Dec. 31, 2012
EGP
5,536,080,095

4,796,240,354
8,893,670,965
23,654,812,174
(3,224,658,841)
(5,148,331,397)
(17,212,737,025)
11,758,996,230

5,393,974,124
7,957,710,034
7,978,030,413
(3,093,283,199)
(4,637,273,016)
(8,063,078,261)
5,536,080,095

commercial international Bank (egypt) S.a.e
Separate cash flow for the year ended December 31, 2013

Cash flow from operating activities
Profit before income tax
Adjustments to reconcile net profit to net cash provided by

operating activities

Depreciation
Impairment charge for credit losses
Other provisions charges
Trading financial investments revaluation differences
Available for sale and held to maturity investments exchange

revaluation differences

Financial investments impairment charge (release)
Utilization of other provisions
Other provisions no longer used
Exchange differences of other provisions
Profits from selling property, plant and equipment
Profits from selling financial investments
Shares based payments
Investments in subsidiary and associates revaluation
Real estate investments impairment charges (release)
Operating profits before changes in operating assets and liabilities

Net decrease (increase) in assets and liabilities
Due from banks
Treasury bills and other governmental notes
Trading financial assets
Derivative financial instruments
Loans and advances to banks and customers
Other assets
Due to banks
Due to customers
Other liabilities
Net cash provided from operating activities

Cash flow from investing activities
Purchase of subsidiary and associates
Purchases of property, plant and equipment
Redemption of held to maturity financial investments
Purchases of held to maturity financial investments
Purchases of available for sale financial investments
Proceeds from selling available for sale financial investments
Proceeds from selling real estate investments
Net cash generated from (used in) investing activities

Cash flow from financing activities
Increase (decrease) in long term loans
Dividend paid
Capital increase
Net cash generated from (used in) financing activities
Net increase (decrease) in cash and cash equivalent during the year
Beginning balance of cash and cash equivalent

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

3,840,212,014

3,053,218,102

202,345,252
915,581,874
129,104,495
17,695,722

(124,230,792)

(6,267,555)
(5,633,785)
(141,521)
16,778,256
(740,692)
(1,656,257)
89,181,563
346,284,340
-
5,418,512,914

(642,434,022)
(9,149,658,764)
(791,761,765)
30,153,546
(1,008,774,806)
(382,561,576)
(341,452,676)
18,105,543,110
(588,304,891)
10,649,261,070

(7,527,300)
(519,822,256)
18,579,337
-
(7,463,491,687)
4,520,053,768
700,000
(3,457,373,543)

51,657,989
(1,055,843,165)
29,348,380
(974,836,796)
6,222,916,136
5,536,080,094

167,225,901
609,971,077
51,616,932
(78,642,848)

(60,242,239)

7,902,478
(12,294,615)
(531,054)
7,230,941
(2,387,583)
(519,013)
79,068,829
89,736,000
(371,000)
3,910,981,908

521,695,379
758,289,224
(832,554,642)
13,896,165
(1,421,772,116)
(948,385,056)
(1,625,931,801)
7,260,679,360
(163,932,538)
7,472,965,883

(32,173,922)
(204,721,832)
-
(4,176,660,408)
(10,163,193,809)
5,343,312,219
2,750,000
(9,270,719,274)

(18,838,138)
(806,206,521)
37,712,420
(787,332,239)
(2,545,054,108)
8,081,134,203

annual report 2013

annual report 2013 93

Financial StatementS: Separate

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annual report 2013

annual report 2013 95

Financial StatementS: Separate

Notes to the consolidated financial statements for the year
ended on December 31, 2013
1. General information
Commercial International Bank (Egypt) S.A.E. provides retail, corporate and investment banking services in various parts of
Egypt through 125 branches, and 27 units employing 5193 employees on the balance sheet date.

Commercial International Bank (Egypt) S.A.E. was formed as a commercial bank under the investment law no. 43 of 1974. The
address of its registered head office is as follows: Nile tower, 21/23 Charles de Gaulle Street-Giza. The Bank is listed in the Egyp-
tian stock exchange.

2. Summary of accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have
been consistently applied to all years presented, unless otherwise stated.

2.1. Basis of preparation
The separate financial statements have been prepared in accordance with Egyptian financial reporting standards issued
in 2006 and its amendments and in accordance with the Central Bank of Egypt regulations approved by the Board of Di-
rectors on December 16, 2008.

The separate financial statements have been prepared under the historical cost convention, as modified by the revaluation
of financial assets and liabilities classified as trading or held at fair value through profit or loss, available for sale invest-
ment and all derivatives contracts.

The separate and consolidated financial statements of the Bank and its subsidiaries have been prepared in accordance
with the relevant domestic laws and the Egyptian financial reporting standards, the affiliated companies are entirely
included in the consolidated financial statements and these companies are the companies that the Bank - directly or indi-
rectly – has more than half of the voting rights or has the ability to control the financial and operating policies, regardless
of the type of activity, the Bank’s consolidated financial statements can be obtained from the Bank’s management. The
Bank accounts for investments in subsidiaries and associate companies in the separate financial statements at cost minus
impairment loss.

The cost method is applied to account for investments in subsidiaries and associates, whereby, investments are recorded
based on the acquisition cost including any goodwill, deducting any impairment losses, and dividends are recorded in
the income statement in the adoption of the distribution of these profits and evidence of the Bank right to collect them.

2.3. Segment reporting
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks
and returns that are different from those of other business segments. A geographical segment is engaged in providing
products or services within a particular economic environment that are subject to risks and returns different from those
of segments operating in other economic environments.

2.4. Foreign currency translation
2.4.1. Functional and presentation currency
The financial statements are presented in Egyptian pound, which is the Bank’s functional and presentation currency.

2.4.2. Transactions and balances in foreign currencies
The Bank maintains its accounting records in Egyptian pound. Transactions in foreign currencies during the period are
translated into the Egyptian pound using the prevailing exchange rates on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the end of reporting period at the
prevailing exchange rates. Foreign exchange gains and losses resulting from settlement and translation of such transac-
tions and balances are recognized in the income statement and reported under the following line items:

• Net trading income from held-for-trading assets and liabilities.
• Other operating revenues (expenses) from the remaining assets and liabilities.

Changes in the fair value of investments in debt instruments; which represent monetary financial instruments, denomi-
nated in foreign currencies and classified as available for sale assets are analyzed into valuation differences resulting from
changes in the amortized cost of the instrument, differences resulting from changes in the applicable exchange rates and
differences resulting from changes in the fair value of the instrument.

Valuation differences resulting from changes in the amortized cost are recognized and reported in the income statement in
‘income from loans and similar revenues’ whereas differences resulting from changes in foreign exchange rates are recog-
nized and reported in ‘other operating revenues (expenses)’. The remaining differences resulting from changes in fair value
are deferred in equity and accumulated in the ‘revaluation reserve of available-for-sale investments’.

The separate financial statements of the Bank should be read with its consolidated financial statements, for the period
ended on December 31, 2013 to get complete information on the Bank’s financial position, results of operations, cash flows
and changes in ownership rights.

Valuation differences resulting from the non-monetary items include gains and losses of the change in fair value of such
equity instruments held at fair value through profit and loss, as for recognition of the differences of valuation resulting
from equity instruments classified as financial investments available for sale within the fair value reserve in equity.

2.2. Subsidiaries and associates
2.2.1 Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Bank has owned directly or indirectly the
control to govern the financial and operating policies generally accompanying a shareholding of more than one half of the
voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are consid-
ered when assessing whether the Bank has the ability to control the entity or not.

2.2.2 Associates
Associates are all entities over which the Bank has significant influence but do not reach to the extent of control, generally
accompanying a shareholding between 20% and 50% of the voting rights.

The acquisition method of accounting is used to account for the purchase of subsidiaries. The cost of an acquisition is
measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed, plus any
costs directly related to the acquisition. The excess of the cost of an acquisition over the Bank share of the fair value of the
identifiable net assets acquired is recorded as goodwill. A gain on acquisition is recognized in profit or loss if there is an
excess of the Bank’s share of the fair value of the identifiable net assets acquired over the cost of the acquisition.

2.5. Financial assets
The Bank classifies its financial assets in the following categories:
• Financial assets designated at fair value through profit or loss.
• Loans and receivables.
• Held to maturity investments.
• Available for sale financial investments.

Management determines the classification of its investments at initial recognition.

2.5.1. Financial assets at fair value through profit or lossThis category has two sub-categories:

• Financial assets held for trading.
• Financial assets designated at fair value through profit and loss at inception.

annual report 2013

annual report 2013 97

Financial StatementS: Separate

A financial asset is classified as held for trading if it is acquired or incurred principally for the purpose of selling or repur-
chasing in the short term or if it is part of a portfolio of identified financial instruments that are managed together and for
which there is evidence of a recent actual pattern of short term profit making. Derivatives are also categorized as held for
trading unless they are designated as hedging instruments.

Financial instruments, other than those held for trading, are classified as financial assets designated at fair value through
profit and loss if they meet one or more of the criteria set out below:

• When the designation eliminates or significantly reduces measurement and recognition inconsistencies that would arise
from measuring financial assets or financial liabilities, on different bases. Under this criterion, an accounting mismatch
would arise if the debt securities issued were accounted for at amortized cost, because the related derivatives are mea-
sured at fair value with changes in the fair value recognized in the income statement. The main classes of financial instru-
ments designated by the Bank are loans and advances and long-term debt issues.

• Applies to groups of financial assets, financial liabilities or combinations thereof that are managed, and their performance
evaluated, on a fair value basis in accordance with a documented risk management or investment strategy, and where
information about the groups of financial instruments is reported to management on that basis.

• Relates to financial instruments containing one or more embedded derivatives that significantly modify the cash flows

resulting from those financial instruments, including certain debt issues and debt securities held.

Any financial derivative initially recognized at fair value can’t be reclassified during the holding period. Re-classification
is not allowed for any financial instrument initially recognized at fair value through profit and loss.

2.5.2. Loans and advances
Loans and advances are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market, other than:
- Those that the Bank intends to sell immediately or in the short term, which is classified as held for trading, or those that
the Bank upon initial recognition designates as at fair value through profit and loss.
• Those that the Bank upon initial recognition designates and available for sale; or
• Those for which the holder may not recover substantially all of its initial investment, other than credit deterioration.

2.5.3. Held to maturity financial investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturi-
ties that the Bank’s management has the positive intention and ability to hold till maturity. If the Bank has to sell other
than an insignificant amount of held-to-maturity assets, the entire category would be reclassified as available for sale
unless in necessary cases subject to regulatory approval.

2.5.4. Available for sale financial investments
Available-for-sale investments are those intended to be held for an indefinite period of time, which may be sold in response
to needs for liquidity or changes in interest rates, exchange rates or equity prices.
The following are applied in respect to all financial assets:

Debt securities and equity shares intended to be held on a continuing basis, other than those designated at fair value, are
classified as available-for-sale or held-to-maturity. Financial investments are recognized on trade date, when the group
enters into contractual arrangements with counterparties to purchase securities.

Financial assets are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value
through profit and loss. Financial assets carried at fair value through profit and loss are initially recognized at fair value,
and transaction costs are expensed in the income statement.

Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or when the
Bank transfers substantially all risks and rewards of the ownership. Financial liabilities are derecognized when they are
extinguished, that is, when the obligation is discharged, cancelled or expired.

Available-for-sale, held–for-trading and financial assets designated at fair value through profit and loss are subsequently
measured at fair value. Loans, receivables and held-to-maturity investments are subsequently measured at amortized
cost.

Gains and losses arising from changes in the fair value of the ‘financial assets designated at fair value through profit or
loss’ are recognized in the income statement in ‘net income from financial instruments designated at fair value’. Gains and
losses arising from changes in the fair value of available for sale investments are recognized directly in equity, until the
financial assets are either sold or become impaired. When available-for-sale financial assets are sold, the cumulative gain
or loss previously recognized in equity is recognized in profit or loss.

Interest income is recognized on available for sale debt securities using the effective interest method, calculated over the
asset’s expected life. Premiums and discounts arising on the purchase are included in the calculation of effective interest
rates. Dividends are recognized in the income statement when the right to receive payment has been established.

The fair values of quoted investments in active markets are based on current bid prices. If there is no active market for a
financial asset, or no current demand prices available the Bank measures fair value using valuation models. These include
the use of recent arm’s length transactions, discounted cash flow analysis, option pricing models and other valuation
models commonly used by market participants. If the Bank has not been able to estimate the fair value of equity instru-
ments classified available for sale, value is measured at cost less any impairment in value.

Available for sale investments that would have met the definition of loans and receivables at initial recognition may be
reclassified out to loans and advances or financial assets held to maturity. In all cases, when the Bank has the intent and
ability to hold these financial assets in the foreseeable future or till maturity. The financial asset is reclassified at its fair
value on the date of reclassification, and any profits or losses that have been recognized previously in equity, are treated
based on the following:

• If the financial asset has a fixed maturity, gains or losses are amortized over the remaining life of the investment using the
effective interest rate method. In case of subsequent impairment of the financial asset, the previously recognized unreal-
ized gains or losses in equity are recognized directly in the profits and losses.

• In the case of financial asset which has infinite life, any previously recognized profit and loss in equity will remain until the
sale of the asset or its disposal, in the case of impairment of the value of the financial asset after the re-classification, any
gain or loss previously recognized in equity is recycled to the profits and losses.

• If the Bank adjusts its estimates of payments or receipts of a financial asset that in return adjusts the carrying amount of
the asset (or group of financial assets) to reflect the actual cash inflows, the carrying value is recalculated based on the
present value of estimated future cash flows at the effective yield of the financial instrument and the differences are rec-
ognized in profit and loss.

• In all cases, if the Bank re-classifies financial asset in accordance with the above criteria and increases its estimate of the
proceeds of future cash flow, this increase adjusts the effective interest rate of this asset only without affecting the invest-
ment book value.

2.6. offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a legally
enforceable right to offset the recognized amounts and there is an intention to be settled on a net basis.

Agreements of repos & reverse repos are shown by the net in the financial statement in treasury bills and other govern-
mental notes.

2.7. Derivative financial instruments and hedge accounting
Derivatives are recognized initially, and subsequently, at fair value. Fair values of exchange traded derivatives are ob-
tained from quoted market prices. Fair values of over-the-counter derivatives are obtained using valuation techniques,
including discounted cash flow models and option pricing models. Derivatives are classified as assets when their fair value
is positive and as liabilities when their fair value is negative.

Embedded derivatives in other financial instruments, such as conversion option in a convertible bond, are treated as
separate derivatives when their economic characteristics and risks are not closely related to those of the host contract,
provided that the host contract is not classified as at fair value through profit and loss. These embedded derivatives are
measured at fair value with changes in fair value recognized in income statement unless the Bank chooses to designate
the hybrid contract as at fair value through net trading income through profit and loss.

annual report 2013

annual report 2013 99

Financial StatementS: Separate

The timing method of recognition in profit and loss, of any gains or losses arising from changes in the fair value of deriva-
tives, depends on whether the derivative is designated as a hedging instrument, and the nature of the item being hedged.
The Bank designates certain derivatives as:

• Hedging instruments of the risks associated with fair value changes of recognized assets or liabilities or firm commit-

ments (fair value hedge).

• Hedging of risks relating to future cash flows attributable to a recognized asset or liability or a highly probable forecast

transaction (cash flow hedge)

• Hedge accounting is used for derivatives designated in a hedging relationship when the following criteria are met.

At the inception of the hedging relationship, the Bank documents the relationship between the hedging instrument and
the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions.
Furthermore, at the inception of the hedge, and on ongoing basis, the Bank documents whether the hedging instrument
is expected to be highly effective in offsetting changes in fair values of the hedged item attributable to the hedged risk.

At the inception of the hedge, and on ongoing basis, the Bank documents whether the hedging instrument is expected to
be highly effective in offsetting changes in fair values of the hedged item attributable to the hedged risk.

2.7.1. Fair value hedge
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recognized in profit
and loss immediately together with any changes in the fair value of the hedged asset or liability that is attributable to the
hedged risk. The effective portion of changes in the fair value of the interest rate swaps and the changes in the fair value of
the hedged item attributable to the hedged risk are recognized in the ‘net interest income’ line item of the income state-
ment. Any ineffectiveness is recognized in profit and loss in ‘net trading income’.

When the hedging instrument is no longer qualified for hedge accounting, the adjustment to the carrying amount of a
hedged item, measured at amortized cost, arising from the hedged risk is amortized to profit and loss from that date using
the effective interest method.

2.7.2. Derivatives that do not qualify for hedge accounting
All gains and losses from changes in the fair values of derivatives that do not qualify for hedge accounting are recognized
immediately in the income statement. These gains and losses are reported in ‘net trading income’, except where deriva-
tives are managed in conjunction with financial instruments designated at fair value , in which case gains and losses are
reported in ‘net income from financial instruments designated at fair value’.

interest income and expense

2.8.
Interest income and expense for all financial instruments except for those classified as held-for-trading or designated at
fair value are recognized in ‘interest income’ and ‘interest expense’ in the income statement using the effective interest
method.
The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability and
of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that ex-
actly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when
appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the
effective interest rate, the Bank estimates cash flows considering all contractual terms of the financial instrument (for
example, prepayment options) but does not consider future credit losses. The calculation includes all fees and points paid
or received between parties to the contract that represents an integral part of the effective interest rate, transaction costs
and all other premiums or discounts.
Once loans or debts are classified as nonperforming or impaired, the revenue of interest income will not be recognized
and will be recorded off balance sheet, and are recognized as income subsequently based on a cash basis according to the
following:

• When all arrears are collected for consumer loans, personnel mortgages and micro-finance loans.
• When calculated interest for corporate are capitalized according to the rescheduling agreement conditions until paying
25% from rescheduled payments for a minimum performing period of one year, if the customer continues to perform, the
calculated interest will be recognized in interest income (interest on the performing rescheduling agreement balance)
without the marginalized before the rescheduling agreement which will be recognized in interest income after the settle-
ment of the outstanding loan balance.

2.9. Fee and commission income
Fees charged for servicing a loan or facility that is measured at amortized cost, are recognized as revenue as the service
is provided. Fees and commissions on non-performing or impaired loans or receivables cease to be recognized as income
and are rather recorded off balance sheet. These are recognized as revenue, on a cash basis, only when interest income
on those loans is recognized in profit and loss, at that time, fees and commissions that represent an integral part of the
effective interest rate of a financial asset, are treated as an adjustment to the effective interest rate of that financial asset.

Commitment fees and related direct costs for loans and advances where draw down is probable are deferred and recog-
nized as an adjustment to the effective interest on the loan once drawn. Commitment fees in relation to facilities where
draw down is not probable are recognized at the maturity of the term of the commitment.

Fees are recognized on the debt instruments that are measured at fair value through profit and loss on initial recognition
and syndicated loan fees received by the Bank are recognized when the syndication has been completed and the Bank
does not hold any portion of it or holds a part at the same effective interest rate used for the other participants portions.

Commission and fee arising from negotiating, or participating in the negotiation of a transaction for a third party such as
the arrangement of the acquisition of shares or other securities and the purchase or sale of properties are recognized upon
completion of the underlying transaction in the income statement .

Other management advisory and service fees are recognized based on the applicable service contracts, usually on accrual
basis. Financial planning fees related to investment funds are recognized steadily over the period in which the service is
provided. The same principle is applied for wealth management; financial planning and custody services that are provided
on the long term are recognized on the accrual basis also.

2.10. Dividend income
Dividends are recognized in the income statement when the right to collect it is declared.

2.11. Sale and repurchase agreements
Securities may be lent or sold according to a commitment to repurchase (Repos) are reclassified in the financial state-
ments and deducted from treasury bills balance. Securities borrowed or purchased according to a commitment to re-
sell them (Reverse Repos) are reclassified in the financial statements and added to treasury bills balance. The difference
between sale and repurchase price is treated as interest and accrued over the life of the agreements using the effective
interest rate method.

2.12. impairment of financial assets
2.12.1. Financial assets carried at amortised cost
The Bank assesses on each balance sheet date whether there is objective evidence that a financial asset or group of fi-
nancial assets is impaired. A financial asset or a group of financial assets is impaired only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event/s’) and
that loss event/s has an impact on the estimated future cash flows of the financial asset or group of financial assets that
can be reliably estimated.

The criteria that the Bank uses to determine that there is objective evidence of an impairment loss include:

• Cash flow difficulties experienced by the borrower ( e.g, equity ratio, net income percentage of sales).
• Violation of the conditions of the loan agreement such as non-payment.
• Initiation of bankruptcy proceedings.
• Deterioration of the borrower’s competitive position.
• The Bank for reasons of economic or legal financial difficulties of the borrower by granting concessions may not agree with

the Bank granted in normal circumstances.

• Deterioration in the value of collateral or deterioration of the creditworthiness of the borrower.

100

annual report 2013

annual report 2013 101

Financial StatementS: Separate

The objective evidence of impairment loss for a group of financial assets is observable data indicating that there is a
measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition
of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, for
instance an increase in the default rates for a particular banking product.

The Bank estimates the period between a losses occurring and its identification for each specific portfolio. In general, the
periods used vary between three months to twelve months.

• The Bank first assesses whether objective evidence of impairment exists individually for financial assets that are individu-
ally significant, and individually or collectively for financial assets that are not individually significant and in this field the
following are considered:

• If the Bank determines that no objective evidence of impairment exists for an individually assessed financial asset, wheth-
er significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collec-
tively assesses them for impairment according to historical default ratios.

• If the Bank determines that an objective evidence of financial asset impairment exist that is individually assessed for im-
pairment and for which an impairment loss is or continues to be recognized are not included in a collective assessment of
impairment.

The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of esti-
mated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s
original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and
the amount of the loss is recognized in the income statement. If a loan or held to maturity investment has a variable inter-
est rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the
contract when there is objective evidence for asset impairment. As a practical expedient, the Bank may measure impair-
ment on the basis of an instrument’s fair value using an observable market price.

The calculation of the present value of the estimated future cash flows of a collateralized financial asset reflects the cash
flows that may result from foreclosure less costs for obtaining and selling the collateral, whether or not foreclosure is
probable.

For the purposes of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk
characteristics (i.e., on the basis of the group’s grading process that considers asset type, industry, geographical location,
collateral type, past-due status and other relevant factors). Those characteristics are relevant to the estimation of future
cash flows for groups of such assets by being indicative of the debtors’ ability to pay all amounts due according to the con-
tractual terms of the assets being evaluated.

For the purposes of evaluation of impairment for a group of a financial assets according to historical default ratios future
cash flows in a group of financial assets that are collectively evaluated for impairment are estimated on the basis of the
contractual cash flows of the assets in the Bank and historical loss experience for assets with credit risk characteristics
similar to those in the Bank. Historical loss experience is adjusted on the basis of current observable data to reflect the
effects of current conditions that did not affect the period on which the historical loss experience is based and to remove
the effects of conditions in the historical period that do not currently exist.

Estimates of changes in future cash flows for groups of assets should be reflected together with changes in related observ-
able data from period to period (e.g. changes in unemployment rates, property prices, payment status, or other indicative
factors of changes in the probability of losses in the Bank and their magnitude). The methodology and assumptions used
for estimating future cash flows are reviewed regularly by the Bank.

2.12.2. Available for sale investments
The Bank assesses on each balance sheet date whether there is objective evidence that a financial asset or a group of
financial assets classify under available for sale is impaired. In the case of equity investments classified as available for
sale, a significant or prolonged decline in the fair value of the security below its cost is considered in determining whether

the assets are impaired. During periods start from first of January 2009, the decrease consider significant when it became
10% from the book value of the financial instrument and the decrease consider to be extended if it continues for period
more than 9 months, and if the mentioned evidences become available then any cumulative gains or losses previously
recognized in equity are recognized in the income statement , in respect of available for sale equity securities, impairment
losses previously recognized in profit and loss are not reversed through the income statement.

If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase
can be objectively related to an event occurring after the impairment loss was recognized in the income statement, the
impairment loss is reversed through the income statement to the extent of previously recognized impairment charge from
equity to income statement.

2.13. real estate investments
The real estate investments represent lands and buildings owned by the Bank in order to obtain rental returns or capital gains and
therefore do not include real estate assets which the Bank exercised its work through or those that have owned by the Bank as settle-
ment of debts. The accounting treatment is the same used with property, plant and equipment.

2.14. property, plant and equipment
Lands and buildings comprise mainly branches and offices. All property, plant and equipment are stated at historical cost
less depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisi-
tion of the items.

Subsequent costs are included in the asset’s carrying amount or as a separate asset, as appropriate, only when it is prob-
able that future economic benefits will flow to the Bank and the cost of the item can be measured reliably. All other repairs
and maintenance are charged to other operating expenses during the financial period in which they are incurred.

Land is not depreciated. Depreciation of other assets is calculated using the straight-line method to allocate their residual
values over estimated useful lives, as follows:

Buildings
Leasehold improvements
Furniture and safes
Typewriters, calculators and air-conditions
Transportations
Computers and core systems
Fixtures and fittings

20 years.
3 years, or over the period of the lease if less
5 years.
8 years
5 years
3/10 years
3 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, on each balance sheet date. De-
preciable assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recovered. An asset’s carrying amount is written down immediately to its recoverable value if the as-
set’s carrying amount exceeds its estimated recoverable amount. The recoverable amount is the higher of the asset’s fair
value less costs to sell and value in use.

Gains and losses on disposals are determined by comparing the selling proceeds with the asset carrying amount and
charged to other operating expenses in the income statement.

2.15. impairment of non-financial assets
Assets that have an indefinite useful life are not amortized -except goodwill- and are tested annually for impairment. As-
sets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s
carrying amount exceeds its recoverable amount.

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Financial StatementS: Separate

The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Assets are tested for impair-
ment with reference to the lowest level of cash generating unit(s). A previously recognized impairment loss relating to a
fixed asset may be reversed in part or in full when a change in circumstances leads to a change in the estimates used to
determine the fixed asset’s recoverable amount. The carrying amount of the fixed asset will only be increased up to the
amount that the original impairment not been recognized.

2.16. leases
The accounting treatment for the finance lease is complied with law 95/1995, if the contract entitles the lessee to purchase
the asset at a specified date and predefined value, or the current value of the total lease payments representing at least 90%
of the value of the asset. The other leases contracts are considered operating leases contracts.

2.16.1. Being lessee
Finance lease contract recognizes the lease cost, including the cost of maintenance of the leased assets in the income
statement for the period in which they occurred. If the Bank decides to exercise the right to purchase the leased asset the
leased assets are capitalized and included in ‘property, plant and equipment’ and depreciated over the useful life of the
expected remaining life of the asset in the same manner as similar assets.
Operating lease payments leases are accounted for on a straight-line basis over the periods of the leases and are included
in ‘general and administrative expenses’.

2.16.2. Being lessor
For finance lease, assets are recorded in the property, plant and equipment in the balance sheet and amortized over the
expected useful life of this asset in the same manner as similar assets. Lease income is recognized on the basis of rate of re-
turn on the lease in addition to an amount corresponding to the cost of depreciation for the period. The difference between
the recognized rental income and the total finance lease clients’ accounts is transferred to the in the income statement
until the expiration of the lease to be reconciled with a net book value of the leased asset. Maintenance and insurance
expenses are charged to the income statement when incurred to the extent that they are not charged to the tenant.

In case there is objective evidence that the Bank will not be able to collect the of financial lease obligations, the finance
lease payments are reduced to the recoverable amount.

For assets leased under operating lease it appears in the balance sheet under property, plant and equipment, and depre-
ciated over the expected useful life of the asset in the same way as similar assets, and the lease income recorded less any
discounts given to the lessee on a straight-line method over the contract period.

2.17. cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise balances with less than three months’
maturity from the date of acquisition, including cash and non-restricted balances with central banks, treasury bills and
other eligible bills, loans and advances to banks, amounts due from other banks and short-term government securities.

2.18. other provisions
Provisions for restructuring costs and legal claims are recognized when the Bank has present legal or constructive obliga-
tions as a result of past events; where it is more likely than not that a transfer of economic benefit will be necessary to settle
the obligation, and it can be reliably estimated.

In case of similar obligations, the related cash outflow should be determined in order to settle these obligations as a group.
The provision is recognized even in case of minor probability that cash outflow will occur for an item of these obligations.

Provisions for obligations, other than those for credit risk or employee benefits, due within more than 12 months from the
balance sheet date are recognized based on the present value of the best estimate of the consideration required to settle
the present obligation on the balance sheet date. An appropriate pretax discount rate that reflects the time value of money
is used to calculate the present value of such provisions. For obligations due within less than twelve months from the bal-
ance sheet date, provisions are calculated based on undiscounted expected cash outflows unless the time value of money
has a significant impact on the amount of provision, then it is measured at the present value.

2.19. Share based payments
The Bank applies an equity-settled, share-based compensation plan. The fair value of equity instruments recognized as
an expense over the vesting period using appropriate valuation models, taking into account the terms and conditions
upon which the equity instruments were granted. The vesting period is the period during which all the specified vesting
conditions of a share-based payment arrangement are to be satisfied. Vesting conditions include service conditions, per-
formance conditions and market performance conditions are taken into account when estimating the fair value of equity
instruments on the date of grant. On each balance sheet date the number of options that are expected to be exercised are
estimated. Recognizes estimate changes, if any, in the income statement, and a corresponding adjustment to equity over
the remaining vesting period.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and
share premium when the options are exercised.

2.20. income tax
Income tax on the profit and loss for the period and deferred tax are recognized in the income statement except for income
tax relating to items of equity that are recognized directly in equity.

Income tax is recognized based on net taxable profit using the tax rates applicable on the date of the balance sheet in ad-
dition to tax adjustments for previous years.

Deferred taxes arising from temporary time differences between the book value of assets and liabilities are recognized in
accordance with the principles of accounting and value according to the foundations of the tax, this is determining the
value of deferred tax on the expected manner to realize or settle the values of assets and liabilities, using tax rates appli-
cable on the date of the balance sheet.

Deferred tax assets of the Bank recognized when there is likely to be possible to achieve profits subject to tax in the future
to be possible through to use that asset, and is reducing the value of deferred tax assets with part of that will come from
tax benefit expected during the following years, that in the case of expected high benefit tax, deferred tax assets will in-
crease within the limits of the above reduced.

2.21. Borrowings
Borrowings are recognized initially at fair value net of transaction costs incurred. Borrowings are subsequently stated at
amortized cost also any difference between proceeds net of transaction costs and the redemption value is recognized in
the income statement over the period of the borrowings using the effective interest method.

2.22. Dividends
Dividends on ordinary shares and profit sharing are recognized as a charge of equity upon the general assembly approval.
Profit sharing includes the employees’ profit share and the Board of Directors’ remuneration as prescribed by the Bank’s
articles of incorporation and the corporate law.

When a provision is wholly or partially no longer required, it is reversed through profit or loss under other operating in-
come (expenses).

2.23. comparatives
Comparative figures have been adjusted to conform with changes in the presentation of the current period where necessary.

104

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annual report 2013 105

Financial StatementS: Separate

3. Financial risk management
The Bank’s activities expose it to a variety of financial risks and those activities involve the analysis, evaluation, acceptance and
management of some degree of risk or combination of risks. Taking risk is core to the financial business, and the operational
risks are an inevitable consequence of being in business. The Bank’s aim is therefore to achieve an appropriate balance between
risk and rewards and minimize potential adverse effects on the Bank’s financial performance. The most important types of fi-
nancial risks are credit risk, market risk, liquidity risk and other operating risks. Also market risk includes exchange rate risk,
rate of return risk and other prices risks.

Risk management is carried out by risk department under policies approved by the Board of Directors. Bank treasury identifies,
evaluates and hedges financial risks in close co-operation with the Bank’s operating units.

The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as for-
eign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments.
In addition, credit risk management is responsible for the independent review of risk management and the control environment.

3.1. credit risk
The Bank takes on exposure to credit risk, which is the risk that counterparty will cause a financial loss for the Bank by
failing to discharge an obligation. Management therefore carefully manages its exposure to credit risk. Credit exposures
arise principally in loans and advances, debt securities and other bills. There is also credit risk in off-balance sheet finan-
cial arrangements such as loan commitments. The credit risk management and control are centralized in a credit risk
management team in bank treasury and reported to the Board of Directors and head of each business unit regularly.

3.1.1. Credit risk measurement
3.1.1.1. Loans and advances to banks and customers
In measuring credit risk of loans and facilities to banks and customers at a counterparty level, the Bank reflects three
components (i) the ‘probability of default’ by the client or counterparty on its contractual obligations (ii) current expo-
sures to the counterparty and its likely future development, from which the Bank derive the ‘exposure at default’; and (iii)
the likely recovery ratio on the defaulted obligations (the ‘loss given default’).

These credit risk measurements, which reflect expected loss (the ‘expected loss model’) are required by the Basel commit-
tee on banking regulations and the supervisory practices (the Basel committee), and are embedded in the Bank’s daily
operational management. The operational measurements can be contrasted with impairment allowances required under
EAS 26, which are based on losses that have been incurred on the balance sheet date (the ‘incurred loss model’) rather
than expected losses (note 3.1).

The Bank assesses the probability of default of individual counterparties using internal rating tools tailored to the various
categories of counterparty. They have been developed internally and combine statistical analysis with credit officer judg-
ment and are validated, where appropriate. Clients of the Bank are segmented into four rating classes. The Bank’s rating
scale, which is shown below, reflects the range of default probabilities defined for each rating class. This means that, in
principle, exposures migrate between classes as the assessment of their probability of default changes. The rating tools
are kept under review and upgraded as necessary. The Bank regularly validates the performance of the rating and their
predictive power with regard to default events.

Bank’s rating
1
2
3
4

description of the grade
performing loans
regular watching
watch list
non-performing loans

Loss given default or loss severity represents the Bank expectation of the extent of loss on a claim should default occur. It is
expressed as percentage loss per unit of exposure and typically varies by type of counterparty, type and seniority of claim
and availability of collateral or other credit mitigation.

3.1.1.2. Debt instruments and treasury and other bills
For debt instruments and bills, external rating such as standard and poor’s rating or their equivalents are used for man-
aging of the credit risk exposures, and if this rating is not available, then other ways similar to those used with the credit
customers are uses. The investments in those securities and bills are viewed as a way to gain a better credit quality map-
ping and maintain a readily available source to meet the funding requirement at the same time.

3.1.2. Risk limit control and mitigation policies
The Bank manages, limits and controls concentrations of credit risk wherever they are identified − in particular, to indi-
vidual counterparties and banks, and to industries and countries.

The Bank structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation to
one borrower, or groups of borrowers, and to geographical and industry segments. Such risks are monitored on a revolving
basis and subject to an annual or more frequent review, when considered necessary. Limits on the level of credit risk by
individual, counterparties, product, and industry sector and by country are approved quarterly by the Board of Directors.

The exposure to any one borrower including banks and brokers is further restricted by sub-limits covering on- and off-
balance sheet exposures, and daily delivery risk limits in relation to trading items such as forward foreign exchange con-
tracts. Actual exposures against limits are monitored daily.

Exposure to credit risk is also managed through regular analysis of the ability of borrowers and potential borrowers to
meet interest and capital repayment obligations and by changing these lending limits where appropriate.
Some other specific control and mitigation measures are outlined below:

3.1.2.1. Collateral
The Bank sets a range of policies and practices to mitigate credit risk. The most traditional of these is the taking of security
for funds advances, which is common practice. The Bank implements guidelines on the acceptability of specific classes of
collateral or credit risk mitigation. The principal collateral types for loans and advances are:

• Mortgages over residential properties.
• Mortgage business assets such as premises, and inventory.
• Mortgage financial instruments such as debt securities and equities.

Longer-term finance and lending to corporate entities are generally secured; revolving individual credit facilities are
generally unsecured. In addition, in order to minimize the credit loss the Bank will seek additional collateral from the
counterparty as soon as impairment indicators are noticed for the relevant individual loans and advances.

Collateral held as security for financial assets other than loans and advances is determined by the nature of the instru-
ment. Debt securities, treasury and other governmental securities are generally unsecured, with the exception of asset-
backed securities and similar instruments, which are secured by portfolios of financial instruments.

3.1.2.2. Derivatives
The Bank maintains strict control limits on net open derivative positions (i.e., the difference between purchase and sale
contracts), by both amount and term. At any one time, the amount subject to credit risk is limited to the current fair value
of instruments that are favorable to the Bank (i.e., assets with positive fair value), which in relation to derivatives is only a
small fraction of the contract, or notional values used to express the volume of instruments outstanding. This credit risk
exposure is managed as part of the overall lending limits with customers, together with potential exposures from market
movements. Collateral or other security is not usually obtained for credit risk exposures on these instruments, except
where the Bank requires margin deposits from counterparties.

106

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annual report 2013 107

Financial StatementS: Separate

Settlement risk arises in any situation where a payment in cash, securities or equities is made in the expectation of a cor-
responding receipt in cash, securities or equities. Daily settlement limits are established for each counterparty to cover
the aggregate of all settlement risk arising from the Bank market transactions on any single day.

3.1.2.3. Master netting arrangements
The Bank further restricts its exposure to credit losses by entering into master netting arrangements with counterpar-
ties with which it undertakes a significant volume of transactions. Master netting arrangements do not generally result
in an offset of balance sheet assets and liabilities, as transactions are usually settled on a gross basis. However, the credit
risk associated with favorable contracts is reduced by a master netting arrangement to the extent that if a default occurs,
all amounts with the counterparty are terminated and settled on a net basis. The Bank overall exposure to credit risk on
derivative instruments subject to master netting arrangements can change substantially within a short period, as it is af-
fected by each transaction subject to the arrangement.

3.1.2.4. Credit related commitments
The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and
standby letters of credit carry the same credit risk as loans. Documentary and commercial letters of credit – which are
written undertakings by the Bank on behalf of a customer authorizing a third party to draw drafts on the Bank up to a
stipulated amount under specific terms and conditions – are collateralized by the underlying shipments of goods to which
they relate and therefore carry less risk than a direct loan.

Commitments to extend credit represent unused portions of authorizations to extend credit in the form of loans, guaran-
tees or letters of credit. With respect to credit risk on commitments to extend credit, the Bank is potentially exposed to
loss in an amount equal to the total unused commitments. However, the likely amount of loss is less than the total unused
commitments, as most commitments to extend credit are contingent upon customers maintaining specific credit stan-
dards. The Bank monitors the term to maturity of credit commitments because longer-term commitments generally have
a greater degree of credit risk than shorter-term commitments.

3.1.3. Impairment and provisioning policies
The internal rating system described in Note 3.1.1 focus on the credit-quality mapping from the lending and investment
activities perspective. Conversely, for only financial reporting purposes impairment losses are recognized for that has
been incurred on the balance sheet date when there is an objective evidence of impairment. Due to the different method-
ologies applied, the amount of incurred impairment losses in balance sheet are usually lower than the amount determined
from the expected loss model that is used for internal operational management and CBE regulation purposes.

The impairment provision reported in balance sheet at the end of the period is derived from each of the four internal credit
risk ratings. However, the majority of the impairment provision is usually driven by the last two rating degrees. The follow-
ing table illustrates the proportional distribution of loans and advances reported in the balance sheet for each of the four
internal credit risk ratings of the Bank and their relevant impairment losses:

Bank’s rating

1-Performing loans

2-Regular watching

3-Watch list

4-Non-Performing Loans

December 31, 2013

December 31, 2012

Loans and
advances (%)
87.71

Impairment
provision (%)
31.49

Loans and
advances (%)
89.99

Impairment
provision (%)
40.84

4.90

3.43

3.96

5.32

19.93

43.26

5.89

0.49

3.63

8.56

2.01

48.58

The internal rating tools assists management to determine whether objective evidence of impairment exists under EAS
26, based on the following criteria set by the Bank:

• Cash flow difficulties experienced by the borrower or debtor
• Breach of loan covenants or conditions
• Initiation of bankruptcy proceedings
• Deterioration of the borrower’s competitive position
• Bank granted concessions may not be approved under normal circumstances due to economic, legal reasons and financial

difficulties facing the borrower
• Deterioration of the collateral value
• Deterioration of the credit situation

The Bank’s policy requires the review of all financial assets that are above materiality thresholds at least annually or more
regularly when circumstances require. Impairment provisions on individually assessed accounts are determined by an
evaluation of the incurred loss at balance-sheet date, and are applied to all significant accounts individually. The assess-
ment normally encompasses collateral held (including re-confirmation of its enforceability) and the anticipated receipts
for that individual account. Collective impairment provisions are provided portfolios of homogenous assets by using the
available historical loss experience, experienced judgment and statistical techniques.

3.1.4. Pattern of measuring the general banking risk
In addition to the four categories of the Bank’s internal credit ratings indicated in note 3.1.1, management classifies loans
and advances based on more detailed subgroups in accordance with the CBE regulations. Assets exposed to credit risk
in these categories are classified according to detailed rules and terms depending heavily on information relevant to the
customer, his activity, financial position and his repayment track record. The Bank calculates required provisions for
impairment of assets exposed to credit risk, including commitments relating to credit on the basis of rates determined
by CBE. In case, the provision required for impairment losses as per CBE credit worthiness rules exceeds the required
provisions by the application used in balance sheet preparation in accordance with EAS. That excess shall be debited to
retained earnings and carried to the general banking risk reserve in the equity section. Such reserve is always adjusted, on
a regular basis, by any increase or decrease so, that reserve shall always be equivalent to the amount of increase between
the two provisions. Such reserve is not available for distribution.

Below is a statement of institutional worthiness according to internal ratings compared with CBE ratings and rates of
provisions needed for assets impairment related to credit risk:

CBE Rating
1
2
3
4
5
6
7
8
9
10

Categorization
Low risk
Average risk
Satisfactory risk
Reasonable risk
Acceptable risk
Marginally acceptable risk
Watch list
Substandard
Doubtful
Bad debts

Provision%
0%
1%
1%
2%
2%
3%
5%
20%
50%
100%

Internal rating
1
1
1
1
1
2
3
4
4
4

Categorization
Performing loans
Performing loans
Performing loans
Performing loans
Performing loans
Regular watching
Watch list
Non performing loans
Non performing loans
Non performing loans

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Financial StatementS: Separate

3.1.6. Loans and advances
Loans and advances are summarized as follows:

Neither past due nor impaired
Past due but not impaired
Individually impaired
Gross
Less:
Impairment provision
Unamortized bills discount
Unearned interest
Net

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

Loans and
advances to
customers
40,832,064,380
2,790,527,143
1,773,225,040
45,395,816,563

2,842,840,136
6,634,495
708,390,220
41,837,951,712

Loans and
advances to
banks
123,630,395
-
30,202,899
153,833,294

Loans and
advances to
customers
40,779,399,095
785,027,964
1,578,381,311
43,142,808,370

Loans and
advances to
banks
1,176,571,369
-
31,595,000
1,208,166,369

21,410,562
-
-
132,422,732

1,901,222,402
22,277,973
520,994,222
40,698,313,773

29,298,630
-
-
1,178,867,739

Impairment provision losses for loans and advances reached EGP 2,864,250,698.

During the year the Bank’s total loans and advances increased by 2.70% .
In order to minimize the propable exposure to credit risk, the Bank focuses more on the business with large enterprises,banks
or retail customers with good credit rating or sufficient collateral.

3.1.5. Maximum exposure to credit risk before collateral held

In balance sheet items exposed to credit risk

Treasury bills and other governmental notes
Trading financial assets:
- Debt instruments
Gross loans and advances to banks
Less:Impairment provision
Gross loans and advances to customers
Individual:
- Overdraft
- Credit cards
- Personal loans
- Mortgages
- Other loans
Corporate:
- Overdraft
- Direct loans
- Syndicated loans
- Other loans
Unamortized bills discount
Impairment provision
Unearned interest
Derivative financial instruments
Financial investments:
-Debt instruments
- Investments in subsidiary and associates
Total
Off balance sheet items exposed to credit risk
Financial guarantees
Customers acceptances
Letter of credit
Letter of guarantee
Total

Dec. 31, 2013
EGP
23,654,812,174

2,047,967,761
153,833,294
(21,410,562)

1,173,942,998
765,623,964
4,181,386,392
383,143,670
10,841,736

5,015,510,545
24,125,578,810
9,630,556,651
109,231,797
(6,634,495)
(2,842,840,136)
(708,390,220)
103,085,538

26,889,648,525
599,276,660
95,265,165,102

2,480,059,591
472,350,554
750,766,099
14,959,372,507
18,662,548,751

Dec. 31, 2012
EGP
11,153,742,074

1,138,056,688
1,208,166,369
(29,298,630)

1,220,222,219
660,932,044
3,616,553,758
463,833,879
20,045,324

4,288,571,348
23,196,204,054
9,588,649,990
87,795,754
(22,277,973)
(1,901,222,402)
(520,994,222)
137,459,761

24,849,111,471
938,033,700
80,093,585,206

2,276,369,133
1,176,928,870
933,297,936
12,787,562,199
17,174,158,138

The above table represents the Bank Maximum exposure to credit risk on December 31, 2013, before taking account of any
held collateral.

For assets recognized on balance sheet, the exposures set out above are based on net carrying amounts as reported in the
balance sheet.

As shown above 44.16% of the total maximum exposure is derived from loans and advances to banks and customers while
investments in debt instruments represents 30.38%.

Management is confident in its ability to continue to control and sustain minimal exposure of credit risk resulting from
both its loans and advances portfolio and debt instruments based on the following:

• 92.61% of the loans and advances are concentrated in the top two grades of the internal credit risk rating system.
• 96.04% of loans and advances portfolio are considered to be neither past due nor impaired.
• Loans and advances assessed individualy are valued EGP 1,803,427,939.
• The Bank has implemented more prudent processes when granting loans and advances during the financial year ended

on December 31, 2013.

• 95.01% of the investments in debt Instruments are Egyptian sovereign instruments.

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Financial StatementS: Separate

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112

annual report 2013

annual report 2013 113

Financial StatementS: Separate

Loans and advances restructured
Restructuring activities include reschaduling arrangements, obligatory management programs, modification and deferral of
payments. The application of restructuring policies are based on indicators or criteria of credit performance of the borrower
that is based on the personal judgment of the management, indicate that payment will most likely continue. Restructuring is
commonly applied to term loans, specially customer loans. Renegotiated loans totaled at the end of the year

Loans and advances to customer
Corporate
Direct loans
Total

Dec. 31, 2013

Dec. 31, 2012

2,950,132,000
2,950,132,000

2,924,873,000
2,924,873,000

3.1.7. Debt instruments, treasury bills and other governmental notes
The table below presents an analysis of debt instruments, treasury bills and other governmental notes by rating
agency designation at e nd of financial year, based on Standard & Poor’s ratings or their equivalent:

Dec. 31, 2013

AAA
AA- to AA+
A- to A+
Lower than A-
Unrated
Total

Treasury bills and
other gov. notes

Trading financial
debt instruments

-
-
-
-
23,654,812,174
23,654,812,174

-
-
-
86,593,728
1,961,374,033
2,047,967,761

EGP

Total

Non-trading
financial debt
instruments
962,346,780
176,768,467
200,559,029
851,468,992

962,346,780
176,768,467
200,559,029
938,062,720
24,698,505,257 50,314,691,464
52,592,428,460
26,889,648,525

3.1.8. Concentration of risks of financial assets with credit risk exposure
3.1.8.1. Geographical sectors
Following is a breakdown of the Bank’s main credit exposure at their book values categorized by geographical region at
the end of the current year.

The Bank has allocated exposures to regions based on the country of domicile of its counterparties.

Dec. 31, 2013

Treasury bills and other governmental notes
Trading financial assets:
- Debt instruments
Gross loans and advances to banks
Less:Impairment provision
Gross loans and advances to customers
Individual:
- Overdrafts
- Credit cards
- Personal loans
- Mortgages
- Other loans
Corporate:
- Overdrafts
- Direct loans
- Syndicated loans
- Other loans
Unamortized bills discount
Impairment provision
Unearned interest
Derivative financial instruments
Financial investments:
-Debt instruments
- Investments in subsidiary and associates
Total

Cairo

23,654,812,174

2,047,967,761
153,833,294
(21,410,562)

788,301,456
577,101,742
2,809,768,674
317,339,513
9,563,433

4,141,934,996
18,759,464,871
8,869,001,700
105,176,241
(6,634,495)
(2,842,840,136)
(553,087,820)
103,085,538

Alex, Delta
and Sinai
-

-
-
-

260,325,730
158,976,345
1,097,553,129
56,881,818
1,278,303

634,425,280
4,753,247,203
761,554,951
4,055,556
-
-
(153,568,700)
-

Upper Egypt

Total

-
-
-

23,654,812,174

2,047,967,761
153,833,294
(21,410,562)

125,315,812
29,545,877
274,064,589
8,922,339
-

239,150,269
612,866,736
-
-
-
-
(1,733,700)
-

1,173,942,998
765,623,964
4,181,386,392
383,143,670
10,841,736

5,015,510,545
24,125,578,810
9,630,556,651
109,231,797
(6,634,495)
(2,842,840,136)
(708,390,220)
103,085,538

26,889,648,525
599,276,660
86,402,303,565

-
-
7,574,729,615

-
-
1,288,131,922

26,889,648,525
599,276,660
95,265,165,102

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114

annual report 2013

annual report 2013 115

Financial StatementS: Separate

3.2. market risk
Market risk represnted as fluctuations in fair value or future cash flow, including foreign exchange rates and commodity
prices, interest rates, credit spreads and equity prices will reduce the Bank’s income or the value of its portfolios. the Bank
separates exposures to market risk into trading or non-trading portfolios.

Market risks are measured, monitored and controlled by the market risk management department. In addition, regular
reports are submitted to the Asset and Liability Management Committee (ALCO), Board Risk Committee and the heads
of each business unit.

Trading portfolios include positions arising from market-making, position taking and others designated as marked-to-
market. Non-trading portfolios include positions that primarily arise from the interest rate management of the group’s
retail and commercial banking assets and liabilities, financial investments designated as available for sale and held-to-
maturity.

3.2.1. Market risk measurement techniques
As part of the management of market risk, the Bank undertakes various hedging strategies. the Bank also enters into in-
terest rate swaps to match the interest rate risk associated with the fixed-rate long-term debt
instrument and loans to which the fair value option has been applied .

3.2.1.1 Value at Risk
The Bank applies a "Value at Risk" methodology (VaR) to its trading and non-trading portfolios, to estimate the market
risk of positions held and the maximum losses expected under normal market conditions, based upon a number of as-
sumptions for various changes in market conditions.

VaR is a statistically based estimate of the potential loss on the current portfolio from adverse market movements. It
expresses the ‘maximum’ amount the Bank might lose , but only to a certain level of confidence (95%). There is therefore
a specified statistical probability (5%) that actual loss could be greater than the VaR estimate. The VaR model assumes a
certain ‘holding period’ until positions can be closed (1 Day). The Bank is assessing the historical movements in the market
prices based on volatilities and correlations data for the past five years. The use of this approach does not prevent losses
outside of these limits in the event of more significant market movements.

As VaR constitutes an integral part of the Bank’s market risk control regime, the Market Risk Management set Soft VaR
Limits, trading book, which have been approved by the board, and are monitored and reported on a daily basis to the Se-
nior Management. In addition, monthly limits compliance is reported to the ALCO.

The Bank has developed the internal model to calculate VaR and is not yet approved by the Central Bank as the regulator
is currently applying and requiring banks to calculate the Market Risk Capital Requirements according to Basel II Stan-
dardized Approach.

3.2.1.2. Stress tests
Stress tests provide an indication of the potential size of losses that could arise under extreme market conditions. There-
fore, bank computes on a daily basis trading Stress VaR, combined with trading Normal VaR to capture the abnormal
movements in financial markets and to give more comprehensive picture of risk. The results of the stress tests are re-
viewed by the ALCO on a monthly basis and the board risk committee on a quarterly basis.

3.2.2. Value at risk (VaR) Summary

Total VaR by risk type

Medium
89,669

Dec. 31, 2013
High
539,916
75,596,340 101,789,562
84,950,011
63,975,773
16,839,550
11,620,567
203,290
124,134
1,124,626
606,374
491,484
305,229
75,622,331 101,827,317

Low
3,370
55,515,213
48,925,587
6,589,626
85,632
35,182
210,658
55,529,386

Medium
40,138
33,579,414
29,092,222
4,487,192
278,907
-
287,242
33,555,660

Dec. 31, 2012
High
175,325
82,099,623
72,429,892
9,669,731
368,507
-
465,524
82,161,567

Foreign exchange risk
Interest rate risk
- For non trading purposes
- For trading purposes
Equities risk
Portfolio managed by others risk
Investment fund
Total VaR

116

annual report 2013

EGP

Low
4,756
3,045,986
919,482
2,126,504
149,646
-
169,518
3,139,829

Trading portfolio VaR by risk type

Foreign exchange risk
Interest rate risk
- For trading purposes
Equities risk
Funds managed by others risk
Investment fund
Total VaR

Medium
89,669

Dec. 31, 2013
High
539,916

Low
3,370

Medium
40,138

Dec. 31, 2012
High
175,325

Low
4,756

11,620,567
124,134
606,374
305,229
11,654,395

16,839,550
203,290
1,124,626
491,484
16,875,949

6,589,626
85,632
35,182
210,658
6,621,300

4,487,192
278,907
-
287,242
4,553,070

9,669,731
368,507
-
465,524
9,721,129

2,126,504
149,646
-
169,518
2,218,253

Non trading portfolio VaR by risk type

Medium

Dec. 31, 2013
High

Low

Medium

Dec. 31, 2012
High

Low

Interest rate risk
- For non trading purposes
Total VaR
The aggregate of the trading and non-trading VaR results does not constitute the Bank’s VaR due to correlations and
consequent diversification effects between risk types and portfolio types.

72,429,892
72,429,892

29,092,222
29,092,222

48,925,587
48,925,587

84,950,011
84,950,011

63,975,773
63,975,773

919,482
919,482

3.2.3. Foreign exchange risk
The Bank's financial position and cash flows are exposed to fluctuations in foreign currency exchange rates. The Board
sets limits on the level of exposure by currency and in aggregate for both overnight and intra-day positions, which are
monitored daily. The table below summarizes the Bank’s exposure to foreign currency exchange rate risk and Bank’s fi-
nancial instruments at carrying amounts, categorized by currency.

Dec. 31, 2013
Financial assets
Cash and balances with

Central Bank
Due from banks
Treasury bills and other
governmental notes
Trading financial assets
Gross loans and advances to

banks

Gross loans and advances to

customers

Derivative financial

instruments

Financial investments
- Available for sale
- Held to maturity
Investments in subsidiary and

associates

Total financial assets
Financial liabilities
Due to banks
Due to customers
Derivative financial

instruments
Long term loans
Total financial liabilities
Net on-balance sheet
financial position

EGP

USD

EUR

GBP

Equivalent EGP
Total

Other

3,934,820,535

685,783,608

97,955,512

21,155,801

56,524,898

4,796,240,354

49,755,496

5,569,959,173

2,823,809,212

386,613,624

63,533,460

8,893,670,965

20,718,475,000

3,832,188,780

181,468,677

2,150,872,512

86,593,728

153,833,294

24,732,132,457

8,881,566

2,246,347,806

153,833,294

25,967,879,074

18,702,088,432

645,731,167

46,134,574

33,983,316

45,395,816,563

35,951,722

65,733,199

1,400,617

22,131,250,477
4,187,173,991

1,232,251,218
-

558,685,850

40,590,810

-
-

103,085,538

23,363,501,695
4,187,173,991

599,276,660

79,734,864,657 30,369,022,242

3,750,365,185

453,903,999

162,923,240

114,471,079,323

319,951,905
64,712,814,197

1,031,898,608
27,965,508,241

20,152,926
3,585,282,145

1,399,569
456,884,824

7,032
219,780,593

1,373,410,040
96,940,270,000

31,266,232

81,503,495

2,108,856

114,878,583

132,153,227
65,196,185,561

-
29,078,910,344

-
3,607,543,927

-
458,284,393

-
219,787,625

132,153,227
98,560,711,850

14,538,679,096

1,290,111,898

142,821,258

(4,380,394)

(56,864,385)

15,910,367,473

annual report 2013 117

Financial StatementS: Separate

3.2.4. Interest rate risk
The Bank takes on exposure to the effects of fluctuations in the prevailing levels of market interest rates on both its fair
value and cash flow risks. Interest margins may increase as a result of such changes but profit may decrease in the event
that unexpected movements arise.The Board sets limits on the gaps of interest rate repricing that may be undertaken,
which is monitored by bank's Risk Management Department.

The table below summarizes the Bank’s exposure to interest rate risks. It includes the Bank’s financial instruments at car-
rying amounts, categorized by the earlier of repricing or contractual maturity dates.

Dec. 31, 2013

Up to1
Month

1-3 Months 3-12 Months

1-5 years Over 5 years

Non- Interest
Bearing

Total

Financial assets
Cash and balances with

Central Bank
Due from banks
Treasury bills and other
governmental notes*
Trading financial assets
Gross loans and advances

to banks

Gross loans and advances

to customers

Derivatives financial

instruments (including
IRS notional amount)
Financial investments
- Available for sale
- Held to maturity
Investments in subsidiary

and associates

Total financial assets
Financial liabilities
Due to banks
Due to customers
Derivatives financial

instruments (including
IRS notional amount)

4,477,416,766

3,966,455,633

286,026,802

3,527,609,980

2,996,487,000

18,208,035,477

4,796,240,354

163,771,764

8,893,670,965

24,732,132,457

136,007,765

1,672,005,178

375,962,584

62,372,279

2,246,347,806

4,342,350

116,417,222

2,870,824

30,202,898

29,833,639,030

6,465,364,854

5,189,602,857

3,111,717,350

795,492,472

153,833,294

45,395,816,563

1,389,566,463

234,619,676

747,844,799

2,185,915,919

332,706,143

53,339,700

4,943,992,700

663,515,064
-

378,645,263
-

2,815,541,814
197,841

13,567,604,319
4,186,976,150

5,351,673,079
-

586,522,156
-

23,363,501,695
4,187,173,991

599,276,660

40,032,097,418 14,157,989,648

27,250,120,414

24,754,421,814

6,855,834,278

6,261,522,913 119,311,986,485

347,374,047
32,282,923,172

-
14,485,215,174

-
11,106,121,075

-
22,458,172,731

-
87,337,000

1,026,035,993
16,520,500,848

1,373,410,040
96,940,270,000

2,315,824,671

1,770,211,105

129,416,652

66,856,880

603,658,202

69,818,235

4,955,785,745

5,314,000
Long term loans
Total financial liabilities 34,974,213,117 16,260,740,279
Total interest re-pricing

28,091,227

5,057,884,301 (2,102,750,631)

GAP Capital

* After deducting Repos.

49,299,000
11,284,836,727

49,449,000
22,574,478,611

-
690,995,202

132,153,227
17,616,355,076 103,401,619,012

15,965,283,687

2,179,943,203

6,164,839,076 (11,354,832,163)

15,910,367,473

3.3. liquidity risk
Liquidity risk is the risk that the Bank does not have sufficient financial resources to meet its obligations arises from its
financial liabilities as they fall due or to replace funds when they are withdrawn. The consequence may be the failure to
meet obligations to repay depositors and fulfill lending commitments.

Projecting cash flows by major currency under various stress scenarios and considering the level of liquid assets necessary
in relation thereto:

• The Bank maintains an active presence in global money markets to enable this to happen.
• Maintaining a diverse range of funding sources with back-up facilities.
• Monitoring balance sheet liquidity and advances to core funding ratios against internal and Central Bank of Egypt regula-

tions.

• Managing the concentration and profile of debt maturities.
• Monitoring and reporting takes the form of cash flow measurement and projections for the next day, week and month re-
spectively, as these are key periods for liquidity management. The starting point for those assets projections is an analysis
of the contractual maturity of the financial liabilities and the expected collection date of the financial assets. Bank's Risk
Management Department also monitors unmatched medium-term.

3.3.2. Funding approach
Sources of liquidity are regularly reviewed jointly by the Bank's Assets & Liabilities Management Department and Con-
sumer Banking to maintain a wide diversification within currencies, geographical area, depositors, products and tenors.

3.3.3. Non-derivative cash flows
The table below presents the undiscounted cash flows payable by the Bank under non-derivative financial liabilities by remain-
ing contractual maturities and the maturities assumption for non contractual products are based on there behavior studies.

Dec. 31, 2013

Financial liabilities
Due to banks
Due to customers
Long term loans
Total liabilities (contractual

and non contractual
maturity dates)

Total financial assets

(contractual and non
contractual maturity dates)

Dec. 31, 2012

Financial liabilities
Due to banks
Due to customers
Long term loans
Total liabilities (contractual

and non contractual
maturity dates)

Total financial assets (con-

tractual and non
contractual maturity dates)

Up to
1 month

One to three
months

Three months
to one year

One year to
five years

Over five
years

Total
EGP

1,373,410,040
14,357,244,907
28,091,227

14,355,336,031
5,314,000

31,020,534,031
49,299,000

36,171,294,031
49,449,000

1,035,861,000

1,373,410,040
96,940,270,000
132,153,227

15,758,746,174 14,360,650,031

31,069,833,031

36,220,743,031

1,035,861,000

98,445,833,267

16,226,910,823 11,735,431,147

29,841,046,583

41,734,405,803 14,830,199,429 114,367,993,785

Up to
1month

One to three
months

Three months
to one year

One year to
five years

Over five
years

Total
EGP

1,714,862,716
11,526,810,962
-

9,736,841,059
-

20,452,119,693
59,508,571

35,809,584,757
20,986,667

1,309,370,420

1,714,862,716
78,834,726,890
80,495,238

13,241,673,678

9,736,841,059

20,511,628,264

35,830,571,424

1,309,370,420

80,630,084,844

9,874,255,242

12,497,060,088

22,097,635,946

39,608,844,700

9,940,640,568

94,018,436,544

Assets available to meet all of the liabilities and to cover outstanding loan commitments include cash, due from CBE and
due from banks, treasury bills, other government notes , loans and advances to banks and customers.

In the normal course of business, a proportion of customer loans contractually repayable within one year will be extend-
ed. In addition, debt instrument and treasury bills and other governmental notes have been pledged to secure liabilities.
The Bank would also be able to meet unexpected net cash outflows by selling securities and accessing additional funding
sources such as asset-backed markets.

118

annual report 2013

annual report 2013 119

Financial StatementS: Separate

3.3.4. Derivative cash flows
Derivatives settled on a net basis
The Bank’s derivatives that will be settled on a net basis include:

Foreign exchange derivatives: exchange traded options and over-the-counter (OTC) ,exchange traded forwards cur-
rency options.

Interest rate derivatives: interest rate swaps, forward rate agreements, OTC and exchange traded interest rate options,
other interest rate contracts and exchange traded futures .

The table below analyses the Bank’s derivative undiscounted financial liabilities that will be settled on a net basis into
maturity groupings based on the remaining period of the balance sheet to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows:

EGP

Dec. 31, 2013

Liabilities
Derivatives financial instruments
- Foreign exchange derivatives
- Interest rate derivatives
Total

Off balance sheet items

Dec. 31, 2013
Letters of credit, guarantees and

other commitments

Total

Up to one
month

One to
three
months

Three
months to
one year

One year to
five years

Over five
years

Total

28,748,121
-
28,748,121

4,157,915
-
4,157,915

12,154,312
1,707,852
13,862,164

-
9,904,184
9,904,184

-
58,206,199
58,206,199

45,060,348
69,818,235
114,878,583

Up to 1 year

1-5 years

Over 5 years

Total

10,428,508,630

5,449,818,970

304,161,560

16,182,489,160

10,428,508,630

5,449,818,970

304,161,560

16,182,489,160

3.4. Fair value of financial assets and liabilities
3.4.1. Financial instruments not measured at fair value
The table below summarizes the book value and fair value of those financial assets and liabilities not presented on the
Bank’s balance sheet at their fair value.

Financial assets
Due from banks
Gross loans and advances to banks
Gross loans and advances to

customers
- Individual
- Corporate
Financial investments
Held to Maturity
Total financial assets
Financial liabilities
Due to banks
Due to customers
Long term loans
Total financial liabilities

Book value

Fair value

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

8,893,670,965
153,833,294

7,957,710,034
1,208,166,369

8,893,670,965
153,833,294

7,957,710,034
1,208,166,369

6,514,938,760
38,880,877,803

5,981,587,224
37,161,221,146

6,514,938,760
38,880,877,803

5,981,587,224
37,161,221,146

4,187,173,991
58,630,494,813

4,205,753,328
56,514,438,101

4,187,173,991
58,630,494,813

4,205,753,328
56,514,438,101

1,373,410,040
96,940,270,000
132,153,227
98,445,833,267

1,714,862,716
78,834,726,890
80,495,238
80,630,084,844

1,373,410,040
96,940,270,000
132,153,227
98,445,833,267

1,714,862,716
78,834,726,890
80,495,238
80,630,084,844

Due from banks
Loans and advances to banks represented in loans do not considering bank placing. The expected fair value of the loans
and advances represents the discounted value of future cash flows expected to be collected. Cash flows are discounted
using the current market rate to determine fair value.

Loans and advances to customers
Loans and advances are net of provisions for impairment. The estimated fair value of loans and advances represents the
discounted amount of estimated future cash flows expected to be received. Expected cash flows are discounted at current
market rates to determine fair value.

Financial Investments
Investment securities include only interest-bearing assets held to maturity assets classified as available for sale are mea-
sured at fair value.

Fair value for held-to-maturity assets is based on market prices or broker/dealer price quotations. Where this information
is not available, fair value is estimated using quoted market prices for securities with similar credit, maturity and yield
characteristics.

Due to other banks and customers
The estimated fair value of deposits with no stated maturity, which includes non-interest-bearing deposits, is the amount
repayable on demand. The estimated fair value of fixed interest-bearing deposits and other borrowings not quoted in an
active market is based on discounted cash flows using interest rates for new debts with similar maturity date.

3.5 capital management
For capital management purposes, the Bank’s capital includes total equity as reported in the balance sheet plus some
other elements that are managed as capital. The Bank manages its capital to ensure that the following objectives are
achieved:

• Compliance with the legally imposed capital requirements in Egypt.
• Protecting the Bank’s ability to continue as a going concern and enabling it to generate yield for shareholders and

other parties dealing with the bank.

• Maintaining a strong capital base to enhance growth of the Bank’s operations.

Capital adequacy and the use of regulatory capital are monitored on a daily basis by the Bank’s management, employing
techniques based on the guidelines developed by the Basel Committee as implemented by the banking supervision unit
in the Central Bank of Egypt.

The required data is submitted to the Central Bank of Egypt on a quarterly basis.

Central Bank of Egypt requires the following:

• Maintaining EGP 500 million as a minimum requirement for the issued and paid-in capital.
• Maintaining a minimum level of capital adequacy ratio of 10%, calculated as the ratio between total value of the

capital elements, and the risk-weighted assets and contingent liabilities of the Bank.

Tier one:
Tier one, comprised of paid-in capital (after deducting the book value of treasury shares), retained earnings and reserves
resulting from the distribution of profits except the banking risk reserve and deducting previously recognized goodwill
and any retained losses.

Tier two:
Represents the gone concern capital which comprised of general risk provision according to the impairment provision
guidelines issued by the Central Bank of Egypt for to the maximum of 1.25% risk weighted assets and contingent liabilities
,subordinated loans with more than five years to maturity (amortizing 20% of its carrying amount in each year of the re-
maining five years to maturity) and 45% of the increase in fair value than book value for available for sale , held to maturity,
subsidiaries and associates investments.

When calculating the numerator of capital adequacy ratio, the rules set limits of total tier 2 to no more than tier 1 capital
and also limits the subordinated to no more than 50% of tier1.

Assets risk weight scale ranging from zero to 100% based on the counterparty risk to reflect the related credit risk scheme,
taking into considration the cash collatrals. Similar criteria are used for off balance sheet items after adjusting it to reflect
the nature of contingency and the potential loss of those amounts. The Bank has complied with all local capital adequacy
requirements for the current year.

The tables below summarizes the compositions of teir 1, teir 2 and the capital adequacy ratio.

120

annual report 2013

annual report 2013 121

Financial StatementS: Separate

According to Basel II :

Tier 1 capital
Share capital (net of the treasury shares)
Reserves
Retained Earnings (Losses)
Total deductions from tier 1 capital common equity
Total qualifying tier 1 capital
Tier 2 capital
45% of special reserve
45% of the Increase in fair value than the book value for available for

sale and held to maturity investments

Dec. 31, 2013
In thousands EGP

Dec. 31, 2012
In thousands EGP
Restated

9,002,436
1,001,869
(546,531)
(726,847)
8,730,927

1,123

21,510

5,972,275
3,909,853
(510,946)
(4,701)
9,366,481

41,821

147,873

Impairment provision for loans and regular contingent liabilities
Total qualifying tier 2 capital
Total capital 1+2
Risk weighted assets and contingent liabilities
Total credit risk
Total market risk
Total operational risk
Total
*Capital adequacy ratio (%)
* Based on consolidated financial statement figures and in accordance with Centeral Bank of Egypt regulation issued on 24 December 2012.

59,514,861
2,429,715
8,135,709
70,080,285
13.55%

56,891,117
1,994,962
6,478,218
65,364,297
15.71%

709,302
898,996
10,265,477

742,938
765,571
9,496,498

4. Critical accounting estimates and judgments

The Bank makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next
financial year.

Estimates and judgments are continually evaluated and based on historical experience and other factors, including ex-
pectations of future events that are believed to be reasonable under the circumstances and available information.

impairment losses on loans and advances

4.1.
The Bank reviews its loan portfolios to assess impairment on monthly basis a quarterly basis. In determining whether
an impairment loss should be recorded in the income statement, the Bank makes judgments as to whether there is any
observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of
loans before the decrease can be identified with an individual loan in that portfolio. This evidence may include observable
data indicating that there has been an adverse change in the payment status of borrowers in a Bank, or national or local
economic conditions that correlate with defaults on assets in the Bank. Management uses estimates based on historical
loss experience for assets with credit risk characteristics and objective evidence of impairment similar to those in the
portfolio when scheduling its future cash flows. The methodology and assumptions used for estimating both the amount
and timing of future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss
experience. To the extent that the net present value of estimated cash flows differs by +/-5%.

impairment of available for-sale equity investments

4.2.
The Bank determines that available-for-sale equity investments are impaired when there has been a significant or pro-
longed decline in the fair value below its cost. This determination of what is significant or prolonged requires judgment. In
making this judgment, the Bank evaluates among other factors, the normal volatility in share price. In addition, impair-
ment may be appropriate when there is evidence of a deterioration in the financial health of the investee, industry and
sector performance, changes in technology, and operational and financing cash flows.

4.3. Fair value of derivatives
The fair value of financial instruments that are not quoted in active markets are determined by using valuation tech-
niques. Where valuation techniques (as models) are used to determine fair values, they are validated and periodically
reviewed by qualified personnel independent of the area that created them. All models are certified before they are used,
and models are calibrated to ensure that outputs reflect actual data and comparative market prices. To the extent prac-
tical, models use only observable data; however, areas such as credit risk (both own and counterparty), volatilities and
correlations require management to make estimates. Changes in assumptions about these factors could affect reported
fair value of financial instruments.

4.4. Held-to-maturity investments
The non-derivative financial assets with fixed or determinable payments and fixed maturity are being classified held to
maturity. This requires significant judgment. In making this judgment, the Bank evaluates its intention and ability to hold
such investments to maturity. If the Bank fails to keep these investments to maturity other than for the specific circum-
stances – for example, selling an insignificant amount close to maturity it will be required to reclassify the entire category
as available for sale. The investments would therefore be measured at fair value not amortized cost.

5. Segment analysis

5.1. By business segment
The Bank is divided into main business segments on a worldwide basis:

• Corporate banking – incorporating direct debit facilities, current accounts, deposits, overdrafts, loan and other credit

facilities, foreign currency and derivative products

• Investment banking – incorporating financial instruments Trading, structured financing, Corporate leasing,and merger

and acquisitions advice.

• Retail banking – incorporating private banking services, private customer current accounts, savings, deposits, investment

savings products, custody, credit and debit cards, consumer loans and mortgages;

• Others –Include other banking business, such as Assets Management.
• Transactions between the business segments are on normal commercial terms and conditions.

Dec. 31, 2013

Revenue according to
business segment
Expenses according to
business segment

Profit before tax
Tax
Profit for the year
Total assets

Dec. 31, 2012

Revenue according to
business segment
Expenses according to
business segment

Profit before tax
Tax
Profit for the year
Total assets

Corporate
banking

SME’s

Investment
banking

Retail banking

EGP

Total

4,446,599,564

698,163,082

(58,811,197)

1,666,363,119

6,752,314,568

(1,626,606,779)

(316,973,281)

(90,547,864)

(877,974,630)

(2,912,102,554)

2,819,992,785
(856,984,584)
1,963,008,201
99,626,236,327

381,189,801
(119,972,068)
261,217,733
2,601,325,392

(149,359,061)
-
(149,359,061)
1,275,407,237

788,388,489
(248,129,927)
540,258,562
10,249,298,810

3,840,212,014
(1,225,086,579)
2,615,125,435
113,752,267,766

Corporate
banking

SME’s

Investment
banking

Retail banking

Total

3,302,588,319

731,332,747

(273,334,474)

1,610,326,906

5,370,913,498

(1,124,760,077)

(308,458,766)

(25,353,002)

(859,123,551)

(2,317,695,396)

2,177,828,242
(552,626,343)
1,625,201,899
80,952,435,040

422,873,981
(107,289,406)
315,584,575
2,626,503,517

(298,687,476)
-
(298,687,476)
1,451,894,947

751,203,355
(190,591,442)
560,611,913
9,374,557,798

3,053,218,102
(850,507,191)
2,202,710,911
94,405,391,302

122

annual report 2013

annual report 2013 123

Financial StatementS: Separate

5.2. By geographical segment

Dec. 31, 2013

Revenue according to geographical segment
Expenses according to geographical segment
Profit before tax
Tax
Profit for the year
Total assets

Dec. 31, 2012

Revenue according to geographical segment
Expenses according to geographical segment
Profit before tax
Tax
Profit for the year
Total assets

Cairo

5,746,507,019
(2,169,461,195)
3,577,045,824
(1,138,986,743)
2,438,059,081
104,134,226,778

Cairo

4,334,514,952
(1,834,683,705)
2,499,831,247
(696,353,609)
1,803,477,638
84,065,156,225

Alex, Delta
& Sinai
907,098,338
(654,444,883)
252,653,455
(82,660,394)
169,993,061
8,163,839,552

Alex, Delta
& Sinai
887,705,321
(399,008,070)
488,697,251
(136,133,396)
352,563,855
9,048,557,087

Upper Egypt

98,709,211
(88,196,476)
10,512,735
(3,439,442)
7,073,293
1,454,201,436

Upper Egypt

148,693,225
(84,003,621)
64,689,604
(18,020,186)
46,669,418
1,291,677,989

EGP

Total

6,752,314,568
(2,912,102,554)
3,840,212,014
(1,225,086,579)
2,615,125,435
113,752,267,766

Total

5,370,913,498
(2,317,695,396)
3,053,218,102
(850,507,191)
2,202,710,911
94,405,391,302

6. Net interest income

Interest and similar income
- Banks
- Clients

Treasury bills and bonds
Reverse repos
Financial investments in held to maturity and available for sale debt

instruments

Other
Total
Interest and similar expense
- Banks
- Clients

Financial instruments purchased with a commitment to re-sale (Repos)
Other
Total
Net interest income

7. Net fee and commission income

Fee and commission income
Fee and commissions related to credit
Custody fee
Other fee
Total
Fee and commission expense
Other fee paid
Total
Net income from fee and commission

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

201,284,007
3,915,076,745
4,116,360,752
5,228,658,859
27,135,663

132,463,454
3,523,926,754
3,656,390,208
4,013,129,815
17,423,270

137,673,401

158,941,017

45,988
9,509,874,663

91,504,193
4,338,661,909
4,430,166,102
25,580,494
4,366,685
4,460,113,281
5,049,761,382

Dec. 31, 2013
EGP

761,430,244
43,812,007
511,674,138
1,316,916,389

127,965,091
127,965,091
1,188,951,298

29,184
7,845,913,494

181,169,862
3,449,311,643
3,630,481,505
310,995,070
3,760,975
3,945,237,550
3,900,675,944

Dec. 31, 2012
EGP

470,471,721
40,798,715
431,596,884
942,867,320

107,365,742
107,365,742
835,501,578

8. Dividend income

Trading securities
Available for sale securities
Subsidiaries and associates
Total

9. Net trading income

Profit (losses) from foreign exchange
Profit (losses) from revaluations of trading assets and liabilities in foreign

currencies

Profit (Loss) from forward foreign exchange deals revaluation
Profit (Loss) from interest rate swaps revaluation
Profit (Loss) from currency swap deals revaluation
Trading debt instruments
Trading equity instruments
Total

10. Administrative expenses

Staff costs
- Wages and salaries
- Social insurance
- Other benefits
Other administrative expenses
Total

11. Other operating (expenses) income

Profits (Losses) from non-trading assets and liabilities revaluation
Profits (losses) from selling property, plant and equipment
Release (charges) of other provisions
Others
Total

Dec. 31, 2013
EGP
-
14,109,201
5,694,250
19,803,451

Dec. 31, 2012
EGP
578,098
27,138,391
4,517,707
32,234,196

Dec. 31, 2013
EGP
442,009,259

2,707,556

(20,513,102)
(1,097,874)
4,095,705
332,508,008
262,771
759,972,323

Dec. 31, 2012
EGP
249,583,425

2,045,486

6,669,087
212,030
(2,963,355)
311,074,819
(893,527)
565,727,965

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

777,016,107
34,795,512
32,515,509
882,193,845
1,726,520,973

684,521,699
30,542,233
30,941,993
698,639,542
1,444,645,467

Dec. 31, 2013
EGP
89,858,233
740,692
(128,962,974)
(116,652,796)
(155,016,845)

Dec. 31, 2012
EGP
36,631,170
2,387,583
(51,085,880)
(97,723,664)
(109,790,791)

124

annual report 2013

annual report 2013 125

Financial StatementS: Separate

12. Impairment (charge) release for credit losses

16. Due from banks

Loans and advances to customers
Total

Dec. 31, 2013
EGP
(915,581,874)
(915,581,874)

Dec. 31, 2012
EGP
(609,971,077)
(609,971,077)

13. Adjustments to calculate the effective tax rate

Dec. 31, 2013
EGP
3,840,212,014
-
3,840,212,014
25.00%
960,053,003

196,289,297
(72,040,958)
140,285,237
500,000
1,225,086,578
31.90%

Dec. 31, 2013
EGP
2,716,110,919
(40,741,664)
(271,611,092)
2,403,758,163
900,243,569
2.67

914,378,753
2.63

Dec. 31, 2012
EGP
3,053,218,102
(65,137,014)
2,988,081,089
24.98%
746,520,272

22,716,152
(77,772,622)
88,495,041
5,411,335
785,370,178
26.28%

Dec. 31, 2012
EGP
2,379,297,994
(35,689,470)
(237,929,799)
2,105,678,724
900,243,569
2.34

911,239,406
2.31

Dec. 31, 2013
EGP
1,674,626,181

3,121,614,173
4,796,240,354
4,796,240,354

Dec. 31, 2012
EGP
1,744,700,680

3,649,273,444
5,393,974,124
5,393,974,124

Profit before tax
Tax settlement for prior years
Profit after settlement
Tax rate
Income tax based on accounting profit
Add / (Deduct)
Non-deductible expenses
Tax exemptions
Effect of provisions
Depreciation
Income tax
Effective tax rate
*Tax claims for the year ended on December.31, 2011

14. Earning per share

Net profit for the period available for distribution
Board member's bonus
Staff profit sharing
Profits shareholders' Stake
Number of shares
Basic earning per share
By issuance of ESOP earning per share will be:
Number of shares including ESOP shares
Diluted earning per share

15. Cash and balances with Central Bank

Cash
Obligatory reserve balance with CBE
- Current accounts
Total
Non-interest bearing balances

126

annual report 2013

Current accounts
Deposits
Total
Central banks
Local banks
Foreign banks
Total
Non-interest bearing balances
Fixed interest bearing balances
Total
Current balances
Total

17. Treasury bills and other governmental notes

91 Days maturity
182 Days maturity
364 Days maturity
Unearned interest
Total 1
Repos - treasury bills
Total 2
Net

18. Trading financial assets

Debt instruments
- Governmental bonds
Total
Equity instruments
- Foreign company shares
- Mutual funds
Total
- Portfolio managed by others
Total financial assets for trading

19. Loans and advances to banks

Time and term loans

Less:Impairment provision
Total
Current balances
Non-current balances
Total

Dec. 31, 2013
EGP
520,680,728
8,372,990,237
8,893,670,965
3,225,196,041
647,259,153
5,021,215,771
8,893,670,965
163,771,764
8,729,899,201
8,893,670,965
8,893,670,965
8,893,670,965

Dec. 31, 2012
EGP
227,153,819
7,730,556,215
7,957,710,034
3,093,850,399
500,586,325
4,363,273,310
7,957,710,034
152,732,954
7,804,977,080
7,957,710,034
7,957,710,034
7,957,710,034

Dec. 31, 2013
EGP
6,524,096,980
7,197,085,800
11,010,949,677
(1,077,320,283)
23,654,812,174
-
-
23,654,812,174

Dec. 31, 2012
EGP
3,142,959,400
4,022,757,000
4,458,084,085
(470,058,411)
11,153,742,074
(3,175,711,661)
(3,175,711,661)
7,978,030,413

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

2,047,967,761
2,047,967,761

1,138,056,688
1,138,056,688

8,881,566
136,007,766
144,889,332
53,490,713
2,246,347,806

15,877,741
318,347,334
334,225,075
-
1,472,281,763

Dec. 31, 2013
EGP
153,833,294

(21,410,562)
132,422,732
102,219,834
30,202,898
132,422,732

Dec. 31, 2012
EGP
1,208,166,369

(29,298,630)
1,178,867,739
1,172,317,036
6,550,703
1,178,867,739

annual report 2013 127

Financial StatementS: Separate

analysis for impairment provision of loans and advances to banks

Beginning balance
Charge (release) during the year
Exchange revaluation difference
Ending balance

20. Loans and advances to customers

Individual
- Overdraft
- Credit cards
- Personal loans
- Mortgages
- Other loans
Total 1
Corporate
- Overdraft
- Direct loans
- Syndicated loans
- Other loans
Total 2
Total Loans and advances to customers (1+2)
Less:
Unamortized bills discount
Impairment provision
Unearned interest
Net loans and advances to customers
Distributed to
Current balances
Non-current balances
Total

Dec. 31, 2013
EGP
29,298,630
(9,224,786)
1,336,718
21,410,562

Dec. 31, 2012
EGP
37,950,503
(11,450,369)
2,798,496
29,298,630

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

1,173,942,998
765,623,964
4,181,386,392
383,143,670
10,841,736
6,514,938,760

5,015,510,545
24,125,578,810
9,630,556,651
109,231,797
38,880,877,803
45,395,816,563

(6,634,495)
(2,842,840,136)
(708,390,220)
41,837,951,712

16,679,527,211
25,158,424,501
41,837,951,712

1,220,222,219
660,932,044
3,616,553,758
463,833,879
20,045,324
5,981,587,224

4,288,571,348
23,196,204,054
9,588,649,990
87,795,754
37,161,221,146
43,142,808,370

(22,277,973)
(1,901,222,402)
(520,994,222)
40,698,313,773

16,908,542,925
23,789,770,848
40,698,313,773

analysis for impairment provision of loans and advances to customers

Dec. 31, 2013

Beginning balance
Charged (Released) during the year
Write off during the year
Recoveries during the year
Ending balance

Overdraft

Credit cards

10,753,047
270,365
(2,755,707)
964,713
9,232,418

8,328,331
2,567,525
(7,254,445)
4,749,763
8,391,174

Individual

Personal
loans
74,435,554
8,225,083
-
-
82,660,637

Real estate
loans
13,376,859
407,070
-
-
13,783,929

Other loans

Total

1,090,931
2,117,699
-
-
3,208,630

107,984,722
13,587,742
(10,010,152)
5,714,476
117,276,788

Dec. 31, 2013

Beginning balance
Charged (Released) during the year
Write off during the year
Recoveries from written off debts
Exchange revaluation difference
Ending balance

Overdraft Direct loans

209,551,228
118,563,373
-
-
6,088,062

1,242,015,939
663,119,750
(6,811,042)
13,906,294
41,099,887
334,202,663 1,953,330,828

Corporate

Syndicated
loans
336,568,605
129,670,518
(81,425,110)
31,417,986
16,830,672
433,062,671

Other loans

Total

5,101,908
(134,722)
-
-
-

1,793,237,680
911,218,919
(88,236,152)
45,324,280
64,018,621
4,967,186 2,725,563,348

Dec. 31, 2012

Beginning balance
Charged (Released) during the year
Write off during the year
Recoveries during the year
Ending balance

Overdraft Credit cards

20,377,614
(9,624,567)
-
-
10,753,047

42,290,218
(8,977,018)
(29,454,339)
4,469,470
8,328,331

Individual

Personal
loans
76,502,471
68,706
(2,135,623)
-
74,435,554

Real estate
loans
11,876,297
1,500,562
-
-
13,376,859

Other loans

Total

1,593,932
(503,001)
-
-
1,090,931

152,640,532
(17,535,318)
(31,589,962)
4,469,470
107,984,722

Dec. 31, 2012

Beginning balance
Charged (Released) during the year
Write off during the year
Recoveries during the year
Exchange revaluation difference
Ending balance

Overdraft Direct loans

167,655,394
39,209,960
-
-
2,685,874
209,551,228

790,797,773
420,954,828
-
14,726,449
15,536,889
1,242,015,939

Corporate

Syndicated
loans
306,628,666
178,455,887
(154,721,287)
-
6,205,339
336,568,605

Other loans

Total

1,686,738
336,089
-
-
3,079,081
5,101,908

1,266,768,571
638,956,764
(154,721,287)
14,726,449
27,507,183
1,793,237,680

21. Derivative financial instruments

21.1. Derivatives
The Bank uses the following financial derivatives for non hedging purposes.

Forward contracts represents commitments of buying foreign and local currencies including unexecuted spot transac-
tions. Future contracts for foreign currencies and/or interest rates represents contractual commitments to receive or
pay net on the basis of changes in foreign exchange rates or interest rates, and/or buying or selling foreign currencies or
financial instruments in a future date with a fixed contractual price under active financial market.

Credit risk is considered low, and future interest rate contracts represents future exchange rate contracts negotiated for
case by case, these contracts requires financial settlements of any differences in contractual interest rates and prevailing
market interest rates on future interest rates on future dates based on contractual amount (nominal value) pre agreed
upon.

Foreign exchange and/or interest rate swap represents commitments to exchange cash flows, resulting from these con-
tracts exchange of currencies or interest (fixed rate versus variable rate for example) or both (meaning foreign exchange
and interest rate contracts)/contractual amounts are not exchanged except for some foreign exchange contracts.

Credit risk is represented in the expected cost of foreign exchange contracts that takes place if other parties default to ful-
fill their liabilities. This risk is monitored continuously through comparisons of fair value and contractual amount, and to
control the outstanding credit risk, The Bank evaluates other parties using the same methods as in borrowing activities.

Options contracts in foreign currencies and/or interest rates represents contractual agreements for the buyer (issuer) to
seller (holders) as a right not an obligations whether to buy (buy option) or to sell (sell option) at a certain day or within
certain period for a certain amount in foreign currency or interest rate. Options contracts are either traded in the market
or negotiated between The Bank and one of its clients (Off balance sheet). The Bank exposed to credit risk for purchased
options contracts only and in the line of its book cost which represent its fair value.

128

annual report 2013

annual report 2013 129

Financial StatementS: Separate

The contractual value for some derivatives options considered a base to compare the realized financial instruments on the
balance sheet, but it didn’t provide indicator on the projected cash flows of the fair value for current instruments, those
amounts doesn’t reflects credit risk or interest rate risk.

Derivatives in The Banks benefit represent (assets) conversely it represents (liabilities) as a result of the changes in foreign
exchange prices or interest rates related to these derivatives. Contractual / expected total amounts of financial deriva-
tives can fluctuate from time to time and also the range through which the financial derivatives can be in benefit of The
Bank or conversely against its benefit and the total fair value of the financial derivatives in assets and liabilities. hereunder
are the fair values of the booked financial derivatives.

21.1.1. For trading derivatives

Foreign derivatives
- Forward foreign exchange

contracts

- Currency swap
- Options
Total 1
Interest rate derivatives
- Interest rate swaps
Total 2
- Commodity
Total 3
Total assets (liabilities) for

trading derivatives (1+2+3)

21.1.2. Fair value hedge
Interest rate derivatives
- Governmental debit
instruments hedging

- Customers deposits hedging
Total 4
Total financial derivatives

(1+2+3+4)

Dec. 31, 2013

Dec. 31, 2012

Notional
amount

Assets

Liabilities

Notional
amount

Assets

Liabilities

1,250,176,084

13,375,501

18,954,700

1,996,990,255

16,812,998

959,570

1,990,431,463
38,331,489

22,576,221
13,794,115
49,745,837

12,311,533
13,794,115
45,060,348

1,258,600,443
770,698,823

9,781,221
7,723,601
34,317,820

3,612,239
7,723,601
12,295,410

389,501,781

6,679,325
6,679,325
-
-

3,744,177
3,744,177
-
-

859,324,209

12,149,920

12,630,731
12,630,731
134,026
134,026

8,739,696
8,739,696
134,026
134,026

56,425,162

48,804,525

47,082,577

21,169,132

603,658,200

3,847,747,181

57,476,340

549,753,000

97,708,858

46,660,376
46,660,376

8,597,718
66,074,058

4,293,389,812

90,377,184
90,377,184

221,270
97,930,128

103,085,538

114,878,583

137,459,761

119,099,260

21.2. Hedging derivatives
21.2.1. Fair value hedge
The Bank uses interest rate swap contracts to cover part of the risk of potential decrease in fair value of its fixed rate gov-
ernmental debt instruments in foreign currencies. Net derivative value resulting from the related hedging instruments is
EGP 57,476,340 at the December 31, 2013 against EGP 97,708,858 at the December 31, 2012, Resulting in net gain form hedg-
ing instruments at the December 31, 2013 EGP 40,232,518 against net loss EGP 19,194,046 at the December 31, 2012. Losses
arises from the hedged items at the December 31, 2013 reached EGP 48,856,503 against profits arises EGP 14,842,228 at
the December 31, 2012.

The Bank uses interest rate swap contracts to cover part of the risk of potential increase in fair value of its fixed rate
customers deposits in foreign currencies. Net derivative value resulting from the related hedging instruments is EGP
38,062,657 at the end of December, 2013 against EGP 90,155,914 at the December 31, 2012, Resulting in net losses form
hedging instruments at the December 31, 2013 EGP 52,093,256 against net profit EGP 32,507,675 at the December 31, 2012.
Gains arises from the hedged items at the 31 December , 2013 reached EGP 60,223,650 against losses EGP 27,731,731 at the
31 December , 2012.

22. Financial investments

Available for sale
- Listed debt instruments with fair value
- Listed equity instruments with fair value
- Unlisted instruments
Total
Held to maturity
- Listed debt instruments
- Unlisted instruments
Total
Total financial investment
- Actively traded instruments
- Not actively traded instruments
Total
Fixed interest debt instruments
Floating interest debt instruments
Total

Beginning balance
Addition
Deduction (selling - redemptions)
Exchange revaluation differences for foreign

financial assets

Profit (losses) from fair value difference
Impairment (charges) release
Ending Balance

Beginning balance
Addition
Deduction (selling - redemptions)
Exchange revaluation differences for foreign

financial assets

Profit (losses) from fair value difference
Impairment (charges) release
Ending Balance

Available for sale
financial
investments
15,412,566,069
10,163,193,809
(5,342,793,206)

60,242,239

895,941,363
(27,266,242)
21,161,884,032

21,161,884,032
7,463,491,687
(4,518,397,511)

124,230,792

(834,813,374)
(32,893,931)
23,363,501,695

22.1. profit (losses) from financial investments

Profit (Loss) from selling available for sale financial instruments
Impairment release (charges) of available for sale equity instruments
Impairment release (charges) of available for sale debt instruments
Impairment release (charges) of subsidiaries and associates
Profit (Loss) from selling held to maturity debt investments
Total

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

22,556,422,828
86,327,447
720,751,420
23,363,501,695

4,159,661,491
27,512,500
4,187,173,991
27,550,675,686
25,948,390,734
1,602,284,952
27,550,675,686
25,791,803,456
1,097,845,069
26,889,648,525

20,607,710,266
84,923,090
469,250,676
21,161,884,032

4,144,677,917
61,075,411
4,205,753,328
25,367,637,360
23,745,724,106
1,621,913,254
25,367,637,360
23,611,233,775
1,237,877,696
24,849,111,471

Held to maturity
financial
investments
29,092,920
4,176,660,408
-

Total
EGP

15,441,658,989
14,339,854,217
(5,342,793,206)

60,242,239

-
-
4,205,753,328

4,205,753,328
-
(18,579,337)

895,941,363
(27,266,242)
25,367,637,360

25,367,637,360
7,463,491,687
(4,536,976,848)

124,230,792

-
-
4,187,173,991

(834,813,374)
(32,893,931)
27,550,675,686

Dec. 31, 2013
EGP
1,656,257
(32,893,931)
-
(349,909,000)
(10,074)
(381,156,748)

Dec. 31, 2012
EGP
519,013
(27,859,838)
593,597
(89,736,000)
(31,018)
(116,514,246)

130

annual report 2013

annual report 2013 131

Financial StatementS: Separate

23. Investments in associates

Dec. 31, 2013

Company’s
country

Company’s
assets

Company’s
liabilities
(without
equity)

Company’s
revenues

Company’s net
profit

Investment
book value
EGP

Stake
%

Subsidiaries
- CI Capital Holding
Associates
- Commercial International

Life Insurance

- Corplease
- Haykala for investment
- Egypt Factors
- International Co. for Secu-
rity and Services (Falcon)

Total

Egypt

633,508,232

316,493,573

140,938,905

455,587

428,011,000 99.98

Egypt

Egypt
Egypt
Egypt

2,202,120,593

2,124,146,722

302,442,516

5,621,494

49,020,250

1,921,220,750
4,573,801
434,219,114

1,723,876,875
199,111
379,404,778

378,253,425
581,125
32,679,897

16,884,595
478,935
425,843

75,054,600
600,000
40,590,810

Egypt

126,867,912

104,633,380

120,221,686

5,344,162

6,000,000

43
40
39

5,322,510,402 4,648,754,439

975,117,554

29,210,616

599,276,660

Dec. 31, 2012

Company’s
country

Company’s
assets

Company’s
liabilities
(without
equity)

Company’s
revenues

Company’s net
profit

Investment
book value
EGP

Stake
%

Subsidiaries
- CI Capital Holding
Associates
- Commercial International

Life Insurance

- Corplease
- Haykala for Investment
- Egypt Factors
- International Co. for Secu-
rity and Services (Falcon)

Total

Egypt

434,893,702

162,263,325

121,446,841

1,611,611

777,920,000 99.98

Egypt

Egypt
Egypt
Egypt

Egypt

1,768,401,691

1,711,942,438

253,087,786

(969,320)

1,539,490,355
3,875,454
203,984,151

1,361,597,602
180,722
151,643,286

317,924,102
270,000
18,514,114

9,974,915
209,835
(3,608,534)

49,020,250

67,527,300
600,000
36,966,150

91,085,635

79,197,211

106,514,090

1,219,081

6,000,000

40
40
39

4,041,730,988 3,466,824,584

817,756,933

8,437,587

938,033,700

24. Investment property*

Commercial unit number f 35 in arkadia mall (14 elbahr st. Boulak

kornish el nile )

338.33 meters on a land and building the property number 16 elmakrizi

st. Heliopolis

Land area with 1468.85 meters elsaidi basin -markaz nabrouh eldakahlia
Land and a bulding in elmansoura elnahda street 766.3 meters
Agricultural area 1 feddan 14t and 17.25 shares near el azazi fakous

elsharkia

Agriculutral area - markaz shebin eldakahlia
Total

Dec. 31, 2013
EGP

432,000

1,121,965
3,463,000

161,000

4,517,721
9,695,686

Dec. 31, 2012
EGP

432,000

700,000

1,121,965
3,463,000

161,000

4,517,721
10,395,686

* Including non registered properties by EGP 6,232,686 which were acquired against settlement of loans to customers and legal procedures is
taking to registered these properties or sell them during the legal period.

25. Other assets

Accrued revenues
Prepaid expenses
Advances to purchase of fixed assets
Accounts receivable and other assets
Assets acquired as settlement of debts
Total

26. Property, plant and equipment

Dec. 31, 2013
EGP
1,703,814,782
114,869,733
134,327,476
906,536,702
20,245,803
2,879,794,496

Dec. 31, 2012
EGP
1,637,781,937
75,319,597
96,120,400
640,826,581
8,977,329
2,459,025,844

Land

Premises

Vehicles Fitting -out

Machines and
equipment

60,575,261

424,861,042

834,806,161

51,772,311

347,435,424

284,157,963

Dec. 31, 2013

Furniture
and
furnishing
114,072,032 2,117,680,194

Total

3,924,261

214,973,061

158,341,911

7,809,546

49,901,395

40,201,441

7,204,257

482,355,872

64,499,522

639,834,103

993,148,072

59,581,857

397,336,819

324,359,404

121,276,289 2,600,036,066

181,000,079

644,737,344

31,504,412

276,816,541

216,844,425

82,249,497 1,433,152,298

24,795,643

69,673,132

3,190,986

40,116,114

42,174,027

22,395,350

202,345,252

205,795,722

714,410,476

34,695,398

316,932,655

259,018,452

104,644,847 1,635,497,550

64,499,522
60,575,261

434,038,381
243,860,963
%5

278,737,596
190,068,817
%33.3

24,886,459
20,267,899

%20

80,404,164
70,618,883
%33.3

65,340,952
67,313,538

16,631,442
31,822,535

964,538,516
684,527,896

%20

Beginning gross assets (1)
Additions (deductions) during

the year

Ending gross assets (2)
Accu.depreciation at beginning

of the year (3)

Current year depreciation
Accu.depreciation at end of

the year (4)

Ending net assets (2-4)
Beginning net assets (1-3)
Depreciation rates

Net fixed assets value on the balance sheet date includes EGP 87,125,263.61 non registered assets while their registrations procedures are in pro-
cess.

27. Due to banks

Current accounts
Deposits
Total
Central banks
Local banks
Foreign banks
Total
Non-interest bearing balances
Fixed interest bearing balances
Total
Current balances
Non-current balances
Total

Dec. 31, 2013
EGP
1,038,717,040
334,693,000
1,373,410,040
3,853,779
313,337,889
1,056,218,372
1,373,410,040
1,026,035,993
347,374,047
1,373,410,040
1,038,717,040
334,693,000
1,373,410,040

Dec. 31, 2012
EGP
369,862,716
1,345,000,000
1,714,862,716
7,546,231
1,362,363,985
344,952,500
1,714,862,716
354,394,897
1,360,467,819
1,714,862,716
369,862,716
1,345,000,000
1,714,862,716

132

annual report 2013

annual report 2013 133

Financial StatementS: Separate

28. Due to customers

Demand deposits
Time deposits
Certificates of deposit
Saving deposits
Other deposits
Total
Corporate deposits
Individual deposits
Total
Non-interest bearing balances
Fixed interest bearing balances
Total
Current balances
Non-current balances
Total

29. Long term loans

Dec. 31, 2013
EGP
23,043,882,291
30,507,692,856
25,259,128,705
16,786,188,314
1,343,377,834
96,940,270,000
48,394,254,589
48,546,015,411
96,940,270,000
16,520,500,848
80,419,769,152
96,940,270,000
70,300,955,105
26,639,314,895
96,940,270,000

Dec. 31, 2012
EGP
17,034,550,714
24,133,038,485
24,299,048,221
12,106,727,204
1,261,362,266
78,834,726,890
36,764,106,988
42,070,619,902
78,834,726,890
12,157,860,312
66,676,866,578
78,834,726,890
51,976,518,051
26,858,208,839
78,834,726,890

Interest rate % Maturity date

Maturing
through
next year
EGP

Balance on
Dec. 31, 2013
EGP

Balance on
Dec. 31, 2012
EGP

Financial Investment & Sector

Cooperation (FISC)

Agricultural Research and Development

Fund (ARDF)

Social Fund for Development (SFD)

Total

3.5 - 5.5
depends on
maturity date
3.5 - 5.5
depends on
maturity date
3 months
T/D or 9%
which is more

3-5 years

555,556

19,095,238

3-5 years

28,310,000

31,380,000

61,400,000

35,486,000

100,217,671

64,351,556

132,153,227

80,495,238

30. Other liabilities

Accrued interest payable
Accrued expenses
Accounts payable
Income tax
Other credit balances
Total

Dec. 31, 2013
EGP
574,521,952
331,203,778
471,928,260
1,179,708,811
68,392,690
2,625,755,491

Dec. 31, 2012
EGP
436,723,614
242,231,936
467,830,762
819,361,660
68,203,599
2,034,351,571

31. Other provisions

Dec. 31, 2013

Beginning
balance

Charged
amounts

Exchange
revaluation
difference

Utilized
amounts

Reversed
amounts

Ending
balance
EGP

Provision for income tax

claims

Provision for legal claims
Provision for Stamp Duty
Provision for contingent
Provision for other claim*
Total

6,909,685

28,363,664
-
257,900,430
17,474,334
310,648,113

6,909,685

1,093,932
31,000,000
88,074,156
8,936,407
129,104,495

1,851
-
16,745,849
30,556
16,778,256

(545,510)
-
-
(5,088,275)
(5,633,785)

(141,521)
-
-
-
(141,521)

28,772,416
31,000,000
362,720,435
21,353,022
450,755,558

Dec. 31, 2012

Provision for income tax

claims

Provision for legal claims
Provision for contingent
Provision for other claim
Total

Beginning
balance

Charged
amounts

Exchange
revaluation
difference

Utilized
amounts

Reversed
amounts

Ending
balance
EGP

6,909,685

35,171,959
210,103,042
12,441,223
264,625,909

6,909,685

4,668,841
40,594,505
6,353,586
51,616,932

11,983
7,202,883
16,075
7,230,941

(10,958,065)
-
(1,336,550)
(12,294,615)

(531,054)
-
-
(531,054)

28,363,664
257,900,430
17,474,334
310,648,113

* Provision for other claim formed on December 31, 2013 amounted to 8,936,407 EGP to face the potential risk of banking operations against

amount 6,353,586 EGP on December 31, 2012 ..

32. Equity

32.1. capital
The authorized capital reached EGP 20 billion according to the extraordinary general assembly decision on March 17,
2010.

Issued and Paid in Capital reached EGP 9,002,435,690 to be divided on 900,243,569 shares with EGP 10 par value for each
share based on:

• Increase issued and Paid in Capital by amount EGP 2,950,721,800 on July 15, 2010 according to Board of Directors decision
on May 12 ,2010 by distribution of one share for every outstanding share by capitalizing on the General Reserve and part
of the Legal Reserve.

• Increase issued and Paid in Capital by amount EGP 33,119,390 on July 31, 2011 in according to Board of Directors decision

on November 10,2010 by issuance of second tranch for E.S.O.P program.

• Increase issued and Paid in Capital by amount EGP 37,712,420 on April 9, 2012 in according to Board of Directors decision

on December 22,2011 by issuance of third tranch for E.S.O.P program.

• Increase issued and Paid in Capital by amount EGP 29,348,380 On April 7,2013 to reach EGP 6,001,623,790 according to

Board of Directors decision on october 24,2012 by issuance of fourth tranch for E.S.O.P program.

• Increase issued and Paid in Capital by amount EGP 3,000,811,895 on December 5, 2013 according to Board of Directors
decision on May 15 ,2013 by distribution of a one share for every two outstanding shares by capitalizing on the General
Reserve.

• The Extraordinary General Assembly approved in the meeting of June 26, 2006 to activate a motivating and rewarding
program for the Bank's employees and managers through Employee Share Ownership Plans (ESOP) by issuing a maximum
of 5% of issued and paid-in capital at par value ,through 5 years starting year 2006 and delegated the Board of Directors to
establish the rewarding terms and conditions and increase the paid in capital according to the program.

• The Extraordinary General Assembly approved in the meeting of April 13,2011 continue to activate a motivating and re-
warding program for The Bank's employees and managers through Employee Share Ownership Plans (ESOP) by issuing
a maximum of 5% of issued and paid- in capital at par value ,through 5 years starting year 2011 and delegated the Board
of Directors to establish the rewarding terms and conditions and increase the paid in capital according to the program.
• Dividend deducted from shareholders' equity in the Year that the General Assembly approves the dispersment the share-
holders of this dividend, which includes staff profit share and remuneration of the Board of Directors stated in the law.

134

annual report 2013

annual report 2013 135

Financial StatementS: Separate

32.2. reserves
According to The Bank status 5% of net profit is to increase legal reserve until it reaches 50% of The Bank's issued and paid
in capital.

Central Bank of Egypt concurrence for usage of special reserve is required.

33. Deferred tax
Deferred tax assets and liabilities are attributable to the following:

Fixed assets (depreciation)
Other provisions (excluded loan loss, contingent liabilities and income

tax provisions)

Other investments impairment
Reserve for employee stock ownership plan (ESOP)
Total

Dec. 31, 2013
Assets (Liabilities)
EGP
(23,992,207)

Dec. 31, 2012
Assets (Liabilities)
EGP
(18,477,693)

12,531,360

49,219,205
45,997,083
83,755,441

10,998,616

98,979,194
37,633,092
129,133,209

34. Share-based payments
According to the extraordinary general assembly meeting on June 26, 2006, The Bank launched new Employees Share Owner-
ship Plan (ESOP) scheme and issued equity-settled share-based payments. Eligible employees should complete a term of 3 years
of service in The Bank to have the right in ordinary shares at face value (right to share) that will be issued on the vesting date,
otherwise such grants will be forfeited. Equity-settled share-based payments are measured at fair value at the grant date, and
expensed on a straight-line basis over the vesting period (3 years) with corresponding increase in equity based on estimated
number of shares that will eventually vest (True up model). The fair value for such equity instruments is measured using of
Black-Scholes pricing model.

Details of the rights to share outstanding during the period are as follows::

Outstanding at the beginning of the year
Granted during the year *
Forfeited during the year
Exercised during the year
Outstanding at the end of the year

Details of the outstanding tranches are as follows:

Maturity date

2014
2015
2016
Total

EGP
Exercise price
10.00
10.00
10.00

Dec. 31, 2013
No. of shares
15,439,582
12,245,031
(832,456)
(2,934,838)
23,917,319

EGP
Fair value
14.17
6.65
16.84

The fair value of granted shares is calculated using Black-Scholes pricing model with the following:
7th tranche
10
34.57
3
14.49%
2.89%
40%

Exercise price
Current share price
Expected life (years)
Risk free rate %
Dividend yield%
Volatility%

Dec. 31, 2012
No. of shares
12,676,036
7,208,355
(673,567)
(3,771,242)
15,439,582

No. of shares

7,929,874
10,032,939
5,954,506
23,917,319

6th tranche
10
18.7
3
16.15%
5.35%
38%

Volatility is calculated based on the daily standard deviation of returns for the last three years.
* The equity instruments fair value and number of shares for the fifth, sixth and seventh trenches have been adjusted to reflect the dilution effect

of the Stock dividend that took place in 2013.

136

annual report 2013

35. Reserves and retained earnings

Legal reserve
General reserve
Retained earnings (losses)
Special reserve
Reserve for A.F.S investments revaluation difference
Banking risks reserve
Total

35.1. Banking risks reserve

Beginning balance
Transferred from profits
Ending balance

35.2. legal reserve

Beginning balance
Transfer from special reserve
Transferred from previous year profits
Ending balance

35.3. reserve for a.F.S investments revaluation difference

Beginning balance
Unrealized gains (losses) from A.F.S investment revaluation
Ending balance

35.4. retained earnings (losses)

Beginning balance
Dividend previous year
Transferred from special reserve
Ending balance

36. Cash and cash equivalent

Cash and balances with Central Bank
Due from banks
Treasury bills and other governmental notes
Obligatory reserve balance with CBE
Due from banks (time deposits) more than three months
Treasury bills with maturity more than three months
Total

Dec. 31, 2013
EGP
490,364,921
406,242,752
-
27,366,759
(720,468,079)
1,990,756
205,497,109

Dec. 31, 2013
EGP
103,716,932
(101,726,176)
1,990,756

Dec. 31, 2013
EGP
380,348,755
-
110,016,166
490,364,921

Dec. 31, 2012
EGP
380,348,755
2,037,107,372
1,001,979
117,805,566
153,506,781
103,716,932
2,793,487,385

Dec. 31, 2012
EGP
281,689,619
(177,972,687)
103,716,932

Dec. 31, 2012
EGP
231,344,896
61,697,292
87,306,567
380,348,755

Dec. 31, 2013
153,506,781
(873,974,860)
(720,468,079)

Dec. 31, 2012
(723,070,818)
876,577,599
153,506,781

Dec. 31, 2013
1,001,979
(1,001,979)
-
-

Dec. 31, 2012
15,105,920
(15,105,920)
1,001,979
1,001,979

Dec. 31, 2013
EGP
4,796,240,354
8,893,670,965
23,654,812,174
(3,224,658,841)
(5,148,331,397)
(17,212,737,025)
11,758,996,230

Dec. 31, 2012
EGP
5,393,974,124
7,957,710,034
7,978,030,413
(3,093,283,199)
(4,637,273,016)
(8,063,078,261)
5,536,080,095

annual report 2013 137

Financial StatementS: Separate

37. Contingent liabilities and commitments

37.1. legal claims
There are a number of existing cases filed against the bank on December.31,2013 without provision as it's not expected to
make any losses from it.

37.2. capital commitments
37.2.1. Financial investments
The capital commitments for the financial investments reached on the date of financial position EGP 42,693,921 as follows:
Investments value
EGP
101,813,351

Available for sale financial investments
37.2.2. Fixed assets and branches constructions
TThe value of commitments for the purchase of fixed assets contracts and branches constructions that have not been
implemented till the date of financial statement amounted to EGP 49,361,799.

Remaining
EGP
42,693,921

Paid
EGP
59,119,430

37.3. letters of credit, guarantees and other commitments

Letters of guarantee
Letters of credit (import and export)
Customers acceptances
Total

38. Mutual funds
osoul fund

Dec. 31, 2013
EGP
14,959,372,507
750,766,099
472,350,554
16,182,489,160

Dec. 31, 2012
EGP
12,787,562,199
933,297,936
1,176,928,870
14,897,789,005

• The Bank established an accumulated return mutual fund under license no.331 issued from capital market authority on

February 22, 2005 CI Assets Management Co.- Egyptian joint stock co-manages the fund.
• The number of certificates issued reached 23,984,353 with redeemed value EGP 5,151,359,337.
• The market value per certificate reached EGP 214.78 on December 31, 2013.
• The Bank portion got 601,064 certificates with redeemed value EGP 129,096,526.

istethmar fund

thabat fund

• CIB bank established an accumulated return mutual fund under license no.613 issued from financial supervisory author-

ity on September 13, 2011. CI Assets Management Co.- Egyptian joint stock co - manages the fund.

• The number of certificates issued reached 692,432 with redeemed value EGP 91,255,613.
• The market value per certificate reached EGP 131.79 on December 31, 2013.
• The Bank portion got 52,404 certificates with redeemed value EGP 6,906,323..

39. Transactions with related parties
All banking transactions with related parties are conducted in accordance with the normal banking practices and regulations
applied to all other customers without any discrimination.

39.1. loans, advances, deposits and contingent liabilities

Loans and advances
Deposits
Contingent liabilities

EGP
798,500,693
255,620,430
74,610,853

39.2. other transactions with related parties

International Co. for Security & Services
Corplease Co.
Commercial International Life Insurance Co.
Commercial International Brokerage Co.
Dynamics Company
Egypt Factors
CI Assets Management
Commercial International Capital Holding Co.

Income
EGP
1,120,494
63,349,222
2,450,265
9,365,639
1,303,059
8,378,800
119,362
3,176,971

Expenses
EGP
39,767,569
48,194,625
1,170,156
4,845,660
824,049
6,436,956
11,266
1,998,015

40. Tax status

• The Bank's corporate income tax position has been examined and settled with the tax authority from the start up of opera-

• CIB bank established the second accumulated return mutual fund under license no.344 issued from capital market au-

tions up to the end of year 1984.

thority on February 26, 2006. CI Assets Management Co.- Egyptian joint stock co-manages the fund.

• The number of certificates issued reached 2,192,761 with redeemed value EGP 160,619,743.
• The market value per certificate reached EGP 73.25 on December 31, 2013.
• The Bank portion got 194,744 certificates with redeemed value EGP 14,264,998.

• Corporate income tax for the years from 1985 up to 2000 were paid according to the tax appeal committee decision and

the disputes are under discussion in the court of law.

• The Bank's corporate income tax position has been examined and settled with the tax authority from Year 2001 up to Year

2006.

• The Bank pays salary tax according to concerning domestic regulations and laws, and the disputes are under discussion

aman fund ( ciB and Faisal islamic Bank mutual Fund)

in the court of ow

• The Bank and Faisal Islamic Bank established an accumulated return mutual fund under license no.365 issued from capi-

• The Bank stamp duty tax calculated according to concerning domestic regulations and laws,and settlement done in time

tal market authority on July 30, 2006. CI Assets Management Co.- Egyptian joint stock co-manages the fund.

according to the law, and the disputes are under discussion in the court of law .

• The number of certificates issued reached 677,076 with redeemed value EGP 32,797,561.
• The market value per certificate reached EGP 48.44 on December 31, 2013.
• The Bank portion got 71,943 certificates with redeemed value EGP 3,484,919.

Hemaya fund

• CIB bank established an accumulated return mutual fund under license no.585 issued from financial supervisory Author-

ity on June 23, 2010. CI Assets Management Co.- Egyptian joint stock co - manages the fund.

• The number of certificates issued reached 174,507 with redeemed value EGP 22,715,576.
• The market value per certificate reached EGP 130.17 on December 31, 2013.
• The Bank portion got 50,000 certificates with redeemed value EGP 6,508,500.

41. Main currencies positions

Egyptian pound
US dollar
Sterling pound
Japanese yen
Swiss franc
Euro

Dec. 31, 2013
In thousand EGP
(34,719)
6,897
21,249
242
(297)
2,247

Dec. 31, 2012
In thousand EGP
12,800
(10,376)
1,670
(67)
179
8,598

138

annual report 2013

annual report 2013 139

Financial StatementS: conSolidated

140

annual RepoRt 2013

annual RepoRt 2013 141

Financial StatementS: conSolidated

commercial international Bank (egypt) S.a.e
Consolidated balance sheet on December 31, 2013

commercial international Bank (egypt) S.a.e
Consolidated income statement for the year ended
on December 31, 2013

Assets
Cash and balances with Central Bank
Due from banks
Treasury bills and other governmental notes
Trading financial assets
Loans and advances to banks
Loans and advances to customers
Derivative financial instruments
Financial investments
- Available for sale
- Held to maturity
Investments in associates
Brokerage clients - debit balances
Reconciliation accounts- debit balances
Investment property
Other assets
Intangible Assets
Deferred tax
Property, plant and equipment
Total assets
Liabilities and equity
Liabilities
Due to banks
Due to customers
Brokerage clients - credit balances
Reconciliation accounts - credit balances
Derivative financial instruments
Other liabilities
Long term loans
Other provisions
Total liabilities
Equity
Issued and paid in capital
Reserves
Reserve for employee stock ownership plan (ESOP)
Retained earnings (losses)
Total equity
Net profit for the year after tax
Total equity and net profit for year
Minority interest
Total minority interest, equity and net profit for year
Total liabilities, equity and minority interest

Contingent liabilities and commitments
Letters of credit, guarantees and other commitments

The accompanying notes are an integral part of these financial statements.

Notes

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

15
16
17
18
19
20
21

22
22
23

24
25
40
33
26

27
28

21
30
29
31

32
32

4,804,974,237
9,003,950,890
23,665,428,816
2,286,484,581
132,422,732
41,733,251,712
103,085,538

23,378,104,482
4,197,176,655
192,752,878
270,811,253
28,778,971
9,695,686
2,892,342,882
-
83,557,219
969,176,894
113,751,995,426

1,373,410,040
96,845,683,408
167,378,879
-
114,878,583
2,656,665,468
132,153,227
454,699,000
101,744,868,605

9,002,435,690
307,060,175
190,260,457
(546,531,497)
8,953,224,825
3,006,487,540
11,959,712,365
47,414,456
12,007,126,821
113,751,995,426

5,393,974,124
8,047,820,388
8,017,754,432
1,515,325,502
1,178,867,739
40,698,313,773
137,459,761

21,177,427,597
4,215,787,960
165,198,634
134,944,510
-
10,395,686
2,474,945,065
33,422,415
71,450,183
683,455,846
93,956,543,615

1,714,862,716
78,729,121,488
124,759,011
1,664,718
119,099,260
2,059,005,013
80,495,238
315,488,382
83,144,495,826

5,972,275,410
2,970,163,921
164,761,121
(568,853,097)
8,538,347,355
2,226,180,503
10,764,527,858
47,519,931
10,812,047,789
93,956,543,615

16,182,439,160

14,897,739,005

Hisham Ezz El-Arab
Chairman and Managing Director

Interest and similar income
Interest and similar expense
Net interest income

Fee and commission income
Fee and commission expense
Net fee and commission income

Dividend income
Net trading income
Profit (Losses) from financial investments
Goodwill Amortization
Administrative expenses
Other operating (expenses) income
Impairment (charge) release for credit losses
Intangible Assets Amortization
Bank's share in the profits of associates
Profit before income tax

Income tax expense
Deferred tax
Net profit for the year

Minority interest
Bank shareholders

Earning per share
Basic
Diluted

Notes

8
9
22

10
11
12

13
33 & 13

Dec. 31, 2013
EGP
9,520,697,141
(4,466,949,161)
5,053,747,980

1,436,107,685
(128,827,179)
1,307,280,506

22,609,614
767,392,333
(28,672,126)
-
(1,850,944,036)
(162,330,554)
(915,581,874)
(33,422,415)
16,402,285
4,176,481,713

(1,182,253,358)
12,148,228
3,006,376,583

Dec. 31, 2012
EGP
7,859,311,839
(3,945,685,636)
3,913,626,203

1,033,628,014
(107,365,742)
926,262,272

33,110,823
574,575,176
(26,909,306)
(10,426,511)
(1,559,401,781)
(103,307,092)
(609,971,077)
(82,990,084)
26,348,545
3,080,917,168

(887,265,476)
33,338,781
2,226,990,473

(110,957)
3,006,487,540

809,970
2,226,180,503

2.67
2.63

2.34
2.31

Hisham Ezz El-Arab
Chairman and Managing Director

142

annual RepoRt 2013

annual RepoRt 2013 143

Financial StatementS: conSolidated

commercial international Bank (egypt) S.a.e
Consolidated cash flow for the year ended on
December 31, 2013 (Cont.)

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

4,804,974,237
9,003,950,890
23,665,428,816
(3,224,658,841)
(5,148,331,396)
(17,212,737,030)
11,888,626,676

5,393,974,124
8,047,820,388
8,017,754,432
(3,093,283,199)
(4,637,273,016)
(8,063,078,264)
5,665,914,465

commercial international Bank (egypt) S.a.e
Consolidated cash flow for the year ended
on December 31, 2013

Cash flow from operating activities
Profit before income tax
Adjustments to reconcile net profit to net cash provided

by operating activities

Depreciation
Impairment charge for credit losses
Other provisions charges
Trading financial investments revaluation differences
Intangible assets amortization
Goodwill amortization
Available for sale and held to maturity investments exchange

revaluation differences

Financial investments impairment charge (release)
Utilization of other provisions
Other provisions no longer used
Exchange differences of other provisions
Profits from selling property, plant and equipment
Profits from selling financial investments
Shares based payments
Investments in associates revaluation
Real estate investments impairment charges
Operating profits before changes in operating assets and liabilities

Cash flow from financing activities
Increase (decrease) in long term loans
Dividend paid
Capital increase
Net cash generated from (used in) financing activities

Net increase (decrease) in cash and cash equivalent during the year
Beginning balance of cash and cash equivalent
Cash and cash equivalent at the end of the year

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

4,176,481,713

3,080,917,168

206,979,088
915,581,874
132,957,495
11,861,371
33,422,415
-

(124,230,792)

(6,136,494)
(10,383,612)
(141,521)
16,778,256
(740,692)
(4,362,940)
89,181,563
(20,026,945)
-
5,417,220,779

(642,434,022)
(9,149,658,764)
(783,020,450)
30,153,546
(904,074,806)
(544,594,696)
(341,452,676)
18,116,561,920
(543,778,286)
10,654,922,545

(7,527,299)
(529,367,091)
18,611,305
-
(7,463,491,687)
4,523,701,229
700,000
(3,457,373,543)

51,657,989
(1,055,843,162)
29,348,380
(974,836,793)

6,222,712,209
5,665,914,467
11,888,626,676

168,382,905
609,971,077
51,872,777
(86,525,026)
82,990,084
10,426,511

(60,242,239)

8,033,536
(13,886,192)
(531,054)
7,230,941
(2,387,583)
(519,013)
79,068,829
-
(371,000)
3,934,431,721

521,695,379
758,289,224
(753,475,026)
13,896,165
(1,421,772,116)
(1,015,446,313)
(1,625,931,801)
7,261,186,229
(156,424,620)
7,516,448,842

(58,522,467)
(211,873,420)
-
(4,176,628,441)
(10,169,757,165)
5,343,312,219
2,750,000
(9,270,719,274)

(18,838,138)
(806,206,518)
37,712,420
(787,332,236)

(2,541,602,668)
8,207,517,133
5,665,914,465

144

annual RepoRt 2013

annual RepoRt 2013 145

Financial StatementS: conSolidated

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146

annual RepoRt 2013

annual RepoRt 2013 147

Financial StatementS: conSolidated

Commercial international Bank (Egypt) S.A.E. was formed as a commercial bank under the investment law no. 43 of 1974. The
address of its registered head office is as follows: Nile tower, 21/23 Charles de Gaulle Street-Giza. The Bank is listed in the Egyp-
tian stock exchange.

CI Capital Holding Co S.A.E it was established as a joint stock company on April 9th, 2005 under the capital market law no. 95
of 1992 and its executive regulations. Financial register no. 166798 on April 10th, 2005 and the company have been licensed by
the Capital Market Authority to carry out its activities under license no. 353 on May 24th, 2006.

As of December 31, 2013 the Bank directly owns 54,988,500 shares representing 99.98% of CI Capital Holding Company’s capital
and on December 31, 2013 CI Capital Holding Co. Directly owns the following shares in its subsidiaries:

Company name
CIBC Co.
CI Assets Management
CI Investment Banking Co.
Dynamic Brokerage Co.

No. of shares
579,570
478,577
2,481,578
3,393,500

Ownership%
96.60
95.72
99.26
99.97

Indirect Share%
96.58
95.70
99.24
99.95

2.1. Basis of preparation
The consolidated financial statements have been prepared in accordance with Egyptian financial reporting standards issued
in 2006 and its amendments and in accordance with the instructions of the Central Bank of Egypt approved by the Board of
Directors on December 16, 2008 consistent with the principles referred to.

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revalu-
ation of trading, financial assets and liabilities held at fair value through profit or loss, available for sale and all derivatives
contracts.

2.1.1. Basis of consolidation
The method of full consolidation is the basis of the preparation of the consolidated financial statement of the Bank, given
that the Bank’s acquisition proportion is 99.98 % (full control) in CI Capital Holding.

Consolidated financial statements consist of the financial statements of Commercial International Bank and consoli-
dated financial statements of CI Capital Holding and its subsidiaries. Control is achieved through the Bank’s ability to
control the financial and operational policies of the companies that the Bank invests in it in order to obtain benefits from
its activities. The basis of the consolidation is as follows:

• Eliminating all balances and transactions between the Bank and group companies.
• The cost of acquisition of subsidiary companies is based on the company's share in the fair value of assets acquired and

obligations outstanding on the acquisition date.

• Minority shareholders represent the rights of others in subsidiary companies.
• Proportional consolidation is used in consolidating method for companies under joint control.

2.2. Subsidiaries and associates
2.2.1. Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Bank has owned directly or indirectly the
control to govern the financial and operating policies generally accompanying a shareholding of more than one half of the
voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are consid-
ered when assessing whether the Bank has the ability to control the entity or not.

2.2.2. Associates
Associates are all entities over which the Bank has significant influence but do not reach to the extent of control, gen-
erally accompanying a shareholding between 20% and 50% of the voting rights.

The acquisition method of accounting is used to account for the purchase of subsidiaries. The cost of an acquisition is
measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed, plus any
costs directly related to the acquisition. The excess of the cost of an acquisition over the Bank share of the fair value of
the identifiable net assets acquired is recorded as goodwill. A gain on acquisition is recognized in profit or loss if there
is an excess of the Bank’s share of the fair value of the identifiable net assets acquired over the cost of the acquisition.

The cost method is applied to account for investments in subsidiaries and associates, whereby, investments are re-
corded based on the acquisition cost including any goodwill, deducting any impairment losses, and dividends are
recorded in the income statement in the adoption of the distribution of these profits and evidence of the Bank right
to collect them.

2.4. Foreign currency translation
2.4.1. Functional and presentation currency
The financial statements are presented in Egyptian pound, which is the Bank’s functional and presentation currency.

• Net trading income from held-for-trading assets and liabilities.
• Other operating revenues (expenses) from the remaining assets and liabilities.

Valuation differences resulting from changes in the amortized cost are recognized and reported in the income statement
in ‘income from loans and similar revenues’ whereas differences resulting from changes in foreign exchange rates are
recognized and reported in ‘other operating revenues (expenses)’. The remaining differences resulting from changes in fair
value are deferred in equity and accumulated in the ‘revaluation reserve of available-for-sale investments’.

148

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Financial StatementS: conSolidated

Management determines the classification of its investments at initial recognition.

2.5.1. Financial assets at fair value through profit or loss
This category has two sub-categories:
• Financial assets held for trading.
• Financial assets designated at fair value through profit and loss at inception.

A financial asset is classified as held for trading if it is acquired or incurred principally for the purpose of selling or re-
purchasing in the short term or if it is part of a portfolio of identified financial instruments that are managed together
and for which there is evidence of a recent actual pattern of short term profit making. Derivatives are also categorized
as held for trading unless they are designated as hedging instruments.

Financial instruments, other than those held for trading, are classified as financial assets designated at fair value
through profit and loss if they meet one or more of the criteria set out below:

• When the designation eliminates or significantly reduces measurement and recognition inconsistencies that would
arise from measuring financial assets or financial liabilities, on different bases. under this criterion, an accounting
mismatch would arise if the debt securities issued were accounted for at amortized cost, because the related deriva-
tives are measured at fair value with changes in the fair value recognized in the income statement. The main classes
of financial instruments designated by the Bank are loans and advances and long-term debt issues.

• Applies to groups of financial assets, financial liabilities or combinations thereof that are managed, and their perfor-
mance evaluated, on a fair value basis in accordance with a documented risk management or investment strategy,
and where information about the groups of financial instruments is reported to management on that basis.

• Relates to financial instruments containing one or more embedded derivatives that significantly modify the cash

flows resulting from those financial instruments, including certain debt issues and debt securities held.

Any financial derivative initially recognized at fair value can't be reclassified during the holding period. Re-classification
is not allowed for any financial instrument initially recognized at fair value through profit and loss.

2.5.2. Loans and advances
Loans and advances are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market, other than:

• Those that the Bank intends to sell immediately or in the short term, which is classified as held for trading, or those that the

Bank upon initial recognition designates as at fair value through profit or loss.
• Those that the Bank upon initial recognition designates as available for sale; or
• Those for which the holder may not recover substantially all of its initial investment, other than credit deterioration.

The following are applied in respect to all financial assets:

Financial assets are initially recognized at fair value plus transaction costs for all financial assets not carried at fair
value through profit and loss. Financial assets carried at fair value through profit and loss are initially recognized at fair
value, and transaction costs are expensed in the income statement.

Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or when
the Bank transfers substantially all risks and rewards of the ownership. Financial liabilities are derecognized when they
are extinguished, that is, when the obligation is discharged, cancelled or expired.

Available-for-sale, held–for-trading and financial assets designated at fair value through profit and loss are subsequent-
ly measured at fair value. Loans and receivables and held-to-maturity investments are subsequently measured at am-
ortized cost.

Gains and losses arising from changes in the fair value of the ‘financial assets designated at fair value through profit or
loss’ are recognized in the income statement in ‘net income from financial instruments designated at fair value’. Gains
and losses arising from changes in the fair value of available for sale investments are recognized directly in equity, until
the financial assets are either sold or become impaired. When available-for-sale financial assets are sold, the cumula-
tive gain or loss previously recognized in equity is recognized in profit or loss.

Interest income is recognized on available for sale debt securities using the effective interest method, calculated over
the asset’s expected life. Premiums and discounts arising on the purchase are included in the calculation of effective in-
terest rates. Dividends are recognized in the income statement when the right to receive payment has been established.

The fair values of quoted investments in active markets are based on current bid prices. If there is no active market for
a financial asset, or no current demand prices available the Bank measures fair value using valuation models. These in-
clude the use of recent arm’s length transactions, discounted cash flow analysis, option pricing models and other valu-
ation models commonly used by market participants. If the Bank has not been able to estimate the fair value of equity
instruments classified available for sale, value is measured at cost less any impairment in value.

Available for sale investments that would have met the definition of loans and receivables at initial recognition may be
reclassified out to loans and advances or financial assets held to maturity. In all cases, when the Bank has the intent and
ability to hold these financial assets in the foreseeable future or till maturity. The financial asset is reclassified at its fair
value on the date of reclassification, and any profits or losses that has been recognized previously in equity, is treated
based on the following:

• In the case of financial asset which has infinite life, any previously recognized profit or loss in equity will remain until the
sale of the asset or its disposal, in the case of impairment of the value of the financial asset after the re-classification, any
gain or loss previously recognized in equity is recycled to the profits and losses.

2.7. derivative financial instruments and hedge accounting
Derivatives are recognized initially, and subsequently, at fair value. Fair values of exchange traded derivatives are ob-
tained from quoted market prices. Fair values of over-the-counter derivatives are obtained using valuation techniques,
including discounted cash flow models and option pricing models. Derivatives are classified as assets when their fair value
is positive and as liabilities when their fair value is negative.

150

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Financial StatementS: conSolidated

Embedded derivatives in other financial instruments, such as conversion option in a convertible bond, are treated as
separate derivatives when their economic characteristics and risks are not closely related to those of the host contract,
provided that the host contract is not classified as at fair value through profit and loss. These embedded derivatives are
measured at fair value with changes in fair value recognized in income statement unless the Bank chooses to designate
the hybrid contact as at fair value through net trading income in profit or loss.

The timing of recognition in profit and loss, of any gains or losses arising from changes in the fair value of derivatives,
depends on whether the derivative is designated as a hedging instrument, and the nature of the item being hedged. The
Bank designates certain derivatives as:

• Hedging instruments of the risks associated with fair value changes of recognized assets or liabilities or firm commit-

ments (fair value hedge).

• Hedging of risks relating to future cash flows attributable to a recognized asset or liability or a highly probable forecast

transaction (cash flow hedge)

• Hedge accounting is used for derivatives designated in a hedging relationship when the following criteria are met.

2.7.1. Fair value hedge
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recognized in profit or
loss immediately together with any changes in the fair value of the hedged asset or liability that are attributable to the
hedged risk. The effective portion of changes in the fair value of the interest rate swaps and the changes in the fair value of
the hedged item attributable to the hedged risk are recognized in the ‘net interest income’ line item of the income state-
ment. Any ineffectiveness is recognized in profit or loss in ‘net trading income’.

When the hedging instrument is no longer qualified for hedge accounting, the adjustment to the carrying amount of a
hedged item, measured at amortized cost, arising from the hedged risk is amortized to profit or loss from that date using
the effective interest method.

interest income and expense

The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability and of
allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appro-
priate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective
interest rate, the Bank estimates cash flows considering all contractual terms of the financial instrument (for example,
prepayment options) but does not consider future credit losses. The calculation includes all fees and points paid or received
between parties to the contract that represents an integral part of the effective interest rate, transaction costs and all other
premiums or discounts.

Once loans or debts are classified as nonperforming or impaired, the revenue of interest income will not be recognized and will
be recorded off balance sheet, and are recognized as income subsequently based on a cash basis according to the following:

• When all arrears are collected for consumer loans, personnel mortgages and micro-finance loans.
• •When calculated interest for corporate are capitalized according to the rescheduling agreement conditions until paying
25% from rescheduled payments for a minimum performing period of one year, if the customer continues to perform, the
calculated interest will be recognized in interest income (interest on the performing rescheduling agreement balance)

without the marginalized before the rescheduling agreement which will be recognized in interest income after the settle-
ment of the outstanding loan balance.

Commission and fee arising from negotiating, or participating in the negotiation of a transaction for a third party such as
the arrangement of the acquisition of shares or other securities or the purchase or sale of properties are recognized upon
completion of the underlying transaction in the income statement .

Operating revenues in the holding company are:

• Commission income is resulting from purchasing and selling securities to a customer account upon receiving the transac-

tion confirmation from the Stock Exchange.

• Mutual funds and investment portfolios management which is calculated as a percentage of the net value of assets under
management according to the terms and conditions of agreement. These amounts are credited to the assets management
company’s revenue pool on a monthly accrual basis.

2.10. dividend income
Dividends are recognized in the income statement when the right to collect is established.

2.11. Sale and repurchase agreements
Securities may be lent or sold subject to a commitment to repurchase (Repos) are reclassified in the financial statements
and deducted from treasury bills balance. Securities borrowed or purchased subject to a commitment to resell them (Re-
verse Repos) are reclassified in the financial statements and added to treasury bills balance. The difference between sale
and repurchase price is treated as interest and accrued over the life of the agreements using the effective interest method..

2.12. impairment of financial assets
2.12.1. Financial assets carried at amortised cost
The Bank assesses at each balance sheet date whether there is objective evidence that a financial asset or group of finan-
cial assets is impaired. A financial asset or a group of financial assets is impaired only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event/s’) and
that loss event/s has an impact on the estimated future cash flows of the financial asset or group of financial assets that
can be reliably estimated.

The criteria that the Bank uses to determine that there is objective evidence of an impairment loss include:

• Cash flow difficulties experienced by the borrower (for example, equity ratio, net income percentage of sales)
• Violation of the conditions of the loan agreement such as non-payment.
• Initiation of Bankruptcy proceedings.
• Deterioration of the borrower’s competitive position.

152

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Financial StatementS: conSolidated

• The Bank for reasons of economic or legal financial difficulties of the borrower by granting concessions may not agree with

the Bank granted in normal circumstances.

• Deterioration in the value of collateral or deterioration of the creditworthiness of the borrower.

The Bank estimates the period between a losses occurring and its identification for each specific portfolio. In general, the
periods used vary between three months to twelve months.

The Bank first assesses whether objective evidence of impairment exists individually for financial assets that are individu-
ally significant, and individually or collectively for financial assets that are not individually significant and in this field the
following are considered:

• If the Bank determines that an objective evidence of financial asset impairment exist that are individually assessed for
impairment and for which an impairment loss is or continues to be recognized are not included in a collective assessment
of impairment.

For the purposes of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk
characteristics (i.e., on the basis of the group’s grading process that considers asset type, industry, geographical location,
collateral type, past-due status and other relevant factors). Those characteristics are relevant to the estimation of future
cash flows for groups of such assets by Being indicative of the debtors’ ability to pay all amounts due according to the
contractual terms of the assets being evaluated.

Estimates of changes in future cash flows for groups of assets should reflect and be directionally consistent with changes
in related observable data from period to period (for example, changes in unemployment rates, property prices, payment
status, or other indicative factors of changes in the probability of losses in the Bank and their magnitude. The methodol-
ogy and assumptions used for estimating future cash flows are reviewed regularly by the Bank.

2.12.2. Available for sale investments
The Bank assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of
financial assets classify under available for sale is impaired. In the case of equity investments classified as available
for sale, a significant or prolonged decline in the fair value of the security below its cost is considered in determining

whether the assets are impaired. During periods start from first of January 2009, the decrease consider significant when
it became 10% from the book value of the financial instrument and the decrease consider to be extended if it continues
for period more than 9 months, and if the mentioned evidences become available then any cumulative gains or losses
previously recognized in equity are recognized in the income statement , in respect of available for sale equity securi-
ties, impairment losses previously recognized in profit or loss are not reversed through the income statement.

2.13. Real estate investments
The real estate investments represent lands and buildings owned by the Bank in order to obtain rental returns or capital
gains and therefore do not include real estate assets which the Bank exercised its work through or those that have owned
by the Bank as settlement of debts. The accounting treatment is the same used with property, plant and equipment.

2.14. property, plant and equipment
Land and buildings comprise mainly branches and offices. All property, plant and equipment are stated at historical cost less
depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the
items.

Subsequent costs are included in the asset’s carrying amount or as a separate asset, as appropriate, only when it is probable that
future economic benefits will flow to the Bank and the cost of the item can be measured reliably. All other repairs and mainte-
nance are charged to other operating expenses during the financial period in which they are incurred.

Land is not depreciated. Depreciation of other assets is calculated using the straight-line method to allocate their residual val-
ues over estimated useful lives, as follows:

Buildings
Leasehold improvements
Furniture and safes
Typewriters, calculators and air-conditions
Transportations
Computers and core systems
Fixtures and fittings

20 years.
3 years, or over the period of the lease if less
5 years.
8 years
5 years
3/10 years
3 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Deprecia-
ble assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recovered. An asset’s carrying amount is written down immediately to its recoverable value if the asset’s car-
rying amount exceeds its estimated recoverable amount. The recoverable amount is the higher of the asset’s fair value less
costs to sell and value in use.

Gains and losses on disposals are determined by comparing the selling proceeds with the asset carrying amount and
charged to other operating expenses in the income statement.

The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Assets are tested for impair-
ment with reference to the lowest level of cash generating unit/s. A previously recognized impairment loss relating to a
fixed asset may be reversed in part or in full when a change in circumstances leads to a change in the estimates used to
determine the fixed asset’s recoverable amount. The carrying amount of the fixed asset will only be increased up to the
amount that it would have been had the original impairment not been recognized.

154

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Financial StatementS: conSolidated

2.15.1. Goodwill
Goodwill is capitalized and represents the excess of acquisition cost over the fair value of the Bank’s share in the ac-
quired entity’s net identifiable assets on the date of acquisition. For the purpose of calculating goodwill, the fair values
of acquired assets, liabilities and contingent liabilities are determined by reference to market values or by discounting
expected future cash flows. Goodwill is included in the cost of investments in associates and subsidiaries in the Bank’s
separate financial statements. Goodwill is tested for impairment, impairment loss is charged to the income statement.

Goodwill is allocated to the cash generating units for the purpose of impairment testing. The cash generating units rep-
resented in the Bank main segments.

2.15.2. Other intangible assets
Is the intangible assets other than goodwill and computer programs (trademarks, licenses, contracts for benefits, the
benefits of contracting with clients).

Other intangible assets that are acquired by the Bank are recognized at cost less accumulated amortization and impair-
ment losses. Amortization is charged to the income statement on a straight-line basis over the estimated useful lives of
the intangible asset with definite life. Intangible assets with indefinite life are not amortized and tested for impairment.

In case of similar obligations, the related cash outflow should be determined in order to settle these obligations as a
group. The provision is recognized even in case of minor probability that cash outflow will occur for an item of these
obligations.

When a provision is wholly or partially no longer required, it is reversed through profit or loss under other operating
income (expenses).

Provisions for obligations, other than those for credit risk or employee benefits, due within more than 12 months from
the balance sheet date are recognized based on the present value of the best estimate of the consideration required
to settle the present obligation at the balance sheet date. An appropriate pretax discount rate that reflects the time
value of money is used to calculate the present value of such provisions. For obligations due within less than twelve
months from the balance sheet date, provisions are calculated based on undiscounted expected cash outflows unless
the time value of money has a significant impact on the amount of provision, then it is measured at the present value.

2.19. Share based payments
The Bank applies an equity-settled, share-based compensation plan. The fair value of equity instruments recognized as
an expense over the vesting period using appropriate valuation models, taking into account the terms and conditions
upon which the equity instruments were granted. The vesting period is the period during which all the specified vesting
conditions of a share-based payment arrangement are to be satisfied. Vesting conditions include service conditions and
performance conditions and market performance conditions are taken into account when estimating the fair value of
equity instruments at the date of grant. At each balance sheet date the number of options that are expected to be exer-
cised are estimated. Recognizes estimate changes, if any, in the income statement, and a corresponding adjustment to
equity over the remaining vesting period.

Operating lease payments leases are accounted for on a straight-line basis over the periods of the leases and are included
in ‘general and administrative expenses’.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value)
and share premium when the options are exercised.

2.16.2. Being lessor
For finance lease, assets are recorded in the property, plant and equipment in the balance sheet and amortized over the
expected useful life of this asset in the same manner as similar assets. Lease income is recognized on the basis of rate
of return on the lease in addition to an amount corresponding to the cost of depreciation for the period. The difference
between the recognized rental income and the total finance lease clients' accounts is transferred to the in the income
statement until the expiration of the lease to be reconciled with a net book value of the leased asset. Maintenance and
insurance expenses are charged to the income statement when incurred to the extent that they are not charged to the
tenant.

In case there is objective evidence that the Bank will not be able to collect the of financial lease obligations, the finance
lease payments are reduced to the recoverable amount.

For assets leased under operating lease it appears in the balance sheet under property, plant and equipment, and de-
preciated over the expected useful life of the asset in the same way as similar assets, and the lease income recorded less
any discounts given to the lessee on a straight-line method over the contract period.

2.17. cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise balances with less than three months’
maturity from the date of acquisition, including cash and non-restricted balances with Central Bank, treasury bills and
other eligible bills, loans and advances to banks, amounts due from other banks and short-term government securities.

2.20. income tax
Income tax on the profit or loss for the period and deferred tax are recognized in the income statement except for income
tax relating to items of equity that are recognized directly in equity.

Income tax is recognized based on net taxable profit using the tax rates applicable at the date of the balance sheet in ad-
dition to tax adjustments for previous years.

156

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annual RepoRt 2013 157

Financial StatementS: conSolidated

2.22. dividends
Dividends on ordinary shares and profit sharing are recognized as a charge of equity upon the general assembly approval.
Profit sharing includes the employees’ profit share and the Board of Directors’ remuneration as prescribed by the Bank’s
articles of incorporation and the corporate law.

2.23. comparatives
Comparative figures have been adjusted to conform to changes in presentation in the current period where necessary.

The Bank’s risk management policies are designed to identify and analyze these risks, to set appropriate risk limits and con-
trols, and to monitor the risks and adherence to limits by means of reliable and up-to-date information systems. The Bank
regularly reviews its risk management policies and systems to reflect changes in markets, products and emerging best practice.
Risk management is carried out by risk department under policies approved by the Board of Directors. Bank treasury identifies,
evaluates and hedges financial risks in close co-operation with the Bank’s operating units.

The board provides written principles for overall risk management, as well as written policies covering specific areas, such as
foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial in-
struments. In addition, credit risk management is responsible for the independent review of risk management and the control
environment.

3.1. credit risk
The Bank takes on exposure to credit risk, which is the risk that counterparty will cause a financial loss for the Bank
by failing to discharge an obligation. Management therefore carefully manages its exposure to credit risk. Credit ex-
posures arise principally in loans and advances, debt securities and other bills. There is also credit risk in off-balance
sheet financial arrangements such as loan commitments. The credit risk management and control are centralized in a
credit risk management team in Bank treasury and reported to the Board of Directors and head of each business unit
regularly.

• The ‘probability of default’ by the client or counterparty on its contractual obligations
• Current exposures to the counterparty and its likely future development, from which the Bank derive the ‘exposure at

default.

• The likely recovery ratio on the defaulted obligations (the ‘loss given default’).

These credit risk measurements, which reflect expected loss (the ‘expected loss model’) are required by the Basel commit-
tee on banking regulations and the supervisory practices (the Basel committee), and are embedded in the Bank’s daily
operational management. The operational measurements can be contrasted with impairment allowances required under
EAS 26, which are based on losses that have been incurred at the balance sheet date (the ‘incurred loss model’) rather than
expected losses (note 3.1).

scale, which is shown below, reflects the range of default probabilities defined for each rating class. This means that, in
principle, exposures migrate between classes as the assessment of their probability of default changes. The rating tools
are kept under review and upgraded as necessary. The Bank regularly validates the performance of the rating and their
predictive power with regard to default events.

Bank’s rating
1
2
3
4

description of the grade
performing loans
regular watching
watch list
non-performing loans

3.1.2.1. Collateral
The Bank employs a range of policies and practices to mitigate credit risk. The most traditional of these is the taking of
security for funds advances, which is common practice. The Bank implements guidelines on the acceptability of specific
classes of collateral or credit risk mitigation. The principal collateral types for loans and advances are:

• Mortgages over residential properties.
• Mortgage business assets such as premises, and inventory.
• Mortgage financial instruments such as debt securities and equities.

158

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annual RepoRt 2013 159

Financial StatementS: conSolidated

3.1.3. Impairment and provisioning policies
The internal rating system described in Note 3.1.1 focus on the credit-quality mapping from the lending and invest-
ment activities perspective. Conversely, for only financial reporting purposes impairment losses are recognized for
that has been incurred at the balance sheet date when there is an objective evidence of impairment. Due to the dif-
ferent methodologies applied, the amount of incurred impairment losses in balance sheet are usually lower than the
amount determined from the expected loss model that is used for internal operational management and CBE regula-
tion purposes.

The impairment provision reported in balance sheet at the end of the period is derived from each of the four internal
credit risk ratings. However, the majority of the impairment provision is usually driven by the last two rating degrees.
The following table illustrates the proportional distribution of loans and advances reported in the balance sheet for
each of the four internal credit risk ratings of the Bank and their relevant impairment losses:

Bank’s rating

1-Performing loans
2-Regular watching
3-Watch list
4-Non-Performing Loans

Loans and
advances (%)
87.65
4.93
3.44
3.98

December 31, 2013
Impairment
provision (%)
31.49
5.32
19.93
43.26

Loans and
advances (%)
90.00
5.89
0.48
3.63

December 31, 2012
Impairment
provision (%)
40.85
8.56
2.01
48.58

The internal rating tools assists management to determine whether objective evidence of impairment exists under EAS
26, based on the following criteria set by the Bank:

difficulties facing the borrower
• Deterioration of the collateral value
• Deterioration of the credit situation

Below is a statement of institutional worthiness according to internal ratings compared with CBE ratings and rates of
provisions needed for assets impairment related to credit risk:

CBE Rating
1
2
3
4
5
6
7
8
9
10

Categorization
Low risk
Average risk
Satisfactory risk
Reasonable risk
Acceptable risk
Marginally acceptable risk
Watch list
Substandard
Doubtful
Bad debts

Provision%
0%
1%
1%
2%
2%
3%
5%
20%
50%
100%

Internal rating
1
1
1
1
1
2
3
4
4
4

Categorization
Performing loans
Performing loans
Performing loans
Performing loans
Performing loans
Regular watching
Watch list
Non performing loans
Non performing loans
Non performing loans

160

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annual RepoRt 2013 161

Financial StatementS: conSolidated

3.1.6. Loans and advances
Loans and advances are summarized as follows:

Neither past due nor impaired
Past due but not impaired
Individually impaired
Gross
Less:
Impairment provision
Unamortized bills discount
Unearned interest
Net

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

Loans and
advances to
customers
40,727,364,380
2,790,527,143
1,773,225,040
45,291,116,563

2,842,840,136
6,634,495
708,390,220
41,733,251,712

Loans and
advances to
banks
123,630,395
-
30,202,899
153,833,294

Loans and
advances to
customers
40,779,399,095
785,027,964
1,578,381,311
43,142,808,370

Loans and
advances to
banks
1,176,571,369
-
31,595,000
1,208,166,369

21,410,562
-
-
132,422,732

1,901,222,402
22,277,973
520,994,222
40,698,313,773

29,298,630
-
-
1,178,867,739

Impairment provision losses for loans and advances reached EGP 2,864,250,698.

During the period the Bank’s total loans and advances increased by 2.47% .

In order to minimize the propable exposure to credit risk, the Bank focuses more on the business with large enterprises,banks
or retail customers with good credit rating or sufficient collateral.

3.1.5. Maximum exposure to credit risk before collateral held

In balance sheet items exposed to credit risk

Treasury bills and other governmental notes
Trading financial assets:
- Debt instruments
Gross loans and advances to banks
Less:Impairment provision
Gross loans and advances to customers
Individual:
- Overdraft
- Credit cards
- Personal loans
- Mortgages
- Other loans
Corporate:
- Overdraft
- Direct loans
- Syndicated loans
- Other loans
Unamortized bills discount
Impairment provision
Unearned interest
Derivative financial instruments
Financial investments:
-Debt instruments
-Investments in associates
Total
Off balance sheet items exposed to credit risk
Financial guarantees
Customers acceptances
Letter of credit
Letter of guarantee
Total

Dec. 31, 2013
EGP
23,665,428,816

2,096,838,419
153,833,294
(21,410,562)

1,173,942,998
765,623,964
4,181,386,392
383,143,670
10,841,736

4,910,810,545
24,125,578,810
9,630,556,651
109,231,797
(6,634,495)
(2,842,840,136)
(708,390,220)
103,085,538

26,899,651,189
192,752,878
94,823,431,284

2,480,059,591
472,350,554
750,766,099
14,959,322,507
18,662,498,751

Dec. 31, 2012
EGP
11,193,466,093

1,181,100,426
1,208,166,369
(29,298,630)

1,220,222,219
660,932,044
3,616,553,758
463,833,879
20,045,324

4,288,571,348
23,196,204,054
9,588,649,990
87,795,754
(22,277,973)
(1,901,222,402)
(520,994,222)
137,459,761

24,859,146,103
165,198,634
79,413,552,530

2,276,369,133
1,176,928,870
933,297,936
12,787,512,199
17,174,108,138

The above table represents the Bank Maximum exposure to credit risk on December 31, 2013, before taking account of any
held collateral.

For assets recognized on balance sheet, the exposures set out above are based on net carrying amounts as reported in the
balance sheet.

As shown above 44.26% of the total maximum exposure is derived from loans and advances to banks and customers while
investments in debt instruments represents 30.58%.

• 92.60% of the loans and advances are concentrated in the top two grades of the internal credit risk rating system.
• 96.04% of loans and advances portfolio are considered to be neither past due nor impaired.
• Loans and advances assessed individualy are valued EGP 1,803,427,939.
• The Bank has implemented more prudent processes when granting loans and advances during the financial year ended

on December 31, 2013.

• 95.01% of the investments in debt Instruments are Egyptian sovereign instruments.

162

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annual RepoRt 2013 163

Financial StatementS: conSolidated

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annual RepoRt 2013

annual RepoRt 2013 165

Financial StatementS: conSolidated

Loans and advances to customer
Corporate
Direct loans
Total

Dec. 31, 2013

Dec. 31, 2012

2,950,132,000
2,950,132,000

2,924,873,000
2,924,873,000

3.1.7. Debt instruments, treasury bills and other governmental notes
The table below presents an analysis of debt instruments, treasury bills and other governmental notes by rating agency
designation at end of financial period, based on Standard & Poor’s ratings or their equivalent:

Dec. 31, 2013

AAA
AA- to AA+
A- to A+
Lower than A-
Unrated
Total

Treasury bills and
other gov. notes

Trading financial
debt instruments

-
-
-
-
23,665,428,816
23,665,428,816

-
-
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135,464,386
1,961,374,033
2,096,838,419

EGP

Total

Non-trading
financial debt
instruments
962,346,780
176,768,467
200,559,029
851,468,992

962,346,780
176,768,467
200,559,029
986,933,378
24,708,507,921 50,335,310,770
26,899,651,189 52,661,918,424

The Bank has allocated exposures to regions based on the country of domicile of its counterparties.

Dec. 31, 2013

Treasury bills and other governmental notes
Trading financial assets:
- Debt instruments
Gross loans and advances to banks
Less:Impairment provision
Gross loans and advances to customers
Individual:
- Overdrafts
- Credit cards
- Personal loans
- Mortgages
- Other loans
Corporate:
- Overdrafts
- Direct loans
- Syndicated loans
- Other loans
Unamortized bills discount
Impairment provision
Unearned interest
Derivative financial instruments
Financial investments:
-Debt instruments
-Investments in associates
Total

Cairo

23,665,428,816

Alex, Delta and
Sinai
-

2,096,838,419
153,833,294
(21,410,562)

788,301,456
577,101,742
2,809,768,674
317,339,513
9,563,433

4,037,234,996
18,759,464,871
8,869,001,700
105,176,241
(6,634,495)
(2,842,840,136)
(553,087,820)
103,085,538

-
-
-

260,325,730

158,976,345
1,097,553,129
56,881,818
1,278,303

634,425,280
4,753,247,203
761,554,951
4,055,556

-
-
(153,568,700)
-

Upper Egypt

Total

-
-
-

23,665,428,816

2,096,838,419
153,833,294
(21,410,562)

125,315,812
29,545,877
274,064,589
8,922,339

1,173,942,998
765,623,964
4,181,386,392
383,143,670
10,841,736

239,150,269
612,866,736

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-
-
-
(1,733,700)
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4,910,810,545
24,125,578,810
9,630,556,651
109,231,797
(6,634,495)
(2,842,840,136)
(708,390,220)
103,085,538

26,899,651,189
192,752,878
85,960,569,747

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7,574,729,615

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94,823,431,284

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166

annual RepoRt 2013

annual RepoRt 2013 167

Financial StatementS: conSolidated

3.2.1. Market risk measurement techniques
As part of the management of market risk, the Bank undertakes various hedging strategies. the Bank also enters into
interest rate swaps to match the interest rate risk associated with the fixed-rate long-term debt instrument and loans to
which the fair value option has been applied .

3.2.1.1. Value at Risk
The Bank applies a "Value at Risk" methodology (VaR) to its trading and non-trading portfolios, to estimate the market
risk of positions held and the maximum losses expected under normal market conditions, based upon a number of as-
sumptions for various changes in market conditions.

VaR is a statistically based estimate of the potential loss on the current portfolio from adverse market movements. It
expresses the ‘maximum’ amount the Bank might lose , but only to a certain level of confidence (95%). There is therefore a
specified statistical probability (5%) that actual loss could be greater than the VaR estimate. The VaR model assumes a cer-
tain ‘holding period’ until positions can be closed ( 1 Day). The Bank is assessing the historical movements in the market
prices based on volatilities and correlations data for the past five years. The use of this approach does not prevent losses
outside of these limits in the event of more significant market movements.

3.2.2. Value at risk (VaR) Summary

Total VaR by risk type

Medium
89,669
75,596,340
63,975,773
11,620,567
124,134
606,374
305,229
75,622,331

High
539,916
101,789,562
84,950,011
16,839,550
203,290
1,124,626
491,484
101,827,317

Dec. 31, 2013
Low
3,370
55,515,213
48,925,587
6,589,626
85,632
35,182
210,658
55,529,386

Medium
40,138
33,579,414
29,092,222
4,487,192
278,907
-
287,242
33,555,660

High
175,325
82,099,623
72,429,892
9,669,731
368,507
-
465,524
82,161,567

Foreign exchange risk
Interest rate risk
For non trading purposes
For trading purposes
Equities risk
Investment fund
Total VaR

168

annual RepoRt 2013

EGP
Dec. 31, 2012
Low
4,756
3,045,986
919,482
2,126,504
149,646
-
169,518
3,139,829

Trading portfolio VaR by risk type

Foreign exchange risk
Interest rate risk
- For trading purposes
Equities risk
Funds managed by others risk
Investment fund
Total VaR

Medium
89,669

Dec. 31, 2013
High
539,916

Low
3,370

Medium
40,138

Dec. 31, 201
High
175,325

Low
4,756

11,620,567
124,134
606,374
305,229
11,654,395

16,839,550
203,290
1,124,626
491,484
16,875,949

6,589,626
85,632
35,182
210,658
6,621,300

4,487,192
278,907
-
287,242
4,553,070

9,669,731
368,507
-
465,524
9,721,129

2,126,504
149,646
-
169,518
2,218,253

Non trading portfolio VaR by risk type

Medium

Dec. 31, 2013
High

Low

Medium

Dec. 31, 2012
High

Low

Interest rate risk
For non trading purposes
Total VaR
The aggregate of the trading and non-trading VaR results does not constitute the Bank’s VaR due to correlations and
consequent diversification effects between risk types and portfolio types.

72,429,892
72,429,892

29,092,222
29,092,222

63,975,773
63,975,773

84,950,011
84,950,011

48,925,587
48,925,587

919,482
919,482

Dec. 31, 2013
Financial assets
Cash and balances with Cen-

tral Bank

Due from banks
Treasury bills and other gov-

ernmental notes

Trading financial assets
Gross loans and advances to

banks

Gross loans and advances to

customers

Derivative financial instru-

ments

Financial investments
- Available for sale
- Held to maturity
Investments in associates
Total financial assets
Financial liabilities
Due to banks
Due to customers
Derivative financial instru-

ments

Long term loans
Total financial liabilities
Net on-balance sheet
financial position

EGP

USD

EUR

GBP

Equivalent EGP
Total

Other

3,943,554,418

685,783,608

97,955,512

21,155,801

56,524,898

4,804,974,237

160,035,421

5,569,959,173

2,823,809,212

386,613,624

63,533,460

9,003,950,890

20,729,091,642

3,832,188,780

181,468,677

2,191,009,287

86,593,728

153,833,294

24,742,749,099

8,881,566

2,286,484,581

153,833,294

25,863,179,074

18,702,088,432

645,731,167

46,134,574

33,983,316

45,291,116,563

35,951,722

65,733,199

1,400,617

103,085,538

22,145,853,264
4,197,176,655
151,872,008

1,232,251,218
-
40,880,870
79,417,723,491 30,369,312,302

-
-
-
3,750,365,185

-
-
-
453,903,999

-
-
-
162,923,240

23,378,104,482
4,197,176,655
192,752,878
114,154,228,217

319,951,905
64,618,227,605

1,031,898,608
27,965,508,241

20,152,926
3,585,282,145

1,399,569
456,884,824

7,032
219,780,593

1,373,410,040
96,845,683,408

31,266,232

81,503,495

2,108,856

114,878,583

132,153,227
65,101,598,969

-
29,078,910,344

-
3,607,543,927

-
458,284,393

-
219,787,625

132,153,227
98,466,125,258

14,316,124,522

1,290,401,958

142,821,258

(4,380,394)

(56,864,385)

15,688,102,959

annual RepoRt 2013 169

Financial StatementS: conSolidated

Dec. 31, 2013

Up to1
Month

1-3 Months 3-12 Months

1-5 years Over 5 years

Non- Interest
Bearing

Total

Financial assets
Cash and balances with

Central Bank
Due from banks
Treasury bills and other
governmental notes*
Trading financial assets
Gross loans and advances

to banks

Gross loans and advances

to customers

Derivatives financial

instruments (including
IRS notional amount)
Financial investments
- Available for sale
- Held to maturity
Investments in associates
Total financial assets

Financial liabilities
Due to banks
Due to customers
Derivatives financial

instruments (including
IRS notional amount)

4,587,696,691

3,966,455,633

286,026,802

3,527,609,980

2,996,487,000

18,218,652,119

4,804,974,237

163,771,764

9,003,950,890

24,742,749,099

184,878,423

1,672,005,178

375,962,584

53,638,396

2,286,484,581

4,342,350

116,417,222

2,870,824

30,202,898

29,728,939,030

6,465,364,854

5,189,602,857

3,111,717,350

795,492,472

1,389,566,463

234,619,676

747,844,799

2,185,915,919

332,706,143

153,833,294

45,291,116,563

4,890,653,000

393,248,050
663,515,064
-
-
-
-
40,086,548,001 14,172,592,435

2,815,541,814
197,841
-
27,260,737,056

13,567,604,319
4,196,978,814
-
24,764,424,478

5,351,673,079
-
-
6,855,834,278

586,522,156
-
192,752,878

23,378,104,482
4,197,176,655
192,752,878
5,801,659,431 118,941,795,679

347,374,047
32,188,336,580

-
14,485,215,174

-
11,106,121,075

-
22,458,172,731

-
87,337,000

1,026,035,993
16,520,500,848

1,373,410,040
96,845,683,408

2,315,824,671

1,770,211,105

129,416,652

66,856,880

603,658,202

69,818,235

4,955,785,745

5,314,000
Long term loans
Total financial liabilities 34,879,626,525 16,260,740,279

28,091,227

49,299,000
11,284,836,727

49,449,000
22,574,478,611

-
690,995,202

132,153,227
17,616,355,076 103,307,032,420

Total interest
re-pricing gap

* After deducting Repos.

5,206,921,476 (2,088,147,844)

15,975,900,329

2,189,945,867

6,164,839,076 (11,814,695,645)

15,634,763,259

3.3.1. Liquidity risk management process
The Bank’s liquidity management process, is carried by the assets and Liabilities Management Department and moni-
tored independently by the Risk Management Department, which includes:
Projecting cash flows by major currency under various stress scenarios and considering the level of liquid assets necessary
in relation thereto:

tions.

• Managing the concentration and profile of debt maturities.
• Monitoring and reporting takes the form of cash flow measurement and projections for the next day, week and month re-
spectively, as these are key periods for liquidity management. The starting point for those assets projections is an analysis
of the contractual maturity of the financial liabilities and the expected collection date of the financial assets. Bank's
Risk Management Department also monitors unmatched medium-term

Three months
to one year

One to three
months

One year to
five years

Over five
years

Up to
1 month

Dec. 31, 2013

Financial liabilities
Due to banks
Due to customers
Long term loans
Total liabilities (contractual
and non contractual maturity
dates)
Total financial assets (con-
tractual and non contractual
maturity dates)

Dec. 31, 2012

1,373,410,040
14,262,658,315
28,091,227

14,355,336,031
5,314,000

31,020,534,031
49,299,000

36,171,294,031
49,449,000

1,035,861,000

1,373,410,040
96,845,683,408
132,153,227

15,664,159,582 14,360,650,031

31,069,833,031

36,220,743,031

1,035,861,000

98,351,246,675

16,226,910,823 11,735,431,147

29,841,046,583

41,734,405,803 14,830,199,429 114,367,993,785

Up to 1month

One to three
months

Three months
to one year

One year to
five years

Over five
years

Total
EGP

1,714,862,716
11,421,205,560
-

9,736,841,059
-

20,452,119,693
59,508,571

35,809,584,757
20,986,667

1,309,370,420

1,714,862,716
78,729,121,488
80,495,238

13,136,068,276

9,736,841,059

20,511,628,264

35,830,571,424

1,309,370,420

80,524,479,442

9,874,255,242

12,497,060,088

22,097,635,946

39,608,844,700

9,940,640,568

94,018,436,544

170

annual RepoRt 2013

annual RepoRt 2013 171

Financial StatementS: conSolidated

3.3.4. Derivative cash flows
Derivatives settled on a net basis
The Bank’s derivatives that will be settled on a net basis include:

Foreign exchange derivatives: exchange traded options and over-the-counter (OTC) ,exchange traded forwards currency
options.

Interest rate derivatives: interest rate swaps, forward rate agreements, OTC and exchange traded interest rate options,
other interest rate contracts and exchange traded futures .

EGP

Dec. 31, 2013

Liabilities
Derivatives financial instruments
Foreign exchange derivatives
Interest rate derivatives
Total

Off balance sheet items

Dec. 31, 2013
Letters of credit, guarantees and

other commitments

Total

Up to one
month

One to
three
months

Three
months to
one year

One year to
five years

Over five
years

Total

28,748,121
-
28,748,121

4,157,915
-
4,157,915

12,154,312
1,707,852
13,862,164

-
9,904,184
9,904,184

-
58,206,199
58,206,199

45,060,348
69,818,235
114,878,583

Up to 1 year

1-5 years

Over 5 years

Total

10,428,458,630

5,449,818,970

304,161,560

16,182,439,160

10,428,458,630

5,449,818,970

304,161,560

16,182,439,160

Financial assets
Due from banks
Gross loans and advances to banks
Gross loans and advances to
customers
Individual
Corporate
Financial investments
Held to Maturity
Total financial assets
Financial liabilities
Due to banks
Due to customers
Long term loans
Total financial liabilities

Book value

Fair value

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

9,003,950,890
153,833,294

8,047,820,388
1,208,166,369

9,003,950,890
153,833,294

8,047,820,388
1,208,166,369

6,514,938,760
38,776,177,803

5,981,587,224
37,161,221,146

6,514,938,760
38,776,177,803

5,981,587,224
37,161,221,146

4,197,176,655
58,646,077,402

4,215,787,960
56,614,583,086

4,197,176,655
58,646,077,402

4,215,787,960
56,614,583,086

1,373,410,040
96,845,683,408
132,153,227
98,351,246,675

1,714,862,716
78,729,121,488
80,495,238
80,524,479,442

1,373,410,040
96,845,683,408
132,153,227
98,351,246,675

1,714,862,716
78,729,121,488
80,495,238
80,524,479,442

Due from banks
The fair value of floating rate placements and overnight deposits is their carrying amount. The estimated fair value of fixed
interest bearing deposits is based on discounted cash flows using prevailing money-market interest rates for debts with
similar credit risk and similar maturity date.

Loans and advances to banks
Loans and advances to banks represented in loans do not considering bank placing. The expected fair value of the loans
and advances represents the discounted value of future cash flows expected to be collected. Cash flows are discounted
using the current market rate to determine fair value.

Financial Investments
Investment securities include only interest-bearing assets held to maturity assets classified as available for sale are mea-
sured at fair value. Fair value for held-to-maturity assets is based on market prices or broker/dealer price quotations.
Where this information is not available, fair value is estimated using quoted market prices for securities with similar
credit, maturity and yield characteristics.

• Compliance with the legally imposed capital requirements in Egypt.
• Protecting the Bank’s ability to continue as a going concern and enabling it to generate yield for shareholders and othe

parties dealing with the bank.

The required data is submitted to the Central Bank of Egypt on a quarterly basis.

Central Bank of Egypt requires the following:

elements, and the risk-weighted assets and contingent liabilities of the Bank.

Tier two:
Represents the gone concern capital which comprised of general risk provision according to the impairment provision
guidelines issued by the Central Bank of Egypt for to the maximum of 1.25% risk weighted assets and contingent liabili-
ties, subordinated loans with more than five years to maturity (amortizing 20% of its carrying amount in each year of
the remaining five years to maturity) and 45% of the increase in fair value than book value for available for sale , held to
maturity, subsidiaries and associates investments.

When calculating the numerator of capital adequacy ratio, the rules set limits of total tier 2 to no more than tier 1 capital
and also limits the subordinated to no more than 50% of tier 1.

172

annual RepoRt 2013

annual RepoRt 2013 173

Financial StatementS: conSolidated

The tables below summarizes the compositions of teir 1, teir 2 and the capital adequacy ratio .

According to Basel II :

sale and held to maturity investments

Dec. 31, 2013
In thousands EGP

Dec. 31, 2012
In thousands EGP
Restated

9,002,436
1,001,869
(546,531)
(726,847)
8,730,927

1,123

21,510

742,938
765,571
9,496,498

59,514,861
2,429,715
8,135,709
70,080,285
13.55%

5,972,275
3,909,853
(510,946)
(4,701)
9,366,481

41,821

147,873

709,302
898,996
10,265,477

56,891,117
1,994,962
6,478,218
65,364,297
15.71%

5. Segment analysis

5.1. By business segment
The Bank is divided into main business segments on a worldwide basis:

• Corporate banking – incorporating direct debit facilities, current accounts, deposits, overdrafts, loan and other credit

facilities, foreign currency and derivative products

* Based on consolidated financial statement figures and in accordance with Centeral Bank of Egypt regulation issued on 24 December 2012.

• Investment banking – incorporating financial instruments Trading, structured financing, Corporate leasing,and merger

4. Critical accounting estimates and judgments

The Bank makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next
financial year.

4.1. impairment losses on loans and advances
The Bank reviews its loan portfolios to assess impairment on monthly basis a quarterly basis. In determining whether
an impairment loss should be recorded in the income statement, the Bank makes judgments as to whether there is any
observable data indicating that there is a measurable portfolio. This evidence may include observable data indicating that
there has been an adverse change in the payment status of borrowers in a Bank, or national or local economic conditions
that correlate with defaults on assets in the Bank. Management uses estimates based on historical loss experience for
assets with credit risk characteristics and objective evidence of impairment similar to those in the portfolio when sched-
uling its future cash flows. The methodology and assumptions used for estimating both the amount and timing of future
cash flows
are reviewed regularly to reduce any differences between loss estimates and actual loss experience. To the extent that the
net present value of estimated cash flows differs by +/-5%

4.2. impairment of available for-sale equity investments
The Bank determines that available-for-sale equity investments are impaired when there has been a significant or pro-
longed decline in the fair value below its cost. This determination of what is significant or prolonged requires judgment. In
making this judgment, the Bank evaluates among other factors, the normal volatility in share price. In addition, impair-
ment may be appropriate when there is evidence of a deterioration in the financial health of the investee, industry and
sector performance, changes in technology, and operational and financing cash flows.

and acquisitions advice.

• Retail banking – incorporating private banking services, private customer current accounts, savings, deposits, investment

savings products, custody, credit and debit cards, consumer loans and mortgages;

• Others –Include other banking business, such as Assets Management.
• Transactions between the business segments are on normal commercial terms and conditions.

Dec. 31, 2013

Corporate
banking

SME’s

Investment
banking

Retail banking

EGP

Total

Revenue according to busi-

ness segment

Expenses according to busi-

ness segment
Profit before tax
Tax
Profit for the year
Total assets

Dec. 31, 2012

Revenue according to busi-

ness segment

Expenses according to busi-

ness segment
Profit before tax
Tax
Profit for the year
Total assets

4,433,071,220

698,163,082

291,097,803

1,666,363,119

7,088,695,224

(1,626,606,779)

(316,973,281)

(90,547,864)

(877,974,630)

(2,912,102,554)

2,806,464,441
(802,003,135)
2,004,461,306
99,625,963,987

381,189,801
(119,972,068)
261,217,733
2,601,325,392

200,549,939
-
200,549,939

788,388,489
(248,129,927)
540,258,562
1,275,407,237 10,249,298,810

4,176,592,670
(1,170,105,130)
3,006,487,540
113,751,995,426

Corporate
banking

SME’s

Investment
banking

Retail banking

Total

3,329,477,415

731,332,747

(273,334,474)

1,610,326,906

5,397,802,594

(1,124,760,077)

(308,458,766)

(25,353,002)

(859,123,551)

(2,317,695,396)

2,204,717,338
(556,045,847)
1,648,671,491
80,503,587,353

422,873,981
(107,289,406)
315,584,575
2,626,503,517

(298,687,476)
-
(298,687,476)
1,451,894,947

751,203,355
(190,591,442)
560,611,913
9,374,557,798

3,080,107,198
(853,926,695)
2,226,180,503
93,956,543,615

174

annual RepoRt 2013

annual RepoRt 2013 175

Financial StatementS: conSolidated

5.2. By geographical segment

Dec. 31, 2013

Revenue according to geographical segment
Expenses according to geographical segment
Profit before tax
Tax
Profit for the year
Total assets

Dec. 31, 201

Revenue according to geographical segment
Expenses according to geographical segment
Profit before tax
Tax
Profit for the year
Total assets

Cairo

6,082,887,675
(2,169,461,195)
3,913,426,480
(1,084,005,294)
2,829,421,186
104,133,954,438

Cairo

4,361,404,048
(1,834,683,705)
2,526,720,343
(699,773,113)
1,826,947,230
83,616,308,538

Alex, Delta &
Sinai
907,098,338
(654,444,883)
252,653,455
(82,660,394)
169,993,061
8,163,839,552

Alex, Delta &
Sinai
887,705,321
(399,008,070)
488,697,251
(136,133,396)
352,563,855
9,048,557,087

Upper Egypt

98,709,211
(88,196,476)
10,512,735
(3,439,442)
7,073,293
1,454,201,436

UpperEgypt

148,693,225
(84,003,621)
64,689,604
(18,020,186)
46,669,418
1,291,677,989

EGP

Total

7,088,695,224
(2,912,102,554)
4,176,592,670
(1,170,105,130)
3,006,487,540
113,751,995,426

Total

5,397,802,594
(2,317,695,396)
3,080,107,198
(853,926,695)
2,226,180,503
93,956,543,615

6. Net interest income

Interest and similar income
Banks
Clients

Treasury bills and bonds
Reverse repos
Financial investments in held to maturity and available for sale debt

instruments

Other
Total
Interest and similar expense
Banks
Clients

Financial instruments purchased with a commitment to re-sale (Repos)
Other
Total
Net interest income

7. Net income from fee and commission

Fee and commission income
Fee and commissions related to credit
Custody fee
Other fee
Total
Fee and commission expense
Other fee paid
Total
Net income from fee and commission

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

201,284,007
3,915,076,745
4,116,360,752
5,234,074,523
27,135,663

132,463,454
3,523,926,754
3,656,390,208
4,021,144,937
17,423,270

143,080,215

164,324,240

45,988
9,520,697,141

91,504,193
4,345,497,789
4,437,001,982
25,580,494
4,366,685
4,466,949,161
5,053,747,980

29,184
7,859,311,839

181,169,862
3,449,759,729
3,630,929,591
310,995,070
3,760,975
3,945,685,636
3,913,626,203

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

761,430,244
166,688,052
507,989,389
1,436,107,685

128,827,179
128,827,179
1,307,280,506

470,471,721
133,589,290
429,567,003
1,033,628,014

107,365,742
107,365,742
926,262,272

8. Dividend income

Trading securities
Available for sale securities
Associates co.
Total

9. Net trading income

Profit (losses) from foreign exchange
Profit (losses) from revaluations of trading assets and liabilities in foreign

currencies

10. Administrative expenses

Staff costs
Wages and salaries
Social insurance
Other benefits
Other administrative expenses
Total

11. Other operating (expenses) income

Profits (Losses) from non-trading assets and liabilities revaluation
Profits (losses) from selling property, plant and equipment
Release (charges) of other provisions
Others
Total

Dec. 31, 2013
EGP
-
16,915,364
5,694,250
22,609,614

Dec. 31, 2012
EGP
578,098
28,015,018
4,517,707
33,110,823

Dec. 31, 2013
EGP
442,009,259

4,293,215

(20,513,102)
(1,097,874)
4,095,705
332,508,008
6,097,122
767,392,333

Dec. 31, 2012
EGP
249,583,425

3,010,519

6,669,087
212,030
(2,963,355)
311,074,819
6,988,651
574,575,176

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

858,673,775
34,795,512
32,515,510
924,959,239
1,850,944,036

761,672,607
30,542,233
30,941,993
736,244,948
1,559,401,781

Dec. 31, 2013
EGP
89,858,233
740,692
(133,065,974)
(119,863,505)
(162,330,554)

Dec. 31, 2012
EGP
36,631,170
2,387,583
(47,537,825)
(94,788,020)
(103,307,092)

176

annual RepoRt 2013

annual RepoRt 2013 177

Financial StatementS: conSolidated

12. Impairment (charge) release for credit losses

16. Due from banks

Loans and advances to customers
Total

13. Adjustments to calculate the effective tax rate

Profit before tax
* Tax settlement for prior years
Profit after settlement
Tax rate
Income tax based on accounting profit
Add / (Deduct)
Non-deductible expenses
Tax exemptions
Effect of provisions
Depreciation
Income tax
Effective tax rate
*Tax claims for the year ended on December.31, 2011

14. Earning per share

Net profit for the period available for distribution
Board member’s bonus
Staff profit sharing
* Profits shareholders’ Stake
Number of shares
Basic earning per share
By issuance of ESOP earning per share will be:
Number of shares including ESOP shares
Diluted earning per share
* Based on dividend of separate financial statements.

15. Cash and balances with Central Bank

Cash
Obligatory reserve balance with CBE
Current accounts
Total
Non-interest bearing balances

178

annual RepoRt 2013

Dec. 31, 2013
EGP
(915,581,874)
(915,581,874)

Dec. 31, 2012
EGP
(609,971,077)
(609,971,077)

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

4,176,481,713
-
4,176,481,713
25.00%
1,044,120,427

55,869,494
(71,693,816)
140,691,487
1,117,537
1,170,105,129
28.02%

Dec. 31, 2013
EGP
2,716,110,919
(40,741,664)
(271,611,092)
2,403,758,163
900,243,569
2.67

914,378,753
2.63

3,080,917,168
(65,137,014)
3,015,780,155
24.98%
753,445,039

23,146,604
(82,115,715)
88,495,041
5,818,873
788,789,842
26.16%

Dec. 31, 2012
EGP
2,379,297,994
(35,689,470)
(237,929,799)
2,105,678,724
900,243,569
2.34

911,239,406
2.31

Dec. 31, 2013
EGP
1,683,360,064

3,121,614,173
4,804,974,237
4,804,974,237

Dec. 31, 2012
EGP
1,744,700,680

3,649,273,444
5,393,974,124
5,393,974,124

Current accounts
Deposits
Total
Central banks
Local banks
Foreign banks
Total
Non-interest bearing balances
Fixed interest bearing balances
Total
Current balances
Total

17. Treasury bills and other governmental notes

91 Days maturity
182 Days maturity
364 Days maturity
Unearned interest
Total 1
Repos - treasury bills
Total 2
Net

18. Trading financial assets

Debt instruments
- Governmental bonds
- Other debt instruments
Total
Equity instruments
- Companies shares
- Mutual funds
Total
Total financial assets for trading

19. Loans and advances to banks

Time and term loans

Less: Impairment provision
Total
Current balances
Non-current balances
Total

Dec. 31, 2013
EGP
630,960,653
8,372,990,237
9,003,950,890
3,225,196,041
757,539,078
5,021,215,771
9,003,950,890
163,771,764
8,840,179,126
9,003,950,890
9,003,950,890
9,003,950,890

Dec. 31, 2012
EGP
317,264,173
7,730,556,215
8,047,820,388
3,093,850,399
590,696,679
4,363,273,310
8,047,820,388
152,732,954
7,895,087,434
8,047,820,388
8,047,820,388
8,047,820,388

Dec. 31, 2013
EGP
6,534,713,622
7,197,085,800
11,010,949,677
(1,077,320,283)
23,665,428,816
-
-
23,665,428,816

Dec. 31, 2012
EGP
3,182,683,419
4,022,757,000
4,458,084,085
(470,058,411)
11,193,466,093
(3,175,711,661)
(3,175,711,661)
8,017,754,432

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

2,047,967,761
48,870,658
2,096,838,419

43,071,616
146,574,546
189,646,162
2,286,484,581

1,138,056,688
43,043,738
1,181,100,426

15,877,741
318,347,334
334,225,076
1,515,325,502

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

153,833,294

1,208,166,369

(21,410,562)
132,422,732
102,219,834
30,202,898
132,422,732

(29,298,630)
1,178,867,739
1,172,317,036
6,550,703
1,178,867,739

annual RepoRt 2013 179

Financial StatementS: conSolidated

analysis for impairment provision of loans and advances to banks

Bgining balance
Charge (release) during the year
Exchange revaluation difference
Ending balance

20. Loans and advances to customers

Dec. 31, 2013
EGP
29,298,630
(9,224,786)
1,336,718
21,410,562

Dec. 31, 2012
EGP
37,950,503
(11,450,369)
2,798,496
29,298,630

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

1,173,942,998
765,623,964
4,181,386,392
383,143,670
10,841,736
6,514,938,760

4,910,810,545
24,125,578,810
9,630,556,651
109,231,797
38,776,177,803
45,291,116,563

(6,634,495)
(2,842,840,136)
(708,390,220)
41,733,251,712

16,679,527,211
25,053,724,501
41,733,251,712

1,220,222,219
660,932,044
3,616,553,758
463,833,879
20,045,324
5,981,587,224

4,288,571,348
23,196,204,054
9,588,649,990
87,795,754
37,161,221,146
43,142,808,370

(22,277,973)
(1,901,222,402)
(520,994,222)
40,698,313,773

16,908,542,925
23,789,770,848
40,698,313,773

analysis for impairment provision of loans and advances to customers

Dec. 31, 2013

Beginning balance
Charged (Released) during the year
Write off during the year
Recoveries from written off debts
Ending balance

Overdraft

Credit cards

10,753,047
270,365
(2,755,707)
964,713
9,232,418

8,328,331
2,567,525
(7,254,445)
4,749,763
8,391,174

Individual

Personal
loans
74,435,554
8,225,083
-
-
82,660,637

Real estate
loans
13,376,859
407,070
-
-
13,783,929

Other loans

Total

1,090,931
2,117,699
-
-
3,208,630

107,984,722
13,587,742
(10,010,152)
5,714,476
117,276,788

Dec. 31, 2013

Beginning balance
Charged (Released) during the year
Write off during the year
Recoveries from written off debts
Exchange revaluation difference
Ending balance

Overdraft Direct loans

209,551,228
118,563,373
-
-
6,088,062

1,242,015,939
663,119,750
(6,811,042)
13,906,294
41,099,887
334,202,663 1,953,330,828

Corporate

Syndicated
loans
336,568,605
129,670,518
(81,425,110)
31,417,986
16,830,672
433,062,671

Other loans

Total

5,101,908
(134,722)
-
-
-

1,793,237,680
911,218,919
(88,236,152)
45,324,280
64,018,621
4,967,186 2,725,563,348

Dec. 31, 2012

Beginning balance
Charged (Released) during the year
Write off during the year
Recoveries from written off debts
Ending balance

Overdraft

Credit cards

20,377,614
(9,624,567)
-
-
10,753,047

42,290,218
(8,977,018)
(29,454,339)
4,469,470
8,328,331

Individual

Personal
loans
76,502,471
68,706
(2,135,623)
-
74,435,554

Real estate
loans
11,876,297
1,500,562
-
-
13,376,859

Other loans

Total

1,593,932
(503,001)
-
-
1,090,931

152,640,532
(17,535,318)
(31,589,962)
4,469,470
107,984,722

Dec. 31, 2012

Beginning balance
Charged (Released) during the year
Write off during the year
Recoveries from written off debts
Exchange revaluation difference
Ending balance

Overdraft Direct loans

167,655,394
39,209,960
-
-
2,685,874

790,797,773
420,954,828
-
14,726,449
15,536,889
209,551,228 1,242,015,939

Corporate
Syndicated
loans
306,628,666
178,455,887
(154,721,287)
-
6,205,339
336,568,605

Other loans

Total

1,686,738
336,089
-
-
3,079,081
5,101,908

1,266,768,571
638,956,764
(154,721,287)
14,726,449
27,507,183
1,793,237,680

21. Derivative financial instruments

21.1. derivatives
The Bank uses the following financial derivatives for non hedging purposes.

Foreign exchange and/or interest rate swap represents commitments to exchange cash flows, resulting from these con-
tracts exchange of currencies or interest (fixed rate versus variable rate for example) or both (meaning foreign exchange
and interest rate contracts)/ contractual amounts are not exchanged except for some foreign exchange contracts.

180

annual RepoRt 2013

annual RepoRt 2013 181

Financial StatementS: conSolidated

21.1.1. For trading derivatives

Foreign derivatives
Forward foreign exchange

contracts
Currency swap
Options
Total 1
Interest rate derivatives
Interest rate swaps
Total 2
Commodity
Total 3
Total assets (liabilities) for
trading derivatives (1+2+3)

21.1.2. Fair value hedge
Interest rate derivatives
Governmental debit

instruments hedging

Customers deposits hedging
Total 4
Total financial derivatives
(1+2+3+4)

Dec. 31, 2013

Dec. 31, 2012

Notional
amount

Assets

Liabilities

Notional
amount

Assets

Liabilities

1,250,176,084

13,375,501

18,954,700

1,996,990,255

16,812,998

959,570

1,990,431,463
38,331,489

22,576,221
13,794,115
49,745,837

12,311,533
13,794,115
45,060,348

1,258,600,443
770,698,823

9,781,221
7,723,601
34,317,820

3,612,239
7,723,601
12,295,410

389,501,781

6,679,325
6,679,325
-
-

3,744,177
3,744,177
-
-

859,324,209

12,149,920

12,630,731
12,630,731
134,026
134,026

8,739,696
8,739,696
134,026
134,026

56,425,162

48,804,525

47,082,577

21,169,132

603,658,200

3,847,747,181

57,476,340

549,753,000

97,708,858

46,660,376
46,660,376

8,597,718
66,074,058

4,293,389,812

90,377,184
90,377,184

221,270
97,930,128

103,085,538

114,878,583

137,459,761

119,099,260

22. Financial investments

Beginning balance
Addition
Deduction (selling - redemptions)
Exchange revaluation differences for foreign

financial assets

Profit (losses) from fair value difference
Impairment (charges) release
Ending Balance

Beginning balance
Addition
Deduction (selling - redemptions)
Exchange revaluation differences for foreign

financial assets

Profit (losses) from fair value difference
Impairment (charges) release
Ending Balance

Available for sale
financial
investments
15,421,546,277
10,169,757,165
(5,342,793,206)

60,242,239

895,941,363
(27,266,242)
21,177,427,597

21,177,427,597
7,463,491,687
(4,519,338,289)

124,230,792

(834,813,374)
(32,893,931)
23,378,104,482

22.1. profit (losses) from financial investments

Profit (Loss) from selling available for sale financial instruments
Impairment release (charges) of available for sale equity instruments
Impairment release (charges) of available for sale debt instruments
Profit (Loss) from selling held to maturity debt investments
Total

Dec. 31, 2013
EGP

Dec. 31, 2012
EGP

22,556,422,828
86,327,447
735,354,207
23,378,104,482

4,169,664,155
27,512,500
4,197,176,655
27,575,281,137
25,972,996,185
1,602,284,952
27,575,281,137
25,801,806,120
1,097,845,069
26,899,651,189

20,607,710,266
84,923,090
484,794,241
21,177,427,597

4,154,712,549
61,075,411
4,215,787,960
25,393,215,557
23,771,302,303
1,621,913,254
25,393,215,557
23,621,268,407
1,237,877,696
24,859,146,103

Held to maturity
financial
investments
39,159,519
4,176,628,441
-

Total
EGP

15,460,705,796
14,346,385,606
(5,342,793,206)

60,242,239

-
-
4,215,787,960

4,215,787,960
-
(18,611,305)

895,941,363
(27,266,242)
25,393,215,557

25,393,215,557
7,463,491,687
(4,537,949,594)

124,230,792

-
-
4,197,176,655

(834,813,374)
(32,893,931)
27,575,281,137

Dec. 31, 2013
EGP
4,362,940
(32,893,931)
-
(141,135)
(28,672,126)

Dec. 31, 2012
EGP
519,013
(27,859,838)
593,597
(162,078)
(26,909,306)

182

annual RepoRt 2013

annual RepoRt 2013 183

Financial StatementS: conSolidated

23. Investments in associates

Dec. 31, 2013

Company’s
country

Company’s
assets

Company’s
liabilities
(without
equity)

Company’s
revenues

Company’s
net profit

Investment
book value
EGP

Stake %

Associates
Commercial International Life

Insurance

Corplease
Haykala for investment
Egypt Factors
International Co. for Security and

Services (Falcon)

Total

Egypt

Egypt
Egypt
Egypt

Egypt

2,202,120,593

2,124,146,722

302,442,516

5,621,494

53,757,396

1,921,220,750
4,573,801
434,219,114

1,723,876,875
199,111
379,404,778

378,253,425
581,125
32,679,897

16,884,595
478,935
425,843

88,281,648
1,465,478
40,880,870

126,867,912

104,633,380

120,221,686

5,344,162

8,367,485

43
40
39

4,689,002,170

4,332,260,866

834,178,649

28,755,029

192,752,878

Dec. 31, 2012

Company’s
Country

Company’s
Assets

Company’s
Liabilities
(without
equity)

Company’s
Revenues

Company’s
Net Profit

Investment
book value
EGP

Stake %

Associates
Commercial International Life

Insurance

Corplease
Haykala for Investment
Egypt Factors
International Co. for Security and

Services (Falcon)

Total

24. Investment property *

Egypt

1,768,401,691

1,711,942,438

253,087,786

(969,320)

49,456,444

Egypt
Egypt
Egypt

Egypt

1,539,490,355
3,875,454
203,984,151

1,361,597,602
180,722
151,643,286

317,924,102
270,000
18,514,114

9,974,915
209,835
(3,608,534)

69,710,183
1,170,896
38,373,478

91,085,635

79,197,211

106,514,090

1,219,081

6,487,632

40
40
39

3,606,837,286

3,304,561,259

696,310,092

6,825,976

165,198,634

Commercial unit number f 35 in arkadia mall (14 elbahr st. Boulak

kornish el nile )

338.33 meters on a land and building the property number 16 elmakrizi

st. Heliopolis

elsharkia

Agriculutral area - markaz shebin eldakahlia
Total

Dec. 31, 2013
EGP

432,000

1,121,965
3,463,000

161,000

4,517,721
9,695,686

Dec. 31, 2012
EGP

432,000

700,000

1,121,965
3,463,000

161,000

4,517,721
10,395,686

* Including non registered properties by EGP 6,232,686 which were acquired against settlement of loans to customers and legal procedures is tak-
ing to registered these properties or sell them during the legal period.

25. Other assets

Accrued revenues
Prepaid expenses
Advances to purchase of fixed assets
Accounts receivable and other assets
Assets acquired as settlement of debts
Total

26. Property, plant and equipment

Dec. 31, 2013
EGP
1,695,498,707
131,518,888
134,327,476
910,752,008
20,245,803
2,892,342,882

Dec. 31, 2012
EGP
1,632,481,861
91,741,953
96,919,829
644,824,093
8,977,329
2,474,945,065

Dec. 31, 2013

Land

Premises

Vehicles Fitting -out

Machines and
equipment

60,575,261

407,137,289

855,453,783

54,254,811

347,435,424

290,416,691

Furniture
and
furnishing
127,403,538 2,142,676,797

Total

3,924,261

214,973,061

161,704,212

8,609,546

49,901,395

41,204,706

12,382,955

492,700,136

64,499,522

622,110,350 1,017,157,995

62,864,357

397,336,819

331,621,397

139,786,493 2,635,376,933

181,000,079

656,413,664

32,187,369

276,816,541

220,840,761

91,962,537 1,459,220,951

24,795,643

72,485,723

4,033,008

40,116,114

42,810,367

22,738,233

206,979,088

205,795,722

728,899,387

36,220,377

316,932,655

263,651,128

114,700,770 1,666,200,039

64,499,522
60,575,261

416,314,628
226,137,210
%5

288,258,608
199,040,119
%33.3

26,643,980
22,067,442

%20

80,404,164
70,618,883
%33.3

67,970,269
69,575,930

25,085,723
35,441,001

969,176,894
683,455,846

%20

Beginning gross assets (1)
Additions (deductions) during

the year

Ending gross assets (2)
Accu.depreciation at beginning

of the year (3)

Current year depreciation
Accu.depreciation at end of
the year (4)
Ending net assets (2-4)
Beginning net assets (1-3)
Depreciation rates

Net fixed assets value on the balance sheet date includes EGP 21,769,393 non registered assets while their registrations procedures are in process.

27. Due to banks

Current accounts
Deposits
Total
Central banks
Local banks
Foreign banks
Total
Non-interest bearing balances
Fixed interest bearing balances
Total
Current balances
Non-current balances
Total

Dec. 31, 2013
EGP
1,038,717,040
334,693,000
1,373,410,040
3,853,779
313,337,889
1,056,218,372
1,373,410,040
1,026,035,993
347,374,047
1,373,410,040
1,038,717,040
334,693,000
1,373,410,040

Dec. 31, 2012
EGP
369,862,716
1,345,000,000
1,714,862,716
7,546,231
1,362,363,985
344,952,500
1,714,862,716
354,394,897
1,360,467,819
1,714,862,716
369,862,716
1,345,000,000
1,714,862,716

184

annual RepoRt 2013

annual RepoRt 2013 185

Financial StatementS: conSolidated

28. Due to customers

29. Long term loans

Dec. 31, 2013
EGP
22,949,345,699
30,507,692,856
25,259,128,705
16,786,188,314
1,343,327,834
96,845,683,408
48,299,667,997
48,546,015,411
96,845,683,408
24,292,673,533
72,553,009,875
96,845,683,408
70,206,368,513
26,639,314,895
96,845,683,408

Dec. 31, 2012
EGP
16,928,995,312
24,133,038,485
24,299,048,221
12,106,727,204
1,261,312,266
78,729,121,488
36,658,501,586
42,070,619,902
78,729,121,488
18,190,307,578
60,538,813,910
78,729,121,488
51,870,912,649
26,858,208,839
78,729,121,488

Interest rate % Maturity date

Maturing
through
next year
EGP

Balance on
Dec. 31, 2013
EGP

Balance on
Dec. 31, 2012
EGP

Financial Investment & Sector Coopera-

tion (FISC)

Agricultural Research and Development

Fund (ARDF)

Social Fund for Development (SFD)

Total

3.5 - 5.5
depends on
maturity date
3.5 - 5.5
depends on
maturity date
3 months T/D
or 9% which
is more

3-5 years

555,556

19,095,238

3-5 years

28,310,000

31,380,000

61,400,000

35,486,000

100,217,671

64,351,556

132,153,227

80,495,238

30. Other liabilities

Accrued interest payable
Accrued expenses
Accounts payable
Income tax
Other credit balances
Total

Dec. 31, 2013
EGP
564,960,679
351,865,685
481,478,219
1,179,708,811
78,652,074
2,656,665,468

Dec. 31, 2012
EGP
430,377,730
256,350,678
478,367,052
819,361,660
74,547,893
2,059,005,013

31. Other provisions

Dec. 31, 2013

Provision for income tax

claims

Provision for legal claims
Provision for Stamp Duty
Provision for contingent
Provision for other claim*
Total

Beginning
balance

Charged
amounts

Exchange
revaluation
difference

Utilized
amounts

Reversed
amounts

Ending
balance
EGP

14,962,108

3,625,000

(4,541,827)

14,045,281

28,619,510
-
257,900,430
14,006,334
315,488,382

1,321,932
31,000,000
88,074,156
8,936,407
132,957,495

1,851
-
16,745,849
30,556
16,778,256

(753,510)
-
-
(5,088,275)
(10,383,612)

(141,521)
-
-
-
(141,521)

29,048,262
31,000,000
362,720,435
17,885,022
454,699,000

Dec. 31, 2012

Provision for income tax

claims

Beginning
balance

Charged
amounts

Exchange
revaluation
difference

Utilized
amounts

Reversed
amounts

Ending
balance
EGP

16,553,685

(1,591,577)

14,962,108

Provision for legal claims
Provision for contingent
Provision for other claim
Total
* Provision for other claim formed on December 31, 2013 amounted to 8,936,407 EGP to face the potential risk of banking operations against

(10,958,065)
-
(1,336,550)
(13,886,192)

28,619,510
257,900,430
14,006,334
315,488,382

35,171,960
210,103,042
8,973,223
270,801,909

4,924,686
40,594,505
6,353,586
51,872,777

11,983
7,202,883
16,075
7,230,941

(531,054)
-
-
(531,054)

amount 6,353,586 EGP on December 31, 2012 .