Driving
Digital Change
A N N U A L R E P O R T 2 0 1 9
TABLE OF
CONTENTS
01
CIB Introduction
06 | At a Glance
08 | Key Financial Highlights
10 | Leadership
24 | What We Do
28 | CIB’s Stock
30 | Our History and Timeline
35 | Awards
03
Our Businesess
68 | Institutional Banking
75 | Retail Banking
82 | Digital Banking
05
Our Controls
112 | Risk Group
118 | Compliance Group
Internal Audit
121 |
07
02
Strategic Direction
38 | Strategy
42 | A Note From Our Chairman
46 | A Note from Our CEO
50 | BOD’s Report
04
Support Functions
94 | Operations and IT
100 | Human Resources
104 | Marketing and Corporate Communications
06
Evironmental, Social, and Governance (ESG)
124 | Environmental Sustainability
128 | Social Development
140 | Corporate Governance
08
Subsidiaries and Associates
156 | Financial Statements
148 | CVentures
150 | Falcon Group
152 | Fawry Plus
Digital Banking
Reimagined
Hi, I’m Zaki the Bot, CIB’s virtual assistant. I’m one of the first
of my kind in the Egyptian banking industry, using advanced
artificial intelligence to assist customers, gather key data, and
help CIB revolutionize digital banking as it stands today.
Conversations with Zaki in this annual report are not an accurate representation of the chat bot’s current functionality.
This report is the first CIB annual report that is being disseminated solely through digital channels. Closer to 100 trees and 26.9 KgCO2e in GHG emissions
were saved by not printing this report.
Annual Report 2019
3
CIB
Introduction
CIB is Egypt’s leading private-sector
bank, offering a full range of financial
products and services to enterprises of
all sizes, institutions, households, and
individuals.
3
key subsidiaries
and affiliates
Zaki the Bot
Your Personal Virtual Assistant
My name is Zaki and I am CIB’s
virtual digital assistant designed to
help you understand more about
CIB.
What can you do for me, Zaki?
I can tell you about your accounts,
help you make a transfer, show you
the nearest ATMs, and answer
whatever banking questions you have.
And I’m always learning. Try me.
What kind of accounts do you offer?
CIB offers a variety of current and
savings accounts. Which are you
interested in?
Current accounts.
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Classic
Easy
Annual Report 2019
5
CIB Introduction
At a
Glance
Ranked #1 bank among
all Egyptian private-sector
banks in terms of revenues,
net worth, total assets, and
deposits.
CIB is Egypt’s leading private-sector bank. It is an
award-winning institution dedicated to creating out-
standing stakeholder value and providing superior
customer service solutions to a broad range of clients.
The Bank furnishes clients with innovative solutions
that satisfy their banking needs and facilitate their
financial lives. Its dynamic business model and com-
mitment to fully integrating superior technology
into its products and services allow it to maintain its
market leadership and to offer staff an engaging work
environment, while generating mounting value.
The Bank serves an expansive network of retail
customers, high-net-worth (HNW) individuals, and
enterprises and institutions that drive the Egyp-
tian economy. With a well-established network of
207 branches and banking units and a workforce
comprising 6,900 employees, CIB provides tailored,
client-centric services to clients in the corporate,
commercial, retail, wealth, and small- and medium-
size enterprise (SME) spheres, while working to de-
liver the most streamlined, efficient banking service
offering in the Egyptian market.
CIB also operates two representative offices, one in
Dubai and the other in Addis Ababa, as channels
driving business through these key markets while
capitalizing on the synergies inherent in the Bank’s
business model as a means of driving value for clients.
The Bank has one fully owned subsidiary, CVentures,
and two associates, Falcon Group and Fawry Plus, in
which it owns stakes of 32.5% and 23.5%, respectively.
CVentures was established in 2018 and is Egypt’s
first corporate venture capital firm owned by a bank
focused primarily on investing in category-defining
companies in the field of financial services. Falcon
Group is a provider of security services, cash-in-
transit, property management, and general and
technical services. Fawry Plus offers agent banking
financial services, including limited KYC services,
the collection of documents needed for mobile wallet
registration, prepaid and credit card issuance, loan
issuance, and account opening, while also taking
care of repaying loan and credit card dues and other
payments such as utility, telecom, taxes, and fines.
For several years, CIB has also enjoyed the titles of
most profitable bank operating in Egypt and the
bank of choice for over 500 of Egypt’s largest corpora-
tions. It has been awarded numerous accolades from
prestigious bodies throughout the year, including the
World’s Best Emerging Markets Bank at the Global
Finance 2018 special awards ceremony, one year after
it was awarded the same title from Euromoney.
Key Facts
+1.4MN
Clients
23EGP
BN
Revenues
207
Branches
122 EGP
BN
Market Cap
6,900
Employees
BN
11.8EGP
Net Profit
6
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Annual Report 2019
7
CIB Introduction
Key Financial
Highlights
FY19
FY18
FY 17
FY 16
FY 15
Consolidated
Consolidated
Consolidated
Consolidated
Consolidated
FY19
FY18
FY 17
FY 16
FY 15
FY 14
FY 13
FY 12
FY 11
FY 10
FY 09
FY19
FY18
FY 17
FY 16
FY 15
Consolidated
Consolidated
Consolidated
Consolidated
Consolidated
FY19
FY18
FY 17
FY 16
FY 15
FY 14
FY 13
FY 12
FY 11
FY 10
FY 09
Common Share Information Per Share
Financial Measures
Earning Per Share (EPS) *
7.33
7.26
5.76
4.56
3.58
3.55
2.67
2.42
2.43
3.00
2.63
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)
1.25
1.00
1.00
0.50
0.75
1.20
1.00
1.25
1.00
1.00
1.50
35.26
29.26
24.43
18.44
14.39
16.31
13.46
18.94
15.03
14.59 23.75
83.5
96.5
88.8
73.6
47.4
51.3
45.4
39.8
47.4
79.49
59.7
82.7
67.0
71.1
30.8
28.9
32.6
27.4
21.1
18.5
33.75
29.5
83.0
74.1
77.4
76.4
38.1
49.2
32.6
34.6
18.7
47.4 54.68
1,469.1 1,166.8 1,161.8 1,153.9 1,147.1
908.2
900.2
597.2
593.5
590.1 292.5
121,963 86,439 89,865 88,155 43,692 44,673 29,330 20,646 11,098 27,973 15,994
11.3
10.2
13.4
16.8
10.6
13.9
12.2
14.3
7.7
15.8
20.8
1.51% 1.35% 1.29% 0.65% 1.97% 2.44% 3.07% 3.62% 5.35% 2.11% 2.74%
15.6% 15.3% 15.4%
9.7% 18.5% 29.9% 34.4% 33.9% 33.9% 27.6% 24.6%
2.35
2.53
3.17
4.14
2.65
3.02
2.42
1.83
1.24
3.25
2.30
Net Operating Income****
23,019 20,379 14,890 11,315 10,189 23,018 20,351 15,192 11,370 10,165
7,717
6,206
5,108
3,837
3,727 3,173
Provision for Credit Losses
- Specific
Provision for Credit Losses
- General
1,435
3,076
1,742
893
1,682
1,435
3,076
1,742
893
1,682
589
916
610
321
Total Provisions
1,435
3,076
1,742
893
1,682
1,435
3,076
1,742
893
1,682
589
916
610
321
6
6
9
9
Cost : Income
21.59% 20.33% 20.79% 21.36% 19.61% 21.58% 20.35% 20.38% 21.26% 19.69% 22.91% 22.89% 28.01% 35.26% 33.11% 32.31%
Return on Average
Common Equity (ROAE)***** 29.49% 33.14% 32.45% 34.24% 33.46% 29.55% 33.13% 32.71% 34.03% 32.80% 30.25% 24.77% 24.18% 22.23% 30.46% 31.18%
Net Interest Margin (NII/
average interest earning
assets)
Return on Average Assets
(ROAA)
Regular Workforce
Headcount
6.48% 6.43% 4.97% 5.47% 5.74% 5.41% 5.36% 4.74% 3.71% 3.62% 3.81%
3.26% 3.03% 2.69% 2.71% 2.95% 3.26% 3.02% 2.72% 2.70% 2.90% 2.87% 2.54% 2.47% 2.20% 3.11% 2.97%
6,900
6,759
6,551
6,714
6,332
6,900
6,759
6,551
6,422
5,983
5,403
5,193
4,867
4,517
4,360 4,162
Balance Sheet and Off Balance Sheet Information (EGP millions)
Sheet Information
(EGP millions)
Cash Resources and
Securities
(Non. Governmental)
63,270 69,068 63,684 77,523 34,808 63,226 69,030 63,673 73,035 34,097 19,430 16,646 16,764 19,821 16,854 16,125
Net Loans and Acceptances 119,946 106,377 88,428 85,384 56,836 119,946 106,377 88,428 86,152 57,211 49,398 41,970 41,877 41,065 35,175 27,443
Assets
Deposits
Common Shareholders
Equity
Average Assets
Average Interest
Earning Assets
Average Common
Shareholders Equity
386,742 342,461 294,782 267,544 179,500 386,697 342,423 294,771 263,852 179,193 143,647 113,752 94,405 85,628 75,093 64,063
304,448 285,297 250,723 231,741 155,234 304,484 285,340 250,767 231,965 155,370 122,245 96,940 78,835 71,574 63,480 54,843
51,880 34,228 28,439 21,374 16,535 51,800 34,147 28,384 21,276 16,512 14,816 12,115 11,311
8,921
8,609 6,946
364,602 318,622 281,163 223,522 161,657 364,560 318,597 279,312 221,523 161,420 128,700 104,079 90,017 80,361 69,578 60,595
328,296 290,869 257,931 203,053 146,033 328,296 290,869 258,315 203,625 145,835 117,133 94,605 79,834 70,549 61,624 53,431
43,054 31,334 24,907 18,955 15,645 42,973 31,265 24,830 18,894 15,664 13,465 11,713 10,116
8,765
7,777 6,288
Balance Sheet Quality Measures
Equity to Risk-Weighted
Assets*****
Risk-Weighted Assets
(EGP billions)
24.32% 16.93% 15.59% 13.34% 15.76% 24.28% 16.89% 15.56% 13.28% 15.74% 15.84% 15.50% 15.69% 14.49% 15.85% 15.34%
199
186
169
150
96
199
186
169
150
96
84
70
65
55
49
41
Non Interest Expense
5,049
4,224
3,119
2,433
2,025
5,045
4,223
3,119
2,433
2,028
1,705
1,450
1,445
1,337
1,188 1,041
Tier 1 Capital Ratio******
23.59% 16.16% 14.93% 12.90% 15.01% 23.59% 16.16% 14.93% 12.90% 15.01% 15.70% 15.23% 14.33% 14.15% 15.66% 15.28%
Net Profits
11,801
9,582
7,516
6,009
4,729 11,804
9,556
7,550
5,951
4,641
3,648
2,615
2,203
1,749
2,141 1,784
Adjusted Capital Adequacy
Ratio******
26.07% 19.09% 18.03% 13.97% 16.06% 26.07% 19.09% 18.03% 13.97% 16.06% 16.77% 16.32% 15.71% 15.40% 16.92% 16.53%
* Based on net profit available for distribution (after deducting staff profit share and board bonus) and unadjusted to stock dividends
** 2018 DPS after taking into account the share distributions of one share for every four shares
*** Unadjusted to stock dividends
**** 2016, 2015 and 2014 excluded CI capital profit (discontinued operations)
***** Total Equity after profit appropriation
****** After profit appropriation, from 2012 to 2019 as per Basel II regulations
8
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9
CIB Introduction
Leadership
Board of Directors
Mr. Hisham Ezz Al-Arab
Chairman and Managing Director
Mr. Hisham Ezz Al-Arab directs a team of profes-
sionals who have transformed CIB from a whole-
sale lender into Egypt’s largest private-sector
bank, which leads the sector in terms of revenue,
profitability, net worth, and market share of
deposits. Under his stalwart guidance, CIB has
grown into an institution that serves millions
of customers throughout the country, from indi-
viduals to small- and medium-sized businesses
and key corporations among Egypt’s 500 largest
firms. Today, the Bank, which consistently holds
the largest market capitalization on the EGX,
is the global investment community’s preferred
proxy for Egypt and a benchmark for the banking
industry in emerging markets.
Mr. Ezz Al Arab’s term has seen CIB develop a
unique culture that balances an innovation-
driven entrepreneurial spirit with a commit-
ment to global best practices. Nurtured for over
15 years, the Bank’s corporate culture gives it a
natural competitive advantage as an employer
in the market, with CIB having established the
first-of-its-kind employee stock ownership plan
(ESOP) in 2006. More than 80% of all employees
have benefited and continue to benefit from
ESOP, thereby aligning the interests of both
employees and shareholders. CIB’s continuous
investment in its people garnered the Bank rec-
ognition as one of the World’s Best Employers by
Forbes in 2019, coming in at 90th place among 500
employers globally.
As part of Mr. Ezz Al-Arab’s drive to see the Bank
create shared value, in 2010, he launched the CIB
Foundation, an Egyptian leader in the provision of
universal access to quality healthcare to underpriv-
ileged communities. Throughout his tenure with
the Bank, Mr. Ezz Al-Arab has also championed
educational initiatives and built collaborations
between CIB and reputable educational organiza-
tions to provide diversified learning opportunities
such as the CIB Endowed Professorship of Banking
at the American University in Cairo.
the Board at Fairfax Africa, and a non-executive
Director of the Board at Ripplewood Advisors
MENA Holdings Limited.
Mr. Ezz Al-Arab joined CIB from Deutsche Bank
and previously served with JP Morgan and Mer-
rill Lynch in postings that took him to Bahrain,
New York, and Cairo. He holds a BA in Commerce
from Cairo University.
Under Mr. Ezz Al-Arab’s direction, CIB has
received numerous prestigious
international
accolades, including being named “World’s Best
Emerging Markets Bank” by Global Finance in
2018, a year after being recognized for the same
award by Euromoney, making it the first bank in
Egypt, North Africa, and Middle East to ever win
this award. For his part, Mr. Ezz Al- Arab was
named “CEO of the Year” by Global Investor in
2019, was recognized in 2016 for his “Outstand-
ing Contribution to Financial Services in the
Middle East” and was EMEA Finance’s “Best
CEO in Egypt and Africa” at the magazine’s 2014
Banking Awards.
Mr. Ezz Al-Arab leads the Federation of Egyptian
Banks as Chairman, is co-chair of the Institute
of International Finance’s Emerging Markets
Advisory Council, and serves as Director of Mas-
tercard Middle East’s Regional Advisory Board.
He is also Chairman of the Board of Trustees of
the CIB Foundation, a non-executive Director of
10
Annual Report 2019
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11
CIB Introduction >> Leadership
Mr. Hussein Abaza
Chief Executive Officer and Board Member
Mr. Hussein Abaza leads strategy and operations at
CIB, Egypt’s premiere private sector bank serving over
a million customers, including corporate clients from
among Egypt’s largest 500 institutions.
Mr. Abaza has been Chief Executive Officer and a
member of the Board of Directors since March 2017.
He assumed this position after a six-year run as CEO of
Institutional Banking. Prior to this, he was the bank’s
Chief Operating Officer and from 2001 until 2010, its
Chief Risk Officer responsible for managing credit,
market, and operational risk.
Mr. Abaza is also a member of the Bank’s award-win-
ning investor relations program, which has helped CIB
grow its market capitalization over tenfold since 2008.
Previously, he served as Head of Research and then
Managing Director at EFG Hermes Asset Management
from 1995 until his return to CIB in 2001.
Mr. Abaza joined CIB after obtaining his BA in Business
Administration from the American University in Cairo.
He has pursued post-graduate training and education
in Belgium, Switzerland, London, and New York.
the Top Executive Group at ABN AMRO Bank and a
member of the Group Finance and Group COO Board.
Mr. Mirza is the founder and Chief Executive Of-
ficer of Focal One for Consultancy in Canada, and
currently serves as Independent Non-Executive
Board Member of Eurobank Ergasias (Athens),
where he chairs the Board Audit Committee and
sits on the Board Risk Committee. Mr. Mirza
also serves as Non-Executive Independent Board
Member of South Africa Bank of Athens (Johan-
nesburg) and sits on the board’s Audit, Risk, and
Technology Committees.
Mr. Mirza holds various business management
degrees from reputable institutions like Queens
Business School (Toronto), Wharton Business
School, Stanford Graduate School of Business, and
is a member of the Institute of Corporate Direc-
tors, Canada.
Mr. Jawaid Mirza
Lead Director since July 2019
Non-Executive Independent Director of the Board
Chair of CIB’s Audit Committee
Chair of CIB’s Governance and Nomination
Committee
Member of Board Risk Committee, Operations
and Technology Committee
Mr. Jawaid Mirza is a strong proponent and practitio-
ner of international corporate governance practices,
bringing over 30 years of diversified experience and
a solid track record in all facets of financial and risk
management, technology, mergers and acquisitions,
business turnarounds, and operations management.
Over the years, Mr. Mirza has worked with global
institutions like Citibank and ABN AMRO Bank
Ltd, where he held several senior positions as
CFO European Region, Managing Director and
Chief Operating Officer for Global Private Bank-
ing, Asset Management and New Growth Markets
(Consumer Banking), and Chief Financial Officer
for the Asian Region including Australia/New
Zealand and the Middle East. Mr. Mirza has led
several due diligences for acquiring banks in
Hungary, Taiwan, Thailand, Germany, Brazil,
France, and Pakistan. He was also a member of
12
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13
CIB Introduction >> Leadership
as Non-Executive Director for a number of com-
panies. Moreover, Mr. Richards is part of a team
of experts focused on developing SMEs in the
World Economic Forum, and he has regular con-
tributions in the world financial media, includ-
ing The Banker, Financial Times, Business day
in South Africa. He is also a jury at the Banker
Annual Financial Awards.
He has a first-class degree from Oxford Uni-
in modern history and economics.
versity
Mr. Richards completed the London Business
School’s Accelerated Development Program and
Ashridge Management College’s Group Level
Strategy Program. He also attended the Leading
Professional Services Firms Program at Harvard
Business School.
Mr. Mark Richards
Non-Executive Independent Director of the Board
Chair of CIB’s Risk Committee
Member of Compensation Committee, Governance
and Nomination Committees
Mr. Mark Richards currently serves as a non-
executive Board Member in NLB Slovenia as well
as VENCAP International UK since 2019. Mr.
Richards was Chief Executive of IPGL (Holdings)
Ltd., a major corporate holding company based
in the United Kingdom. Mr. Richards brings
considerable experience in emerging market
banking and investment. He was Partner and
Global Head of Financial Services at Actis, one
of the world’s leading and most ethical emerg-
ing market private equity groups. During his 11
years at Actis, Mr. Richards was responsible for
building many successful companies in Africa,
Asia, and Latin America.
Previously, Mr. Richards spent 18 years at Bar-
clays, where he served in senior leadership roles,
including CFO of the International Offshore
Bank, Director of Group Strategy, and Head of
Group Corporate Development.
With his 30 years of global experience in Bank-
ing and financial services, Mr. Richards serves
profitability and growth by taking strategically lead-
ing positions within the insurance industry in Japan.
From 2001 to 2004, he was the President of AIG’s Gen-
eral Insurance operations based in Seoul, South Ko-
rea, where a major restructuring plan resulted in sig-
nificant revenue and profitability increases through
specific product and channel strategies. From 1997
to 2001, Mr. Khosrowshahi was Vice Chairman and
Managing Director of AIG Sigorta based in Istanbul,
Turkey, and was involved in negotiating strategic
alliances and joint ventures with Turkish conglomer-
ates and working with governmental regulators to
improve support for new product introductions to
the emerging Turkish insurance market.
Before this position, Mr. Khosrowshahi was Regional
Vice President of AIG’s domestic property and ca-
sualty operations for the Mid-Atlantic region based
in Philadelphia. He also held various underwriting
and management positions with increasing respon-
sibilities at AIG’s headquarters in New York after he
joined AIG in 1986. He has served on the board of the
Foreign Affairs Council and the Insurance Society of
Philadelphia. He has also been a council member of
USO in South Korea, the Chairman of the Insurance
Committee of the American Chamber of Commerce
in South Korea, and a member of the Turkish Busi-
nessmen’s Association. He is also a member of the
Chartered Insurance Institute.
Mr. Khosrowshahi obtained an MBA in 1986 fol-
lowing an undergraduate degree in Mechanical
Engineering in 1983 from Drexel University. He par-
ticipated in the Executive Development Program at
the Wharton School of the University of Pennsylvania
in 2003 and is a regular lecturer at universities and
insurance institutes.
Mr. Bijan Khosrowshahi
Non-Executive Director of the Board (represent-
ing the interest of Fairfax Financial Holdings Ltd)
Chair of CIB’s Compensation Committee
Member of Risk Committee, Governance and
Nomination Committee
Mr. Bijan Khosrowshahi is the President and CEO
of Fairfax International. He joined Fairfax Finan-
cial Holdings in June 2009 and is currently based in
the US. Fairfax is a financial services holding com-
pany which, through its subsidiaries, is engaged in
property and casualty insurance and reinsurance
and investment management. Fairfax is listed on
the Toronto Stock Exchange.
Fairfax International focuses on expanding Fairfax
Financial Holdings’ insurance presence outside
North America. Mr. Khosrowshahi also represents
Fairfax’s interests as a board member at several
international institutions.
Prior to joining Fairfax, Mr. Khosrowshahi was the
President and CEO of Fuji Fire & Marine Insurance
Company Ltd., based in Japan. He is the only non-
Japanese individual who has been the President of
a publicly traded Japanese insurance company. He
was elected President in June 2004 and successfully
implemented a turnaround strategy to return Fuji to
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15
CIB Introduction >> Leadership
points nationwide. Mrs. Habib’s journey with
Fawry culminated with a successful exit to a
consortium of private equity funds in 2015.
Prior to Fawry, Mrs. Habib spent nine years as a
member of Raya Holding’s executive team, where
she played a key role in the merger and develop-
ment of Raya Group, as well as being responsible
for the creation and development of the Raya
brand during its evolution into one of Egypt’s
leading technology players.
Mrs. Habib obtained an MBA from INSEAD,
France. She holds a BSc with Honors in Computer
Science from the American University in Cairo.
development as well as the second 10-year African
Programme for Infrastructure Development as well
as many cross-continental initiatives and projects.
Dr. Abou-Zeid was selected twice, in 2012 and 2019, as
one of The Most Influential Women in Africa and also
in Egypt; she was decorated the Wissam Alaouite
from Morocco, named “Personalité d’avenir” from
France and received the “Outstanding Alumni
Award” from the University of Manchester, UK - some
of numerous international awards and recognitions.
Dr. Abou-Zeid is a member of the prestigious Global
Leaders Broadband Commission for Sustainable
Development, the Global Council on Digital ID, the
Global Commission for Urgent Action on Energy Ef-
ficiency, as well as the Stewardship Board for System
Initiative on Shaping the Future of Energy.
Dr. Abou-Zeid sets the example for women in STEM
and in leadership and decision-making positions and
is long named and recognized as a champion of gen-
der equality and women’s empowerment.
An Egyptian national, Dr. Abou-Zeid has a multi-
disciplinary educational background, receiving a BSc
in Electrical Engineering from Cairo University, MBA
from Université Senghor, MPA from Harvard Univer-
sity, and PhD in Social and Economic Development
from The University of Manchester.
Dr. Amani Abou-Zeid
Non-Executive Independent Director of the Board
Chair of CIB’s Corporate Sustainability Task Force
Member of Risk Committee, Governance and
Nomination Committee, and Compensation
Committee
H.E. Dr. Amani Abou-Zeid is the African Union
(AU) Commissioner in charge of Infrastructure,
Energy, ICT, and Tourism. For more than 30 years,
Dr. Abou-Zeid has served in leadership positions in
international organizations and has amassed a re-
markable mix of experience from across continents
and stakeholders.
She has managed the African Development Bank’s
largest operational portfolio and
implemented
national and continental multi-sectoral develop-
ment programs, including implementing the world’s
largest solar power plant. As AU Commissioner, she
launched the Single African Air Transport Market,
benefitting 800 million Africans, delivering on the
first flagship project for African Integration under AU
Agenda 2063. She also launched Africa’s digital trans-
formation strategy to enhance Africa’s leapfrogging
Mrs. Magda Habib
Non-Executive Independent Director of the Board
Chair of CIB’s Operation and Technology Committee
Member of Risk Committee, Governance and
Nomination Committee, and Compensation
Committee
Mrs. Magda Habib is the co-founder and Chief
Executive Officer of Dawi Clinics, a chain of pri-
mary care clinics established in Egypt in 2016.
Mrs. Habib has vast experience in the technical
information technology and electronic payments
fields, as well as smart banking solutions. She
brings 25 years of expertise in various manage-
rial arenas, including strategic brand manage-
ment, consumer and retail marketing, corporate
communications, and investor relations.
She was also a co-founder, Board Member, and
Chief Commercial, Marketing & Strategy Offi-
cer at Fawry Banking and Payment Technology
Services. As a co-founder and a key member of
the executive team, Mrs. Habib helped establish
Fawry as the leading electronics payment plat-
form in Egypt with more than 50,000 payment
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17
CIB Introduction >> Leadership
departments, including corporate banking, risk
management, financial control, and credit ad-
ministration. Mr. Sukthankar is currently Lead
Partner in Sanaksh Advisors LLP, a firm that pro-
vides advisory services to private equity, venture
capital, and other entities.
Mr. Sukthankar received a BCom from Sydenham
College and an MBA from Jamnalal Bajaj Institute
of Management Studies, University of Mumbai. He
has also completed the Advanced Management
Program (AMP) from Harvard Business School.
Mr. Paresh Sukthankar
Non-Executive Independent Director of the Board
Member of Audit Committee, Risk Committee,
Compensation Committee, Governance and
Nomination Committee.
Mr. Paresh Sukthankar has been a banker for over
three decades. He was part of the core team that
founded HDFC Bank in 1995 and helped build it into
one of India’s leading, most respected financial insti-
tutions. At HDFC Bank, he contributed to various key
areas, including credit, risk management, finance,
human resources, investor relations, corporate com-
munications, corporate social responsibility, and in-
formation security. He also led the teams managing
HDFC Bank’s two acquisitions and its equity capital
issuances in the domestic and international markets.
Mr. Sukthankar was inducted on the bank’s Board as
Executive Director in 2007 and was elevated to the
post of Deputy Managing Director in 2014. Mr. Suk-
thankar resigned from HDFC Bank in 2018.
Mr. Sukthankar has been a member of various
committees formed by Reserve Bank of India
and Indian Banks’ Association. Prior to joining
HDFC Bank, Mr. Sukthankar worked in Citibank
for over nine years from 1985 to 1994, in various
He started his career at Citibank NA where he
worked for two decades and in his last role was the
Regional Head and CEO for Citibank’s Turkey, Mid-
dle East and Africa region until 2006. He moved as
the Global Co-Founder of Fullerton Financial Hold-
ings, Singapore where he served for 13 years on the
Global Management Board as its Executive Vice
President and Global Head of Consumer Banking,
and the CEO-CEEMEA region of Fullerton Finan-
cial from 2006-2017. At the same time, he was also
was the founder of Dunia Finance LLC, Fullerton’s
UAE subsidiary, which he operated as its Founder
Managing Director and CEO until 2018.
Mr. Kakar also serves on several Bank and Financial
Institution boards, namely, Eurobank Ergasias SA
(Greece), Gulf International Bank (GIB Bahrain),
Gulf International Bank (GIB Saudi Arabia), Com-
mercial International Bank (Egypt), UTI Asset Man-
agement Company (India), and Satin Credit Care
Networks (India). He is also a member of the Global
Advisory Board of the University of Chicago’s Booth
School of Business since 2009.
Mr. Rajeev Kakar
Non-Executive Independent Director of the Board
Member of Risk Committee, Governance and
Nomination Committee, Operations and Technol-
ogy Committee, and Compensation Committee.
Mr. Rajeev Kakar is a seasoned banker, business
founder, entrepreneur, and corporate board mem-
ber with over three decades of global banking ex-
perience and expertise in financial services, espe-
cially in Emerging Local Corporate/Commercial/
MSME/Retail Banking, across multiple countries
globally with focus on high-growth emerging
markets in the Asia Pacific/China, Europe, Indian
Sub-Continent, MENA/GCC, and Central/Eastern
Europe regions.
Mr. Kakar has a strong track record of success-
fully operating large banks, financial institu-
tions, and leading business turnarounds, with a
demonstrated ability to conceptualize and ex-
ecute multi-country business strategies, lead ac-
quisitions and business/digital transformations,
launch green-field financial services businesses,
and deliver profitability over a sustained period,
while contributing to the community and serving
on several boards across different countries.
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CIB Introduction >> Leadership
Dr. Sherif Kamel
Non-Executive Director of the Board (until Octo-
ber 2019)
Chaired the Operations and Technology Com-
mittee (until October 2019)
Member of the Audit, Governance and Nomi-
nation, and Compensation committees (until
October 2019)
Dr. Sherif Kamel is a professor of management and
the Founder and Dean of the School of Business
at AUC. He now chairs the American Chamber of
Commerce in Egypt. Before joining AUC, he was
director of the Regional IT Institute and Training
Manager at the Cabinet of Egypt’s Information
and Decision Support Center. He is an Eisenhower
Fellow and a Fellow at the Center for Global En-
terprise.
Dr. Kamel is a member of the AACSB Internation-
al Middle East Advisory Council, the Egypt-US
Business Council, and Education for Employment
Egypt. He has served on the board of the Egyp-
tian American Enterprise Fund and has been a
member of the World Bank Knowledge Advisory
Commission. Dr. Kamel was a founding member
of the Internet Society of Egypt. He has been in-
vited as panelist and speaker to a variety of policy,
development, and leadership conferences and
expert meetings, including the Asia-Middle East
Dialogue, AACSB International, World Summit on
the Information Society, the Center for Strategic
and International Studies, Atlantic Council, Ger-
man Marshall Fund, Middle East Institute, the In-
ternational Monetary Fund, and the World Bank.
Dr. Kamel holds a PhD in Information Systems
from the London School of Economics and Politi-
cal Science, an MBA, a BA in Business Administra-
tion, and an MA in Islamic Art and Architecture
from AUC. His research and teaching interests
include the management of information technol-
ogy, the transfer of information technology to de-
veloping nations, organizational transformation,
electronic business, decision support systems,
and entrepreneurship. His work on information
systems and management is published in schol-
arly journals and books.
Mr. Yasser Hashem
Non-Executive Director of the Board (until Octo-
ber 2019)
Chaired the Governance and Nomination Com-
mittee (until October 2019)
Member of the Audit and Compensation Com-
mittees (until October 2019)
Mr. Yasser Hashem has held the position of Managing
Partner at ZH&P since 1996. The legal skills he has ex-
tended to the privatization of public sector entities and
his role in the inception of private provision of telecom
services in Egypt have made him a valued veteran of
legal practice in Egypt. Combining a wide range of
extensive legal knowledge with honed networking and
interpersonal skills, Mr. Hashem protects and furthers
the interest of over 100 local and international clients.
With a special focus on corporate law, Mr. Hashem has
supported the privatization program of public sector
entities in Egypt through hundreds of restructurings,
incorporations of foreign and domestic companies,
and advising foreign and local investors on the most
efficient vehicles and structures for implementing their
investments in Egypt.
In the fields of M&A and capital markets, he has reli-
ably represented acquirers in all major tender offers
and M&A transactions in Egypt and has led the four
largest multibillion dollar M&A transactions in Egypt.
He has also played a major role in most IPOs that have
taken place in Egypt.
Mr. Hashem has advised on Egypt’s most significant
telecom license acquisitions and M&A transactions.
The legal services he has extended to this sector include
the acquisition and mandatory tender offers of telecom-
munication companies, as well as support for consortia
on a number of mobile and fixed wireless license bids.
He has contributed to the drafting and negotiation of
all major telecom licenses, including public payphones,
mobile cellular networks, private data networks, satel-
lite, and marine fiber-optic cabling, among others.
Mr. Hashem received his LL.B. from Cairo University in
1989. He was admitted to the Egyptian Court of Cassa-
tion in 2007 and is a member of the Egyptian Society of
International Law and the Licensing Executive Society.
He is fluent in Arabic, English, and German.
Management Committee
Mr. Hussein Abaza
Chief Executive Officer and Board Member
Chair of Management Committee
Chair of High Lending and Investment Committee
Mr. Hussein Abaza leads strategy and operations at
CIB, Egypt’s premiere private sector bank serving over
a million customers, including corporate clients from
among Egypt’s largest 500 institutions.
Mr. Abaza has been Chief Executive Officer and a
member of the Board of Directors since March 2017.
He assumed this position after a six-year run as CEO of
Institutional Banking. Prior to this, he was the bank’s
Chief Operating Officer and from 2001 until 2010, its
Chief Risk Officer responsible for managing credit,
market, and operational risk.
Mr. Abaza is also a member of the Bank’s award-win-
ning investor relations program, which has helped CIB
grow its market capitalization over tenfold since 2008.
Previously, he served as Head of Research and then
Managing Director at EFG Hermes Asset Management
from 1995 until his return to CIB in 2001.
Mr. Abaza joined CIB after obtaining his BA in Business
Administration from the American University in Cairo.
He has pursued post-graduate training and education
in Belgium, Switzerland, London, and New York.
Mr. Mohamed Sultan
Chief Operating Officer
Mr. Mohamed Sultan joined CIB as Head of Consumer
Operations in 2008, and within six months, was ap-
pointed Head of the Operations Group. In September
2014, Mr. Sultan was appointed Head of Operations and
IT before assuming his role as COO.
Under his leadership and management, the Opera-
tions Group was significantly developed, resulting in
major expansions within the operations function. New
divisions were established, serving the expansion of the
business or merging several operations divisions, in-
cluding Corporate Services, Alternative Channels, and
Real Estate and Facility Management.
In his continuous efforts to enhance the Bank’s
internal and external customer experience in align-
ment with CIB’s overall objectives and strategic
goals, multiple departments were established, in-
cluding Treasury Middle Office, Operations Control
Management, Retail Operations, Customer Care
and Experience, as well as the Sustainable Develop-
ment Department.
His vision brought about the establishment of the Se-
curity and Resilience Management Group, with a clear
strategic mandate to develop and firmly establish the
Bank’s business continuity and cyber security manage-
ment capabilities. Under his leadership, CIB has ob-
tained ISO22301:2012 Certification in Business Conti-
nuity Management, positioning CIB as the pioneer and
leader among peer financial institutions in the market.
In 2015 and 2016, Mr. Sultan led a major transformation
strategy in the IT Department, adding significant value
to existing technology and enhanced infrastructure.
The aim was a more solid foundation that provides
superior services to customers and allows the business
to grow smoothly as the Bank moves forward. Mr. Sul-
tan has also been leading programs under the Bank’s
Strategic and Digital Transformational Agenda and has
played a significant role in expediting the adoption of
digital technologies with the aim of maintaining CIB’s
role as market leader in this domain.
Prior to joining CIB, Mr. Sultan held the positions of Vice
President of Branch Operations and Control Manage-
ment at Mashreq Bank and Country Operations Head
at the National Bank of Oman. He has attended several
leadership programs in top business schools and is also
an alumnus of INSEAD Business School.
Mr. Amr El Ganainy
Chief Executive Officer, Institutional Banking
Mr. Amr El Ganainy joined CIB as General Man-
ager of the Financial Institutions Group. In Janu-
ary 2010, he assumed his role as President of the
Global Customer Relations Department, before
taking on his current role.
Mr. El Ganainy is the Chairman of International
Securities & Services Co. (Falcon Group), Chair-
man of the Normalization Committee, Egyptian
Football Association, a Board Member of CI Capi-
tal Holding Co., Board Member of Misr for Central
Clearing, Depositary and Registry Company, Board
Member of The Egyptian Holding Co. for Airports
and Air Navigation, General Assembly Member of
Egyptair Holding Co., Honorary Chairman of both
Interarab Cambist Association (ICA) and Egyptian
Dealers Association (ACI Egypt) and a member of
the American Chamber of Commerce in Egypt.
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21
CIB Introduction >> Leadership
Mr. El Ganainy has served as Chairman of CI Asset
Management Co., Chairman of Commercial Inter-
national Brokerage Co., Board Member of TE Data,
Executive Board Member of ACI International (The
Financial Market Association), Board Member of
Royal & Sun Alliance Insurance Co., and the Chair-
man of Capital Securities Brokerage Co.
Prior to joining CIB, Mr. El Ganainy worked at the
United Bank of Egypt as General Manager, Trea-
surer and Head of Correspondent Banking and was
Chief Dealer of the Export Development Bank. He
began his career as a dealer at Suez Canal Bank.
Mr. Ahmed Issa
Chief Executive Officer, Retail Banking
Mr. Ahmed Issa started his banking career in 1993 at
CIB branches and attended CIB’s industry-leading cred-
it course in 1994. He was later promoted through the
ranks within CIB’s Corporate and Investment Banking
divisions, and his career has seen him take on notable
positions such as Head of Financial Institutions Group,
CIB’s Group CFO, Head of Strategic Planning in addition
to a successful career as a Corporate and Investment
Banker at CIB and CI Capital. Mr. Issa was also Chair-
man of the Board at CORPLEASE and Falcon Group.
He chairs the Banking Committee at the American
Chamber of Commerce in Egypt, and sits on the board
of Egypt’s Internal Trade Development Authority since
2017 and EGYPTAIR Holding Company since 2018.
Mr. Issa earned his MBA at UNC Chapel Hill’s Kenan-
Flagler Business School in 2003 and re-joined CIB in
the same year. As a Fulbright scholar, Mr. Issa attended
the Program on Investment Appraisal and Manage-
ment at Harvard University in 1997 and subsequently
interned at Merrill Lynch in NY, USA. He attended the
industry-leading CIB Credit Course in 1994 and more
than 25 executive and leadership development pro-
grams in LBS, INSEAD, IMD, and others.
Ms. Pakinam Essam
Chief Risk Officer (until January 2020)
Ms. Pakinam Essam launced the Risk Transforma-
tion Process at the start of her appointment. CIB’s
Risk Group has evolved into a forward-looking,
holistic organization with an integrated view of
key risk areas, including institutional banking,
consumer banking, business banking, market, op-
erational, liquidity, and interest rate risks. She has
expanded the group’s coverage to focus on emerg-
ing non-financial risks, such as conduct, cyber se-
curity, information security, vendor management,
IT, reputation, and social and environmental risks.
She has championed the Bank’s Enterprise Risk
Management framework, with emphasis on infra-
structure, process, environment, and risk culture.
Under her leadership, CIB has been recognized for six
prestigious risk awards by Asian Banker Singapore for
the Middle East and Africa in the following categories:
Enterprise Risk Management, Retail Risk, Liquidity
Risk, and Operational Risk.
Ms. Essam is a key member of the Bank’s Executive
Committee and an active member of the Bank’s
Sustainability Steering Committee and the Board of
Trustees of the CIB Foundation.
Ms. Essam joined CIB after graduating from the Facul-
ty of Economics and Political Science, Cairo University,
and has over 25 years of experience in banking and risk
management. Ms. Essam has decided to retire and will
depart CIB effective January 2020.
Ms. Hanan El Borollossy
Deputy Chief Risk Officer (acting CRO effective
19 January 2020)
Ms. Hanan El Borollossy started her career at CIB in
1991 in the Corporate Banking department, where she
rose in the ranks until becoming Head of Group. Her
responsibilities grew to include strategic and manage-
rial functions aimed at growing CIB’s portfolio by iden-
tifying lucrative business opportunities. Throughout her
career, Ms. Borollossy was chosen to represent the Bank
as a Board Member in several affiliates and became the
Chairperson for Commercial Life Insurance Company.
She was appointed as Deputy Chief Risk Officer with
duties including enhancing CIB’s integrated Enter-
prise Risk Management (ERM) framework. In her cur-
rent capacity, Ms. Borollossy is responsible for manag-
ing and developing all key risk areas including credit
risk in Institutional Consumer and Business Banking,
Assets and Liabilities Management Risk including
market, liquidity and interest rate risks in addition
to non-financial risks including operation, strategic,
conduct, vendor management, IT, reputation, and
social and environmental risks. She is a senior member
of all essential committees at the Bank, including High
Lending and Investment Committee, Consumer and
Business Banking Risk committees, and Non-Financial
Risk and Compliance Committee.
Ms. Borollossy received her BA in Political Science from
the American University of Cairo in 1983 and has since
pursued a number of postgraduate trainings in dif-
ferent corporate, investment, and risk and strategic
management areas.
From right to left: Mr. Ahmed Issa, Mr. Amr El Ganainy, Ms. Hanan El Borollossy,
Mr. Hussein Abaza, Ms. Pakinam Essam, Mr. Mohamed Sultan
22
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23
CIB Introduction
What
We Do
Institutional Banking
Corporate Banking and Global Customer
Relations Group
Widely recognized as Egypt’s preeminent corpo-
rate bank, CIB serves enterprises ranging from
industry-leading corporates to medium-sized
businesses.
Debt Capital Markets
Global product knowledge, local expertise, and
capital resources make CIB an Egyptian industry
leader in project finance, syndicated loans, secu-
ritization, bonds, and structured finance. CIB’s
project finance and syndicated loan teams facili-
tate market access for large borrowers, providing
them with world-class services at exceptional
execution times.
Direct Investment
As a local player that adheres to widely acclaimed
international standards, CIB actively participates
in carefully selected direct investment opportu-
nities in Egypt and across the region, maximizing
return on investment.
Financial Institution Group
CIB provides a diverse set of banking and fi-
nancial services designed to suit the needs of
different financial institutions through facilities
tailored to address the financing needs of bank-
ing and non-banking financial institutions.
Treasury and Capital Market Services
CIB delivers world-class services in the areas of cash
and liquidity management, capital markets, foreign
exchange, and derivatives.
Strategic Relations Group
CIB is dedicated to servicing its prime institutional
entities through the Strategic Relations Group. SRG
carries out this function with highly qualified relation-
ship managers, who supply our customers with exclu-
sive, personalized services, catering to their unique
business needs. The market segment covered by SRG
contains strategic entities, including, but not limited
to, the vast majority of sovereign diplomatic missions.
Enterprise and Governmental Relations Group
Enterprise and Governmental Relations aims at man-
aging the Bank’s relationship with strategic govern-
mental and large enterprises by focusing on providing
first class service and lifetime value for top tier local
and regional companies under state-owned enter-
prises, governmental entities or sovereign authorities,
which require a more sophisticated level of service in
order to increase their business with CIB. In addition
to creating new business opportunities for other LOB’s
out of those customers by offering different corporate,
digital, and consumer products and services.
Global Transaction and Digital Banking
The Bank’s Global Transaction and Digital Banking
Group manages all corporate and consumer digital
channels to fully integrate the Bank into our clients’
daily lives. It develops simple, reliable, and consulta-
tive digital experiences that meet customers’ needs
anytime, anywhere, and on any device.
Retail Banking
Consumer Banking
The Consumer Banking Division is the core engine
to CIB’s dynamic service offering, providing a broad
range of retail clients in different customer segments
(Prime, Plus, Wealth, or Private), an extensive bundle
of products and services tailored to satisfy their needs.
These products are diversified from personal
to specialized lending solutions, cash manage-
ment services to credit and debit card offerings,
in light with a full-fledged competitive analysis
in depth.
Business Banking
The Business Banking segment serves over 54,000
SMEs with revenues ranging from EGP 1 million to
over EGP 200 million through a network of over a
hundred experienced relationship managers. The
division works with clients across the industry,
providing market-leading services and innovative,
bespoke solutions for small and medium enter-
prises as it works to cement CIB’s position as a bank
of choice for business owners.
Representative Offices, Subsidiaries,
and Associates
Dubai Representative Office
CIB launched its UAE operations in 2005, al-
lowing for a direct presence in the GCC region
to offer a full range of products to retail and
corporate clients. The Dubai Representative Of-
fice offers its existing and new customer base
consultation regarding the Egyptian market,
thanks to CIB’s strong business foothold and
track record. The office focuses on attract-
ing and channeling inbound investments and
cementing relationships with reputable GCC
corporations with investment or planned in-
vestments in Egypt and Africa, in addition to
targeting high-net-worth individuals and busi-
ness banking clients with an appetite for the
Egyptian market. The office creates a bridge
between the GCC market and the Egyptian
market to provide growth opportunities for the
Bank, while extending its business portfolio
and plays a key role in building and maintaining
relationships with large corporate clients and
financial institutions in the GCC to boost the
corporate and trade finance business in Egypt.
These strategic alliances are key to the expan-
sion strategy of the Bank, allowing it to leverage
unique opportunities to offer clients extensive
financial tools while providing valuable market
information to GCC clients.
Addis Ababa Representative Office
CIB established its Ethiopia Representative Of-
fice in April 2019 in Kirkos Sub City, Addis Ababa
and has been fully operational since 19 July 2019.
Entering one of the most attractive markets in the
region, with one of the highest GDP growth rates
globally over the last few years and the second-
largest population in Africa, CIB will be able to
further its expansion strategy for tremendous
growth opportunities. The office works closely
with Egyptian corporations operating in Ethio-
pia, as well as international and local financial
institutions to offer creative solutions for their
foreign and local financing needs. The office
maintains and builds relationships with Egyptian
expatriates in Ethiopia and focuses on develop-
ing strong ties with Ethiopian banks to pave the
way for establishing on-the-ground market intel-
ligence within the country.
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CIB Introduction >> What We Do
Widely recognized as Egypt’s
preeminent corporate bank,
CIB serves enterprises
ranging from industry-leading
corporates to medium-sized
businesses.
CVentures
CVentures is Egypt’s first corporate venture capital
firm owned by a bank focused primarily on invest-
ing in category-defining companies in financial
technology spaces with the potential to create
meaningful change in financial services. CVen-
tures primarily participates in Series A and Series
B investment rounds, and seed investment rounds
in core financial applications including, but not lim-
ited to, capital markets and payments, money trans-
fers and remittances, digital lending and financial
data platforms, artificial intelligence, data analytics
and machine learning, security and enterprise IT,
insuretech, blockchain, marketing and customer
experience, alternative finance, regtech, and digital
banking solutions.
Falcon Group
Falcon Group provides a plethora of services includ-
ing, but not limited to, security services, money
transfer, technical systems, and security products,
public services and project management, and tour-
ism and concierge services to a variety of industries
such as the industrial, commercial, tourism, and
public sectors. The group provides state-of-the-art,
holistic solutions tailored to every client’s specific
requirements. Falcon Group’s key strength lies in its
single-point-of-contact solutions that ensure it pro-
vides consistent services at the highest quality, low-
est risk, and with great flexibility at a reasonable cost.
Fawry Plus
Fawry Plus is Egypt’s first agent banking company,
providing a wide array of banking and financial
services to end consumers and businesses through a
network of retail branches across Egypt, focusing on
serving urban and underserved regions. Fawry Plus
branches provide banking services, including lim-
ited KYC services and document collection required
for mobile wallet registration, prepaid and credit
card issuance, loan issuance, and account opening.
Other services include collecting bank correspon-
dence and mail, cash withdrawal and deposits, re-
paying loan and credit card dues, as well as various
bill payments such as utility, telecom, subscription
fees, taxes, and fines.
Hello Zaki, I have a problem, can
you help me?
Of course, tell me what it is I can
assist you with today.
I withdrew money from a CIB ATM
and I think I left my card at the
machine.
Was it a credit or a debit card?
It was a credit card.
For your safety we recommend
you cancel your card now and
apply for a new one. To cancel
your card online, please click
here or you can do it through
our call center on 19666.
Thank you.
26
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27
CIB Introduction
CIB’s
Stock
The Bank offered shares to the public in 1995 and
has since become the biggest constituent on the
Egyptian Exchange (EGX). Not only is CIB’s stock
viewed as the gateway to Egypt, but investors and
analysts often view CIB’s stock as a proxy for the
Egyptian market, with the Bank acting as a mir-
ror for the local banking sector. The economy’s
growth prospects is generally depicted in the
credit outlook, while retail banking is seen as
portraying the longer-term story of financial
inclusion.
CIB was the first Egyptian bank to offer its shares
on international markets with a GDR program
on the London Stock Exchange (LSE) in 1996. In
2001, CIB was again a first, being the first Egyp-
tian bank to register its shares on the NYSE in the
form of ADR Level 1 program. In 2012, the Bank
began trading on OTCQX International Premier,
a segment of the OTCQX marketplace reserved
for
international-leading, non-US companies
listed on a qualified international exchange and
providing their home country disclosure to US
investors.
By the end of 2019, CIB’s total issued shares were
1,469,082,130, the Bank’s GDR outstanding posi-
tion reached 423,398,421 shares, representing
28.82% of issued shares, and its ADR outstanding
position recorded 21,767,360 shares, representing
1.48% of issued shares.
CIB has the highest weight on the EGX30, ac-
counting for 43.47% of the index, and has the
highest free float at 93.45%. CIB’s stock is one of
Egypt’s most liquid, and it is the most valuable
financial institution with a market capitalization
of EGP 122 billion as of December 2019.
Breakdown of Shareholders by Region
(As of December 2019)
Breakdown of Shareholders by Type
(As of December 2019)
around the world, allowing them to make informed
investment decisions.
Thanks to the team’s continuous efforts to further
enhance the program, CIB received three awards
in 2019 in the largest investor relations event in the
MENA region organized by the Middle East Investor
Relations Association (MEIRA) in partnership with
Extel. The Bank’s Chief Executive Officer received
“Best Investor Relations by CEO in the Middle East,”
the Chief Communications Officer was named “Best
Investor Relations Professional – Egypt,” and CIB
was awarded the “Leading Corporate for Investor
Relations in Egypt.”
This is the sixth year running in which CIB has re-
ceived at least one award from MEIRA.
Equity Analysts’ Ratings
CIB is widely covered by leading research houses
both locally and internationally. In 2019, 16 institu-
tions regularly issued research reports on CIB, with
68.8% of analyst recommending “Buy,” 25% recom-
mending “Hold,” and only 6.2% recommending “Sell.
COMI started the year with an open price of EGP
59.26 and ended it at EGP 83.00 with 40% y-o-y
positive change. During 2019, CIB’s price reached
a peak of EGP 85.00 and a valley of EGP 58.60, and
the average VWAP during the year was EGP 74.47,
with an average volume of more than EGP b1.2
million and an average market capitalization of
EGP 109.5 billion. All figures are adjusted to the 1:4
bonus stocks that took place on February 14th 2019.
North America
Africa
GCC
Continental Europe
UK & Ireland
Rest of the World
55.70%
13.55%
9.84%
8.21%
7.66%
5.05%
Investor Relations
CIB works diligently to increase value for its stake-
holders. The Bank’s active Investor Relations Division
maintains a proactive investor relations program to
keep shareholders and investors abreast of develop-
ments impacting the Bank’s performance. The team
and senior management dedicate significant time to
one-on-one meetings, road shows, investor confer-
ences, and conference calls, sparing no effort in pro-
viding the investment community with transparent
disclosures while simultaneously ensuring analysts
have the information they need to maintain balanced
coverage of the Bank’s shares.
Institutions
Individuals
92.53%
7.47%
During 2019, the team and senior management
took part in ten local and international investor
conferences held in the UK, US, Africa, Asia, and
the Gulf, in addition to two road shows and one
business trip. Alongside several in-house meetings,
the team conducted more than 210 one-on-one and
group meetings throughout the year and met with
over 350 local and international investment funds
and research analysts. CIB hosted several confer-
ence calls in 2019, bringing its senior management
together with the investor community.
Disclosures, including regular updates and re-
leases, were periodically made available on CIB’s
investor relations website as well as the EGX, LSE,
and OTCQX portals in a timely manner that en-
sures fair access to information for investors from
28
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29
CIB Introduction
Our History
and Timeline
Commercial International Bank (CIB) was founded
in 1975 as Chase National Bank, a joint venture
between Chase Manhattan Bank and the National
Bank of Egypt (NBE) with ownership of 49% and
51%, respectively. In 1987, Chase divested its owner-
ship stake as part of a shift in its international strat-
egy. NBE acquired that stake, renaming the former
joint venture Commercial International Bank (CIB).
Over time, NBE’s ownership stake in CIB declined,
falling to 19% in 2006. That year, a consortium led
by Ripplewood Holdings acquired NBE’s remain-
ing stake. In July 2009, Actis, a Pan-African private
equity firm specializing in emerging markets, ac-
quired 50% of the Ripplewood Consortium’s stake.
In December 2009, Actis became the single largest
shareholder in CIB with a 9.09% stake after Ripple-
wood sold its remaining share of 4.7% on the open
market. The emergence of Actis as the predominant
shareholder marked a successful transition in the
Bank’s strategic partnership.
In March 2014, Actis undertook a partial real-
ization of its investment in CIB by selling 2.6%
of its stake on the open market, maintaining its
seat on the board. In May 2014, the private eq-
uity firm sold its remaining 6.5% stake to several
wholly-owned subsidiaries of Fairfax Financial
Holdings, making the latter the sole strategic
and largest shareholder in CIB. Fairfax is rep-
resented on CIB’s Board of Directors (BoD) by a
non-executive member.
1975
• Established as Chase National Bank; the first joint venture bank in Egypt
• Becomes the first Egyptian bank to introduce an Institutional Banking Risk
Rating Model
1977
• Becomes first private sector bank to create a dedicated division providing 24/7
banking services to shipping clients, with a primary focus on business in the
Suez Canal
1989
• Selected by BSP to become its agent in Egypt
1991
• First Egyptian commercial bank to arrange debt swap transactions
• First bank to launch a smart card center in Egypt
1993
1994
1996
1997
1998
• Concludes Egypt’s largest initial public offering (IPO) for a domestic bank,
which was 1.5x oversubscribed, selling 1.5 million shares in a span of 10 days
and generating EGP 390 million in proceeds
• First bank in Egypt to connect with the international SWIFT network
• First Egyptian bank to have a Global Depository Receipt (GDR) program on the
London Stock Exchange
• First Egyptian bank to link to SWIFT via CITA
• Concludes first and largest EUR-syndicated loan
• Becomes first private sector bank with investment rating (after Luxor inci-
dent), rated BBB by Fitch IBCA
• First private sector bank with investment rating (after Luxor incident), rated
BBB by S&P
• First bank to link its database to Misr for Central Clearing, Depository and
Registry (MCDR) Company
• First Egyptian bank to form a Board of Directors Audit Committee
1987
• Chase Manhattan divests its stake in the Bank,
• and the Bank changes its name to Commercial International Bank (CIB)
2001
• First Egyptian bank to register its shares on the New York Stock Exchange in
the form of American Depository Receipts (ADR) Level 1 program
• First bank to introduce FX cash services for five currencies through ATM
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CIB Introduction >> Our History and Timeline
2005
• First bank in Egypt to launch a page on Bloomberg for local debt securities
2012
• First Egyptian bank to officially establish a Sustainable Development Department
2006
2007
• First to adopt a pricing policy according to client risk rating to abide by Basel
II requirements
• First Egyptian bank to execute an EGP 200 million repo transaction in the lo-
cal market
• First and largest Egyptian bank to provide securitization trustee services
• Only Bank in Egypt chosen by UNIFEM and World Bank to participate in the
Gender Equity Model (GEM)
2008
• First bank to use Value at Risk (VaR) for trading and banking book for internal
risk management requirements, despite there being no regulatory requirements
2009
• First regional bank to introduce unique concierge and Mastercard emergency
services
• Only Egyptian bank recognized as ‘Best Bank in Egypt’ by four publications—
Euromoney, Global Finance, EMEA Finance, and The Banker—in the same year
• First Egyptian bank to establish a global transaction service department
• The only bank in Egypt able to retain one of the top two positions in the pri-
mary and secondary markets for Treasury Bills and Treasury Bonds
• First and only Egyptian bank to enforce business continuity standards
• CIB Foundation becomes the first in Egypt to have its annual budget insti-
tutionalized as part of its founding institution’s bylaws, as CIB shareholders
unanimously agree to dedicate 1% of annual net profit to the Foundation
2010
2011
2013
2014
2015
2016
• First Egyptian bank to upgrade its ADRs to trade on the OTCQX platform
• First Egyptian bank to sign an agreement with Bolero International, joining
the Bolero multi-bank service for guarantees
• First Egyptian bank to establish an ERM framework and roadmap
• Becomes first Egyptian bank to use RAROC
• First Egyptian bank to introduce an interactive multimedia platform that of-
fers customers the option of interacting with call center agents over video calls
• First Egyptian bank to sign an agreement with Misr for Central Clearing,
Depository & Registry (MCDR) company to issue debit cards for investors to
collect cash dividends
• Launches first co-branded credit card, Mileseverywhere, with national car-
rier Egyptair
• Introduces the first interactive social media platform in the Egyptian
banking industry
• The first block trading transaction on the EGX takes place when Actis sells its
6.5% stake in CIB to Fairfax
• First Egyptian bank to successfully pass external quality assurance on its In-
ternal Audit Department
• Generates highest FX income in 10 years among private-sector banks in Egypt
• First Egyptian bank to recognize conduct risk and establish a framework
• Launches mobile banking application
• Becomes the first Egyptian bank recognized as an active member of the United
Nations Environmental Program—Financial Initiative
• Receives Socially Responsible Bank of the Year 2016 award from African Banker
• CIB-TCM becomes pioneer in trading in almost 114 new and unconven-
tional currencies
2017
• Becomes the only Egyptian bank ranked on the FTSE4Good Sustainability Index
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33
CIB Introduction >> Our History and Timeline
In 2019, CIB became a
founding signatory to the
United Nations Environment
Program Financial Initiative
(UNEP-FI’s) Principles for
Responsible Banking.
2018
2019
• First Middle Eastern company to be analyzed in a case study conducted by the
Leadership Institute of the London Business School
• Establishes CVentures, Egypt’s first corporate venture capital firm primarily
focused on investing in transformational fintech startups
• Receives ISO22301:2012 certification for Business Continuity Management
by PECB, a global provider of training, examination, audit, and certification
standards, in partnership with EGYBYTE, a leader in the MENA market for IT
service management
• Ranks first on the EGX’s sustainability index (S&P/EGX ESG) for the fifth year
in a row since 2014
• Included on the 2019 Bloomberg Gender-Equality Index (GEI), becoming the
first Arab and African company to be named to the index out of the 230 com-
panies. Bloomberg GEI is the world’s only comprehensive investment-quality
data source on gender equality
• Became the only representative from Egypt’s private sector to join the Digital
Economy Task Force (DETF)
• Launched CIB’s Chatbot named Zaki, which uses artificial intelligence, becom-
ing the first bank in Egypt to introduce a chatbot that supports both English
and colloquial Arabic
• Became a founding signatory to the United Nations Environment Program
Financial Initiative (UNEP-FI’s) Principles for Responsible Banking
• Recognized by Forbes among the top 500 employers globally coming in the
90th place; within the top 100 companies in the world
Awards
1993 – 1998
2005
2016
Six-time recipient of
Best Bank in Egypt
award by Euromoney
First Egyptian
bank to win the
JP Morgan Quality
Recognition Award
2006 – 2012
2013
Seven-time recipient of
JP Morgan Quality
Recognition Award
First Egyptian
bank to win the
JP Morgan Quality
Recognition Award
• Socially Responsible Bank of the Year
by African Banker
• Best Bank in Egypt Supporting
Women-Owned and Women-Run
Businesses by the American Chamber of
Commerce in Egypt
• Achievement in Liquidity Risk and
Operational Risk for the Middle East
and Africa by Asian Banker
• Best Retail Risk Management Initiative
by Asian Banker
• Most Active Issuing Bank in Egypt
in 2015 by the European Bank for
Reconstruction and Development
• Middle East Most Effective Recovery
by BCI
2017
2018
2019
First Egyptian bank to win the
JP Morgan Quality Recognition Award
• World’s Best Bank in the
Emerging Markets by
Euromoney, the first bank
in the Middle East and
Africa to win this award
• First Egyptian bank
be named Best Bank
in the Middle East by
Euromoney
• World’s Best Emerging
Markets Bank by Global
Finance, the second
consecutive year in
which CIB has been
awarded this title by an
international institution;
CIB is the first bank
in Egypt and the
Middle East to win this
prestigious award
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35
Strategic
Direction
CIB’s forward-looking strategy is
propped up by the strength of its
people, effective data analytics tools,
and a stalwart management team.
Zaki the Bot
Your Personal Virtual Assistant
I am a business owner, what can CIB offer me?
CIB caters to businesses, both large and
small. We have developed several
business banking segments suited to every
clients needs. Each segment has its own
set of benefits and service levels. Do you
want to know more?
Yes, I run a small business, what would be best
for me?
It sounds like you’d be interested in the CIB
Growth Segment. This is catered to
entrepreneurs whose businesses have up
to EGP 50 million in annual sales turnover
or an average deposit balance ranging from
EGP 250,000 to EGP2 million.
What are the benefits?
The segment features a personalized
communication channel that encourages
businesses to digitize their transactions for
both ease and convenience. With the Easy
Business Account, you enjoy zero account
opening fees, zero minimum balance, and
zero admin fees, plus free access to CIB
Business Online.
How do I apply?
You can apply online for the Easy Business
Account by tapping here now.
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37
Strategic Direction
Strategy
Over the past few years, CIB’s strategy has been fo-
cused on moving toward a more customer-centric
approach to uniquely position it among peers as an or-
ganization. This focus revolves around the customer
experience and a superior brand image. To carry out
our strategy, we have been investing heavily in data
analytics, upscaling our infrastructure, digitaliz-
ing and automating the way we do business, while
constantly developing our employees’ skills with the
latest emerging trends.
As we start a new chapter in CIB’s journey, the Bank’s
outlook is dictated by the progress achieved in the
previous periods, while supporting the decision-mak-
ing process with structured data, creating countless
experiences that are consumed digitally by our cus-
tomers and acknowledging that artificial intelligence,
blockchain, cloud and data (ABCD) will play a pivotal
role in defining our mode of operations.
Our Vision and Mission
In staying true to the above, our vision and mission
statements have changed as well:
Our Vision
To be at the forefront of change, building for the future
and turning aspirations into reality.
Our Mission
To transform traditional financial services into simple
and accessible solutions by investing in people, data,
and digitalization to serve tomorrow’s needs today.
Core Banking Activities
• Offering solutions designed with individual needs
in mind for our targeted customer base relying on
ABCD as the forces driving change and innova-
tion and impacting every aspect of CIB’s strategy
and line of business and support function.
Digital Strategy
• Developing our digital capabilities to tap into
financial inclusion opportunities, lower the cost
to serve, and decrease turnaround time to ensure
operational efficiency and allocation of resources.
Geographical Expansion
• Growing our continental footprint with a focus on
East Africa.
Responsible Banking
• Continuing to advocate and lead in responsible
banking principles by driving financial inclusion
and literacy, women and youth empowerment,
and equality, in addition to adopting the best
practices for sustainability, CSR, and governance.
• Directing our efforts toward maintaining our
position as Egypt’s number one green bank,
as well as upholding employee wellbeing,
community investments, and making bank-
ing accessible for those with disabilities and
the unbanked.
Our Values
• Integrity
• Client Focus
• Innovation
• Hard Work
• Teamwork
• Respect for the Individual
• Decorum
• Responsible Leadership
• Empowerment
Our Pillars
• Segmentation – developing innovative prod-
ucts tailored to the customer’s needs, while
relying on behavioral analysis.
• Customer Experience – leveraging behavioral
analytics and technology to improve the cus-
tomer experience.
• Operational Efficiency – ensuring a stream-
lined approach to provide exceptional custom-
er experience through process re-engineering
and straight-through processing.
• Digitalization of the Customer Journey – de-
veloping our digital capabilities and transac-
tional banking.
Value Creation Model
Value creation is and has always been one of the
main areas of focus in the Bank’s strategy. CIB
works diligently to create value for its sharehold-
ers, customers, employees, and society. To do this,
the Bank efficiently utilizes its key resources to best
serve its strategic priorities, taking into account all
the macroeconomic driving forces that prevail. This
results in creating both financial and non-financial
value for CIB’s stakeholders.
Customer
Centricity
• Offer need-based,
bundled value
propositions like digital
solutions through data
analytics
• Quality of service
initiatives to enhance
customer experience
• Performance-driven
culture
• Social and environ-
mental management
system
• Human capital
development
Organizational
Development &
Sustainability
Strategic Priorities
Financial
Performance
• Asset quality
• Profitability
• Loan growth
• Centralization of
operational processes
with focus on auto-
mation through STP
• Business continuity,
cybersecurity and
resilience manage-
ment
Operational
Efficiency
Key Stakeholders
Clients
Shareholders and Investors
Employees
Society
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39
Strategic Direction >> Strategy
Resources (Input)
Value Created (Outcome)
Resources (Input)
Value Created (Outcome)
Financial Capital
Strong financial capital is
always reinvested in the Bank’s
activities
• EGP 11.8 billion in net income
• EGP 23 billion total revenues
• EGP 51.8 billion net worth
• EGP 387 billion total assets
• EGP 304 billion total deposits
• EGP 122 billion market capitalization
• 29.49% ROAE
• 3.99% NPLs
• 21.59% cost/income
Financial Performance
• Ranked #1 bank among all Egyptian
private-sector banks in terms of
revenues, net worth, total assets, and
deposits
• The largest market capitalization in the
Egyptian banking sector
• One of the highest ROEs, compared to a
market average of 21.5%
• One of the lowest efficiency ratios among
Egyptian private-sector banks
Human Capital
CIB’s in-depth expertise in
different industries is mainly
rooted in our skilled, specialized
and dedicated staff
• 6,900 total workforce as of year-end
• 347,100 training hours
Human Capital
• CIB recognized as one of the World’s
Best Employers by Forbes in 2019,
coming in at 90th place among top 500
employers globally.
• Highly skilled staff capable of sustaining
CIB’s path of success and maintaining
the Bank’s leading position within the
market
Innovation and Technology
Innovation is chiseled in the
Bank’s DNA, and CIB is at
the forefront of the market
in offering simple, fast, and
contextual experiences to its
customers, with a special focus
on digitalization
• #1 in mobile wallet activity in Egypt
• 114% y-o-y increase in number of
Innovation and Technology
• Expanding in digital banking platforms
transactions
• 45% y-o-y increase in number of new
online banking clients, and 51% y-o-y
increase in number of transactions
• 65% y-o-y increase in number of new
smart wallet users, and 34% y-o-y
increase in number of transactions
• Largest ATM network among private
banks, at 1,012 ATMs achieving high
cash deposit and withdraw transactions
migration rates from branches to reach
95% and 98%, respectively.
through availing more services to
enhance customer experience, sales
efficiency, and manage costs. Digital
banking achieved total cost synergy of
EGP 2.2 billion, a 22% y-o-y increase
• Continuously upgrading our infrastruc-
ture and cyber security capabilities to
provide a seamless customer experience
in a safe environment
Service Excellence and
Brand Recognition
CIB has long-standing
relationships with clients that
are built on trust and customer-
centricity. The Bank’s core values
enabled the Bank to preserve
and strengthen its brand
positioning in the financial
services market in Egypt as the
largest private bank
NPS in 2019:
• Wealth 45, vs. 20.3 NPS ME Benchmark
• Plus 38, vs. 20.3 NPS ME Benchmark
• Prime 32, vs. 20.3 NPS ME Benchmark
• Corporate 23, vs. 37.9 NPS ME Benchmark
• Business Banking 21, vs. 37.9 NPS
ME Benchmark
CSAT in 2019:
• Wealth 8.5,vs. 8.4 in 2018
• Plus 8.3; same as in 2018
• Prime 8; same as in 2018
• #38 on Forbes Middle East Top 100
Listed Companies in the Arab World,
and ranked #1 ahead of the other three
Egyptian companies on the list
Service Excellence and Brand
Recognition
• CIB listens attentively to its clients and
continuously incorporates customer
feedback into its financial offering as
part of the Bank’s customer-centricity
strategy. As a result, CIB’s Net Promoter
Score (NPS) and Customer Satisfaction
(CSAT) score are strong
• CIB was named “World’s Best Emerg-
ing Markets Bank” by Global Finance
for 2018 for the second consecutive
year after being named “World’s Best
Bank in Emerging Markets” by Euro-
money in 2017. CIB is the first bank in
the Middle East and Africa to win this
prestigious award
Responsible Banking
Integrating sustainability best
practices as an advocate of
responsible banking, whereby
CIB manages its environmental
footprint by applying the
highest standards related to its
energy and water consumption,
carbon footprint, and waste
management
• 11% decline in electricity consumption
across CIB premises
• 40% reduction in water consumption
• Saved 600,000 A4 paper sheets, the
equivalent of saving 500 trees
• Three head offices are awarded the high-
est environmental GPRS Green Level
• Ranked #1 on the EGX Sustainability
Index in 2019 for the 5th consecutive year
• For the 2nd consecutive year, CIB is
listed on the 2020 Bloomberg Gender
Equality Index (GEI), after being
the first Arab and African company
listed on the 2019 Bloomberg GEI— the
world’s only comprehensive investment-
quality data source on gender equality
• 2019 CIB emissions totaling
36,373,090 MtCO2
Responsible Banking
• CIB signed a commitment document to
the UNEP FI for Principles for Respon-
sible Banking (PRB), which embeds
sustainability across all business areas
and align the Bank to the society’s
sustainable development goals Waste
management remains of focus, as we
continue the segregation and selling
of electronic waste, while establishing
partnerships to encourage and promote
recycling. The Annual Sustainability
Report is in line with the Global Report-
ing Initiative (GRI) Core Standards,
which provide the most comprehensive
framework for sustainability reporting
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41
Strategic Direction
A Note From
Our Chairman
CIB has long sought to
reduce its environmental
footprint, and we take into
account in our credit process
the footprints of our clients.
If there’s one thing we know for certain about 2020 and
the new decade that it marks, it is that politics, tech-
nology, and economic forces are reshaping our world.
From Lebanon to Iraq, Chile to Hong Kong, we see
calls for sweeping political and economic change. In
the United States, Bernie Sanders is running for the
Democratic presidential nomination on a platform
promising radical economic overhauls.
BlackRock, the world’s largest investor, wants to
change how it allocates capital to give more weight
to climate change and environmental, social, and
governance factors.
Corporations are being forced to re-think how
they define success and to formulate a new, more
inclusive model of growth that leaves more on the
table for employees, clients, and the communities in
which they do business.
The debate over gender equality has gone global,
leaving me proud to note that we have been meeting
our internal targets on diversity and gender inclu-
sion for years, with women accounting for 30% of our
employees, including 39 out of 147 senior managers.
Other businesses in Egypt and beyond are starting
to take gender equality seriously, but we have been
walking the walk for years, culminating early in
the new year with our being named one of just 325
companies to make the Bloomberg 2020 Gender-
Equality Index (GEI).
It is only right that we now look to extend this
leadership to the impact of climate change on
our business and on the economy. CIB has long
sought to reduce its environmental footprint,
and we take into account in our credit process
the footprints of our clients. But we need — as
an institution and as a business community — to
do better. Our continent’s carbon emissions are a
fraction of those of China or the United States, but
we stand to suffer disproportionately the most
from the effects of climate change, from flooding
to drought and more. Indeed, Moody’s declared in
January 2020 that Egypt (alongside Vietnam, Su-
riname, and the Bahamas) is among the countries
whose sovereign credit rating is most at risk from
the impact of rising sea levels on incomes, assets,
health, and safety.
Despite these challenges, CIB is fully aware that
there are substantial opportunities to create val-
ue for shareholders while honoring stakeholders.
There is, in particular, opportunity in Africa that
demands our collective attention. People may
be disaffected and disconnected in the west, but
our African neighbors are looking to a more con-
nected future.
Start with electricity, where just one out of every
three people have access, but where Egypt has in-
vested in conventional and renewable generation
capacity that now leaves us with an energy surplus.
This is why the administration of President Abdel
Fattah El Sisi is remaking Egypt not just as a pre-
mier Eastern Mediterranean natural gas hub, but
as a continental energy center that can — through
interconnections with Sudan, Saudi Arabia, Jordan,
and our North African neighbors — help bridge the
continental electricity gap.
Whether it is access to energy or to connectivity,
African nations are working together to create
equitable and shared growth. This extends to the
emphasis on access to financial services in Egypt
and across the continent — energy and connectiv-
ity are precursors to access to finance, the tool
that gives men and women alike the ability to take
charge of their financial futures.
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43
Strategic Direction >> A Note From Our Chairman
Similarly, Africa is getting serious about eliminat-
ing physical barriers to inter-continental trade
that range from unusable inland waterways (un-
like many in Western Europe and parts of North
America, they do not interconnect and cannot be
navigated for trade) to railways and ports built to
suit colonial resource extraction rather than inter-
African commerce.
Look, for example, at the recent progress on the
creation of a Single African Air Transportation
Market (SAATM), which promises to improve
economic integration and connections between
countries and regions.
But the real trade efficiencies are going to come in
the long term from investment in infrastructure,
particularly in ports. Africa’s 170 or so ports are
under-developed and inefficient, with shipping
costs 1.5-3x more than in other regions, according
to PricewaterhouseCoopers. What’s more, some 16
of the continent’s 55 countries are landlocked. Here
again, Egypt provides a model for others to con-
sider with its investment in infrastructure ranging
from rail and road to ports, industrial parks, and
inland “dry” ports.
It is for all of these reasons that your Bank looked
to Africa in 2019, setting the stage for our growth
beyond our borders for the first time. In April, we
opened a representative office in Addis Ababa
to serve as a bridgehead to a key trading partner
and fellow custodian of the mighty River Nile. In
November, we made clear our intention to acquire
a stake in a Kenyan bank.
In Kenya, we will offer back-to-back trade finance,
facilitating Egyptian exports to (and imports
from) this vital East African market, while we
look forward to exploring the exciting Ethiopian
market it embarks on a period of political and
economic reform.
Our growth into Africa is part of a story of Africans
reclaiming control of their financial apparatus. At
the beginning of 2019, CIB had 10 correspondent
banks in Africa; when we wanted to work with any
other party, we typically did so through a European
intermediary. Today, we cover 18 African countries
through a diverse network of correspondant rela-
tionships with 24 African Banks as well Pan African
Banking Institutions.
My frequent visits to other African nations have left
me impressed with the talent of today’s youth and
their fluency in deploying technology to capture op-
portunities that eluded their predecessors less than
a generation ago. From Kenya to Uganda, Egypt to
South Africa, top applications and tech platforms
tend to be home-grown, not imported. It is a devel-
opment that gives me heart.
Harnessing the power of technology is not “on CIB’s
radar.” We are not “preparing for a digital future,”
we are already living it. Technology is an integral
part of the fabric of your Bank, from how we interact
with all of our clients to how we formulate, price,
and bring products to market.
Change is coming, whether in the form of declining
interest rates in Egypt, political shifts in our key
global partners, or our integration with Africa. I am
very pleased to report that your bank is not merely
prepared for this change, but thanks to our out-
standing people at all levels, we are leading it. Our
people are benefitting from advances in Big Data,
artificial intelligence, and process automation, al-
lowing us to effectively become a leaner and more
efficient organization while simultaneously being
able to deploy our people where they can make the
biggest difference. More thinking with and for our
clients. More time spent cultivating and deepen-
ing relationships. Much less time spent doing rote
work that is best performed by machines.
We have repositioned your Bank to ensure we are
agile and nimble as an organization, able to harness
shifts in technology and respond to the evolving
preferences of clients of all forms. Our growing
branch network serves those who want face-to-face
counsel and contact, and our powerful, easy-to-use
online and mobile banking solutions are ideal for
those who want to take charge of their financial
futures from the comfort of their handset, tablet or
laptop, wherever they may be.
Ours remains a relationship-based business,
whether that relationship plays out in person
or via a screen, and your Bank is committed to
delivering clients of all sizes a personalized,
meaningful, and engaging experience when and
where they want it.
Finally, ladies and gentlemen, I would ask that all of
you join me in celebrating the life and memory of my
friend Paul Volcker, the chairman of the US Federal
Reserve, who passed away in December 2019. We
owe Paul a debt of gratitude as bankers, but as CI-
Bans, we owe him even more: Paul was an invalu-
able Senior Advisor to our Board of Directors for a
three-year period ending in 2008. His emphasis on
responsible governance and passion for our indus-
try stands as a model for us all.
Hisham Ezz Al-Arab
Chairman and MD
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45
Strategic Direction
A Note From
Our Chief Executive Officer
The true measure of a banker is their ability to generate
returns for shareholders over the long term by putting
capital to work. If we do it right, we play meaningful
roles in helping individuals live better lives and corpo-
rate clients build businesses.
In the 1990s, bankers helped build a new private sec-
tor in Egypt. In the 2000s, we helped those businesses
grow and began banking a new generation of young en-
trepreneurs and professionals. In the 2010s, we helped
businesses survive a tumultuous period marked by
sweeping political change, devaluation, and runaway
inflation, and added “financial inclusion” to our indus-
try’s vocabulary, signaling that the banking system
needs to be available to people from all income levels.
Today, with a recovery in consumer demand now a
given as inflation cools and incomes catch-up, I am
growing increasingly optimistic that the twenties will
be about helping individuals and companies alike cap-
ture new opportunities.
These opportunities will take many forms. Some of
them are obvious to us now, others will become clear
only with the passage of time. Among them:
• Egypt is emerging as a regional hub for every-
thing from energy (including natural gas and
renewable energy) to manufacturing;
• Egypt is a net producer of talent for the
industries of the future, from technology to
financial services;
• Egypt isn’t just contributing to the growing
global middle class, it is a beneficiary as our
tourism market skews toward new, fast-grow-
ing inbound markets in Asia and Africa;
• Our nation’s fast-growing population will
give us a demographic advantage support-
ing workforce stability and consumer market
growth just as population growth;
• And technology is remaking industries from
finance to professional services, manufacturing
to tourism — providing opportunities for busi-
nesses and entrepreneurs, professionals, and
low-income earners alike.
Against that backdrop, I am now optimistic that we
will see double-digit growth in corporate demand for
credit in 2020. Allow me to explain.
Where we’ve been
Companies had little appetite to invest in growth
after the events of 2011. Macroeconomic headwinds
and strains on foreign currency availability in the fol-
lowing years didn’t help, nor did the effective collapse
of tourism after the October 2015 crash of a Russian
airliner in Sinai.
Most of you reading this can likely recount what
happened next: The economy ground to a halt amid
foreign exchange constraints and a burgeoning
parallel market for FX, a logjam the Central Bank of
Egypt decisively broke in late 2016 with the float of
the Egyptian pound and an exceptionally sharp hike
in interest rates.
As spiraling inflation eroded consumer and corporate
consumption, those of our corporate clients who
posted revenue growth did so on price hikes, not
on volumes. There was, quite simply, no impetus to
borrow for much other than working capital finance
— and even if there had been, the cost of capital was
prohibitive with borrowing rates north of 20%.
But as those of us who live, work and do business
in Egypt have always known, it was never a ques-
tion of “if ” demand would come back, it was one
of “when.” With 100 million consumers (and grow-
ing), ours is a consumption-driven economy whose
challenges were the result of economic shocks, not
of long-term political unrest.
Today, consumer spending is on the upswing, pur-
chasing power is rising, and the ratio of consumer
debt to GDP is still less than 10%. In US dollars, cor-
porate earnings caught up in 2019 to their pre-float
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Strategic Direction >> A Note Fomr Our CEO
informs every decision we make, from product
formulation to pricing and delivery. Technology in-
fuses the Bank from straight-through processing to
electronic documentary collection and the launch
of a retail-oriented chatbot on our public website.
Wherever our clients want to bank — in person or
on their handsets — we’re there.
Heading into the 2020s, then, our goal is simple: To
create value for our clients and our shareholders
alike by being at the forefront of change.
Hussein Abaza
Chief Executive Officer
levels. Subsidies have been lifted. Foreign exchange
is freely available, reserves have been rebuilt, and
our exchange rate shows healthy volatility. We
have invested in critical infrastructure that has
not just made rolling electricity blackouts a thing
of the past, but that now sees us positioned as an
energy export hub.
In parallel, interest rates have declined — they fell 450
basis points in 2019, and the market consensus is for
the easing cycle to continue through the end of 2020.
This is our new reality.
Where we are
Our consumer banking arm delivered another very
strong year in 2019, and we see substantial room for
continued growth in 2020 and beyond on both the
asset and liabilities side as more people come into
the banking system and as appetite for consumer
credit expands in an under-penetrated market. But
we are particularly excited about the outlook in this
new decade for our institutional banking arm — the
traditional growth engine of our bank.
Consumers and corporations alike have caught their
breath after the shocks of the past several years. In a
consumption-driven economy, this sets up what we
expect will be a virtuous cycle of growth in which
declining interest rates are a catalyst.
With interest rates on an easing path and companies
borrowing at floating rates, the signal to the C-suite
from the Central Bank of Egypt is clear. Our Institu-
tional Banking team started seeing the signs in the
second half of last year as our clients initiated talks
for facilities to support their 2020 growth plans.
The CBE and the government are both telling the
market it is time to invest, announcing in December
2019 an EGP 100 billion initiative to boost domestic
manufacturing by allowing small- and medium-
sized factors access to subsidized loans at a declin-
ing 10% interest rate.
After a year of single-digit loan growth, we are opti-
mistic we will see a double-digit expansion this year,
barring any exogenous shocks. We are, in short, going
back to “traditional banking” after a decade of crisis
management. Technology is changing. Markets are
changing. But in a very real sense, we’re going back to
our comfort zone.
Our people will carry us the next mile
We take great pride in having been the top-
ranked African company (and number 90 overall)
on Forbes’ 2019 ranking of the World’s 500 Best
Employers, but we also take it in stride. We have
known for more than 40 years that banking is fun-
damentally a people business.
That’s why we continued to invest in our industry-
leading credit certification program throughout
the dislocations of the past decade. Every year, we
had an average of 40 new credit analysts coming
online. They have been actively working to develop
relationships with our corporate clients, giving us
an edge as the market enters this new phase. Sim-
ply put, our people and the client relationships they
maintain allow us to deliver a personalized, be-
spoke offering that no other bank is able to extend.
Our shareholders have broadly welcomed our finan-
cial performance amid complex market conditions
in a challenging economy. With the tide now turn-
ing, we look forward to showing what we can do
from a position of strength.
Today, CIB is ideally positioned in terms of people,
processes, capital, and technology. Big data now
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Strategic Direction
Board of Directors’
Report
Snapshot of 2019
As Egypt continues its transformation journey,
several social and economic strides have been un-
dertaken throughout the year. Any change of this
nature does not come without the need for adjust-
ments. Without question, these decisions will ulti-
mately lead to the betterment of Egypt. Accordingly,
we as Board and Management, having anticipated
the urgency and necessity for agility, flexibility,
decisiveness, and foresight, enabled us to navigate
through the changes. These attributes were born of
long and deep market experience to guide the bank.
Accordingly, it is with much pride we report to you
the robust and exemplary results of Commercial
International Bank (CIB) for the financial year 2019.
The results on which we are now reporting are a
testament to the depth of this institution — includ-
ing the strategic direction and oversight provided
by the board; the stewardship of the management
team; and strong on-the-ground execution across all
channels of our platform, from digital to branches,
product to support functions.
CIB entered 2019 well positioned, having calibrated
our profit distribution strategy in light of what we
expected would be the natural evolution of more
stringent regulatory requirements as regards
bank capital. In parallel, we entered 2019 with the
expectation that Egypt would soon enter an ag-
gressive easing cycle. We accordingly restructured
our balance sheet position for the Bank to optimize
returns, as that expectation became a reality. Our
foresight was again proven correct, as 2019 saw the
Central Bank of Egypt push through a total 450
basis points (bps) of rate cuts, bolstered by factors
including and improving fiscal position as Egypt
met its 2% primary surplus target, which narrowed
the general government fiscal deficit to 8.2% of GDP
in FY2018/19, down from 9.7%. Meanwhile, Egypt re-
ported its highest real GDP growth since FY2007/08
at 5.6% in FY2018/19, and we saw a consistent
recovery in purchasing power as inflation fell to its
lowest rate since December 2005, recording 3.15% in
October 2019.
Our foresight was not limited to the macroeconomic
environment in Egypt, but also the overarching
direction of global economic trends, all of which
together shape our institution’s future direction.
Cognizant of the nation’s direction imperative to re-
integrate with Africa, your Board and Management
team took steps well ahead of our peers to map and
set a strategy that wills your Bank to grow outside
our borders. This cross-border strategy began to
unfold almost three years ago as we developed the
intelligence and indicators we needed to choose the
most value-accretive entry point and the strategy
best-suited to capture opportunity in Africa.
Also in 2019, the changing world around us de-
manded that we explore and adopt new Vision
and Mission statements that together reflect your
Bank’s strategy. We believe they are important to
include here in full:
Our Vision
To be at the forefront of change, building for the
future and turning aspirations into reality.
Our Mission
To transform traditional financial services into simple
and accessible solutions by investing in people, data,
and digitalization to serve tomorrow’s needs today.
CIB’s Strategy
CIB’s flexibility to adapt to unforeseen changes in
the market supports our strong commitment to cre-
ate value for stakeholders at each step. Over the past
few years, the Bank adopted a strategy that focused
on transforming CIB into a more customer-centric
organization that stands out from its peers through
its superior products, services, and brand image.
In doing so, we have been investing heavily in data
analytics and artificial intelligence, upscaling our
infrastructure, digitalizing and automating how
we do business, while continuously developing the
skills of our employees.
Core Business Activities
With the ultimate goal of building a bank that
offers bespoke customer solutions, CIB pursues
innovative ways to conduct business to drive the
Bank to new heights. CIB intends to expand its out-
reach across all lines of businesses by exploiting
new core banking modules, advanced campaign
management capabilities, process re-engineering,
workflow optimization, data analytics, digital
thinking, and a new distribution approach.
The Bank’s transformation was supported by a
strong and dynamic balance sheet management,
which was formulated in response to a relaxed
lending appetite. This was spurred by high interest
rates that prevailed during the first half of 2019,
which was followed by an easing cycle in the third
quarter. Through a deposit-gathering strategy
aimed at reshaping its funding mix, CIB was able
to create a flexible balance sheet structure to se-
cure earnings and profitability in anticipation of
rate cuts.
Digital Strategy
The Bank’s technological transformation, which
began several years back, continues to evolve to
this day. Ahead of the market, CIB has embraced
the alphabet of the future; ABCD; artificial intel-
ligence, blockchain, cloud, and data.
the rest of its strategy pillars and advance its inter-
national presence.
To our clients, we offer simple, secure, and ac-
cessible banking solutions at their fingertips
regardless of when or where they perform their
transactions. Internally, we focus on increasing
migration and automation ratios, optimizing
costs, and generating revenue.
In 2019, CIB became the first bank in Egypt to intro-
duce a chatbot that supports both English and col-
loquial Arabic. Using artificial intelligence to help
CIB customers and non-customers learn about the
Bank’s products, latest offers, and find the nearest
ATM or branch, CIB introduced a virtual assistant
named “Zaki the Bot.” Operating both on Facebook
Messenger and on CIB’s public website, Zaki is an
important digital milestone that has the potential
to be a key channel for data supported by machine
learning, while delivering customer-centric solu-
tions and innovative touch points.
As a firm believer that financial inclusion will be
one of Egypt’s turning points, CIB is constantly de-
veloping payment services through its mobile ap-
plication CIB Smart Wallet and availing it to both
the banked and unbanked, allowing them to pay
bills, buy from merchants using QR codes, and send
money to other wallet holders in Egypt with rela-
tively lower fees. As of December 2019, CIB had the
highest activity rate for mobile payment through
its Smart Wallet in the Egyptian market, amount-
ing to 18% with a total value of transactions of EGP
1.4 billion.
CIB prioritizes big data as it develops structures
for information-gathering and analysis, which will
allow quantitative knowledge to further the pos-
sibilities of strategies and operations. It is these
building blocks that will allow the Bank to meet
As a result of its digital transformation efforts, CIB
is ranked first in Egypt for digital domestic trans-
fers through Automated Clearing House (ACH),
while holding 25% market share for both internet
and mobile banking.
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As a key supporter of the nation’s entrepreneurial
ecosystem, CIB has intensified its activities in
the field of financial technology (fintech) and en-
trepreneurship. In support of fintech companies,
the Bank organizes workshops and offers mentor-
ship to provide the community with guidance. It
is always on the lookout for new collaborations
under the Bank’s Entrepreneurs Engagement
Program (EEP), which supports startups who have
fast and agile solutions by helping them material-
ize their offerings into product lines. The Bank
also promotes intrapreneurs by conducting in-
novation challenges and competitions that bring
together creative teams from different areas and
levels within CIB. During 2019, CIB’s Innovation
Lab contributed to more than 35 events, enrolled
more than 30 mentors who have conducted over
150 mentoring hours, approached more than 150
startups, and is in serious talks with more than 10.
On the operational front, CIB continues to focus
on increasing digital transformation and automa-
tion rates along with enhancing cost synergies
and increasing revenues. Accordingly, the Bank’s
digital channels achieved total cost savings of EGP
2.2 billion as of December 2019, recording a y-o-y
increase of 22%. Internet Banking played a vital
role in automation and off-loading CIB branches
as credit card settlement, internal transfer, and ex-
ternal transfer transactions migration rates from
branches reached 91%, 76%, and 39%, respectively.
As part of the Contact Center transformation, the
interactive voice response (IVR) saw an 84% migra-
tion rate of eligible inquiries from the call center,
boosting agents’ productivity and reducing the call
center’s operational costs. Ranked the largest pri-
vate-sector bank and the 3rd largest among all banks
in ATM network with 1,012 machines, CIB achieved
high migration rates from branches in cash deposits
(less than EGP 10,000) and withdrawals (less than
EGP 20,000) of 95% and 98%, respectively. CIB’s as-
tute digital thinking was reflected in several lines of
businesses in 2019, among which was Global Trans-
action Banking (GTB). Moreover, the Bank was com-
mitted to introducing the most comprehensive pay-
ment products on the e-payments market, as well
as a number of core digital efforts in cash manage-
ment. In 2019, CIB ranked highly among Egyptian
banks in market share of domestic digital transfers
through ACH receivables and payables (ACH Direct
Credit and ACH Direct Debit).
Online Trade Finance, CIB’s market-leading online
trade channel, offers clients the ability to conduct
and manage their trade finance transactions online.
The channel provides customers with transparent
and clear information about their transactions,
while eliminating paperwork, saving them time and
money. As of December 2019, the migration rate for
online trade reached 27%.
In line with the Ministry of Finance’s target to collect
all government payments electronically, CIB and
e-finance, a company that develops and operates e-
payment platforms and channels, agreed to enable
customs, tax, and other government authorities to
receive payments through the E-Pay portal. Through
its clients, CIB executed 35 thousand transactions
in 2019, amounting to 32% of total transactions.
In its quest to develop promising digital transforma-
tion initiatives, CIB engaged in several multilateral
task forces and regional forces alike. CIB joined the
World Economic Forum (Africa), Smart Africa, and
the European and African Union’s Digital Economy
Task Force (EU AU DETF). The Bank also partnered
with Carnegie Mellon University, a global leading
data science university, to provide real-life business
case practicum courses to their Master of Science
in Information Technology (MSIT) degree program
cohort in Kigali, Rwanda. The Bank also cooper-
ated with JP Morgan Chase and 160 other banks in
2019 to develop its propriety Blockchain Interbank
Information Network (IIN), which allows for the
exchange of information in real-time to verify
payment approvals. This infrastructure will offer
beneficiaries simplified and expedited global cross-
border payments in every major market.
Given the Bank’s renowned technical expertise,
the CBE invited CIB to join a taskforce for an
eKYC project that involved studying the appli-
cation of Distributed Ledger Technology (DLT),
more commonly known as “blockchain” to eKYC
frameworks. In parallel, CIB, part of the R3 con-
sortium, leveraged R3’s open-source platform and
DLT technology to develop use-cases for trade
finance and SWIFT, both for the Bank and the
Egyptian banking sector.
In recognition of its conscientious efforts, CIB’s
Analytics and Data Management (ADM) team re-
ceived the International Data Group’s Digital Edge
50 Award for its branch customer journey simulator
project in the category of Artificial Intelligence,
Machine Learning, and Cognitive Computing. Fur-
thermore, CIB’s data transformation was included
as a case study for Harvard Business School.
Geographical Expansion
CIB has always been on the lookout for produc-
tive organic growth opportunities that diver-
sify its operations, balance sheet structure,
and sources of income. Given the fundamental
similarities the region shares with Egypt, CIB
management concluded that Africa – specifi-
cally East African countries – being a natural
geographic extension to Egypt, presents lucra-
tive growth opportunities for CIB. In addition to
its plentiful attractive investment opportunities,
the English-speaking region is also a key market
for Egypt-based products in several sectors,
and its political stability, as ascertained by the
Bank’s recently developed political risk index,
only underscore its attractiveness. Moreover,
East African countries are part of the African
Continental Free Trade Area (ACFTA), which is
expected to allow the free movement of business
travelers and investments, create a continental
customs union to streamline trade, and attract
long-term investment in Africa. Additionally,
these countries have a successful record of ac-
complishments in digital banking and financial
inclusion, which offers CIB an unmatched learn-
ing opportunity in these arenas.
As a result, CIB management has carefully stud-
ied several opportunities during the past three
years in order to choose the best fit for its expan-
sion strategy. Based on this, CIB established a
commercial representative office in Addis Aba-
ba, the capital of Ethiopia to capture growth op-
portunities in other flourishing markets, which
has been operational since July 2019. With one of
the highest GDP growth rates globally over the
last several years, Ethiopia is one of the most at-
tractive markets in the region. The office gives
CIB a first-mover advantage once the Ethiopian
banking sector opens to foreign investors. Right
now, the Bank is focused on gathering market in-
telligence to deepen its presence and supporting
clients who operate in the country by promoting
Egyptian exports. Additionally, the Bank is in the
final stages of concluding a partnership transac-
tion that will see CIB enter the Kenyan market,
further expanding its geographical reach.
Responsible Banking
Equally important and high up on our priority list is
being a Responsible Bank that maintains the same
level of transparency that CIB has always been well
renowned and acknowledged for.
Environmental, Social, and Governance
CIB believes it is the duty of every institution to
act responsibly to the benefit of the community in
which it does business, the environment, and its
shareholders. The Bank practices the Progressive
Sustainability approach through interrelated chan-
nels: environment, society, and economy. Population
growth, coupled with technological advancements,
are affecting our planet in distinct ways. Dilemmas
such as climate change, decaying natural systems,
and rates of migration are exponentially increasing.
Progressive Sustainability is proving to be the key
avenue to minimize the negative impacts of envi-
ronmental and social problems through innovation,
increasing equity, and offering opportunities for a
balanced life.
Environmental Sustainability
The Bank takes immense pride in the concrete steps
it has executed over the past years in the field of en-
vironmental sustainability. The decisions, activities,
and initiatives undertaken by CIB, especially in the
last eight years, have resulted in a shift in how the
Bank has been regarded locally and internationally
— a responsible institution that works tirelessly to
benefit the community and contribute to the wellbe-
ing of the environment.
In its efforts to reduce its negative impact on the
environment, CIB applies and promotes sustain-
able ways of conducting its business by using its
resources in environmentally friendly ways.
• Carbon Footprint Calculations – With cli-
mate change becoming a pressing issue for the
world, the Bank made it imperative to under-
stand its direct and indirect emission impact
on the environment. A consolidated Carbon
Footprint Audit Report on all CIB premises
was developed, showing total CIB emissions
hit 36,373,090 MtCO2e for the year, and a target
was set for 2025 to reduce greenhouse gas emis-
sions by 10% (1,800 MtCO2e).
• Energy Efficiency – CIB is applying an En-
ergy Management System (EnMS) to provide
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technical data on energy consumption and how
to effectively manage it. This step will help us
acquire an ISO certification in EnMS, enable us
to better manage CIB’s energy usage, achieve
operating cost savings, and improve energy ef-
ficiency. Thanks to various energy saving initia-
tives, we recorded a 3% reduction in electricity
consumption for the year compared to 2018.
• Sound Measurement – In line with CIB’s com-
mitment to employees’ wellbeing, health, and
safety, CIB finalized a sound measurement
exercise on the five busiest branches in Cairo,
Giza, and Alexandria. The exercise included the
maintenance and architectural adjustments
required to decrease noise pollution. The results
showed that CIB successfully decreased noise
pollution levels on average by 10-12 decibels per
branch, putting them in the safe zone according
to international standards.
• Reducing Waste and Managing Resources
– As CIB aims to transform its buildings and of-
fices into eco-friendly spaces, water consump-
tion is controlled through water restrictors
and other devices, waste management systems
(electronic and paper waste) are in place, paper
waste is sold to paper recycling startups, and
biodegradable plastic is used. The Bank also
encourages carpooling through a tailored CIB
application.
• Natural and Cultural House of Zawara, Wadi
El Rayan/Fayoum – The project, executed in
collaboration with the UNDP, the Egyptian Ital-
ian Environmental Project (EIEP), and the Min-
istry of Environment, will introduce a new eco-
tourism destination that plays on the natural
and cultural diversity of the area. Aside from its
positive social, environmental, and economic
impacts, the project provides CIB with the op-
portunity to align its internal environmental
initiatives with external community invest-
ment and partner with leading global entities to
harness key synergies and collaborations.
Sustainable Partnerships
2019 featured recognition from different stakehold-
ers of the Bank’s initiatives and systems.
• UNEP FI Responsible Banking Principles
– Being a member of the UN Environmental
Program - Finance Initiative (UNEP-FI), CIB
worked with other leading domestic, regional,
and international financial institutions to pro-
mote sustainable practices in the global finan-
cial sector. The Bank participated with 29 other
financial institutions to develop the UNEP-FI’s
Principles for Responsible Banking (PRB), which
are the first principles specifically for banking
institutions to encompass social, environmental,
and governance practices as part of their day-to-
day operations. CIB became one of the founding
signatories of PRB, committing to strategically
align its business with the Sustainable Develop-
ment Goals and the Paris Agreement on Climate
Change. CIB joins a coalition of 130 banks
worldwide, representing over USD 47 trillion in
assets, in committing to taking on a crucial role
in achieving a sustainable future.
• Digital Economy Task Force (DETF) – CIB is
the sole representative from Egypt’s private sec-
tor in the Digital Economy Task Force (DETF)
— a joint venture between the African Union and
the European Union. This invitation cements
CIB’s position as a leader in the development
of the financial sector and the digitalization of
banking services. The DETF consists of multiple
stakeholders from government, civil society, fi-
nancial institutions, development agencies, and
the private sector to achieve cross-border inte-
gration and cooperation in Africa. Through this
platform, the DETF seeks to establish its goals
by developing policies and recommendations to
create alignment across the national, regional,
and continental levels and ensure synergies be-
tween the initiatives under implantation.
Sustainability Indices
• Financial Times Sustainability
Index
(FTSE4 Good) – CIB was a constituent in
FTSE4 Good for the fourth consecutive year.
• EGX Sustainability Index – CIB was ranked
first on the EGX Sustainability Index 2019 for
the fifth year in a row.
• Carbon Disclosure Project (CDP) – CIB
is one of the companies listed in the CDP, a
climate change program aimed at reducing
companies’ greenhouse gas emissions and
mitigate climate change risk. CDP recognizes
companies with high-quality disclosure in its
annual scoring process.
• Bloomberg Gender-Equality Index – CIB
was included in the 2020 Bloomberg Gender
Equality Index for the second year running.
Corporate Sustainability Task Force
In line with the Bank’s commitment to sustainable
business practices, CIB established a Corporate
Sustainability Task Force in 2019, chaired by a
non-executive Board Member and composed of
six members who meet at least four times a year.
Through engaging with staff members in workshops
and meetings, the task force keeps staff members
aware of all the sustainability activities undertaken
by the Bank and encourages personal sustainable
endeavors.
As a result, a team member in the Port Said branch
funded and planted over 2,000 trees in the governor-
ate. The Port Said branch also minimizes its environ-
mental impact by tackling two main pillars: digital
transformation and the reduction of CO2 emissions.
During the year, the branch scored first in terms of
e-statement migration, issuing 9,500 e-statements and
saving over 70,000 sheets of paper in the process. The
branch also hit the highest number of Smart Wallet
subscribers bank-wide at 463 subscriptions for the
year. It also greatly reduced its air-conditioning usage,
lowering the branch’s electricity bills by 13% in 2019.
Social Development
CIB strives to create a positive impact on the lo-
cal community and has undertaken a number
of initiatives to support underserved segments.
The Bank’s commitment to social development is
performed through three channels: the Corporate
Social Responsibility (CSR) Program, the CIB
Foundation, and dedication to supporting squash
and Egyptian squash champions.
Corporate Social Responsibility
2019 was another eventful year, seeing the Bank
expand its CSR activities to increase the number
of beneficiaries. CIB executed various projects
and provided support to initiatives carried out by
other organizations.
Social Activities
• Autism International Day/ADVANCE –
This year, the Bank continued its sponsor-
ship of the Egyptian Advance Society for
Persons with Autism and Other Disabilities
(ADVANCE)’s annual ceremony. CIB also
sponsored the 2019 World Autism Awareness
Day in Egypt, where the Bank’s Smart Village
headquarters and select branches were lit in
blue in solidarity.
• Beena – For four consecutive years the Bank
has been the main partner and financial
sponsor of Beena, a protocol signed between
CIB and the Ministry of Social Solidarity to
encourage active youth participation and
monitor social care services. Beena attracted
thousands of youths to volunteer with or-
phans, senior citizens, and individuals with
special needs.
Cultural Activities:
• El Sawy Culture Wheel – In 2019, CIB contin-
ued its long-lasting sponsorship of El Sawy
Culture Wheel, supporting various intellec-
tual, cultural, and social activities.
• Cairo International Biennale “Towards the
East” – The 2019 Biennial was the first follow-
ing an eight-year hiatus where 80 artists repre-
senting 50 countries participated. The artistic
works of the festival were hosted in the historic
and cultural locations throughout Cairo, in-
cluding the Palace of Arts, Aisha Fahmy Pal-
ace, the Museum of Modern Egyptian Art, and
the Zamalek Art Complex.
• Reimagined Narratives – This is a successful
series of annual art exhibitions held at differ-
ent heritage sites across Egypt, sponsored by
CIB in 2019 for the third year in a row, and held
under the auspices of the Egyptian Ministry
of Antiquities. This year, the exhibition was
held for the first time at the UNESCO World
Heritage Site in Historic Cairo, where it trans-
formed several locations in Moez Street into
open art spaces, housing the work of over 20
contemporary Egyptian artists.
• KidZania – CIB and KidZania’s partnership
began in 2013, and since then, the Bank has orga-
nized several trips each year to KidZania for more
than 150 underprivileged and special needs chil-
dren, as well as children with health conditions.
• Alex Workshop Center – This year marked the
20th anniversary of the Alex Workshop Center,
which was supported by CIB. The center has
been a pillar of the Alexandrian community,
supporting local artists, artists with special
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needs, and other members of the community
to safeguard the artistic heritage of the city
and spread art throughout the city.
CIB Foundation
Established in 2010 as a non-profit organization under
the Ministry of Social Solidarity Decree No. 588, the
CIB Foundation is dedicated to improving healthcare
and nutrition services extended to children of un-
derprivileged families with limited access to quality
healthcare. The CIB Foundation’s efforts include not
only donations, but also the monitoring of projects’
impact. In addition to the direct donations made to its
fundraising account, the Bank supports the CIB Foun-
dation with 1.5% of its annual net profit.
With a vision to ease the burden on families in need,
the CIB Foundation works with private, public, and
non-governmental healthcare providers that offer
free-of-charge services to ensure the widest communi-
ty reach and to maximize the value of its work through
achieving positive and sustainable results.
Over the past years, the CIB Foundation has expanded
its activities and initiatives to include different geo-
graphical areas throughout Egypt. During 2019, the
CIB Foundation allocated a total budget of EGP 143
million to be channeled through four main pillars:
purchasing medical equipment, funding surgeries and
treatment, sponsoring operating costs for healthcare
providers, and financing medical convoys. Total ex-
penditure in 2019 reached EGP 89.5 million for a total
of 20 projects serving hundreds of thousands of Egyp-
tian children in different governorates across Egypt.
For detailed information on its projects, please refer to the
CIB Foundation annual report available on CIB’s website.
Supporting Squash
Supporting sports and athletes has always been an
integral part of CIB’s commitment to social devel-
opment. The Bank recognized early on the true po-
tential of Egypt’s squash players who are currently
dominating world rankings. Six Egyptians are in the
world’s top 10 men players, and five Egyptians are in
the top 10 women as of December 2019, and are per-
ceived as ambassadors representing Egypt globally.
Stemming from the belief that supporting these tal-
ents generates more value for the Egyptian athletic
community and raises Egypt’s profile on the world
stage, the Bank broadened its support of the sport
in 2019 to capitalize on the traction its players are
carving out globally.
• Nour El-Tayeb – #4 on the Women’s PSA World
Squash List
Squash Tournament Sponsorships
CIB expanded its squash-related sponsorships to
open doors for more Egyptian athletes to progress
in the PSA world rankings.
The most notable sponsorship in 2019 was the CIB PSA
Women’s World Championship and the CIB Egyptian
Squash Open Men’s Platinum, which took place si-
multaneously in front of the Great Pyramid of Giza
and brought together 64 female athletes and 48 male
athletes. For the first time in any sport, the women’s
competition had a bigger prize purse than the men’s;
the women’s squash world champion prize was USD
430,000, while the men’s prize was USD 185,000. The
tournament made significant international waves
in both the squash community and sporting arena
worldwide due to the unprecedented move toward
women’s equality and empowerment.
Sponsoring the Egyptian Squash Federation
CIB maintained its sponsorship of the Egyptian
Squash Federation for the eighth consecutive year
and sponsored the National Men’s, Women’s and
Junior Squash Teams. This support has played a
direct role in the national teams’ accomplishments
throughout the year, including the Girls’ National Ju-
nior Squash Team winning the World Junior Squash
Championship in Malaysia for the seventh time since
1994. In addition, Egyptian players won both the Boys
and Girls World Individual titles. The National Men’s
Squash Team was named World Team Champion in
Washington, DC successfully retaining their title.
Currently, Egyptian players hold the Men’s World
Team Championship, the Women’s World Team
Championships, and the Juniors’ World Team Cham-
pionship titles as well as individual world titles.
Sponsoring Egyptian Athletes
In support of young players leading the world’s
squash rankings, CIB tailored special sponsorships
to help eight talented players maintain their rank-
ings and continue representing the country around
the world, as of December 2019:
• Ali Farag – #1 on the Men’s PSA World
Squash List
• Karim Abdel Gawad – #3 on the Men’s PSA World
Squash List
• Tarek Momen – #4 on the Men’s PSA World
Squash List (current world champion)
• Hania El-Hammamy – #10 on the Women’s PSA
World Squash List
• Mohamed Abouelghar – #8 on the Men’s PSA
World Squash List
• Marwan Elshorbagy – #9 on the Men’s PSA
World Squash List
• Salma Hany – #14 on the Women’s PSA World
Squash List
Partnership with Wadi Degla Clubs’ Darwish
Squash Academy
CIB continued its partnership with Wadi Degla
Clubs to support young Egyptian squash athletes by
developing their skills and enhancing their interna-
tional rankings. The partnership is part and parcel
of the Bank’s strategy to support up-and-coming
talents from the ground up and builds on our pio-
neering role in this area. The athletes representing
Wadi Degla and sponsored by CIB are:
• Raneem El Welily – World No.1 on the Women’s
PSA World Squash List
• Nouran Gohar – World No.3 on the Women’s
PSA World Squash List
Corporate Governance
In its mission to provide best-in-class financial
solutions to enterprises and individuals, CIB
strives to apply international best practices in
the area of corporate governance. The Bank is
wholly committed to the principles and corpo-
rate values that distinguish the finest governance
structures.
Aimed at sustaining the Bank’s success, CIB’s
governance framework is backed by a solid set of
policies and procedures tailor-made to the Bank’s
scope, size, and business complexity. Among these
policies is the Code of Conduct, which sets out the
standards expected from all employees and pro-
vides staff, senior management, and the BoD with
a comprehensive frame of reference regarding their
rights and duties. The code further enshrines the
principles of equal employment opportunity and
gender equality.
Encouraged to raise concerns about wrongdoing
or unethical conduct, CIB’s Whistleblowing Policy
guarantees a supportive environment for staff who
decide to report suspected violations of the law or
Bank policies through clear reporting and escala-
tion channels. The Bank handles cases of whistle-
blowing, whether from internal or external sources,
very seriously and at a senior level.
The Bank’s Conflict of Interest policy guarantees
that all staff and board members remain aware of
any conflict of interest between the Bank and their
personal, professional, and business interests, pro-
viding guidance on how to handle those cases.
In order to safeguard the interests of our clients,
the Conduct Risk Policy clarifies the Bank’s re-
lationship with customers and its duties toward
them. It also outlines the Bank’s approach to the
management of conduct risk. CIB considers that
the most effective way to avoid conduct risk is
to embed a culture of integrity and high ethical
standards across the organization.
This inclusive policy structure reflects CIB’s
prioritization of a strong governance framework,
one that is fully backed by each of the Bank’s BoD
members and firm leadership and vision. CIB’s
experienced executive management team plays
an important role in the governance of the Bank
by faithfully and efficiently executing the strategy
set by the BoD and properly implementing the
Bank’s policies.
Board of Directors
CIB’s corporate governance structure is anchored
in a team of highly professional executive directors
and a distinguished group of independent non-ex-
ecutive directors (NEDs) who seek the best interest
of all related stakeholders. The BoD is collectively
responsible for CIB’s long-term financial and non-
financial success, setting the Bank’s strategic ob-
jectives, and overseeing its implementation.
The BoD is also mandated to ensure the effective-
ness of the internal control systems, managing
risk, and securing CIB’s institutional reputa-
tion and long-term sustainability. Through its
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57
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different committees, the BoD is responsible for
setting compensation and performance goals and
managing director nomination, evaluation, and
succession planning.
The Bank’s BoD structure is in line with interna-
tional best practices and allows for the position of
a lead director. Since July 2019, CIB has appointed a
lead director who is an independent member of the
BoD. The latter’s responsibilities include developing
board-meeting agendas in collaboration with the
Chairman to discuss critical issues, following up on
with executive management, establishing a compre-
hensive evaluation process, and gathering feedback
from BoD members on executive management per-
formance, among others.
The Bank organized an informative intervention fo-
rum for members moderated by top professors from
IMD Business School to align the organization with
best international practices.
Changes to the Board of Directors
In October 2019, CIB appointed two new indepen-
dent non-executive directors, Mr. Paresh Sukthan-
kar and Mr. Rajeev Kakar, who are both seasoned
bankers with a long reputable record of accom-
plishments. Mr. Sukthankar brings in more than
30 years of experience in banking and last served
as the Deputy Managing Director of HDFC, one
of India’s leading private banks, from 2014 until
2018. Mr. Kakar has over three decades of expertise
in financial services, especially in retail and SME
banking, across multiple global markets. He is
the founder of Dunia Finance, a non-bank finance
company, in which he served as the Managing Di-
rector and CEO from 2006 until 2018. Mr. Kakar is
also a co-founder of Fullerton Financial Holdings,
a global company that invests in creating emerging
market financial institutions, in which he served as
Executive Vice President and Global Head of Con-
sumer Banking from 2006 until 2017.
The Bank also saw the departure of both Mr. Yas-
ser Hashem and Dr. Sherif Kamel from CIB’s BoD,
having concluded six years of service on the BoD,
in accordance with CBE corporate governance
guidelines. The Bank is deeply grateful to both
gentlemen for their valued guidance, commit-
ment, and dedication throughout their years of
service, which have no doubt contributed to CIB’s
transformation and success.
With these changes, CIB’s BoD is currently com-
prised of nine directors, where seven out of the
nine members are NEDs (78%), one of whom repre-
sents Fairfax’s interest in CIB and six of whom are
independent (67%). Our board boasts an optimal
mix of skills, experience, and diversity in terms of
gender and nationality, with two female directors
(22%) and five non-Egyptian directors (56%). CIB
prides itself on having a diverse board with signifi-
cant leadership and experience across a broad set
of industries.
Segregation of MD and CEO Roles
In line with CBE directives on corporate governance
as well as international best practices, CIB segre-
gates between the roles and responsibilities of both
the Managing Director (MD) and the Chief Execu-
tive Officer (CEO). This split ensures clear account-
abilities and responsibilities.
The MD is responsible for ensuring adequate and
effective governance through managing the inde-
pendent control functions — Risk, Compliance,
Audit, and Legal, and also focusing on the strategic
direction of the Bank. On the other hand, the CEO is
responsible for managing the Bank’s business lines
and day-to-day operations.
Board Committees
CIB’s BoD is supported by seven specialized commit-
tees that assist in fulfilling its responsibilities. Five
non-executive committees: Audit, Governance and
Nomination, Compensation, Risk, and Operations
and Technology, and two executive committees:
Management, and High Lending and Investment, in
addition to a Corporate Sustainability Task Force.
Each committee chairperson is responsible for
briefing the BoD on the major issues raised by the
committee that he or she chairs.
People…The Main Enabler
For several years, CIB has been investing in its peo-
ple, the Bank’s main enabler, efforts that garnered
the bank recognition as one of the World’s Best Em-
ployers by Forbes in 2019, coming in at 90th place
among top 500 employers globally.
CIB continues to attract and retain the best cadres
in the market and works on their development as
early as the onboarding process. During the year,
CIB attended 21 employment initiatives in differ-
ent universities and venues across Egypt in search
of new talent. In 2019, CIB hired 571 external talent
individuals, moved 1,328 across different areas, and
internally promoted 625 promising young talents
for better exposure and to enhance their career
progression.
On the Retail Banking front, the Consumer and
Business Banking Financial Services Management
program was designed to acquire and develop
potential agents for the Product and Segment, Busi-
ness Banking, and Digital Banking departments.
The SME Academy, a technical program designed
for the Business Banking segment, was rolled out to
select the best candidates to receive an intensive cus-
tomized training program in the field. In addition, 25
Plus Bankers and Wealth Managers were given inter-
national certification through the new Wealth, Plus,
and Private Academy. 2019 saw the first graduates of
the Financial Control School, an in-house training
facility delivered by top professionals providing ap-
plicants with both theoretical and practical training.
Moreover, CIB became the first bank in Egypt to be
the approved employer of the Association of Char-
tered Certified Accountants (ACCA).
Also under this umbrella, CIB employees enjoy pref-
erential rates for post-graduate studies with ESLSCA
Business School and the University of Chicago Booth
School of Business. They have access to various online
finance programs and preferential rates for finance
courses from ACCA.
Career maps for all CIB employees were automated
in 2019 and transparently communicated Bank-
wide. Digital learning through CIB’s video and
audio libraries on the iKnow application was ex-
panded to include more topics in finance, econom-
ics, globalization and technology, management and
leadership, sales, and marketing. Several e-learning
sessions were launched to increase awareness on
topics such as reputational risk, HR policies, and
organization awareness, while other topics were tai-
lored to specific teams such as Corporate Banking,
Credit and Investment Exposure Management, Debt
Capital Markets, and Business Banking.
CIB provides programs to equip managers with
the best leadership techniques. During the year,
1,239 employees ranging from professionals, first-
line managers, and middle managers attended
a variety of programs with local and interna-
tional vendors and schools, including Frankfurt
Business School. Some 18 employees were offered
programs of this nature abroad.
As employee recognition and reward management
are crucial investments in any organization, CIB
revamped the Employee’s Recognition Program in
2019. It continues to provide employees with competi-
tive compensation and benefit schemes, including an
employee stock ownership plan (ESOP).
CIB provides its staff with equal opportunities for
advancement regardless of gender, age, ethnicity,
religion, or any other aspect of their identity. The
Bank is deeply committed to further advance gen-
der equality and women’s empowerment. In 2019,
women accounted for 30% of CIB’s total workforce,
well above Egypt’s average ratio of 23%. The Bank
rolled out several initiatives during the year, such as
Women in Tech, which was introduced for the first
time in the Egyptian banking industry and address-
es the gender gap in the technology departments of
the Bank and helps in building up skilled women to
work in these divisions. Fourteen candidates were
identified to join this program and rotated within
several different departments, and four candidates
were hired from the program. “She is Back” is an-
other initiative introduced in 2019, aimed at easing
the transition for women returning from maternity
and/or childcare leave by refreshing their corpo-
rate and macroeconomic knowledge. A total of 43
women attended the rounds. Moreover, an in-house
program was created this year to empower women
and support them build long-term career success,
with 45 women attending women empowerment
seminars. Additionally, a two-day program was
specifically tailored to first- and middle-line man-
agement levels and consisted of two international
leadership modules on key management skills.
Some 70 women across CIB were selected to attend
the Exclusive Women Leadership program by the
Egyptian Banking Institute (EBI).
2019 Financial Position
Starting 1Q2019, CIB reported its financial state-
ments in accordance with IFRS 9, as stipulated
by the CBE. The Bank has been preparing for the
shift to IFRS 9 since 2018 and communicated trial
financial statements to the CBE for three consecu-
tive quarters in 2018. The impact on CIB’s provisions
was immaterial, with no extra provisions required,
thereby leaving the reserve created for this purpose
last year based on CBE directives untouched, which
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59
Strategic Direction >> BoD Report
underscores the Bank’s prudent risk management
and conservative provisioning approach. CIB was
also well positioned to accommodate the new tax
treatment for income from treasuries enacted in
1Q2019, thanks to the adaptable structure of CIB’s
balance sheet along with precautionary measures
taken on by management over the past year.
CIB reported another remarkable set of results in
FY2019, with consolidated net income up 23% y-o-y
to EGP 11.8 billion. Standalone net income reached
EGP 11.8 billion, up 24% from 2018. Standalone
revenues grew 13% over the previous year to EGP
23 billion. Net interest income hit EGP 21.6 billion
in FY2019, an increase of 19 y-o-y. Normalized for
EGP 1.8 billion transferred in 2018 from unearned
interest to interest income, standalone revenues
grew 24% and net interest income 32% over the
previous year.
The Bank was able to maintain its operational
efficiency in 2019, with the cost-to-income ratio
standing at 21.6% compared to 20.3% in 2018.
Return on average equity (ROAE) recorded 29.5%
on a consolidated basis (post profit appropria-
tion) from 33.1% in 2018. Consolidated return on
average assets (ROAA) increased to 3.26% (post
profit appropriation) for 2019, up from 3.03% in
2018. As of year-end 2019, CIB booked a net inter-
est margin (NIM) of 6.48%, up from 5.81% a year
earlier, after normalizing for the aforementioned
recycled amount.
CIB’s gross loan portfolio stood at EGP 132 billion
at year-end, growing 10% from EGP 119.5 billion
y-o-y. This increase met the Bank’s strategic ob-
jectives in maintaining asset quality and enhanc-
ing profitability. CIB’s market share of total loans
amounted to 6.82% in November 2019.
The Bank pursued deposit growth in 2019, adding
EGP 19 billion to its base, which grew to a total
of EGP 304 billion over the year, an increase of
7% from 2018. CIB’s share of the deposits market
reached 7.44% in November 2019.
Through the Bank’s conservative risk-manage-
ment strategy, asset quality remained resilient
in 2019 while booking provisions adequate to
mitigate any potential risks. Provision expense
for 2019 amounted to EGP 1.4 billion, bringing the
loan-loss provision balance to EGP 11.8 billion.
NPLs represented 3.99% of the gross loan portfo-
lio, cushioned by a solid 225% coverage ratio.
(ESOP), through increasing the issued and paid-up
capital from EGP 14,690,821,300 to EGP 14,776,813,400.
The Bank remains comfortably covered in terms
of capital adequacy, with year-end CAR recording
26.1% (post profit appropriation) — well above the
minimum regulatory requirement.
Through the efforts of the Taxation team and the
Financial Control Group, CIB became the first or-
ganization in Egypt to conclude its tax inspection
process for a particular year ahead of the following
year-end. CIB was also the first bank to conclude
the settlement of all legal cases and disputes out-
standing with the Tax Authority in the course of
the Income Tax Protocol signed between the Fed-
eration of the Egyptian Banks and the Ministry of
Finance. This enabled CIB to clear any tax-related
uncertainties, further highlighting the quality of
its financial statements.
In collaboration with the Financial Control Group
and the Enterprise Risk Management (ERM) team,
CIB developed the methodology of the Risk-Adjust-
ed Return on Capital (RAROC) calculation. Through
applying the latest CBE practices, the RAROC cal-
culation will help elevate the business lines’ perfor-
mance management.
Appropriation of Income in 2019
The BoD has proposed the distribution of a dividend
per share of EGP 1.25 and increasing its legal reserve
by EGP 590 million to EGP 2,778 million, and its gen-
eral reserve by EGP 7.84 billion to EGP 24,315 billion.
This reinforces the Bank’s solid financial position, as
evidenced by its capital adequacy ratio (CAR) of 26.1%.
The proposed dividend distribution falls in line with
the Bank’s strategy of maintaining a healthy capital
structure to address more stringent regulations,
mitigate associated risks, as well as support the Bank’s
future growth plans.
Moreover, the BoD has proposed the distribution of
one free share for every three existing shares (fractions
in favor of minority shareholders) by increasing the is-
sued and paid-up capital from the general reserve from
EGP 14,776,813,400 to become EGP 19,702,417,900; an
increase of EGP 4,925,604,500 distributed over a total
of 492,560,450 shares, with a nominal value of EGP ten
per share. This increase is to take place following the
implementation of the capital increase related to the
11th tranche of the Employee Stock Ownership Plan
2019 Operational Highlights
Institutional Banking
The Institutional Banking (IB) group met its
performance targets for 2019. The group contrib-
uted 64.9% to CIB’s loan growth during the year.
Building on the trust of the Bank’s clients and
longlasting relationships developed throughout
more than 40 years in the market, the Bank’s Cor-
porate and Global Customer Relations (GCR) group
ventured into new segments and sub-segments in
2019, such as education, frozen vegetables, hospi-
tals, leather, and wood and furniture. Through this,
CIB was able to expand its existing client base and
open new market opportunities by financing mega-
projects in key sectors, including power, real estate,
telecom,
food and beverages, petrochemicals,
and oil and gas. Short-term working capital loans
remained the main form of facilities required by
clients throughout the year, mostly in LCY, showing
an increase of 40% y-o-y.
The group’s extensive experience, along with its
superior financial structuring capabilities have
continued to position CIB at the forefront of corpo-
rate banking. The Bank expects to sustain this po-
sitioning given its commencement in automating
the credit approval cycle and re-engineering the
processes in line with international best practices.
Through its Debt Capital Markets (DCM) division,
CIB was the only local bank to act as a security
agent on behalf of international lenders such as
EBRD and Proparco for renewable energy projects
specifically under the feed-in tariff program —
a national landmark project supported by the
government. Moreover, the team was able to
close 75% of securitization deals in Egypt, which
further strengthend CIB’s position as the top
Egyptian bank in structuring securitizations in
the local market. CIB was also the top-ranking
private sector bank in Egypt in the arrangement
of syndicated loans and book running. The Bank
was awarded two accolades for medium-term
and revolving credit facilities extended to a com-
pany in the fertilizer industry, garnering the Bank
the title of Best Refinancing in Africa and Best
Refinancing Deal Award at the EMEA Finance
Achievement and Project Finance Awards. CIB
also won the Best Syndicated Facility in North
Africa for restructuring the medium-term loan
and working capacity facilities for a company in
the petrochemicals industry and the Best Tele-
com Deal in Africa for the 4G rollout for a com-
pany in the telecom sector. In 3Q2019, CIB ranked
second among Egyptian banks on the Bloomberg
Africa Mandated Lead Arranger and Administra-
tive Agent League Tables and ranked third among
Egyptian banks on the Bloomberg Africa Book
Runner League Table.
With the recent rise of importance of the Chinese
Yuan (CNY), a reserve currency since 2016, along
with the hike in the Egyptian-Chinese trade rela-
tions over the past five years, CIB added CNY to its
portfolio of major currencies in 2019. With this step,
not only is the Bank a pioneer in dealing in CNY and
CNH currencies, but it is now capable of handling
various transactions and payments denominated
in CNY, including account openings, treasury and
dealing services, and issuing and handling trade
instruments. Moreover, CIB expanded its trading
on 114 unconventional currencies through third
counter-party trading — a tool used by importers
who pay off their suppliers in the original country of
the unconventional currency.
In line with the Bank’s expansionary plans in Afri-
can, CIB’s Correspondent Banking team expanded
its coverage of Sub-Saharan Africa to include a port-
folio of banking relationships in 22 countries across
different regions of the continent.
Retail Banking
The Consumer Banking division relied on data
analytics to enhance value-based segmentation,
which is built on behavior and lifestyle, allows
the Bank to proactively serve customers, boost
digital activation, and increase cross-selling op-
portunities.
As part of CIB’s unwavering commitment to pro-
mote financial inclusion, it was one of the first
private sector banks to offer the national Meeza
cards. Meeza prepaid and debit cards allow cus-
tomers to withdraw cash from ATMs, conduct
purchases, and perform e-commerce transac-
tions in Egypt. Moreover, CIB was the first in the
Egyptian banking sector to offer the contactless
payment feature for debit cards, credit cards, and
select POS machines.
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Ranked third among all Egyptian banks and first
among private banks, CIB’s market share in household
loans recorded 7.13% in November 2019. On the liabili-
ties’ side, CIB revamped its existing Save and Safe ac-
count to Premium Savers in 2019 to enhance its prod-
uct offering and provide customers with an attractive
balance of financial and non-financial benefits. CIB
also launched a new payroll proposition — the Mil-
lennial bundle — targeting the younger age bracket
of the payroll portfolio. It incentivizes this segment to
maintain higher AUMs and encourages more usage of
debit cards to further boost the digital platforms.
Consumer Banking grew its loan portfolio by 17% y-o-y
and deposit portfolio by 9% y-o-y. To enhance profit-
ability and the funding mix, CIB continued to gather
current accounts and had the highest DDA market
share among all private banks at 17% in November
2019. CASA accounted for 56% of the total funding base.
Having the largest ATM network among Egypt’s
private banks, CIB added more than 130 machines
throughout the year, bringing its ATM network to
1,012 ATMs at year-end 2019. The Bank increased its
branch network by six branches, to bring the total
branches to 207.
Following the major transformation that took place
in CIB’s Business Banking division during 2018,
the Bank launched a comprehensive loan program
tailored to SMEs in 2019. The year also saw the of-
fering of unique deposit bundles such as the Super
Business Account, which gives customers exclusive
benefits and services to manage their business ef-
ficiently and conveniently, and the Easy Business
Account, an online account that allows customers
to fulfill most of their banking needs without having
to visit a branch. Moreover, CIB launched in 2019 an
SME-dedicated call center to enhance the service
level offered to this segment of clients, the first of its
kind in Egypt.
Accordingly, the Business Banking division wit-
nessed continued growth in 2019, with its client
base growing 13% y-o-y to over 54,000 companies.
The division’s operating profits grew 5% y-o-y to EGP
1.6 billion and deposits hit EGP 23.4 billion, growing
18% y-o-y. In the payment solution space, the divi-
sion was one of the top market leaders processing
EGP 33 billion transactions. CIB was able to domi-
nate Egypt’s payment acceptance sector in 2019,
with market shares of 26% and 19% for POS transac-
tions and e-commerce transactions, respectively.
CIB pursues innovative ways
to conduct business to drive
the Bank to new heights.
Operations and Information Technology
The Operations and IT divisions work together
to support the implementation of CIB’s strategic
vision by improving operational efficiency, auto-
mation, and process re-engineering, along with
incorporating technological advancements and
artificial intelligence across the Bank’s functions.
Using one of the most advanced technology infra-
structures in the Egyptian industry with state-
of-the-art computing systems, fully virtualized
platforms, and powerful and initiative storage
appliances, Operations and IT are instrumental in
reducing the cost of service and better improving
customer satisfaction.
To improve operational efficiency by offering en-
hanced technology, system stability, and decreased
time to market, CIB upgraded its core system to
the T24 Core Banking system in 2019. The year also
witnessed the completion of the Sigma program,
which aims to streamline customer service deliv-
ery at branches. The program has contributed to
the successful rollout of account openings and loan
origination, which resulted in better customer ex-
perience, service delivery turn-around-time (TAT),
and business growth. In 2019, the Bank started a
Business Process Reengineering (BPR) initiative to
enhance efficiency and productivity rates, reduce
TAT, improve the customer experience, and build
effective Service Level Agreements (SLAs). More-
over, the Bank expanded its Straight Through Pro-
cessing (STP) by growing the list of products and
processes that are currently automated.
2019 witnessed the launch of the Visa Contactless
Card for both debit and credit cards with dual con-
tact methodology. With these new cards, clients can
make payments in a faster and more convenient way
without swiping their cards on POS machines or
entering their pin numbers.
Security and Resilience Management
CIB has a dedicated team that safeguards the Bank
and its stakeholders against cyber-attacks, disrup-
tions, threats, and risks. With a superior, robust
defense infrastructure, coupled with the industry’s
global standards and best practices, CIB prides itself
on its quality of protection against advanced threats
and attacks.
Ensuring that security incidents are identified,
monitored, analyzed, and responded to, CIB’s
Security Operations Center (SOC) furnishes the
Bank with a comprehensive overview of the entire
network and possible vulnerabilities at an early
stage. Another firewall is the Bank’s business
continuity and resilience management, which is
responsible for planning and executing different
response strategies in the event of business dis-
ruption. Moreover, CIB is governed by stringent
security policies and guidelines through the
security governance framework as stipulated by
Information Security Management.
In 2019, the Bank renewed its Business Continuity
Management ISO 22301:2012 certification for the
second year, taking a proactive approach to mini-
mize impacts of incidents, improve recovery time,
and enhance its resilience capabilities to better
serve customers. The Bank has also maintained
its Payment Card Industry – Data Security Stan-
dard (PCI-DSS) certification, as well as assuring
full compliance with SWIFT Customer Security
Program requirements.
Awards and Recognition in 2019
In 2019, CIB received numerous awards and recogni-
tions from prominent local and international institu-
tions, echoing its position as a leader in the industry.
As a testament to CIB management’s excellence,
the Bank’s Chairman and Managing Director was
named CEO of the Year in 2019 by Global Investor.
CIB received three awards in 2019 in the MENA re-
gion’s largest investor relations event organized by the
Middle East Investor Relations Association (MEIRA) in
partnership with Extel. CIB was awarded the Leading
Corporate for Investor Relations in Egypt, the Bank’s
Chief Executive Officer received Best Investor Relations
by CEO in the Middle East, and the Chief Communica-
tions Officer was named Best Investor Relations Profes-
sional – Egypt. This is the sixth year running in which
CIB has received at least one award from MEIRA.
Furthermore, CIB was able to maintain its rank-
ing on Forbes Middle East’s Top 100 Listed Com-
panies in the Arab World, coming in at 38th and
ahead of the four Egyptian companies on the list,
solidifying its position as a local bank with inter-
national standards.
Awards by Global Finance
• Best Bank in Egypt
• Best Online Portal Services
• Best Information Security and Fraud Manage-
ment
• Best Online Deposit, Credit, and Investment
Product Offerings
• Best Bill Payment and Presentment
• Best Integrated Consumer Banking Site
• Best in Mobile Banking
• Best Mobile Banking App
• Most Innovative Digital Bank and Best Trade
Finance Services
• Best Trade Finance Provider in Egypt
• Best Treasury and Cash Management Provid-
ers in Egypt
• Best Subcustodian Bank in Egypt
• Best Bank for Payments and Collections in the
Middle East
Awards by Euromoney
• Middle East’s Best Bank for Corporate Respon-
sibility
• Best Bank in Egypt
Awards by EMEA Finance
• Best FX Services
• Best Payment Services in North Africa
2020 Business Outlook
Despite regional and international headwinds,
2020 is perceived to be the year in which Egypt
reaps the fruits of the accomplishments it has
achieved over the past few years. Structural
economic reforms and the expected additional
rate cuts should improve the business climate
for the year.
CIB will continue to provide valuable opportuni-
ties for shareholders by providing clients with the
highest quality of service while supporting their
investment and financial growth plans. No matter
the operating environment, the Bank will remain
committed to maximizing returns for sharehold-
ers through a business strategy centered around
asset quality and profitability.
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Strategic Direction >> BoD Report
Performance Table
2019 Performance Measures
Results
2019 Performance Measures
Results
COMMUNITY
• Donate 1.5% of annual net profit to the CIB Foundation
• Make positive contributions by:
- Supporting employees’ community involvement
and fund-raising efforts
- Supporting advances in areas of focus, including
education, arts, culture, health, and environmen-
tal protection
• CIB strives to create a positive impact on the local
community. Accordingly, it has undertaken a number
of initiatives to promote inclusive and sustainable
development across the country as well as provide
support to underserved segments of the community
through the Bank’s Corporate Social Responsibility
Program, the CIB Foundation, and its dedication to
supporting Egyptian champions.
SAFEGUARDING THE INTERESTS OF
SHAREHOLDERS
CIB maintains a proactive investor relations program
to keep shareholders abreast of developments that
could have an impact on performance. The team and
senior management attend one-on-one meetings, road
shows, investor conferences, and conference calls,
sparing no effort in providing the investment com-
munity with a consistent stream of transparent disclo-
sures while simultaneously ensuring analysts have the
information they need to maintain balanced coverage
of the Bank’s shares
As a result of the team’s conscious efforts in its Investor
Relations program, CIB received three awards in a 2019
study conducted by the Middle East Investor Relations
Association (MEIRA) in partnership with Extel. The
Bank’s efforts have been globally recognized, receiving at
least one award annually in the past six years. In 2019,
CIB received the following awards:
• Leading Corporate for Investor Relations in Egypt
• Best Investor Relations by CEO in the Middle East for
our Chief Executive Officer
• Best Investor Relations Professional – Egypt for our
Chief Communications Officer
FINANCIAL
• Consolidated ROAE of 29.5% (after profit
• Maximize shareholder equity and deliver above-
appropriation)
peer-average total shareholder return
• Grow earnings per share (EPS)
• Deliver above-peer-average return on risk-
weighted assets
• Focus on capital to cushion the Bank against any
unforeseen external shocks
• Consolidated 24% EPS growth
• Total tier capital hit 25.43% of risk-weighted assets
BUSINESS OPERATIONS
• Grow revenues faster than expenses
• Identify market gaps and attain first-mover advan-
tage by laying the groundwork ahead of peers to
allow the Bank to benefit from rising opportunities
• Standalone cost-to-income ratio of 21.6%
• Institutional banking profit before tax rose 12% over
last year to EGP 10.7 billion, and loan portfolio grew
to EGP 104.1 billion, up 8% y-o-y
• Retail banking profit before tax increased 8% y-o-y
to EGP 4.9 billion and deposits grew to EGP 27.3
billion, an 18.9% y-o-y increase
CUSTOMER
• Improve customer experience
• Invest in core businesses to enhance customer experience
EMPLOYEE
• Enhance employee experience by:
- Listening to employees
- Providing a healthy, safe, and flexible work
environment
- Providing competitive pay, benefits, and perfor-
mance-based compensation
Investing in training and development
-
• Much effort was exerted to improve cybersecurity
standing, with a clear strategy and comprehen-
sive plan to improve security capabilities and
continuously provide a safe banking environment
for customers
• CIB renewed its Business Continuity Manage-
ment ISO 22301:2012 certification for the second
year in 2019
• CIB had an average of 6,827 employees in 2019
with an average annual income of EGP 246,000
per employee
• CIB implements an Employee Stock Ownership Plan
(ESOP) as part of its compensation strategy, aimed
at attracting, motivating, retaining, and rewarding
outstanding employees, managers, and executive
board members. ESOP allows designated employees
to own CIB stocks at face value via promise-to-sell
agreements. CIB allocates 1% of its issued and
paid-in capital to ESOP. During 2019, CIB allocated
a total of 10,541,330 stocks to 4,242 employees. Since
the inception of the plan in 2006 and its renewal
in 2015, the Bank has allocated 91,032,963 shares
to its employees (taking into consideration capital
increases throughout the stated period)
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65
Our
Businesses
CIB is an award-winning institution
dedicated to creating outstanding
stakeholder value and providing superior
customer service solutions to a broad
range of clients.
Zaki the Bot
Your Personal Virtual Assistant
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Wealth, and CIB Private.
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CIB Wealth is a premium segment that
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the CIB Wealth webpage by tapping here.
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67
Our Businesess
Institutional
Banking
100 EGP
BN
group loan and investment portfolio
Corporate and Global Customer
Relations (GCR) Group
The Corporate and Global Customer Relations (GCR)
Group continues to build on its legacy and steadfast
commitment to supporting the Egyptian economy
and providing world-class customer experience. This
is owing to the Bank’s fortitude and far-reaching
experience that allows the group to help clients
thrive in today’s evolving and complex market. CIB’s
talented teams, coupled with its superior financial
structuring capabilities, have continued to position
the Bank at the forefront of the corporate banking
sector through constantly innovating its product of-
ferings while maintaining unparalleled asset quality.
Despite the challenging macroeconomic environ-
ment witnessed in the first half of 2019, the group
has ventured into new potential segments and
sub-segments such as education, frozen vegetables,
hospitals, leather, and wood and furniture. Further-
more, the group has expanded the existing client
network to tap into further market opportunities,
by financing mega-projects in active sectors such
as power, real estate, telecom, food and beverages,
petrochemicals, and oil and gas.
The Bank’s strategy in the years to come is to invest
in a digital transformation that will provide clients
with effective financial strategies. This is backed
by the belief that a global offering is paramount
to meeting clients’ financial objectives, which will
serve as the catalyst for this transformation. In this
regard, the group has embarked on a journey to
optimize all credit processes, including automation
of the credit approval cycle and the re-engineering
of processes in line with international best prac-
tices. In addition, the Bank will utilize its access to
a wealth of client information to develop predictive
analytics to tailor future credit offerings as well as
forecast possible early-warning indicators.
Furthermore, the group plans to promote trade fi-
nance business flow through the Bank’s digital plat-
forms as well as expand the electronic cash, trade,
and CPS (governmental e-payments) management
solutions. Electronic services will also facilitate
ring-fencing of full business cycles with counterpar-
ties, which will maximize transactional returns.
The group will also continue to support medium-sized
companies by offering customized financial solutions
and promoting their financial inclusion in the market.
2019 Highlights
The second half of 2019 underscored that the Egyp-
tian economy is on the right trajectory towards
growth, which has created a more stable environ-
ment for banks. Factors contributing to the growth
include a declining interest environment, a stronger
EGP, a decrease in inflationary levels accompanied
by an increase in consumer purchasing power, a
boom in the tourism sector, as well as a sustained
reform momentum. Nonetheless, other macroeco-
nomic factors have weighed down on the economy,
including generally slower global economic growth,
which has decreased FDIs and affected exports, as
well as turbulence in some strategic industries such
as cement and heavy steel.
However, the group’s loan and investment portfolio
recorded EGP 100 billion as of December 2019 com-
pared to EGP 88 billion as of December 2018. The
group finalized several key transactions during the
period, including but not limited to:
• In cooperation with several partner banks, CIB
arranged a securitized facility for the New Urban
Communities Authority (NUCA) for a codevel-
opment contract portfolio to partially finance
national real estate and infrastructure projects.
• Engaged in several escrow arrangements for co-
development concepts in the real estate market.
• Financed the upgrade of the National Electric-
ity Grid and electricity distribution networks.
CIB’s strategy in the years
to come is to invest in a
digital transformation that will
provide clients with effective
financial strategies.
• Extended short-term working capital facilities to
leading players in the food and beverage sector.
• Supported the tourism sector by extending
sizeable facilities directed at the renovation of
existing hotels.
• Financed the export business of leading compa-
nies in the petroleum industry.
• Supported major telecom players in the pro-
curement of high-speed routers.
• Participated in a club deal to finance the expan-
sion of El Sokhna Port.
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Our Businesess >> Institutional Banking
2020 Forward-Looking Strategy
In an environment of rapid change and increased
competition, the group’s strategy is to optimize
credit offerings and processes. Even as the
market pioneer, the group is always prepared in
case of disruptions and will continue to invest
in digital technologies to provide clients with
valuable data and insights. Welcoming change is
accordingly of utmost importance as it paves the
way for creativity and eliminates crippling risks
that can be caused by short-termism. Moreover,
by leveraging on the vast capabilities of data
analytics, a deeper understanding of clients’
needs and behaviors will allow CIB to tailor and
differentiate products for such sub-segments and
to continuously review market demand in a non-
traditional manner.
As such, the group plans to focus on strategic op-
portunities that lay ahead that will derive contin-
ued success for our clients, as well as our Bank. This
includes exploring new opportunities for financing
mega projects in the petrochemicals, real estate,
power, tourism, oil and gas, textiles, food and bev-
erages, construction, and transportation sectors.
It also entails further digitization and automation
of the credit approval process as well as improving
inefficiencies through developing technological
capabilities that better service clients’ accounts to
simplify business, improve straight-through pro-
cessing, and add higher-value clients.
The year will also see an increased focus on
the growth potential of the SME segment and
potential business opportunities in various gov-
ernorates. It will also continue to build strategic
relationships with key government entities. Sup-
ply chain financing, forfeiting services to export-
oriented clients, and product bundling such as
hedging offers and automated cash-management
solutions will also be important for the division in
the year ahead.
Debt Capital Markets (DCM)
CIB’s Debt Capital Markets Division (DCM)
prides itself on its unmatched track record and
experience in underwriting, structuring, and ar-
ranging of syndicated loans and project financ-
ing, as well as securitization transactions and
bond issuance.
2019 Highlights
In 2019, DCM arranged and closed numerous deals
(long term and working capital facilities) in the
fields of real estate, petroleum, and food and bever-
ages. It was also the only local bank to act as a secu-
rity agent on behalf of international lenders such as
EBRD and Proparco for renewable energy projects
specifically under the feed-in tariff program—a
national landmark project supported by the govern-
ment. DCM also acted as the facility agent, account
bank, and security agent for other syndicated facili-
ties in various industries.
In 2019, DCM closed 75% of securitization deals in
Egypt, firmly cementing CIB’s position as the top
Egyptian bank structuring securitizations in the
local market. The division also penetrated new sec-
tors in 2019, including micro and consumer finance.
DCM continued to play a pivotal role in advising and
arranging securitization issuances in cooperation
with several partner banks and has closed the big-
gest securitization deal to date for NUCA.
CIB is also the top-ranking private sector bank in
Egypt in both arrangement of syndicated loans as
well as book running. In recognition of its efforts,
2019 saw the Bank awarded two accolades for the
Egyptian Fertilizers Company (EFC)’s medium-
term and revolving credit facilities, garnering the
Bank the title of Best Refinancing in Africa and
Best Refinancing Deal Award at the EMEA Finance
Achievement and Project Finance Awards. It also
won the Best Syndicated Facility in North Africa for
restructuring the MTL and WC Facilities of Egyp-
tian Propylene and Polypropylene (EPP) at the
EMEA Finance Achievement Awards and the Best
Telecom Deal in Africa for Orange Egypt’s 4G roll-
out expansion at the EMEA Finance Achievement
Awards.
CIB ranked second among Egyptian banks on the
Bloomberg Africa Mandated Lead Arranger and Ad-
ministrative Agent League Tables and ranked third
among Egyptian banks on the Bloomberg Africa
Book Runner League Table, both in 3Q19.
2020 Forward-Looking Strategy
In line with the Egyptian government’s economic
reform program, DCM will continue to capitalize
on key industries and to focus on expanding in
transactions related to alternative energy, power,
infrastructure (such as railways and ports), tour-
ism, fertilizers, packaging, petrochemicals, and real
estate, as well as acquisition finance.
Given our solid track record and previous experi-
ence in assuming the role of agent and security
agent, DCM will also be capitalizing on its repu-
tation to expand its services of both agency and
security agency roles for transactions financed by
local and foreign lenders.
DCM plans to introduce new structures in the
debt capital market in addition to tapping the
market for green bonds.
Direct Investment Group (DIG)
CIB’s investment arm, the Direct Investment Group
(DIG), is responsible for the Bank’s direct equity
acquisitions, divestitures, and equity portfolio man-
agement across local and regional markets. DIG
maximizes CIB’s return on investments by utilizing
the Bank’s designated funds to invest in sectors
with high potential for growth.
Our primary objectives revolve around generating
attractive, risk-adjusted financial returns for our
institution through dividend income and capital
appreciation, as well as enabling CIB to offer a
broad spectrum of funding alternatives to sup-
port clients’ growth.
We commit to operational excellence by adopting
industry best practices, which is supported by our
unique value proposition of a full-fledged financial
partner in addition to our team of specialized in-
vestment experts.
2019 Highlights
Capitalizing on Egypt’s economic direction and
focus on key sectors, DIG has targeted invest-
ment opportunities related to the healthcare and
education sectors. It has leveraged its extended
network to execute the acquisition of a minority
stake in a market-leading pharmaceutical com-
pany in a non-traditionally structured transac-
tion. The acquisition, in addition to the equity
market exposure in general, solidifies CIB’s posi-
tion as a full-fledged financial partner to Egypt’s
business community.
In line with its five-year strategy, DIG has embarked
on the process of restructuring its investment port-
folio by enhancing exposure to the fast-growing
financial services sector, targeting investments in
defensive sectors (like healthcare and education),
and focusing on dividend-generating opportunities
that ensure a certain level of steady profitability.
2020 Forward-Looking Strategy
In 2020, DIG will continue expanding and diversify-
ing its portfolio by executing select, quality invest-
ments. DIG’s Marketing and Deal Sourcing team
will continue to add lucrative deals to its investment
portfolio while the Portfolio Management team will
ensure CIB is represented as a full-fledged financial
service provider through the active participation in
portfolio companies’ board of directors, maximiz-
ing direct and indirect investment returns.
DIG will embark on a set of initiatives, entailing new
equity products/tailored structures to expand its
investment portfolio and broaden its funding alter-
natives offered to support clients’ growth.
Financial Institutions Group (FIG)
The Financial Institutions Group (FIG) consists of
three teams: Correspondent Banking, Non-Bank
Financial Institutions, and Development Finance.
Together, these teams are CIB’s first point of contact
for credit institutions and manage the Bank’s rela-
tionships with different global institutions.
2019 Highlights
2019 was another exceptional year for contingent
business, whereby new foreign currency in USD
and local currency-denominated bookings grew
by c.12% y-o-y and 15% y-o-y, respectively. Fi-
nally, the Correspondent Banking’s contribution
to the group’s total revenue is about 59.86%. CIB
inaugurated its representative office in Addis
Ababa, Ethiopia with the aim of strengthening
relationships with Ethiopian banks, promot-
ing Egyptian exporters, and gaining market
insight, while Correspondent Banking expanded
its coverage of Sub-Saharan Africa to include a
portfolio of banking relationships in 22 coun-
tries across the continent. Also, the successful
opening of the CIB Nostro account in China will
be a key first step to cater to clients’ needs for
payments denominated in CNY.
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71
Our Businesess >> Institutional Banking
The Non-Banking Financial Institution Invest-
ment Portfolio saw healthy growth in 2019, in-
cluding CIB’s participation in bonds issued under
securitization transactions, totalling EGP 1,709
million at year-end 2019. CIB saw 42% growth y-
o-y from new securitization transactions during
2019 in the leasing and car finance sectors.
Non-Bank Financial Institutions O/S Loans ex-
tended to microfinance institutions grew this year.
CIB served a total of 133,000 individual active micro-
entrepreneurs, compared to 108,000 as of December
2018, of which 48% were women. The Non-Bank
Financial Institution FY2019 total loan portfolio
amounted grew 19% y-o-y to EGP 2.299 million.
2020 Forward-Looking Strategy
Correspondent Banking will continue to aggres-
sively grow contingent business with a focus on
mega-projects.
Africa continues to be a core priority, and we plan to
increase our direct relationships with African corre-
spondents in key Sub-Saharan markets and expand
our on-ground presence. By enhancing coverage, we
can efficiently identify business opportunities and
better serve our clients, capitalizing on our relation-
ships with African FIs, DFIs, and pan-African banks
to grow our share of intra-African trade transactions.
Additionally, the focus will be on growing the Non-
Bank FI loan portfolio by increasing penetration
in potentially developing industries (factoring and
consumer lending) and existing industries (leas-
ing, microfinance, and car finance). By marketing
CIB’s Digital Cash Management solutions, we will
enhance the development of the microfinance,
factoring, and leasing loan portfolios, with a focus
on targeting insurance, investment, and brokerage
companies to increase their LCY deposits.
Treasury Group
The Treasury Group provides a range of activities,
including foreign exchange and money market
trading, primary and secondary government debt
trading, management of interest rate gaps, and
pricing of local and foreign currency deposits. The
group’s wide range of hedging products cover spot
transactions, forwards, swaps, and plain vanilla
options, and an array of option structures, such
as premium-embedded options, participating
forwards, zero-cost cylinders, and boosted calls, in-
cluding cash export and import, FX-linked yield en-
hancement products such as dual one-touch, range
accruals, touch and no-touch deposits, hedging, and
investment advisory.
The Treasury Group’s strategy is to further enhance
the performance of its overall activities by manag-
ing CIB’s margins and spreads effectively, thus
maximizing the group’s profitability. On the other
hand, the Treasury Group will upgrade its front-
office system to allow CIB to shift towards real-time
treasury and a more dynamic approach of manag-
ing liquidity and risk management. Furthermore,
it will utilize data analytics, machine learning, and
artificial intelligence in FX trading and reserve
management by relying on automation.
2019 Highlights
CIB’s Treasury Group was a pioneer in the involve-
ment of CNY and CNH currencies with clients. The
year also saw trading on 114 unconventional curren-
cies through third counter-party trading — a tool
used by importers who pay off their suppliers in the
original country of the unconventional currency.
Consumers and retailers also use third counter-par-
ty trading if they need to transfer an unconventional
currency to their foreign bank account.
Throughout 2019, we witnessed a noticeable increase
in foreign currency inflows on the back of the rise in
export proceeds, growth in the tourism sector, and
the cancelation of the repatriation mechanism. The
import business also witnessed enhanced growth
during the period. Turnaround time was reduced
as a direct result of competitive pricing and the
streamlining of the trade finance issuance process.
The Treasury Group was well positioned in antici-
pation of the CBE’s easing cycle by adjusting the
Bank’s balance sheet and thus maximizing the
profit opportunities and maintaining spreads.
The CBE announced in 2019 the launch of the Cai-
ro Overnight Index Average (CONIA) as Egypt’s
risk-free benchmark interest rate. CIB, as a mem-
ber of the Money Market Contact Group (MMCG),
was part of the development of CONIA, which was
the result of collaborative efforts by the Egyptian
MMCG and EBRD. CIB’s Treasury Group present-
ed the MMCG with a detailed framework of how
to develop and calculate the risk-free benchmark.
The introduction of CONIA will lay the founda-
tion for improved efficiency in the market.
CIB’s Treasury Group positively
impacted the
Bank’s non-interest income, growing the volume
of trade products opened at CIB from the sale of
foreign currency through the free market, incoming
documentary collections (IDCs), and letters of cred-
it (LCs). This allows CIB’s foreign currency exposure
to consistently make a positive contribution to the
Bank’s consolidated reported earnings.
To round out the year, the Treasury Group won
several prestigious global awards in 2019, includ-
ing the Best FX Services in North Africa Award
from EMEA Finance and the Best Treasury and
Cash Management Providers in Egypt Award from
Global Finance.
2020 Forward-Looking Strategy
The Treasury Group will continue to shift from
offering classic products to more client-centric
ones. In line with the Bank’s expansionary plans,
the Treasury Group will seek to enhance the
performance of its trading and sales activities
by expanding into other African nations. This
expansion will allow the group to act as a hub for
international investors and support the represen-
tative office with a range of treasury solutions.
Moving forward, our goals are to manage liquid-
ity efficiently, develop strong and profitable rela-
tionships with customers, and take all necessary
steps to ensure proper risk management, while
maximizing the group’s profitability.
Strategic Relations Group (SRG)
The Strategic Relations Group (SRG) is an institu-
tional banking group dedicated to initiating, nur-
turing, and growing banking relationships with
strategic institutional depositors who are essential
contributors to CIB’s stable funding base. The
group’s primary goal is to offer a first-class banking
experience while maintaining the delicate balance
between mainstream commercial banking activi-
ties and the non-commercial needs of its clients.
Africa continues to be
one of our core priorities,
and we plan to build
direct relationships with
correspondents in key
markets across the continent.
CIB takes pride in the fact that it is the sole bank
operating in Egypt with such a unique focus group,
dedicated to servicing its prime institutional enti-
ties. SRG carries out this function through highly
qualified Relationship Managers, whose role is to
ensure that customers receive superior, personal-
ized services catering to their unique business
needs. SRG provides tailor-made banking services
with a special focus on digital banking solutions.
Products or services that only CIB offers to clients
include advanced, tailor-made GTS products and
short-term bridge finance facilities for the educa-
tional sector to eliminate cash-flow gaps that de-
velop during the year.
SRG’s strategic clientele comprises of more than 180
diplomatic missions, NGOs, educational entities,
and distinguished international and local donor
agencies. The team works tirelessly to facilitate its
clients’ business operations and meet their bank-
ing requirements by creating innovative, tailored
products and services. Its functions include offer-
ing customized digital solutions, the collection of
tuition and visa fees, the monitoring and reporting
of deposit activities, fund management and pen-
sion savings plans, providing a settlement system
between tourism companies and airlines, dispatch-
ing mobile tellers upon customer request to act as
a temporary small banking unit at the customer’s
premises, and special offerings for staff loans.
2019 Highlights
The group successfully oversaw the marketing of
a new lending program extending debt against a
guaranteed flow of proceeds to an identified group
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Our Businesess >> Institutional Banking
180
institutions served
through SRG
of clients operating within the airline industry. In
addition, efforts were directed at expanding mar-
keting efforts to attract the educational sector’s de-
posits. The group also successfully executed bridge
finance facilities for the educational sector.
2020 Forward-Looking Strategy
The group has become one of CIB’s primary chan-
nels for corporate lead generators, leveraging exist-
ing relationships while simultaneously capturing
NTB opportunities by creating a wider networking
base. A tailor-made, short-term bridge finance facil-
ity was designed and implemented for the education
sector, including universities and schools, to elimi-
nate cash-flow gaps that develop during the year.
This product is poised to become a major attraction
for these institutions, helping expand our institu-
tional depositor rate and enhance the utilization of
CIB’s digital banking solutions.
Enterprises and Governmental
Relations (EGR)
The Enterprises and Governmental Relations (EGR)
Group has gone from strength to strength since its
establishment in 2016, positioning it a head above
others in the market. By 2019, EGR evolved to man-
age relationships with large private sector compa-
nies, conduct fundraising, and attract customers
previously segmented under state-owned enterpris-
es, government entities, and sovereign authorities.
EGR clients require higher flexibility and constant
support in their transactions along with the usual
financial and advisory assistance, and the group
caters to the needs of these strategic customers
through tailored products and services, all while
growing CIB’s business.
EGR’s mission is to become the market leader in the
provision of banking services to both governmental
and private sector companies. The group has worked
tirelessly to acquire new business in these areas, capi-
talizing on a highly experienced staff, a strong cus-
tomer base, a healthy and diversified portfolio, and a
broad coverage of different sectors and industries. As
such, the team now possesses a deeper understand-
ing of both segments’ operations, which allows it to
act as client advocates within the Bank.
2019 Highlights
During 2019, EGR leveraged the power of digital bank-
ing to offer a banking experience to customers and
achieved remarkable growth in all GTS services ratios,
as reflected by impressive achievements in the trade
finance business compared to the previous year.
2020 Forward-Looking Strategy
In the year ahead, the division seeks to achieve a
steady presence in the market and manage its rela-
tionships with clients in a sustainable manner that
drives value for customers.
Retail
Banking
Consumer Banking
CIB’s Consumer Banking division is one of the
Bank’s driving forces. Serving a broad range of
customers, the division offers customer-centric
solutions tailored to each segment and works to
deliver a truly unique experience to every client.
Throughout the last three years, the division con-
tinued to expand its value proposition in the mar-
ket, and in 2019, the Bank doubled its customer
base in target segments.
2019 Highlights
During 2019, the division invested heavily in
data analytics, automated account opening, and
the second phase of CRM development platform
involving several internal stakeholders with an
eye to deepening its customer-centric model.
This strategy has allowed the Bank to segment its
customers through a value-based segmentation
approach built on behavior and lifestyle, allowing
it to not only serve them with a proactive rather
than reactive approach, but also boost digital
activation, as well as up and cross-selling op-
portunities. Tailored campaigns, along with more
specific product targeting criteria, were also
launched with great success.
The division enhanced the Payroll proposition, includ-
ing differentiated and targeted marketing by sub-
segmenting its Payroll portfolio by age and income
bracket to offer more relevant and attractive offers
and introduced new assets products. A Millennials
bundle, which will target the younger age bracket of
the Payroll portfolio, was launched in November 2019,
incentivizing them to maintain higher assets under
management (AUMs) and use debit cards.
Segments
Private
The Private segment caters to the banking and in-
vestment needs of clients with a minimum AUMs
of EGP 20 million, aiming to become the flagship
brand catering to HNW individuals in Egypt.
In 2019, a state of art hub located in Zamalek was
inaugurated to serve Private clients. Well-trained
and experienced Private Advisors were hired from
internal and external sources, as the primary own-
ers of customer relationships. They received their
first level of in-house financial planning certifica-
tion, while the second level was conducted with an
industry expert in October 2019. A Private Advisor
is also available in Alexandria to exclusively serve
customers who are located there.
Portfolio management services and margin
lending will soon be launched for Private cli-
ents. Deposits for the segment hit EGP 24.3 bil-
lion, while the total assets portfolio came in at
EGP 2.9 billion.
Premium Segments (Wealth and Plus)
Premium segments serve upper, middle, and
mass affluent individuals and customers under
the Wealth (liquid financial assets of EGP 1 mil-
lion to EGP 20 million) and Plus segments (liquid
financial assets of EGP 200,000 to EGP 1 million).
These segments are the main contributors to the
Consumer Banking division’s profitability, con-
stituting 60% of consumer banking revenues and
representing 11% of the total Consumer Banking
customer base.
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Our Businesess >> Retail Banking
4
consumer banking segments
include the Overseas
Premium segments also
Banking segment with professional Country Rela-
tionship Managers providing banking services for
non-resident Egyptians and non-resident foreigners
through online video banking or by phone. In 2019,
we expanded our services in Saudi Arabia, placing a
Country Relationship Manager in the kingdom.
In 2019, deposits for the Wealth segment rose
to EGP 108.4 billion, while the assets portfolio
came in at EGP 13.5 billion. The Plus segment’s
total deposits reached EGP 26.3 billion and as-
sets EGP 2.4 billion.
Prime
Mass customers are served through the Prime seg-
ment, which focuses on the more specific needs of
different sub-segments, including Millennials, Payroll
Blue Collars, Payroll White Collars, and Families.
In 2019, the Prime Segment achieved remarkable
figures in terms of assets, liabilities, and profitability
margins. Assets ENR for the segment reached EGP 7.4
billion, while deposits came in at EGP 23 billion with
a favorable mix of 79% CASA and 21% Term Deposits.
This success was possible thanks to the implementa-
tion of key initiatives such as: 1) cost optimization by
aligning incentives with digital migration objectives;
2) CRM with bi-weekly campaigns to drive assets pen-
etration; 3) differentiated marketing campaigns based
on behavioral segmentation targeting sub-segments
to boost customer activation levels, drive credit card
utilization, and increase assets penetration.
Consumer Banking
continued to expand its value
proposition in the market, and
in 2019, the Bank doubled its
customer base.
significant growth over the past three years CIB
moved from the fifth position in the market to the
third position and is currently the number one pri-
vate sector bank by consumer assets.
Cards
Cards, both debit and credit, are the main drivers
of market share and income — both interest and
fees through interchange — as they have the high-
est spread amongst assets products. They are vital
tools in recruiting new-to-bank (NTB) customers
and in deepening existing relationships.
Prepaid cards play a key role in serving financial
inclusion and penetrating the unbanked and under-
banked segments of society. The issuance process
and the required documentation make the cards an
appealing banking product to customers who can-
not open a bank account or apply for a credit card.
Consumer Banking Household Assets
CIB Consumer Banking Household Assets achieved
In 2019 we introduced several acquisition cam-
paigns and new products:
• New contactless payment (issuing and acquir-
ing): CIB launched the new contactless payment
feature for debit cards, credit cards, and selected
POS machines for the first time in Egypt.
• Meeza prepaid and debit cards: Meeza debit and
prepaid card products were launched in 2Q19 in
alignment with the CBE initiative to move to a
cashless society and achieve financial inclusion.
• Debit card designs: Existing debit card
designs were revamped to reflect each seg-
ment’s brand designs.
• Annual Membership Fees cashback cam-
paigns: As an acquisition sweetener to attract
new customers and enhance penetration
rates, we launched quarterly acquisition cam-
paigns giving customers annual membership
fees (AMF) as cashback upon spending in the
first two months.
In terms of financial achievement, cards ENR
reached EGP 4.2 billion, interest income EGP 810
million, and fees EGP 355 million.
Consumer Loans
CIB’s personal loan portfolio is ranked third among all
Egyptian banks and first among private banks. Con-
sumer Loans is the main asset income generator for
Consumer Banking, standing at 79% of the total loan
portfolio book.
We aim to continue expanding through portfolio
optimization and focused acquisition programs
to grow our market share of both outstanding and
new acquisitions.
In 2019, we introduced several acquisition cam-
paigns and new products, such as:
• Bullet payments for unsecured payroll loans
in the petroleum sector: Given the nature of
salaries for this customer subset, they can now
pay quarterly, semi-annually, and annually in
addition to monthly installments.
• Online alternative channel: Capture custom-
ers using digital networks offering CIB assets
products through a promotional offer and near
real-time engagement.
• Travel Loan: The loan allows customers to pur-
chase travel packages and pay in installments
over five years.
• ESLSCA Educational Loan: We signed a tie-
up with ESLSCA Business School targeting
customers applying for post-graduate studies,
offering them preferential interest rates and
several exclusive features.
• CBE initiatives: We participated in two CBE
initiatives aimed at women and youth to en-
courage them to apply for personal loans by
offering them discounted admin fees during
the promotion period.
In terms of financial achievements, loans ENR
reached EGP 19.2 billion, interest income EGP 2.95
billion, and fees EGP 188 million.
Liabilities
Consumer Banking Liabilities’ NII contributes
to 87% of total Consumer Banking’s NII FY2019.
Although challenging to continue to acquire the
target share of deposits steady growth in Egypt,
opportunities presented in the Prime and Plus
segments are a major growth prospect for the
business.
In 2019, we launched a new account opening
capability to improve sales and cross-selling, re-
duce costs, and attract NTB customers. We also
launched the TD/CD module on CRM.
We revamped our existing Save and Safe account
to Premium Savers, offering a newly structured
and propositioned savings account with a
unique group of non-interest benefits to help
boost CASA acquisitions. We also launched the
Upfront TD product and acquired a decent sales
volume.
We successfully attracted inexpensive funds to
build a less price-sensitive customer deposit base.
Moreover, we devised a strategy to reduce over-
reliance on term deposits: CDs and TDs.
A key pillar in our success in 2019 was our quick
and effective response to changing interest rates
and pricing by both the CBE and competition.
Our approach has consistently been to correctly
assess product prices with multiple pricing
tools, like selective pricing for TDs, tiered pric-
ing for savings accounts, and restrictive pricing
for FCY deposit.
In 2019, liabilities’ ENR reached EGP 182 bil-
lion, interest Income EGP 17.5 billion, and fees
EGP 221 million.
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Our Businesess >> Retail Banking
Insurance
The Insurance business provides life and general
insurance programs and generates non-interest
revenues for the Consumer Banking division in the
form of fees. In partnership with AXA, CIB has be-
come the largest distributor of individual life insur-
ance policies in Egypt and the first bank in Egypt
to provide individual international health solutions
that cover a wide array of global services.
In 2019, AXA launched Shield, a simple life insurance
product that offers a lump-sum in case of accidental
death or disability. We offered the product primarily
to the Prime segment customers who can afford to
pay a small monthly premium. We also developed in-
surance benefits for the Premium Savers new savings
account. Additionally, the AXA local medical prod-
uct was revamped in 2019 by adding more insurance
benefits, increasing the insurance limit per cover to
CIB customers, and enhancing payment facilities.
In 2019, total insurance fees were EGP 213 million,
while total insurance business hit EGP 700 million.
2020 Forward-Looking Strategy
In 2020, Consumer Banking will leverage the new
digital platform and account opening/loan origina-
tion capability to improve sales efficiency, including
cross-selling, reduce cost through activity migra-
tion, and attract NTB customers. We will continue
to focus on the Prime segment and develop custom-
ized propositions in line with each sub-segments’
needs as NTB Prime customers contribute 90% to
total NTB household acquisitions. We will deliver ef-
ficiency through a revised ‘bulk’ on-boarding CRM
capability and will continue to invest in building
further capabilities in our core banking modules
and wealth management.
Segments
Private
We will focus on positioning our CIB Private brand
within the HNW community. The aim is to have
strong brand recognition within this target group
and position CIB Private as the partner of choice
while selecting a bank.
To reach our goal, we will increase our social
activities within the business community by
complementing our offering with non-banking ben-
efits, collaborating with high-end brands, hosting
events, as well as using the Zamalek hub, operating
in 2019, as the segment’s primary base. We will also
create a Key Client desk, a selective approach to
serve the Bank’s key stakeholders that will act as
brand ambassadors in the market.
Premium Segments (Wealth and Plus)
In 2020, we aim to increase our premium segment
client base by 9% for Wealth and 22.5% for Plus
by capitalizing on new technology infrastructure
under the T24 Core Banking System and Wealth
Management Module. We will create a new range
of product designs and launch simulations and
bundles directed toward increasing revenue and
improving customer retention. Services and opera-
tions will also be enhanced, allowing for a flexible
and efficient customer experience.
Prime
The Prime segment will continue to focus on its main
pillar of sub-segmentation in 2020 with Payroll, Youth,
and Blue Collar Payroll being the key sources of custom-
er NTB acquisitions. Digital mobilization will be high-
lighted to reduce costs while growing our Net Promoter
Score (NPS). Positive jaw management will be essential
through process optimization, expense management,
and driving NII growth by extracting value from the
existing portfolio through asset penetration and credit
card utilization and growing average AUMs ticket sizes.
The key strategic focus areas for 2020 will be:
• Developing relevant and attractive product and
service bundles for the different sub-segments,
leveraging digital solutions to better serve our
customers in a convenient, efficient, and cost-
effective manner.
• Enhancing and speeding up assets acquisition
and customer on-boarding to improve cus-
tomer experience and increase NPS.
• Drive customer loyalty and increase our share
of wallet by using big data to further improve
and refine our micro-targeting marketing com-
munication, activities, and promotions.
Consumer Banking Household Assets
Cards
In 2020, we aim to launch a cashback card to com-
plement the product suite of offering points and
miles. We are also planning on offering a Digital
credit card to cater to digital-savvy customers.
During the year, we will align our debit cards with the
most relevant and attractive value proposition from
customers’ perspectives based on their segment.
We will offer prepaid payroll cards to customers
with salaries of EGP 2,000 and less. This card will
offer a low-cost solution for blue collar workers to
receive their salaries without shouldering incur-
ring account maintenance fees.
We will be able to cross-sell our banking products
to customers with only prepaid cards by 2020 as
we migrate to the prepaid Cortex card system and
link it to the T24 system.
We will be offering a generic multi-purpose pre-
paid card Charge and Go and ISIC prepaid card
aligned to the student market.
Consumer Loans
We will offer new product variants that cater to spe-
cific customer needs and facilitate sourcing.
We will also enhance the product suite through focus-
ing on aligning existing products with the new initia-
tives and credit programs such as launching a new Car
Finance program, revamping the Payroll proposition,
and introducing new segmented products, in addition
to launching the overdraft margin lending, the Private
facility pack, and overdrafts against savings accounts.
We will continue to focus on
the Prime segment as NTB
Prime customers contribute
90% to total NTB Consumer
Banking acquisitions.
700EGP
MN
APIs
Mortgage
In 2020, we will introduce changes in low-income
mortgage incentives and the recognition program
to enhance the sales team’s productivity. The overall
mortgage process will be revamped to reduce the
turnaround time and administrative requirements
by the subsidy fund.
Liabilities
Liabilities will remain the largest revenue driver
for Consumer Banking. The focus will continue
to be acquiring CASA LCY to enhance the book’s
profitability and mix. CIB currently has the high-
est market share among all private banks at 6.69%,
which we aim to increase in the year to come by
offering new innovative products, capitalizing on
data analytics and behavioral segmentation with
Prime and Plus segments, and leveraging digital
channels to decrease our operating costs while
providing a better customer experience.
Insurance
To enhance our product mix, we’re working on
adding a non-life product. This will round out our
product offering and provide insurance products
catering to all needs, from travel to auto and home
insurance, to name a few.
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Our Businesess >> Business Banking
state-of-the-art
Using
technology, Business
Banking will build the infrastructure to auto-
mate processes to improve the customer experi-
ence. Business Banking will invest in its online
banking capabilities to provide clients with
convenient and efficient ways to manage their
finances around the clock, in addition to giving
them access to online government payments
and payroll services.
The division will focus on growing its acquiring
business in e-acquiring through QR codes and
developing value propositions for different mer-
chant segments capitalizing on the current prod-
ucts available suitable to merchant needs.
Business Banking
CIB Business Banking has served over 54,000 small-
and medium-sized enterprises (SMEs) in the Egyp-
tian market since 2011 through a network of over
100 experienced Relationship Managers across the
country. We understand customers’ business needs
and their daily challenges to help them compete
and grow in their respective industries. We provide
market-leading services and an innovative portfolio
of products and solutions that include cash manage-
ment, secured and unsecured lending, trade finance,
payment, and e-commerce tailored to the needs of
enterprises. CIB will continue to support SMEs as a
cornerstone of both Egypt and CIB’s growth.
2019 Highlights
Business Banking has built a well-established cash
and trade management business with average
liability book growth rates of 34% and 35%, re-
spectively, for the last five years. In 2019, operating
profits for the division came in at EGP 1.6 billion,
up 5% y-o-y, deposits hit EGP 23.4 billion, growing
18% y-o-y, while trade gained 14% y-o-y to EGP 33.6
billion. In the payment solution space, the division
captured a market share of 26%, processing EGP 33
billion transactions. The Business Banking client
base grew to more than 54,000 companies during
the year, up 13% y-o-y.
Following the nation’s economic strategy to sup-
port SMEs by helping them grow and consequently
further economic development, Business Banking
underwent a major transformation in 2018 to re-
vamp the lending business. In 2019, it launched a
comprehensive loan program tailored to SMEs with
limits up to EGP 30 million for both new and existing
customers. The year also saw several new initiatives
launched that were tailored to SME clients, includ-
ing credit facilities with tenors of up to five years,
overdrafts, time loans (against contracts, purchase
orders, checks, and export contracts), as well as let-
ter of guarantee and letter of credit facilities.
Business Banking also developed unique and dif-
ferentiated deposit bundles suitable for various
customer needs and banking preferences, including
the Super Business Account, which gives custom-
ers exclusive benefits and services to manage their
business efficiently and conveniently, and the Easy
Business Account, an online account that allows
customers to fulfill most of their banking needs
without having to visit a branch. The division also
launched a dedicated call center in 2019 to enhance
the service level offered to SMEs, making it the first
of its kind in Egypt.
CIB maintained its dominant position in Egypt’s
payment acceptance sector in 2019, attaining a
market-leading share of 26% for POS transactions
and a 19% market share for e-commerce transac-
tions. In addition, following the country’s push
for financial inclusion, CIB managed to activate
all POS and e-commerce platforms to accept the
government-backed Meeza card and launched QR
acceptance to reach untapped segments — a key
enabler of payment business growth, especially
with very small merchants.
Business Banking continued to empower women by
developing a special proposition to support women
entrepreneurs. It included financing various types
of lending facilities, advisory services for women
entrepreneurs, and tailored financial workshops.
We provide market-leading
services and an innovative
portfolio of products and
solutions that include cash
management, secured and
unsecured lending, trade
finance, payment, and
e-commerce tailored to the
needs of enterprises.
The year also saw the launch of a pilot of the ex-
clusive Professional Services Alliances program,
which is designed to help SME customers better
manage their businesses and grow by collaborat-
ing with a league of third parties in several sup-
porting services to offer their products and ser-
vices to clients at subsidized prices.
2020 Forward-Looking Strategy
In the year to come, CIB Business Banking’s SME
clients companies will enjoy a bouquet of products
and services designed for each segment according
to their business requirements. In addition, Busi-
ness Banking will enhance its value proposition
by tailoring services to the ever-changing needs
of its clients. It will leverage data to enhance
business decisions that will drive innovation in
product development, segment-focused sales,
risk management, and process optimization.
Moreover, Business Banking will launch a special
program for Women in Business.
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Our Businesess
Digital
Banking
CIB has integrated digital thinking widely and
deeply into the organization. This focus goes beyond
service channels and transaction processing, as
the Bank strives for the digital transformation of
its entire business, from product development to
risk management and human capital management.
With digital banking mapping out the future of
businesses and the economy at large, big data has
become vital as we build information-gathering
and analysis structures and turn our quantitative
knowledge into building blocks for future strate-
gies and operation. It is these building blocks that
CIB believes will form the foundation of an entirely
distinct business line that forms the beating heart of
the Bank: Digital Banking.
Our comprehensive digital transformation frame-
work is built to illustrate the futuristic role that dig-
ital banking will play in driving the Bank’s growth,
with data science and analytics at the forefront of
this move. It is our plan to use this largely untapped
resource and the business and consumer analytics
involved as a foundation on which our digital chan-
nels will be developed. The framework will also en-
compass long-, medium- and short-term planning,
ensuring continuous improvement, to enable the
Bank to optimize current resources while building
new ones, providing smooth transitions for our cus-
tomers, and setting CIB apart from its competitors.
CIB’s digital business plan is driven by a vision
to make CIB part of our customers’ daily lives. By
giving customers a simple, trusted, and enjoyable
experience that includes the right advice and sup-
port no matter when, where, and how they interact
with the Bank, our digital solutions provide tremen-
dous value. They enhance the customer experience,
optimize working capital, reduce operating cost,
improve control and visibility of payments and re-
ceivables, and add security to financial operations.
These elements are also expected to see continu-
ous optimization on the back of CIB’s use of data
sciences, management, and analytics in finessing
its blockchain initiatives and overarching digital
strategy. Through the dynamic use of data in as-
sessing internal and external facets like risks and
performance, the Bank is expecting to easily expand
its digital infrastructure as needed to complement
the everchanging demands of digitalization.
Accordingly, the four pillars of CIB’s digital business
plan are improving the customer experience, increas-
ing migration and automation ratios, optimizing
costs, and generating revenue. These are handled
through two core groups: the Analytics and Data
Management Division and the Digital Banking and
GTB group, each of which has its own individual
segments, directives, and strategies to achieve these
goals. Both divisions work together seamlessly to ad-
here to CIB’s digital business plan and transform the
Bank into the digital bank of the future.
Analytics and Data Management
Division
In line with a long-term strategy to digitalize CIB and
entrench a digital culture throughout the Bank, the
Analytics and Data Management (ADM) division fo-
cused this year on various core initiatives covering data
science and analytics, data democratization and gov-
ernance and performance management. During 2019,
an overarching digital transformation strategy came
together in a coordinated manner across the Bank.
Globally, this year has seen a significant amount
of focus on building digital economies across
1.2EGP
BN
cost synergy generated from
migrating transactions to the Bank’s
ATM channel
CIB’s digital business plan
is driven by a vision to make
CIB part of our customers’
daily lives.
industries, countries, and continents. Given this
ever-dynamic landscape, CIB has planned out its
medium- to long-term digital bank strategy with
current and future customers in mind. ADM con-
tinues to implement its well-planned, ambitious
capabilities to enhance its value proposition to cus-
tomers, staff, and shareholders.
2019 saw CIB spearheading change in local and
regional markets by engaging and being showcased
in multilateral task forces and regional forces alike,
including joining the World Economic Forum (Af-
rica), Smart Africa, and the European and African
Union’s Digital Economy Task Force (EU AU DETF).
Moreover, CIB partnered with Carnegie Mellon Uni-
versity, a global leading data science university, to
provide real-life business case practicum courses to
their Master of Science in Information Technology
(MSIT) degree program cohort in Kigali, Rwanda.
During 2019, the ADM team was honored to receive
the International Data Group’s Digital Edge 50 Award
for the branch customer journey simulator project
for the category of Artificial Intelligence, Machine
Learning, and Cognitive Computing. Furthermore,
CIB’s data transformation case study was included as
a case study for Harvard Business School.
The 92-strong ADM team will expand according to
the growing requirements and demands of the digi-
tal economy. A fresh and disruptive strategy based on
customer-centric and cutting-edge services driven
by top talent, promises to create a lasting footprint
within the Egyptian and African banking sectors.
Consumer Analytics
During 2019, the ADM group continued to focus on
building a truly customer-centric institution while
increasing internal efficiencies at the operational
level. Various projects were completed within
these scopes, including an intelligent product rec-
ommendation engine that recommended the next
best product for the customer. This AI-driven tool
took into consideration the customers’ current
product portfolio, segment, and product usage,
and then targeted the right customer with the right
product at the right time. Concurrently, an ATM
location optimization model was implemented,
which supports the business with their ATM loca-
tion decisions.
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83
Our Businesess >> Digital Banking
At the customer level, ADM developed an income
imputation model that provided a tool to estimate
income for customers with no readily available
income-proof to better cater to asset and liability
product needs. This poses a vast opportunity for CIB
to lend to customers based on surrogate programs
as per CBE regulations.
A customer lifetime value model was formulated
to quickly assess and identify customers who
deserve preferential rates based on their lifetime
value. Another aspect of the model was to estab-
lish which clients were expected to build a long-
term relationship with CIB, and as a result, offer
them better prices and services.
Furthermore, the ADM team formulated a Real Time
Media Analytics project to help define a marketing
strategy and approach by understanding custom-
ers’ perception of the CIB brand and products. This
was accomplished by assessing different aspects of
the customer journey as well as providing real-time
displays and easy-to-use dashboards.
In addition, a young professional’s initiative was
launched to develop different bundles of suggested
products that match youth customer needs and
journeys.
Business Analytics
ADM launched a call center demand forecasting
model to help the call center team estimate the
number of incoming calls for better planning and
resource allocation. Additionally, a Merchant Ac-
quiring Profitability Strategy (MAPS) project was
implemented to improve POS efficiency and profit-
ability by introducing new methods of segmenting
merchants. The model provided a big picture of the
impact of Dynamic Currency Conversion (DCC) rev-
enue on profitability, shifted the focus of merchants
on DCC, and identified merchants with low-volume
POS as potential efficiency improvement candidates.
advantages, for banks and clients alike, are to be
able to process payments more quickly, accurately,
and securely while reducing transaction process-
ing costs, risks, and capital requirements. CIB has
sought to embrace this new technology and disrupt
from within.
Given CIB’s recognized technical expertise, the
ADM team was invited by the CBE to join a task
force for an eKYC project that involved studying the
application of Distributed Ledger Technology (DLT)
to eKYC frameworks. A joint assessment was con-
ducted for the best eKYC use-case platforms (Corda
and Hyperledger) and to choose the most relevant
application vendors for the potential nation-wide
rollout of eKYC.
In parallel, as a part of the R3 consortium, CIB lever-
aged R3’s open-source platform and DLT technology
to develop use-cases for trade finance and SWIFT,
both for the Bank and the entire Egyptian banking
sector.
Also, during the year, CIB, in cooperation with JP
Morgan Chase and 160 other banks, initiated the
development of its propriety Blockchain Interbank
Information Network (IIN) to be able to exchange
information in real-time to verify payment approv-
als. With such infrastructure in place, global cross-
border payments in every major market will reach
beneficiaries faster and with fewer steps.
Risk Analytics
Over the years, CIB has been investing in its abil-
ity to better assess the risks it takes to maintain its
leadership position in the marketplace. This year, the
Data Governance team initiated a project to monitor
Bank-wide KYC defect rates on a weekly and monthly
basis across all relevant business areas. This exercise
led to a significant elimination of defective records
while providing insights into the behavior of and
activities performed by defective customers.
In addition, an improved Expense Monitoring Sys-
tem was implemented by Enterprise Performance
Measurement (EPM) systems to maintain efficiency
throughout the Bank.
Also during 2019, the ADM team built a loan-utili-
zation tracker tool that monitored corporate loan
utilization on a weekly basis to provide an instant
pulse of the GCR’s overall exposure to CIB facilities.
Blockchain Initiatives
One of the most exciting developments in the fi-
nancial services industry today is blockchain. The
Digital Banking
The Digital Banking group serves the Bank by:
• Being a channel for acquiring new customers
• Creating new touch points for existing CIB cus-
tomers
• Generating efficiencies and reducing costs
across the Bank
• Increasing migration and automation ratios
• Creating new revenue streams
• Enhancing the customer experience and inte-
grating channels seamlessly
• Enabling new market segments, specifically
financial inclusion
• Driving product and service innovation
The group is divided into the following divisions:
Global Transaction Banking (GTB): The GTB
division helps promote, monitor, and analyze the
performance of the Bank’s digital channels, report-
ing on traffic, segments, products, and services with
the goal of maximizing product penetration and in-
creasing CIB’s share of the customer’s “wallet.” The
GTB division focuses on:
• Global Securities Services products
• Cash management products
• Trade finance products
• Supply chain products
• GTB business development
• GTB governance and support
Consumer Digital Products and Channels: The
Consumer Digital Products and Channels divi-
sion develops and promotes digital products and
services for consumer banking. It monitors and
analyzes the performance of these channels and
platforms in terms of traffic, segments, products,
and services to maximize product penetration and
increase CIB’s share of the customer’s “wallet.” The
division focuses on:
• Consumer digital business development
• Internet and mobile banking channels
• IVR and contact center channels
• ATMs & self-service channels
• Digital transformation
Financial Inclusion and Mobile Products: CIB
provides convenient, secure, and cost-effective ways
to make purchases and transfer money using mobile
devices, serving both banked and unbanked cus-
tomer segments, and supporting financial inclusion.
The Financial Inclusion and Mobile Products divi-
sion oversees the implementation of the Bank’s mo-
bile payments strategy and systematically measures
CIB is ranked first in Egypt for
digital domestic transfers.
the Bank’s digital services and their lifecycles to
ensure that customer interactions continually mi-
grate to optimal channels.
Digital Strategic Alliance and Innovation: The
Digital Strategic Alliance and Innovation division
leads on CIB’s innovation and fintech strategies.
It seeks to build a strong pipeline of potential en-
trepreneurs and start-ups to serve CIB’s strategic
objectives, enrich the Bank’s value proposition, and
help achieve its financial inclusion goals. As a result,
the division helps position CIB as a key supporter of
the nation’s entrepreneurial ecosystem.
Internal and External Success
In the last three years, sustained efforts to maintain
success and meet the evolving needs of custom-
ers have brought noticeable improvements to the
Bank’s digital capabilities across all channels. The
Global Transaction and Digital Banking division
has successfully reduced processing times and cost-
to-income rations by migrating transactions away
from branches. The result is improved customer
adoption rates and enhanced employee efficiency.
CIB is ranked first in Egypt for digital domestic
transfers and holds almost 25% market share for
both internet and mobile banking.
These successes come from putting the voice of
the customer at the heart of product and service
development and innovation across the Bank,
from new customer propositions to customizing
existing ones. The Global Transactional and
Digital Banking division advocates for the cus-
tomer during all process redesigns, digital up-
grades, and enhancements, helping to translate
an understanding of customer needs into clear
system requirements, ultimately improving the
customer experience.
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Our Businesess >> Digital Banking
164EGP
MN
global securities service revenues
500EGP
MN
cost synergy generated from
migrating transactions to the Bank’s
Internet Banking channel
A number of services have been extended to the
Bank’s support functions, resulting in notable gains.
Awareness visits conducted for Relationship Manag-
ers and branch staff improved customer service by
improving their knowledge of our digital products.
Business reengineering to adopt straight-through
processing (STP), including process redesigns and
automation, increased efficiency, and reduced the
workload managed by CIB staff. These and other
initiatives to digitalize internal departments helped
eliminate manual work and automate daily pay-
ment processing for finance and cost control, HR,
treasury, retail loans, the card center, the social
insurance fund, and custody.
Each year, the biggest challenge for the Global
Transaction and Digital Banking division is priori-
tizing projects and the hundreds of potential digital
investments. Return on Investment (ROI) measures,
along with the Bank’s human capital plans and oth-
er capacity assessment tools, support the division’s
decision-making process. But most importantly, we
listen to internal and external customers, making
sure that our priorities match their needs.
The Innovation Lab
CIB’s Innovation Lab is the fintech and entrepre-
neurial hub of Egypt’s banking sector. It contributes
to incubators and accelerators with workshops, a
mentorship community, and support for key events
in the sector. These initiatives allow for global
and local scouting of startups for CVentures, our
venture capital arm, and for new collaborations
under our Entrepreneurs Engagement Program
(EEP). EEP supports startups who have fast and
agile solutions by helping them transform their
offerings into a product-line to serve CIB’s depart-
ments. The program extends CIB’s resources and
Revenue
• EGP 36.6 million cash management revenues
(as of December 2019), up 39% y-o-y
• EGP 160 million governmental payments
revenues (as of December 2019), up 31% y-o-y
• EGP 164.2 million global securities service
revenues (as of December 2019), up 19%
y-o-y
Cost Synergy
• EGP 480 million generated from migrating cash
management transactions to digital channels
(as of December 2019) up 170% y-o-y
• EGP 1.2 billion generated from migrating
transactions to the Bank’s ATM channel (as of
December 2019), flat y-o-y.
• EGP 500 million generated from migrating
transactions to the Bank’s internet banking
channel (as of December 2019), up 61% y-o-y.
brand-recognition to the startups while enriching
CIB’s market value proposition via their unique of-
ferings.
Recognizing that the best fintech providers will
come from the internal talent of a financial institu-
tion as powerful as CIB, the Innovation Lab also pro-
motes intrapreneurs. The lab conducts innovation
challenges and competitions that bring together
creative multidisciplinary teams from different ar-
eas and levels within the Bank.
The Innovation Lab manages seed and pre-seed
funds from CVentures to support its early-stage
startups, whether entrepreneurs or intrapreneurs.
2019 Highlights
CIB’s Innovation Lab contributed to more than 35
events, enrolled more than 30 mentors who have
conducted over 150 mentoring hours, approached
more than 150 startups, and is in serious talks
with more than 10.
• 98% of cash withdrawals below EGP 20,000 mi-
grated to ATMs.
• New utilities (i.e., electricity and water) were
added to ATM bill payment services, contribut-
ing both to revenue and account growth.
2020 Forward-Looking Strategy
CIB’s Innovation Lab intends to proceed with the ac-
tivities that brought success in 2019. We look forward
to implementing collaborations with startups and
scaleups for short-term monetization and to pro-
ceeding with longer-term investments with others.
ATM Network
CIB operates the largest ATM network among
Egypt’s private banks, with over 1,012 ATMs as at
the end of December 2019. The network provides
customers with withdrawal, deposit, bill payment,
check deposit, and credit card settlement services.
2020 Forward-Looking Strategy
Efforts in 2020 will continue to encourage customer
migration from in-branch transactions. New func-
tions at competitive prices will enhance the cus-
tomer experience, maximize ATM use, and increase
the profitability of our network. We also plan to
develop a number of in-branch digital tactics to help
reduce waiting and service times.
Internet and Mobile Banking
Internet and mobile banking enable customers to ac-
cess their accounts with ease and convenience and to
conduct a broad range of financial transactions.
2019 Highlights
Increasing ATM usage by customers and maximiz-
ing ROI from the network were the top focus, but in
addition to playing a key role in improving customer
experience, our ATMs also help migrate customers
from in-branch interactions to digital ones. In 2019,
the Bank monitored customer behavior in branches
to capture transactions eligible to take place
through our digital channels.
Results include:
• The average number of transactions across the
ATM network increased 16% y-o-y, compared to
transaction growth of 12% in 2018.
• The ATM network grew by over 95 machines.
• 95% of cash deposits below EGP 10,000 migrated
to ATMs from in-branch deposits.
2019 Highlights
In 2019, we focused on enhancing our Mobile Banking
application by revamping the customer interface and
improving the user experience. Online banking chan-
nels helped realize the total cost savings of EGP 500
million as of December 2019. The online customer base
reached 592,000 users, with an activity rate of 64% as of
December 2019. Online banking subscribers increased
by 45% y-o-y as of December 2019 and the number of
transactions grew by 51% y-o-y in the same period. The
user base for CIB’s Mobile Banking app continued to
grow, with a 114% y-o-y increase in transactions as of
December 2019.
CIB’s new digital platform is expected to launch in 2020,
with the analysis phase completed in 2019 and testing
underway. The platform will provide our customers
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Our Businesess >> Digital Banking
with a seamless multichannel experience across all our
online channels with a wide range of banking function-
alities and added services.
2020 Forward-looking Strategy
In 2020, improvements to our state-of-the-art
digital platforms will enable more of the day-to-day
banking activities. In doing this, we plan to boost
acquisition rates, activity rates, and customer re-
tention and loyalty.
Phone Banking and Call Center
CIB’s phone banking and call center provides value
to customers by giving them personalized advice
for their banking needs and by offering digital solu-
tions that let them bank more quickly and efficiently
wherever they are. It increases the Bank’s digital
services and offloads interactions from branches
and contact centers.
2019 Highlights
In 2019, a roadmap was developed for contact
center transformation. A new top-level was intro-
duced to the interactive voice response (IVR) tree
to distinguish between CIB customers and non-
customers, simplifying the IVR tree for each type
of caller. A “favorite” menu was also introduced
that lets CIB customers access their most-used
IVR service without repeatedly navigating the
whole IVR tree.
The IVR revamp, together with ongoing customer
awareness and migration efforts, reduced the call cen-
ter’s operational costs, boosted agents’ productivity,
and increase migration. Data is as of December 2019,
and is compared to FY2018 figures:
Zaki the Bot operates both on Facebook Messenger
and on CIB’s public website, off-loading inquiries
from both call-center agents and social media
teams, and significantly, it creates a new customer
touch point. Zaki the Bot also has the potential to
become a key channel for customer data that will
help the Bank deliver more client-focused solutions.
2020 Forward-looking Strategy
In 2020, Zaki the Bot’s use cases will be expanded
to serve new customer segments, such as corporate
and business banking, where the chatbot can provide
smooth, real-time support for product inquiries.
CIB Mobile Payment (Smart Wallet)
Smart Wallet’s innovative payment experience
serves both banked and unbanked customer
segments by providing a convenient, secure, and
cost-effective way to make purchases on mobile
devices. Customers can easily pay bills, recharge
their mobile prepaid lines, send money to other
wallet holders in Egypt, and deposit and with-
draw funds from all ATM machines or via any of
our authorized banking agents.
2019 Highlights
Throughout 2019, CIB worked on multiple fronts to
leverage Smart Wallet’s value proposition, increas-
ing its customer base to 625,167 as of December
2019, with an activity rate of 18% over 90 days. This
was achieved by:
• On the ground promotions in Cairo, Giza,
Port-Said, and the North Coast that enrolled
new Smart Wallet users.
• Increased corporate collaboration for payroll
disbursement using Smart Wallet.
• Migration rate improved to 84%, compared to
• A 60% increase in corporate participation in
78% for 2018.
Smart Wallet, compared to 2018.
• A 24% y-o-y increase in the IVR log-ins to reach
• More competitive pricing for bank agents.
2.1 million.
• A 22% y-o-y increase in the IVR customer base
to reach 687,000 customers.
CIB Chatbot
The most important digital transformation for the
contact center in 2019 was the introduction of “Zaki
the Bot.” This virtual assistant uses artificial intel-
ligence to help CIB customers and non-customers
learn about the Bank’s products and latest offers
and find the nearest ATM or branch. CIB is the first
bank in Egypt to introduce a chatbot that supports
both English and colloquial Arabic.
2020 Forward-looking Strategy
A number of initiatives in 2020 will continue to
propel the success of Smart Wallet:
• Promoting payroll disbursement via Smart
Wallet.
• Bundling the Meeza card with Smart Wallet.
• Introducing an advanced salary overdraft us-
ing microfinance services.
• Creating bundled digital communities for
large corporate clients.
• Creating a premium Smart Wallet segment
for CIB’s Wealth and Plus customers and
launching digital mega-campaigns to increase
Smart Wallet’s banked customer base.
• Increasing the product salesforce across Egypt
to increase Smart Wallet enrollments.
• Adopting the new UI to offer better services
and modernized customer experience.
• Making self-registration services available via
Smart Wallet.
Cash Management
CIB is committed to introducing the most compre-
hensive payment products on the e-payments mar-
ket. Cash management at CIB focuses on a number
of core digital efforts.
• Increasing CIB’s market share for international
remittances.
• Providing custody, securities, liquidity, and
treasury modules over our online platform.
• Revamping OTP across all portals to enhance
customer experience, reducing handling times
for issuing tokens, revamping online portals
(CIB Business Online and ACH) to improve
customer experience and decrease transaction
turnaround times.
• Integrating with corporate financial systems
such as oracle, ERB, and others, and offering an
API gateway for third parties.
2019 Highlights
In 2019, CIB achieved a strong ranking among Egyp-
tian banks with the largest market share of com-
mercial domestic payments, including automated
clearing house (ACH) receivables and payables
(ACH Direct Credit and ACH Direct Debit). A notice-
able increase in transactions generated significant
synergies for cash management, which increased
by 170% y-o-y as of December 2019 to reach EGP 480
million, while cash management revenue reached
EGP 37 million during the same period.
Other key highlights include:
• A 29% y-o-y increase in the customer base to
reach 12,000 corporate customers.
• Migration rate of 87% for all outgoing transfers.
• Migration rate of 62% for all internal transfers.
• A 32% y-o-y increase in the number of transac-
tions to reach 2.9 million.
• In cooperation with the Egyptian Banks Com-
pany, introducing foreign exchange services on
the ACH local remittance platform.
• Extending the ACH Direct Debit settlement
window from 11:00 a.m. to 3.00 p.m. (CLT) in a
In 2019, CIB achieved
a strong ranking among
Egyptian banks with the
largest market share of
commerical domestic
payments.
custom arrangement for CIB that will be useful
for brokerage companies.
• Introducing the new ACH integration approach
to one of the biggest power and electricity sup-
pliers in the Middle East.
• Enrolling Egypt’s largest microfinance compa-
nies in ACH.
2020 Forward-looking Strategy
Efforts to expand international remittance pay-
ments and target new markets, while focusing on
increasing our market share in existing ones, will
continue increasing subscribers, transaction vol-
umes, and migration rates.
Trade Finance Management
Trade Finance Online is CIB’s market-leading
online trade channel, offering clients the ability
to conduct and manage their trade finance trans-
actions online. The channel provides customers
transparent and clear information about all their
transactions, while eliminating paperwork and
saving them time and money.
2019 Highlights
• In 2019, we began migrating customers to
a new Export Direct Collection service on
the CIB Business Online portal. The service
allows Business Online customers to send
shipping documents directly to CIB without
visiting a branch and lets them track the
entire journey.
• The queue-matic system directs service
requests to back-off ice counters. It was
adjusted at 35 hubs to give higher pri-
ority to trade f inance and cash service
requests from CIB Business Online cor-
porate customers.
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Our Businesess >> Digital Banking
61EGP
BN
fixed-income investments
under custody
412EGP
BN
total assets under custody
2020 Forward-Looking Strategy
The Digital Governance team will continue to
diligently ensure compliance across the Bank’s
digital channels. It will challenge stakeholders to
adopt new technologies while ensuring that digital
products, strategies, and financial inclusion efforts
comply with regulatory guidelines as they are up-
dated. In all interactions, the team will encourage
stakeholders to increase their digital appetite.
• Provisional LC was launched on the Business
Online channel to replicate the current email
process for corresponding with the LC Trade
operation team to request and amend a draft
before the final LC is issued.
2019 Highlights
2019 saw a number of notable achievements:
• A 69% y-o-y increase in the customer base to
reach 866 corporate customers.
• A 67% y-o-y increase in the number of transac-
• As of December 2019, the migration rate for
tions to reach 35,000 transactions.
online trades reached 27%.
• Revenue of EGP 160 million as of December 2019.
2020 Forward-Looking Strategy
The Business Online channel will be improved
with more features that make it a convenient
and secure platform for trade and supply-chain
finance, cash, treasury, and lending services.
Both new markets and increasing market share
in existing markets will be targeted in order to
increase subscribers and transaction volumes.
Work to migrate customers from in-branch trans-
actions to online transactions will continue.
Governmental Payment Products
As part of the Ministry of Finance’s aim to collect all
government payments electronically, an agreement
was reached between CIB and E-Finance Company
(which develops and operates e-payment platforms and
channels) to enable customs, tax, and other government
authorities to receive and collect payments through
the E-Pay portal. In cooperation with E-Finance, CIB
also moved bill payment services for customers to the
digital platform using E-Pay’s generalized portal, which
greatly improves the customer experience.
CIB also established the Corporate Payment Service
(CPS) portal, which allows corporate customers to
pay and manage their government payments from
the comfort of their office, 24/7.
2020 Forward-Looking Strategy
A key objective for 2020 is to ease the burden of gov-
ernmental payment processes in the branches. In
2020, we expect that E-finance services will be made
available through our ATMs to help meet the Egyp-
tian government’s strategy for achieving a cashless
society, which envisions increasing the country’s
banked population and their use of ATMs.
Global Securities Services
2019 Highlights
• Global Security Services (GSS) is ranked num-
ber one among Egypt’s providers of trustee
services, handling 20 special purpose vehicles
(SPVs) out of 30 SPVs in the market, with total
assets of EGP 16.5 billion.
• GSS attracted new portfolios worth a total of
EGP 29 billion, diversified across scriptless and
physical securities, while fixed-income invest-
ments under custody increased significantly,
with a 29% growth in T-bills to reach EGP 61
billion as of December 2019.
• For the tenth consecutive year, CIB was rec-
ognized as the best sub-custodian in Egypt
by Global Finance. It recognized the Bank’s
distinguished services with total assets under
custody of EGP 412 billion.
2020 Forward-Looking Strategy
Key initiatives will be undertaken in 2020:
• The margin lending service will be launched for
retail clients wanting to invest in the capital
market.
• A service for treasury bill investments through
the online banking system ‘’FBCC’’ will be
launched exclusively for corporate clients.
• The onboarding process for custody services
will be revamped to allow clients to receive
custody services without maintaining a cash
account at CIB.
• CIB’s prime corporate clients will be registered
in the central depository, increasing GSS’s share
of the custody market.
Digital Governance
The digital governance team manages collaboration
between the Global Transaction and Digital Bank-
ing division and both the Bank’s internal stakehold-
ers and the Central Bank of Egypt and other external
stakeholders.
2019 Highlights
2019 saw continued collaboration with the Fed-
eration of Egyptian Banks (FEB), CBE, and the other
stakeholders on the transformation of the Egyptian
economy to a cashless society.
The digital governance team presented a detailed
study to the Federation of Egyptian Banks on the
challenges of new CBE financial inclusion regula-
tions. The team also represented CIB in the CBE’s
initiative to implement eKYC for the banking sector
over the blockchain.
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91
Support
Functions
Three distcinct support functions act as
the beating heart of CIB’s organizational
structure.
Operations and IT
Operations and IT continue to be the
cornerstones of the Bank’s
strategic vision
HR
CIB invests heaviliy in its human capital,
the driving force behind its success
Marketing
CIB’s brand equity is expertly driven by
a team of industry professionals
Zaki the Bot
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Support Functions
Operations and IT
207
total branches
CIB stands apart from other banks, largely due to
its unmatched customer experience. The develop-
ment and implementation of customer-centric
strategies is largely fueled by the efficiency of inter-
nal processes, such as operations and information
technology. Managed through the COO Area, the
operations and IT functions within the Bank work
together to incorporate technological advance-
ments and artificial intelligence across the Bank’s
functions with an eye to seeing the Bank meet its
growth targets.
The Operations and IT Group, in collaboration with
the Information Technology (IT) division, con-
tinue to be cornerstones of supporting the Bank’s
strategic vision. The goal of the operation to offer
our customers the highest level of service quality,
which would not be achieved without improving
the Bank’s operational efficiency, automation, and
process re-engineering, all with the aim of reduc-
ing the cost of service and better improving our
customer satisfaction.
2019 Highlights
In 2019, CIB upgraded its core system to the T24
Core Banking system to improve operational ef-
ficiency. The shift facilitated the introduction of
an arrangement architecture module, which is a
new core banking engine outfitted with a product
builder to serve all business segments. The new
module will provide future products with en-
hanced technology, system stability, and decreased
time to market.
This year, the division finalized the Sigma pro-
gram, which aims to streamline customer service
delivery at branches. The program has contributed
to the successful rollout of account openings and
loan origination resulting in better customer ex-
perience, service delivery turn-around-time (TAT),
and business growth.
The Bank continues to expand its digital footprint,
introducing a digital program to cater to untapped
segments and support financial inclusion with the
new e-wallet, while introducing a new digital plat-
form for our existing customers, which are targeted
for launch in 2020. As such, security processes have
had to move in tandem with these advancements
to enhance the reliability of the Bank’s digital
services and secure data, all while delivering a
streamlined and secure customer experience.
In 2019, the division also began a Business Process Re-
engineering (BPR) initiative that will continue in 2020.
BPR aims to enhance efficiency and productivity rates,
reduce TAT, upgrade the customer experience, and
build effective Service Level Agreements (SLAs) based
on targeted TAT to detect any changes in the sector.
The division continued to work diligently to sup-
port the Bank’s brick-and-mortar expansion plan;
6 new branches were added to the network for a
total of 207, including a Private segment branch
in Zamalek. Expansion and renovation work was
completed for 6 branches during the year. The divi-
sion also helped boost the ATM network to 1,012
ATMs across Egypt.
In FY2019, the Real Estate and Premises Projects
Group obtained ISO 9001/2015 certification, the
international standard for a Quality Management
System (QMS), to improve the performance and
efficiency of the real estate management process.
Information Technology
CIB’s technology infrastructure is considered the
most advanced in the industry due to its state-of-
the-art computing systems, fully virtualized plat-
forms, and powerful storage appliances. Through-
out the year, the IT team continued to enhance
customer touch points such as ATM machines,
online banking, e-wallets, and others and pressed
on with optimization efforts across infrastructure
layers for better customer experience, cost optimi-
zation, and efficiency.
The team’s primary focus in 2019 was to upgrade
the core banking system to ensure a seamless
customer journey. IT also enhanced the Bank’s
infrastructure resiliency through the implemen-
tation of network virtualization phase I and start
the rollout of a new virtual desktop platform. CIB
brought state-of-the-art technology for computing
systems, fully virtualized platforms, and powerful
enterprise storage appliances. The whole infra-
structure caters to one of the most advanced data
centers in the banking sector.
IT has supported business growth on all levels,
beginning with the increase in number of cus-
tomers, which has necessitated that the team
bolster the benchmarking of system availability
levels, starting with an ongoing stability program
across critical systems and the enhancement of
system monitoring.
IT streamlined CIB’s mobile banking platform
to improve the customer experience by offering
a few new features and functionalities that have
propelled the platform to one of the best in the
Egyptian market.
Operations and IT continue
to be cornerstones of the
Bank’s strategic vision.
To cater to the increasing number of new custom-
ers in a cost-effective manner, a fully automated
customer onboarding process was established.
The process is flexible enough to handle onboard-
ing requests coming from different touch points
through several integrated systems. The division
also improved the retail origination process, which
enabled a full segmentation, targeting, and posi-
tioning process through fully integrated systems
and technology components.
The Vendor and Financial Management division
created a framework that enabled additional con-
trol over the vendor management process through
a scientific scoring approach for vendors, which
enabled better management decisions.
The Business Architecture Program, launched in
2019, allows for a better understanding of CIB’s
business needs and builds a baseline view for cur-
rent capabilities. This identifies gaps in the busi-
ness capability level to identify the technological
strengths and weaknesses. The program allowed the
division to formulate a strategy aligned with that of
the Bank, creating a target baseline view for CIB’s
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Support Functions >> Operations & IT
1,012
ATMs
1.2 EGP
BN
migrating transactions to the Bank’s
ATM channel
business capabilities and technology landscape that
will be used as a reference point for strategic plans.
A new technology onboarding process, based on
the Gartner framework, was adopted to ensure any
new technological components within CIB’s envi-
ronment is aligned with its strategy. The process
has become the main gateway for any new technol-
ogy introduced into CIB.
As IT environments mature, it is important to con-
tinually increase visibility across IT structures and
enhance service levels for different domains. The ad-
dition of new capabilities for security provisioning
allows the division to upgrade security for all inter-
nal stakeholders and, more importantly, customers.
An automation program is currently running
on track to automate manual IT tasks and, at a
later stage, incorporate Artificial Intelligence (AI)
technology in all the IT processes and functions to
reach maximum efficiency.
IT continuously delivers new business capabilities,
technology components, and systems automation
through a complete set of well-defined processes
governed by strong controls and managed by
flexible project management methodologies. The
division will endeavor to enhance services to reach
higher customer satisfaction levels by ensuring the
implementation of the latest technology, security
controls, and governance.
Security and Resilience Management
With the ever-changing and dynamic security
landscape and in alignment with global and local
initiatives and trends, CIB’s Security and Resil-
ience Management division focused on enhancing
the Bank’s security and resilience frameworks. The
objective is to improve business continuity and
security capabilities to enable them to be more re-
silient in the face of disruptions, threats, and risks
as well as introduce automation, where applicable.
Focusing on process, people, and technology, the
Security and Resilience Management division,
through a team of approximately 30 members, is
comprised of three main areas:
• Security Operations Center - Responsible for
ensuring that security incidents are monitored
and responded to.
• Continuity and Resilience Management - Re-
sponsible for the planning and execution of
the different response strategies in the event of
business disruptions.
• Information Security Management - Responsible
for putting in place a proper security governance
framework and defining as well as setting the
bank-wide security policies and guidelines.
The teams work together to ensure the necessary
policies, procedures, and guidelines are aligned
with industry best practices and global standards
are being implemented and adhered to. Through
the different security controls and defense in depth
infrastructure that provides preventive and detec-
tive capabilities, the Bank is protected against
advanced threats and persistent attacks. This in-
frastructure is managed and monitored by highly
skilled and certified teams, also equipped with
cyber threat intelligence that enables the team to
take proactive measures in managing cybersecu-
rity risks and threats.
In 2019, CIB received ISO22301:2012 certification
for Business Continuity Management by PECB, a
global provider of training, examination, audit,
and certification standards, in partnership with
EGYBYTE, a leader in the MENA market for IT
Service Management. The Bank has also been
able to successfully maintain its Payment Card
Industry – Data Security Standard (PCI-DSS) cer-
tification, as well as assuring full compliance with
SWIFT Customer Security Program requirements.
Adopting a data-centric security strategy, the
Security and Resilience Management division has
focused its efforts on taking the necessary security
and protection measures to safeguard customers’
information against unauthorized access or leak-
age. Data privacy and security has become a key
strategy pillar, aligning with global and local data
protection guidelines and requirements.
The Security team has supported the Bank’s digital
transformation agenda to ensure full compliance
with the country’s regulations and guarantee
security measures and controls are embedded
within the early stages of product development.
This enhances time to market, provides trusted
security services, and allows the Bank to provide a
streamlined and secure customer experience. The
Security and Resilience Management division also
provided visibility on the Bank’s cyber threat land-
scape and attack surface, enabling the business to
take more informed risk-based decisions.
To stay abreast of the latest security and resil-
ience trends and evolvements, investments in our
human capital through training and certification
continues to be a key focus. The team also at-
tended various global and local conferences and
seminars to this effect. The team has expanded
30% this year alone, underscoring the Bank’s
commitment to investing in security and resil-
ience as a core part of its strategy.
Operations, Channels, and Customer
Experience
As CIB continues to maintain its attention to cus-
tomer satisfaction, this year, the Operations, Chan-
nels, and Customer Experience division completed
the annual Customer Satisfaction and Net Promoter
Score (NPS) survey, which measures customer sat-
isfaction across segments and service channels in-
cluding digital ones. In 2019, the survey showed that
individual customer segments have sustained satis-
factory service quality, beating NPS levels against
regional benchmarks. The survey also highlighted
service enhancement opportunities in both the cor-
porate and business banking lines of business.
This year, the Bank successfully launched the Cor-
porate Portal/Digital Support Contact Center and
Business Banking Contact Center Channel, each
with a dedicated team to handle general inquiries,
activation, and complaints.
The Card Center has made several achievements
during the year, including, but not limited to, Visa
Contactless Card for both Debit and Credit cards
with dual contact methodology. It also completed
phase I (on the acquiring side), including the accep-
tance of Meeza cards over governmental websites.
In line with ongoing system upgrades and the
Bank’s digital transformation strategy, the year
also saw the launch of the Business Process Re-
engineering (BPR) initiative, beginning with trade
products targeting corporate and business bank-
ing customers. The first outcome of the exercise
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Support Functions >> Operations & IT
CIB’s focus will continue to be on
enhancing the technology stack to
support aggressive business plans
and the fostering of new ideas.
was the launch of the first phase of the Inward Doc-
ument for Collection (IDC) issuance re-engineered
process, which brings TAT to 100 minutes, beating
market benchmarks. Also, the first phase of the In-
ward Letter of Credit (ILC) issuance re-engineered
process launched in the fourth quarter of 2019.
Straight Through Processing (STP) is another
important milestone for the Bank, which has
increased processing efficiency, leading to a bet-
ter customer experience. With certain products
and processes now executed end-to-end without
any manual or human intervention, STP comple-
ments the Bank’s digital agenda. The division
also launched the Transactional Volume Analysis
(TVA) model, which will be used as a forecast-
ing tool for capacity planning and to optimize
resource utilization. The first phase of the Trade
Finance Dashboard and Remittance Dashboard
was launched in the fourth quarter of 2019.
CIB has taken concrete steps since 2018 to estab-
lish new headquarters in the New Administrative
City. With the land handed over, the entire build-
ing raft, as well as design documents (architec-
tural, structure, etc.), are 100% completed. Con-
struction of the lower basement is 50% complete.
Efforts are taking place to expedite the comple-
tion of the Command Control Room (CCC). Net-
work and security hardware has been delivered,
and CCC is up and running, monitoring 100
branches in 2019.
2020 Forward-Looking Strategy
For the coming years, CIB’s focus and attention
will continue to be on enhancing the technology
stack to support aggressive business plans and
CIB infrastructure caters to
one of the most advanced
data centers in the Egyptian
banking sector.
the fostering of new ideas. This is to ensure the
Bank is up to date with the latest technologies to
deliver quality customer service, maintain strong
governance and security standards, and optimize
its back-end to adapt quickly to changes in cus-
tomer behavior.
The Security and Resilience Management divi-
sion’s focus in the years to come will be build-
ing further trust and reliability in its services
and systems while setting a solid foundation of
compliance with regulations and best practices.
It will also improve organizational resilience to
effectively manage emerging risks and enhance
visibility and response capabilities to different
threats. In addition, it will develop its Security
Operations Center’s capabilities to proactively
manage threats and immediate responses, re-
duce costs, increase efficiencies, and mitigate
risks through actionable intelligence. In the next
five years, the focus will be given to orchestration
and automation, as well as enhancing our inci-
dent response capabilities, cyber resilience, and
data protection.
Hi Zaki, I want to know what CIB
does for clients.
CIB caters to every type of client, from
large corporations looking to structure
syndicated loans, to small SME clients from
a broad range of industries, all the way
through to personal banking customers
looking to open a current account.
Where are you located?
The Bank is headquartered in Egypt with
offices, branches, and ATMs across the
country. We also have two representative
offices in the region: one in Dubai, UAE,
and one in Addis Ababa, Ethiopia, to serve
our ever-growing client base.
And what other service do you
provide?
We have three service arms under our
umbrella: CVentures, which is Egypt’s
first corporate venture capital firm
providing fintechs with the support they
need to thrive, Falcon Group, which
provides clients with numerous security,
technical, and project management
services, and Fawry Plus, Egypt's
premiere payment platform.
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Support Functions
Human
Resources
571
new hires in 2019
Data analytics and integration,
digital power, and the rise of
smart devices will impact the
way HR is managed.
The real value of CIB lies in our passion for people. We
are delighted to work with top talents in the banking
industry who provide exceptional customer care and
experience. We challenge our employees to perform
to the best of their ability and enhance their career
progression within CIB, while ensuring our employ-
ees enjoy a positive work environment, outstanding
training, and diverse career opportunities, which
support them to develop to their full potential. HR
focuses on enabling business performance by acting
as a change agent in transforming an organization,
equipping employees with new digital competencies,
and embedding them in employee behaviors as well
as empowering them to continuously adapt to a dy-
namic and fast-paced environment.
In the coming years, data analytics and integra-
tion, digital power, and the rise of smart devices
are expected to make a significant impact on the
way HR is managed. HR will play a strategically
enabling role to evolve current human capabilities,
establish a culture of innovation, engagement, and
enablement, and build the right skill sets that match
with a digital future. These new skills will enhance
sense-making, social intelligence, adaptive think-
ing, cross-cultural competency, computational
thinking, cognitive load management, and virtual
collaboration. HR will need to lead the way when it
comes to developing organizational structures, job
design, and strategic workforces, allowing them to
reshape the hiring strategy for the future workforce.
Talent Acquisition and Career Mobility
CIB continues to attract and retain the best in the
market, providing employees with opportunities
to make meaningful steps in their careers. HR
aims to attract agile and adaptable people who can
effectively deal and respond to rapidly changing
circumstances and whose values and beliefs match
our own. In 2019, CIB hired 571 external talent indi-
viduals, moved 1,328 across different areas, and in-
ternally promoted 625 promising young talents for
better exposure and enhanced career progression.
A total of 21 employment initiatives took place in
2019 across universities and other venues in Egypt
to promote CIB’s employer value proposition and
competitive advantage. Tawarny is an initiative that
started in 2018 and continued into 2019. It allows uni-
versity students to practice mock HR interviews and
provide them with tips and constructive feedback to
prepare them for the corporate world. The initiative
falls in line with CIB’s aim to equip Egyptian youth
with the rights tools for the labor market, creating a
new generation of qualified candidates who will drive
the country’s development and growth.
Building on our objective to initiate mobile re-
cruitment teams outside Cairo, in 2019, HR sus-
tained the previously introduced “Ma7atetna 3an-
dak” initiative, where the HR team visited eight
areas across Egypt to facilitate the recruitment
process for candidates at local hubs.
Lastly, CIB continued to invest heavily in advancing
our current employees, providing them with clear
job descriptions, affording them the tools they need
to do their jobs, relieving them of unnecessary ad-
ministrative burdens, and putting in place a reward
strategy that motivates them to grow.
Business Enablement and Skills
Development
This year, HR developed specialized training tracks
to provide the relevant technical training for each
business and build the competencies needed for
employees to perform their jobs. The modules were
offered in association with international certifica-
tion bodies to provide our employees with inter-
national exposure. Exposing employees to various
development opportunities increases motivation,
enhances performance, and helps them achieve
higher job satisfaction.
• Consumer and Business Banking Financial
Services Management Program - A program de-
signed in alignment with the Consumer Bank-
ing team to develop and acquire new internal
calibers who would be potential agents for the
Product and Segment, Business Banking, and
Digital Banking departments.
• SME Academy - A technical program designed
for the Business Banking segment to select
the best internal calibers to receive intensive,
customized training on different domains
to prepare them for their roles. In addition,
60 Business Banking Relationship Managers
were registered for the Simplified Examina-
tion to Maximize Profit (SEMP) offered by
the Association of Accredited Small Business
Consultants (AASBC).
• Wealth, Plus, and Private Academy - A new spe-
cialized academy where 25 Plus Bankers and
Wealth Managers were granted international
certification from the Chartered Institute of
Securities and Investment. Further customized
technical programs were designed for the Pri-
vate Segment team to expose them to market
trends and financial planning.
In 2019, further learning tracks were developed
for those in finance, audit, information security,
institutional banking, payroll, and IT to enhance
their capabilities and widen their understanding
by participating in technical and tailored devel-
opment programs.
Finally, CIB offers employees different paths for de-
velopment through multiple opportunities, offering
special preferential rates for post-graduate studies
with ESLSCA Business School and the University
of Chicago Booth School of Business. In addition,
CIB is the ‘Employer of Choice’ in the Association
of Chartered Certified Accountants (ACCA), giving
CIB employees access to various finance online
programs and preferential rates for finance courses.
Leadership and Talent Management
In 2019, 18 employees from different areas and man-
agement levels were exposed to overseas programs to
enhance their technical and leadership capabilities
through various international vendors and schools.
CIB is keen to cater to programs to various mana-
gerial levels to prepare them to face any challenges
using the best managerial techniques. During the
year, 1,239 employees ranging from profession-
als, first-line managers, middle managers to other
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Support Functions >> Human Resources
management levels attended a variety of leadership
programs with local and international vendors and
schools, including Frankfurt Business School.
Additionally, CIB organized an informative inter-
vention forum for board members moderated by top
professors from IMD Business School to align the
organization with the best international practices.
Employee Engagement
During 2019, career maps for all CIB employees
were automated to support their career progression
within CIB. In addition, as employee recognition
is a crucial investment in any organization, HR
revamped the Employee’s Recognition Program
in 2019 to reward employees for their efforts. The
program seeks to retain top talents, increase mo-
tivation, boost employee productivity, and most
importantly, foster a positive working environment.
HR will continue to build a robust engagement
strategy to improve productivity and promote sus-
tainable engagement. It will work on enhancing the
onboarding experience for new hires to maintain
CIB’s position as an employer of choice. Other digital
channels will also be used to bolster communica-
tion between employees, raise awareness about HR-
related activates across the organization, and help
facilitate several engaging and social initiatives to
increase employee feedback.
During the year, HR conducted three team building
activities for the IT, Consumer Assets Fulfilment
Unit (CAFU), Risk, and Analytics and Data Man-
agement departments. A total of 200 employees
attended from the IT division, 72 from CAFU and
Risk, and 65 from Analytics and Data Management.
Reward Management
In an effort to retain top talent, CIB provides
employees with meaningful rewards and fair com-
pensation, including an Employee Stock Ownership
plan, to strengthen their ties to our organization,
while implementing a comprehensive performance
management system. Our remuneration is assessed
on a yearly basis taking into consideration market
fluctuations and external market developments.
Customer Experience
Building on the success of the iCare campaign that
was launched and implemented in 2016-17, more
than 3,000 staff members from different areas and
management levels attended various versions of
the program to spread knowledge and proliferate a
culture of customer-centricity.
Moreover, iOwn was created and developed in 2018
to create full ownership for first-time resolutions
while equipping our staff with tools to handle cus-
tomer complaints using best practices. The program
was customized with different versions to serve var-
ious types of frontliners. The customer experience
journey continued in 2019, where 450 employees
from frontline positions and supporting functions
attended the program.
Gender Equality Initiatives
CIB aims to provide equal opportunities for ad-
vancement to all employees regardless of gender,
age, ethnicity, religion, or any other aspect of their
identity. We seek to create a professional working
environment in which all people feel safe and wel-
come. The HR department collaborates with man-
agement to ensure all employees are treated fairly
and with respect and have their needs recognized
as individuals that enjoy the same rights, resources,
opportunities, and protections. Accordingly, several
initiatives were rolled out in 2019:
Women in Tech
In 2019, CIB introduced for the first time in the
Egyptian banking industry the Women in Tech ini-
tiative, which addresses the gender gap in the tech-
nology departments of the Bank and helps build up
talented women to work in these divisions. Fourteen
candidates were identified to join this program, and
their rotation included the IT, Security and Resil-
ience Management and Digital Banking, and Global
Transaction Banking departments. It included both
theoretical and practical knowledge, and the closing
ceremony featured presentations from candidates
in front of the Chief Operating Officer (COO), Chief
Information Officer (CIO), Chief Security Officer
(CSO), and the Chief Digital Officer (CDO). Accord-
ingly, four candidates were hired from the program.
She is Back
In 2019, CIB launched She is Back initiative to ease
the transition for women returning to CIB from ma-
ternity and/or childcare leave. The aim was to help
6,900
Headcount
30%
Female Workforce
them refresh their corporate knowledge and keep
them abreast of any material changes or updates to
the way in which the Bank does business, internal
policy changes, and economic and banking sector
updates so they can easily take on their newly as-
signed roles. During 2019, three rounds were con-
ducted for a total of 43 women attending.
Women Empowerment
The Women Empowerment initiatives, which are es-
sential to highlight women’s efforts inside the organiza-
tion, consisted of a series of customized events during
the year. In 2019, 45 women attended Women Empow-
erment seminars as part of the program. Additionally,
the Bank launched a training program on empower-
ment in the workplace and gender equality, which was
attended by 47 women in the Bank. Due to its success,
the training module will continue into 2020.
Exclusive Women Leadership Program by
Egyptian Banking Institute (EBI)
This two-day program was specifically tailored to
women at the middle and first-line management
levels. It consisted of two international leadership
modules on key management skills for women in the
banking sector. A total of 70 women across CIB were
selected to attend the program.
Automation
At the beginning of 2019, CIB witnessed the
launch of the Performance Management System
(PMS) project. The automation of the PMS will sig-
nificantly enhance the performance management
process by increasing the accuracy of monitoring,
performance evaluations, and cascading objectives
to ensure alignment across the Bank.
By the end of 2019, the Recruitment team finalized
the implementation of Taleo Recruitment System,
which will enhance the overall candidate experience
by increasing our digital presence effectively through
integrations with social media websites. In addition,
the system provides support for growing mobile us-
age by candidates, allowing them to apply for jobs
through a dedicated mobile application process.
The Taleo Recruitment System will increase produc-
tivity due to its advanced automated prescreening
features and is accessible from any location. It will
enhance communication between the team and hir-
ing managers as it can track the progress of requisi-
tions and candidates.
Digital Learning
CIB offers employees several platforms to boost
employee’s awareness and knowledge, such as
CIB’s video and audio libraries on the iKnow ap-
plication. Topics are presented in the field of
finance, economics, globalization and technology,
management and leadership, sales and marketing,
strategy, and personal effectiveness.
The division also employed digital solutions to increase
bank-wide awareness through a series of e-learning
sessions launched in 2019 to meet the various needs
of business stakeholders. These covered topics such as
reputational risk, HR policies, and organization aware-
ness (operational and conduct risk). It also developed
specialized e-learning sessions targeted at particular
employees including those in Corporate Banking, Cred-
it and Investment Exposure Management, Debt Capital
Markets, Global Customer Relations, Business Banking,
Branches, as well as the Wealth and Plus segments.
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Support Functions
Marketing and Corporate
Communications
Marketing is constantly evolving; it has moved
from mass marketing to direct marketing to
digital marketing, and now to data-driven mar-
keting. CIB’s marketing strategies and resources
have kept pace with these changes while adapt-
ing to external factors, the Bank’s objectives, and
consumer behavior.
CIB owns the complete marketing funnel. The Mar-
keting and Corporate Communications division in-
cludes a team of user experience (UX) designers who
are responsible for the front-end experience across
all digital touch points. Marketing campaigns have
both the goal of raising awareness for products and
services and of driving traffic to digital channels.
Today, consumers use more devices, are more pri-
vacy-aware, and have increasingly sophisticated
customer-experience expectations. CIB’s forward-
looking approach to marketing and communica-
tions has kept us aligned with these trends, setting
CIB apart from other banks.
A Unique Approach to Marketing and
Communications
CIB does not adopt a one-size-fits-all approach
but targets its marketing campaigns to raise
awareness for specific products and services
with specific customer segments. It begins with
the creative elements, including subtle consider-
ations like tone of voice, to make each campaign
personable and relevant to the target audience,
maximizing conversions.
CIB’s marketing campaigns focus on value proposi-
tions rather than on competitive pricing or other
simple appeals. For example, unique experiences
for select HNW individuals fitted to lifestyle and
social status foster a sense of belonging for specific
customer segments, delighting them, deepening
their relationship with the Bank, and increasing
their loyalty. The result is customer advocacy, or
“word-of-mouth,” that generates referrals and
grows CIB’s share of HNW individuals’ wallets.
A Unified Marketing and Corporate
Communications Division
In 2018 the department was restructured to bring
the Branding and Corporate Communications team
and the Marketing Communications team under the
single leadership of the Chief Communications Of-
ficer (CCO), working in the following teams:
CIB allocates campaign budgets individually, includ-
ing the cost of developing concept designs and other
early-stage efforts. The bulk of campaign budgets go-
to digital marketing, including:
• Corporate Communications
• Marketing
• Sustainability
• Marketing Services
• Direct marketing via SMS and email
• Social media marketing
• Content marketing
• Search engine marketing
• Digital advertising and prospecting
• Influencer marketing
The restructuring has enabled the division to deliver
higher value to the Bank. Notably:
• An increase in digital prospecting and lead
generation.
• High brand visibility and recognition within
the digital space; CIB owns the internet when it
comes to the financial sector.
• Better migration of customers to digital chan-
nels, including to online banking and Smart
Wallet use.
• The rebranding of product segments, including
the launch of our “Private” segment for UHNW
individuals.
• A consolidation of our marketing materials for each
segment and product family, with a face-lift for our
digital channels to better reflect each segment.
• Achieving business goals for marketing cam-
paigns, such as cost-to-income, acquisition,
and usage targets.
A Uniquely Digital Division
CIB’s bank-wide digitalization push has had a deep
effect on all aspects of marketing and communica-
tions. In fact, it was clear from the start that in order
to measure the success of marketing campaigns,
and to maximize conversions the marketing func-
tion needed to lead the digital customer journey.
As a result, marketing and communications has
played a key role in the Bank’s digitalization over
the past five years.
CIB’s Sigma program to automate and streamline op-
erational and redundant tasks helps employees work
faster and is focused primarily on customer needs.
Likewise, upgrades to the core banking system to
increase automation and efficiency helps deliver
superior and frictionless customer service. It also
gives the marketing division visibility on valuable
customer experience metrics, such as account open-
ing times under 15 minutes and instant credit card
settlements. It results in tailored value propositions
CIB’s bank-wide digitalization
push has had a deep effect
on all aspects of marketing
and communications.
and product bundles that increase product and ser-
vice acquisitions. Having the tools to differentiate
banking products in the market gives CIB leverage
over its competition.
CIB’s alternative channels have been upgraded
to provide new functions, features, tools, and
analytical capabilities that enable personalized
customer experiences, digital onboarding, and
migrating customers from in-branch interactions
to digital alternatives.
Investments in big data have enabled marketing
to better target customers by behavior and seg-
ment, identifying customers who have a tendency
towards spending, saving, or traveling and build-
ing personas of the Bank’s card users based on
how they spend.
All these investments in digitization will reap more
benefits as we integrate data from standalone
platforms and sources with new campaign manage-
ment tools and eventually enable automation that
will support segment management and cross- and
upselling activities.
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Support Functions >> Marketing and Corporate Communications
Corporate Communications continued to promote
CIB as a best-in-class operator on the international
stage, showcasing additional areas of strength,
including digital banking, sustainability, and social
responsibility.
2019 Highlights
The focus last year was ensuring that the combined
Marketing and Corporate Communications divi-
sion operated at full capacity. In 2019, the emphasis
shifted from execution to performance. Marketing
campaigns were focused on specific objectives and
supported by live monitoring, and campaign objec-
tives were correlated with business outcomes in
order to ensure the highest ROI.
For example, CIB’s new platform for monthly card
offers consolidates all standalone card campaigns
into a single mega-campaign that has gained trac-
tion both with customers, who look forward to the
monthly announcement, and with merchants, who
increasingly seek to be featured in the monthly offer.
The division also continued to broaden its audience
by engaging customers over social media. This reduc-
es our cost per reach and maximizes return without
increasing budgets. Two priorities in 2019 were: a fo-
cus on experiences for HNW customers and human-
izing banking for less sophisticated consumers.
Through CIB’s blog and social media, including
short videos such as the “How It Works” series,
we are providing simple information that demys-
tifies banking products and services. The goal
is two-fold: positioning CIB as a first-mover for
financial literacy and financial inclusion in Egypt
and — from a product and service perspective —
reinforcing CIB’s values, establishing trust, and
keeping CIB top of mind with consumers who are
considering a banking product or service.
A major ongoing effort is CIB’s new public website,
content management system, and analytics tools.
In addition to creating a consistent and reliable
user experience across the web, online banking,
and ATMs, this upgrade to our digital channels
will enable analyses of audience behavior and
engagement, specifically in response to marketing
campaigns. It will allow us to serve customers a
unique and dynamic experience every time they
visit our website and to serve them relevant and
personalized advertising to drive lead conversions.
Local and International Media Engagement
In 2019, Corporate Communications continued
to promote CIB as a best-in-class operator on the
international stage, showcasing additional areas of
strength, including digital banking, sustainability,
and social responsibility. Specific efforts highlighting
CIB’s commitment on these fronts led to global recog-
nition for the Bank’s achievements and leadership in
these areas. In addition, Corporate Communications
reinforced CIB’s presence as the leading financial
services supporter of Egypt’s economic progress
through featuring senior management in prominent
publications such as Global Markets, Global Finance,
The Banker, and Euromoney.
Over 20 interviews and a high-level Africa round-
table with senior public and private sector leaders
in London were held with top-tier global publica-
tions, including the Financial Times, New York
Times, Bloomberg, The Banker, Thomson Reuters,
BreakingViews, and Euromoney. This interna-
tional media engagement resulted in a number of
articles and awards, recognizing CIB’s leadership
role in gender equality, social responsibility, and
digital banking. Of special note was the interna-
tional coverage of CIB’s sponsorship of the CIB
PSA Women’s World Championship squash tour-
nament held in Cairo. Widespread international
2,000
acticles written on the CIB PSA
Women’s World Championship
and regional coverage of the sponsorship spanned
print, online, broadcast, social media, and wire
services for a total of over 2,000 articles, includ-
ing ones on CNN, BBC, New York Times, Thomson
Reuters, Associated Press, Yahoo, L’Equipe, MSN,
Eurosport, Skye News.
Internal Communications
Internal communications efforts included on-
going townhalls and casual staff events, which
maintain direct communication between senior
management and employees. The success of “CIB
Bel 3araby” (CIB in Arabic) continued in 2019. The
first of its kind in the banking sector, this TV show
for CIB staff tackles important bank and employee
concerns in a humorous way. Our digital newslet-
ter, “CIB Round-up,” which sheds light on CIB-
related news, the banking sector, and the Egyptian
economy, received very positive feedback from
staff, and in 2019 its frequency was increased from
bi-weekly to weekly.
Corporate Social Responsibility
As part of CIB’s commitment to supporting the
community, the Marketing and Corporate Com-
munications division expanded its corporate social
responsibility activities. In 2019, CIB sponsored and
contributed to numerous events across the country,
with sponsorships encompassing art, culture, sports,
CSR initiatives, and many others.
CIB believes that sports play an integral role in
shaping the minds and health of Egyptian youth,
and the Bank has been diversifying its efforts to
support Egyptian athletes. For more informa-
tion, please refer to the “Social Development”
section of this report.
2019 Awards
• Middle East’s Best Bank for Corporate
Responsibility, Euromoney
• Best Bank in Egypt, Global Finance
• Best Bank in Egypt, Euromoney
• Best Online Portal Services, Global
Finance
• Best Information Security and Fraud
Management, Global Finance
• Best Online Deposit, Credit, and
Investment Product Offerings, Global
Finance
• Best Bill Payment and Presentment,
Global Finance
• Best Integrated Consumer Banking
Site, Global Finance
• Best in Mobile Banking, Global Finance
• Best Mobile Banking App, Global
Finance
• Most Innovative Digital Bank and Best
Trade Finance Services, Global Finance
• Best Trade Finance Provider in Egypt,
Global Finance
• Best Treasury and Cash Management
Providers in Egypt, Global Finance
• Best Subcustodian Bank in Egypt,
Global Finance
• Best Bank for Payments and
Collections in the Middle East, Global
Finance
• Best FX Services, EMEA Finance
• Best Payment Services in North Africa,
EMEA Finance
• Number 38 on Forbes Middle East’s
“Top 100 Listed Companies in the Arab
World,” (highest of the four Egyptian
companies listed)
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Support Functions >> Marketing and Corporate Communications
+18
awards won in 2019
CIB’s connection to its core values remain strong,
and the Bank has strengthened its brand position in
the financial services sector in Egypt, and beyond.
Both locally and internationally, CIB had been rec-
ognized for its customer focus, social commitment,
and innovation. The many awards and recognitions
that CIB received in 2019 serve to reaffirm our com-
mitment and successful performance as a local
bank with global standards.
2020 Forward-looking Strategy
Over the coming few years, the Marketing and Corpo-
rate Communications department will generate leads
by delivering, analyzing, and understanding customer
experiences across all our digital touch points.
In 2020, marketing managers will begin working
closely with business lines, experimenting with the
analytics and marketing capabilities of the new
website and online banking platform, incorporat-
ing transactional data from our big data initiatives,
to collect customer insights and build customer
profiles. These profiles will aid product design, data-
driven marketing, and customer loyalty.
Marketing will also work closely with business lines
to automate behavioral and event-based marketing,
CRM marketing, and customer life-stage marketing,
mainly via SMS and email. The UX design team will
support these efforts by improving digital customer-
facing experiences. This will entail:
• Growing the team and training team members
on the new digital platforms.
• Analyzing customer journeys and identifying
user experience issues and bottlenecks that pre-
vent customers from achieving a desired goal.
• Configuring the platforms with automated,
integrated, and personalized campaigns.
• Support GTB, business banking, and corporate
banking in redesigning digital platforms and cus-
tomer-facing products and services as required.
Automation and Personalization
The department’s medium-term focus is to establish
a customer relationship management (CRM) strat-
egy to convert leads into customers by building and
sustaining customer lifecycle experiences through
automation and personalization over the next two
years. Input from sales, marketing, and customer ser-
vice will identify all potential touch points that occur
during the customer journey.
One of the primary requirements for actively shap-
ing individual customer journeys across channels
is to have a comprehensive data set for each cus-
tomer, without breaking customer trust and not
at the cost of being authentic and transparent.
To produce these 360-degree customer profiles,
marketing, and bank-wide stakeholders will con-
solidate and correlate data from customer touch
points, including the data warehouse, the public
website, and the online banking platform.
During the first six months after the launch of the
public website in 2020, CIB will collect traffic data for
the new public website and will configure the platform
with rules for building customer profiles and for per-
sonalization of content in order to continuously serve
prospects relevant advertisements based on their in-
teractions with the website. This will be a continuous
exercise of experimentation and optimization.
New marketing and analytics modules for the on-
line banking platform will launch in 2020. The sys-
tem’s event-based rules will be configured based on
how customers consume products through online
banking. These rules will support cross-selling
and upselling as well as encourage customers to
migrate to the Bank’s digital services.
Branding
CIB’s business is growing and changing, and it is im-
portant that our brand reflects this. A brand refresh
is expected to begin in 2020, not only to remain
modern and relevant to our audience but to show
that we are connected to our industry. A competi-
tive edge for CIB has always been our identity as a
bank that is ahead of the curve.
CIB’s brand refresh will reflect a more current and
updated image. A new tone of voice has been devel-
oped for use across all our communications to convey
a younger and more approachable brand personality
than we have used in the past.
The brand refresh has the following objectives:
• Preserve the integrity and relevancy of CIB’s brand.
• Infuse the business with new vitality.
• Ensure CIB’s image keeps up with the changing
marketplace and represents the transformation
of CIB that is underway.
• Expand our reach to new customers, specifi-
cally younger generations.
• Signal that CIB, the Egyptian bank, is becom-
ing a regional brand and support our expansion
into Africa.
A new CIB Academy in Egypt’s new Capital City will
be a strong statement for CIB’s positioning as the
place to learn banking. With an L&D department and
a fintech lab open to pioneering students, academics,
and entrepreneurs, the academy will help elevate the
industry under CIB’s leadership.
The Marketing and Corporate
Communications department
will generate leads by
delivering, analyzing, and
understanding customer
experiences.
Local and International Media Engagement
In 2020, media engagement will focus on the follow-
ing messaging: CSR, product and service launches,
expansion into Africa, and broader organizational
achievements. Exposure for CIB’s up-and-coming
young leaders will signal to local media the Bank’s
management depth and the behind-the-scenes engine
that drives CIB. Foreign media efforts will include TV,
print, and online outlets, as well as identifying specific
international correspondents who focus on Africa.
Internal Communications
Internal communications will focus on simplifying
internal messages and raising awareness of the
Bank’s expansions into Africa. For example, a new
print publication for CIB’s drivers and clerks will
present the breadth of CIB’s journey, the Bank’s
achievements along the way, and our aspirations in
a suitable vocabulary and tone.
Better systems will be implemented for measur-
ing if internal messages have been delivered and
received by their intended audiences.
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Our
Controls
Risk
is responsible for the independent
oversight of the Bank’s operations
through an ERM framework
Compliance
is a holistic practice that helps mitigate
risks and set the ethical tone for the
Bank
Internal Audit
provides independent and objective
assurance and consulting activities to
stakeholders
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both school and university fees.
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undergraduate or post graduate degrees in
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150,000. Would you like to know the
requirements?
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We have rigorous risk and credit assessments in
place to make sure that the loans on offer suit our
clients and their requirements to ensure we work
together as partners to fulfill your goals, no matter
what they are.
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111
Our Controls
Risk
Group
The Risk Group is responsible for the indepen-
dent, holistic, and forward-looking oversight of
the Bank’s operations through an Enterprise Risk
Management (ERM) framework. The Chief Risk
Officer (CRO) manages financial and non-financial
risks, the Treasury Middle Office, and Internal
Control Management functions.
CIB’s ERM framework dates back to 2014, position-
ing the Bank as a pioneer on local and regional
scales, and serving as a key pillar for the Bank. It
adopts an integrated and forward-looking risk
approach, combined with a dynamic risk culture,
as well as a robust data governance and adaptable
technology platform.
In light of the growing importance of digitalizing
the financial services sector, the Risk Group has
undertaken a number of initiatives to embrace the
Bank’s digital transformation efforts. The group re-
lies on data analytics in managing exposures and
mitigating risk, as well as developing informed and
granular risk and reward optimization via better
quality models, and enhanced risk reporting.
CIB’s Enterprise Risk Management (ERM) Framework
Environment
Framework Implementation
Infrastructure
IMMMR Process
Strategy
P
A
A
C
I
e
c
n
a
n
r
e
v
o
G
n
o
i
t
u
c
e
x
E
Business
Strategy
Risk
Strategy
Risk
Appetite
Identification Measurement Management
Monitoring &
Reporting
e
r
u
t
l
u
C
g
n
i
t
s
e
T
s
s
e
r
t
S
/
n
o
i
t
a
d
i
l
a
V
t
n
e
m
s
s
e
s
s
a
e
R
Organization
and People
Systems and
Methodologies
Data
Policies and
Limits
5. Integrated Risk Management
The Bank’s comprehensive and integrated risk
framework is not complete without its Stress Test-
ing Program, which covers the main types of risks
and assesses resilience to unfavorable shocks. This
integrated framework is documented in the Inter-
nal Capital Adequacy Assessment Process (ICAAP)
and Risk Management Framework (RMF). Several
types of stress testing are performed to assess the
potential impact on the Bank’s financial position,
with scenarios regularly updated to reflect dynamic
changes in the economic environment and the
Bank’s risk profile to ensure its compliance with
international standards and global best practices.
Financial Risk, Non-Financial Risk, and
Risk Functions
The Risk Group aims to respond to the rapid chang-
es in both international and local risk requirements,
adopting a proactive approach to managing risks
and building an internal framework.
1. Risk Strategy and Risk Appetite Framework
CIB embeds risk management into its strategy,
budgeting, and performance management through
providing management with insights necessary to
adopt appropriate strategies. The Risk Appetite
Framework (RAF) plays an important role in
cascading the risk strategy and aligning business
objectives with risk appetite and risk tolerance
indicators to ensure a forward-looking approach.
In addition, the RAF accounts for all significant
changes arising from internal, external, potential,
or pre-existing conditions.
2. Risk Management Process
CIB maintains a robust Identification, Measuring,
Managing, Monitoring and Reporting (IMMMR)
process for principal risks, which identifies pri-
mary risk categories and their respective sub-
risks; employs effective methodologies and tools
for quantitative and qualitative measurements;
adopts appropriate responses; and deploys recov-
ery and contingency plans, as needed.
3. Risk Infrastructure
The Bank’s objective is to maintain an effective
risk infrastructure, including IT data architecture,
information tools and platforms, event databases,
policies and procedures, as well as other methods
to monitor increasing risks and continuously im-
prove the Bank’s mitigation plan.
4. Risk Environment
The Bank fosters a sound risk culture through
its
internal policies, communications, and
awareness programs to ensure all employees are
fully aware of their responsibilities towards risk
management on a regular basis. These initiatives
work together with the Bank’s solid risk gover-
nance, which is deployed through the Three
Lines of Defense model.
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Our Controls >> Risk Group >> IMMR Framework
Risks
Main Risk Measurements
Governance
Policy/Guide
Risks
Main Risk Measurements
Governance
Policy/Guide
Financial Risks
Non-Financial Risks
• Independent and objective
quantitative and qualitative
credit assessment using
independent credit risk assess-
ment tools
• Adequate collateral manage-
ment
• Managing counter-party credit
risk
• Monitoring the portfolio
through adequate Risk Appetite
Indicators (RAIs) & Early Warn-
ing System tools
• Ensuring consistent adequate
provisions coverage and accept-
able loss rates
• Consumer Credit Risk monitor-
ing leading, coincidental, and
lagged indicators/ behavioral
segmentation, vintage, and past
dues analysis
• Maintaining adequate rehabili-
tation and restructuring process
• Value at Risk (VaR)
• Expected Shortfall (ES)
• Portfolio duration
• Liquidity gaps analysis
• Net Stable Funding Ratio
Credit Risk
g
n
i
t
s
e
T
s
s
e
r
t
S
Market Risk
Liquidity Risk
(NSFR)
• Liquidity Coverage Ratio (LCR)
• Funding concentration
Interest Rate
Risk
• Economic Value of Equity
• Earnings at Risk (EaR)
• Interest rate gaps
• High Lending and Invest-
ments Committee
• Consumer Risk Commit-
tee
• Business Banking Risk
Committees
• Board Risk Committee
• Credit Policy
• Investment Policy
• Consumer Credit
Policy
• Business Banking
Credit Policy
• Fully Secured Policy
• Credit Concentra-
tion Policy
P
A
A
C
I
• Asset and Liability Com-
mittee
• Board Risk Committee
Treasury Policy
Non-Financial Risks
Operational
Risk &
Conduct Risk
Reputational
Risk
• Event management
• Risk & Control Self-Assessment
(RCSA)
• Risk heat map
• Key Risk Indicators (KRIs)
• Event Management Process
• Risk Assessment Matrix (Heat-
Map)
• Sentiment Analysis
• Non-Financial Risks and
Compliance Committee
• Board Risk Committee
• Operational Risk
Policy
• Conduct Risk
Policy
Reputation Risk Policy
Compliance
Risk
• Audit and internal control
reports analysis
• Applied risk-based approach
• Independent testing
Strategic Risk
• Profitability limit
• Market share and peer analysis
• Early warning signals
Social &
Environmental
Credit Risk
• Portfolio concentration in
high-risk clients
• Performance standards
thresholds
Model Risk
• Validity of data and reports
• Model validation
Vendor Risk
• Incident reports
• Key Risk Indicators (KRIs)
Information
Technology
Risk
• Incident/problem report
• System availability report
• Business continuity plan
Security Risk
• Different security risk assess-
ments
• Real-time alerts
• Security information and event
management
g
n
i
t
s
e
T
s
s
e
r
t
S
• Compliance Policy
• Code of Corporate
• Non-Financial Risks and
Compliance Committee
• Board Risk Committee
Governance
• Anti-Money
Laundry
• Management Committee
• Board Risk Committee
• Non-Financial Risk and
Compliance Committee
• Board Operations and
Technology Committee
• Board Risk Committee
• Know Your Cus-
tomer
Strategic Risk Policy
Social & Environmen-
tal Credit Risk Policy
Guide
Model Risk Guide
Vendor Management
Policy
Information Technol-
ogy Policy
• Security Gover-
nance
• Business Continuity
Management
P
A
A
C
I
Other Risk Functions
Internal
Control
Management
(ICM)
Treasury
Middle Office
(TMO)
• Scorecard and scoring method-
ology for reviewed functions
• Non-Financial Risk and
Compliance Committee
• Board Risk
ICM Guide
• Money market, FX, cash exports,
or interest rate swaps and credit
limits
• Management Committee
• Asset and Liability Com-
mittee
• Sovereign/investments concen-
• High Lending and Invest-
TMO Guide
tration limits
ments Committee
• Board Risk Committee
Quantitative
Risk
Management
• Stress testing
• Internal Capital Adequacy
Assessment Process (ICAAP)
• Management Committee
• Board Risk Committee
• Stress Testing Policy
• ICAAP
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115
Our Controls >> Risk Group
26.07%
CAR
3.99%
NPL ratio
757%
LCY LCR Ratio
255%
LCY- NSFR Ratio
2019 Highlights
The Risk Group has implemented organizational
changes that complement the growth strategy set
by the Bank for a number of its segments through
developing specialized monitoring and early warn-
ing mechanisms for more robust control. It has also
begun automating its consumer credit policies,
granting instant preliminary approvals, streamlin-
ing processes, and enhancing overall service qual-
ity and customer experience. A leading technology
provider was appointed to finalize the development
of application and behavior scorecards, with the
aim of maintaining its portfolio quality, managing
the Bank’s increasing sourcing volumes, supporting
decision making, and eliminating bias.
CIB’s balance sheet met CBE regulations and inter-
national best practices in the areas of capital ade-
quacy and liquidity requirements, as demonstrated
by the following:
• High-quality funding, with customer deposits
comprising 91% of total liabilities. Diversifying
the Bank’s deposit base enables CIB to continue
supporting customers’ needs and maintains ac-
ceptable concentration risk levels.
• The LCY-CBE liquidity ratio remained well
above the 20% requirement of regulators at
74.9%, while the FCY liquidity ratio reached
56.5%, which is above the regulatory threshold
of 25%.
• The Net Stable Funding Ratio (NSFR) hit 255%
for local currency and 156% for foreign cur-
rency, with the Liquidity Coverage Ratio (LCR)
standing at 757% for local currency and 231%
for foreign currency, all coming in above the
100% regulatory requirement.
CAR Trend
2018
2019
CIB Capital Adequacy Ratio (CAR)
19.09%
26.07%
CBE Minimum Requirement
11.875%
Buffer over CBE Requirement
7.22%
12.75%
13.35%
2020 Forward-Looking Strategy
The Risk Group will continue to enhance the Bank’s
infrastructure through the introduction of system
upgrades and end-to-end automation, and support
business through leveraging on new digital platform
that provides instant credit decisions and guaran-
tee service of the highest quality as an acquisition
tool to maximize sales efficiency, optimize the cost
of serving segments, offer exclusive product ranges
and increase penetration rates. It will also offer new
credit programs, built on a risk-reward strategy, to
help the Bank achieve its targeted portfolio growth.
The group will also continue developing its Corpo-
rate Lending Transformation Project, and is looking
into implementing a fully integrated “Credit Ap-
proval Cycle” for all stakeholders. A credit database
for all borrowers will also be created to hold all rel-
evant credit data, with a historical timeline that will
assess historical trends and norms, and translate all
inputs into qualitative and quantitative measures.
Incorporated in its strategy is also the automation
of the Early Warning Signals system to enable auto-
mated tracking of triggers. It will also be integrated
with the core and past due systems, allowing stor-
age of historical data to assess trends, continue
validation, and backtesting.
Non-financial risks, comprehensive frameworks for
technology, vendor, and model risks continue to be
further developed for a robust enterprise risk man-
agement universe.
Throughout the year, specific and systemic
stress testing scenarios showed no need for im-
mediate action on the Contingency Funding Plan
(CFP) in light of the Bank’s High-Quality Liquid
Assets (HQLA).
Asset quality remained resilient, as reflected by
the Bank’s NPL ratio, which came in at 3.99% of its
gross loan portfolio — covered 2.25 times (225%)
by the Bank’s loan loss provision balance. CIB is-
sued its financial statements in compliance with
IFRS 9 standards, and focused on automating and
digitally-integrating the process throughout 2019.
With an established financial risks framework
benchmarked against global banks’ standards, CIB
has expanded its non-financial risks framework in
the past few years. In line with this, the Risk Group
finalized its SMA Operational Risk Minimum Regu-
latory Capital Quantitative Impact study and en-
forced CBE requirements related to the protection
of customers’ rights.
The credit approval process was re-engineered to
enhance the customer experience, reducing the ap-
proval process turnaround time, and setting a clear
end-to-end process. This process starts from initia-
tion and goes on to funds disbursement, including
portfolio management & monitoring post disburse-
ment, which has consequently increased efficiency
and safeguarding rights.
The Risk Group commenced was the industry assess-
ment model, which is used to determine targeted,
industry-specific growth rates based on current and
historical credit standing, performance, and finan-
cial data. This translates all inputs and triggers into
qualitative and quantitative measures.
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117
Our Controls
Compliance
Group
14
cases presented to the
Staff Issues Committee
Compliance is a multi-dimensional practice with
various scopes, including the management and
mitigation of risks and setting the ethical tone for
the entire Bank. CIB has a well-established, inde-
pendent Compliance Group that helps the Bank
meet its growth strategies through the dedication
of a team of industry veterans from a variety of
backgrounds. Within CIB, the Compliance Group
aligns its activities with international best practic-
es and promotes the highest standards of honesty,
transparency, and integrity.
The group protects the Bank from the risk of legal
or regulatory sanctions, material financial loss,
and loss of reputation resulting from failure to
comply with laws, regulations, rules, related self-
regulatory organizational standards, or codes of
conduct applicable to its banking activities. Ad-
ditionally, the group provides intrinsic benefits,
including constructive communication, improved
overall business practices, and a better under-
standing of the regulatory environment. The group
ensures that CIB adheres to compliance standards
to safeguard the Bank against a full spectrum of
compliance risks through five distinct depart-
ments: the Compliance, Policies, and Procedures
Division; Corporate Governance and Code of
Conduct Division; AML and Terrorism Financing
Division; Foreign Account Tax Compliance Act
Division; and CBE Relations Division.
2019 Highlights
Compliance, Policies, and Procedures
Division
The Compliance, Policies, and Procedures Division
ensures that all controls, laws, and regulations are
embedded in the applied policies and procedures,
all of which are periodically reviewed to ensure
they are up to date. The division is also responsible
for reviewing and approving marketing materials,
contracts, and customer forms. The scope of the
division also includes monitoring bank products
through reports to ensure compliance with poli-
cies, processes, and regulations, in addition to the
involvement in the process of re-engineering ini-
tiatives and digital services expansion plans.
Following the preventive measures taken by the
Compliance Group in 2019, where several corrective
actions took place to mitigate risks, the Compliance,
Policies, and Procedures Division began in 2019 con-
tribution in the process re-engineering processes in
Trade Finance Operations. Moreover, the division
worked with Operational and Conduct Risk Manage-
ment to comply with Customer Protection Rights
instructions issued by the CBE and closed any gaps
within the grace period granted by the CBE.
It contributed to several digital initiatives such
as the El Mowaten governmental payment dues,
El Mowaten governmental supply order, Unified
Gateway payments, and others.
The division successfully launched many financial
inclusion products in alignment with CBE direc-
tives, allowing CIB to become part of the first
wave of contributors to the initiative. In 2019, the
division helped launch QR acceptance services to
select merchants who accept payments through
digital mobile wallets; contactless services in col-
laboration with select merchants according to CBE
instructions; and Meeza Prepaid Cards that posi-
tively enhances the payment process for untapped
customers through the governmental entities and
The Compliance Group
successfully launched many
financial inclusion products in
alignment with CBE directives.
achieves the country’s initiative for the compre-
hensive financial inclusion.
Corporate Governance and Code of Conduct
Division
The Corporate Governance and Code of Conduct
Division structures CIB’s governance framework
in a way to enhance long-term value for all the
Bank’s stakeholders. The division works to en-
sure that the corporate governance system is
documented, transparent, and clear. It ensures
investors, both foreign and local, customers,
employees, and the general public are confident
in the ways the Bank is managed and supervised.
In March 2019, the Corporate Governance and
Code of Conduct Division issued the first Corpo-
rate Governance Report for 2018, as mandated by
the Financial Regulatory Authority (FRA). The di-
vision continued to manage relevant staff issues
and encouraged the use of the Bank’s Whistle-
Blowing Policy in cases of suspected wrongdo-
ing. Moreover, the division efficiently managed
potential conflicts of interest by reviewing sev-
eral departments’ restructuring in line with their
respective job descriptions.
The division also ensured that neither employees
nor insiders traded CIB stocks during blackout
periods to promote transparency and integrity
among all shareholders. Furthermore, the divi-
sion conducted several induction sessions to raise
staff awareness of governance, compliance, and
conduct-related issues, in line with CIB’s strategy
to foster a culture of compliance and good gover-
nance within the Bank.
In 2019, 14 cases were presented to the Staff Issues
Committee,
including performance disagree-
ments, mismanagement issues, and violations of
the Bank’s code of conduct. All issues raised to the
committee were thoroughly investigated, and fair
and sound decisions were reached.
AML and Terrorism Financing Division
The Anti-Money Laundering and Terrorism Fi-
nancing (AML) Division develops, implements,
and maintains the AML program across the Bank.
The division screens transactions against nega-
tive lists and sanctioned countries to shield the
Bank against sanctions. The AML Division uses an
automated transaction monitoring system, which
detects money laundering, terrorism financing
crimes, and suspicious activities. Additionally,
the division maintains records of customers and
reports suspicious activities to authorities.
In 2019, the AML Division successfully implement-
ed batch screening, which allows the Bank to peri-
odically screen its customer base and safeguards it
against sanctions. In addition, the division imple-
mented APIs to automatically screen automatic
clearing house transactions.
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119
Our Controls >> Compliance Group
Internal
Audit
CIB’s AML team attended several international
seminars, including those on financial crime, new
trends such as cybersecurity and human traffick-
ing, to remain up to date on AML trends locally
and globally to ensure it upholds the highest inter-
national standards and best practices.
Starting 3Q19, the CBE Relations Division became
part of the re-engineering of the Trade Finance
division to enhance the Inward Documentary Col-
lections (IDC) process, allowing it to be controlled
and monitored through a workflow platform (BPM)
thereby enhancing performance and efficiency.
Foreign Account Tax Compliance Act
Division
The Foreign Account Tax Compliance Act (FATCA)
Division ensures correct implementation of FATCA
regulations and actively follows up on any new
updates or requirements, in addition to reporting
annually to the US Internal Revenue Service (IRS).
During 2019, the FATCA Division successfully
uploaded two yearly reports to the IRS as a single
Foreign Financial Institution (FFI) as well as an-
other report as a Sponsoring Entity for CIB Mutual
Funds. The division also provided continuous sup-
port for different cases to facilitate the smooth
implementation of FATCA rules while ensuring
customer satisfaction.
CBE Relations Division
The CBE Relations Division acts as an advisor to
all the Bank’s departments to ensure they adhere
to CBE regulations and instructions. CIB is the
first local bank to establish a division that directly
handles relations associated solely with CBE.
In 2019, the division assured regulatory instruc-
tions were adhered to without impact on the
business. It collaborated with other divisions
as needed to add value and guidance as well as
assisted in the structuring of credit facilities to
ensure their compliance with CBE regulations and
lending guidelines.
2020 Forward-Looking Strategy
Going forward, the Compliance Group plans to
continue enhancing the efficiency of processes and
turnaround time as it works to safeguard the Bank
against the full spectrum of compliance risks.
The Compliance Group will continue to adopt a
risk-based approach that recognizes that different
areas of the business and regulatory issues carry
varying levels of regulatory risk. Accordingly, the
Bank’s resources can be prioritized and allocated
to areas with the highest need to boost produc-
tivity. It will also increase staff awareness of key
compliance issues by delivering effective education
and training programs and fostering the values of
knowledge, honesty, integrity, respect, and profes-
sionalism across the Bank.
In 2020, Compliance, Policies, and Procedures will
continue supporting CIB’s digital framework by
adding more governmental payments such as real
estate taxes and corporate electricity dues as well
as launching a payment facilitator and payment
aggregator to enroll more untapped merchants
through a third party as it continues to work to-
ward financial inclusion.
As a market leader, CIB was the first bank in Egypt
to conduct an external quality assurance to its au-
dit activities by an independent external audit firm
in 2015. Three years later, this practice became
mandatory in the Egyptian banking sector.
The Internal Audit Group provides independent
and objective assurance and consulting activities
to its stakeholders, to add value and improve the
organization’s operations. Also, it supports Senior
Management in accomplishing the Bank’s objec-
tives, by assessing the adequacy and effectiveness
of the control system. Concurrently, it also evalu-
ates and enhances the effectiveness of Enterprise
Risk Management and governance processes.
The Internal Audit function at CIB takes its author-
ity from its direct reporting to the Bank’s Board
Audit Committee, which is the backbone of the
Internal Audit Group, approving its charter and
safeguards its independence as the third line of
defense. The Audit Committee also performs a full
oversight on all Internal Audit activities, accord-
ing to a risk-based audit methodology.
Internal Audit employees are one of the group’s key
pillars. They are thoroughly selected to staff the de-
partment with diversified professional experience
covering all banking functions and supported by
professional certifications. The Bank continuously
provides them with internal and external training,
and they regularly attend international confer-
ences to acquaint themselves with the latest inter-
national trends and methodologies.
Empowered by our Board Audit Committee and
in line with the latest international trends, there
The Internal Audit Group
provides independent and
objective assurance and
consulting activities to its
stakeholders to add value
and improve operations.
exist synergies between the Internal Audit Group
and our Analytics and Data Management Division.
Leveraging on the expansive capabilities provided
by Big Data, Internal Audit will be able to provide a
continuous monitoring mechanism and help man-
agement to detect alarming indicators early on.
2020 Forward-Looking Strategy
The group’s strategy for 2020 and beyond is to
continue accommodating its stakeholders’ expec-
tations by providing assurance on a range of new
emerging risks and uncertainties, in a fast-chang-
ing environment, while also delivering timely
insights to guide key strategic decisions and help
management navigate a rapidly changing business
system and complex local and global regulations.
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121
Evironmental,
Social, and
Governance
(ESG)
CIB runs a robust ESG program that not
only benefits our profitability but builds
a strong brand equity and promotes
sustainable long-term growth.
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122
Annual Report 2019
Annual Report 2019
123
Evironmental, Social, and Governance (ESG)
Environmental
Sustainability
CIB embraces a culture of sustainability, believing
that a responsible institution benefits the com-
munity and contributes to the wellbeing of the
environment.
Sustainable activities undertaken by the Bank
for the past eight years have helped promote and
strengthen the Bank’s brand both locally and
internationally. Over the years, sustainability has
become central to its activities and evolved in line
with international best practices.
CIB practices the Progressive Sustainability Ap-
proach through interrelated domains: environ-
ment, society, and economy. Population growth,
coupled with technological advancements, are af-
fecting our planet in distinct ways; dilemmas such
as climate change, decaying natural systems, and
rates of migration are exponentially increasing.
Progressive Sustainability is proving to be the key
avenue to minimize the negative impacts of envi-
ronmental and social problems through innova-
tion, increasing equity, and offering opportunities
for a balanced life.
Corporate Sustainability Task Force
In line with CIB’s commitment to sustainable busi-
ness practices, it established a Corporate Sustain-
ability Task Force. The group is chaired by a non-
executive Board Member and is composed of six
members who meet at least four times a year. They
are decentralized and engage with all staff mem-
bers throughout different channels via workshops
and meetings. The task force keeps staff members
aligned and aware of all the sustainability activities
undertaken by the Bank and encourages personal
sustainable endeavors. As a direct result, Ahmed
Wafeek, a Senior Personal Banker, is an active team
member in Port Said’s branch who funded and
planted over 2,000 trees in the governorate.
The Bank’s Port Said branch took a positive step
forward and joined hands to minimize its environ-
mental impact on the environment by tackling two
main pillars: digital transformation and the reduc-
tion of CO2 emissions.
During the year, the branch scored first in terms of
e-statement migration, issuing 9,500 e-statements
during the year and saving over 70,000 sheets of
paper in the process. The branch also hit the high-
est number of Smart Wallet subscribers Bank-wide
at 463 subscriptions for the year. It also greatly
reduced its air-conditioning usage, lowering the
branch’s electricity bills by 13% in 2019.
Environmental Sustainability
CIB promotes and applies green concepts and
activities to reduce harm on the environment
and promote sustainable ways of operating and
conducting its daily business. CIB works to use
its resources in ways leading to minimal environ-
mental harm.
Carbon Footprint Calculations
Climate change is currently one of the world’s most
pressing issues. Accordingly, it was imperative for
the Bank to understand the impact of its direct
and indirect emissions to the environment. In this
sense, a consolidated Carbon Footprint Audit Re-
port on all CIB premises was developed. Total CIB
emissions hit 36,373,090 MtCO2e for the year, and
a target was set for 2025 to reduce greenhouse gas
emissions by 10% (1,800 MtCO2e).
CIB practices the Progressive
Sustainability Approach
through interrelated domains:
environment, society, and
economy.
Energy Efficiency
Building on this report, CIB is applying an Energy
Management System (EnMS) to provide technical
data on energy consumption and how to effec-
tively manage it. This step will help us acquire
an ISO certification in EnMS, enable us to better
manage CIB’s energy usage, achieve operating
cost savings, and improve energy efficiency. As for
electricity consumption, thanks to various energy
saving initiatives, we recorded a 3% reduction in
consumption for the year compared to 2018.
Sound Measurement
In line with CIB’s commitment to employees’ well-
being, health, and safety, CIB finalized a sound
measurement exercise on the five busiest branches
in Cairo, Giza, and Alexandria. The exercise included
the maintenance and architectural adjustments
required to decrease noise pollution. The results
showed that CIB successfully decreased noise pollu-
tion levels on average by 10-12 decibels per branch,
putting them in the “safe zone” according to interna-
tional standards.
Reducing Waste and Managing Resources
As CIB aims to transform its buildings and offices into
eco-friendly ones, the Bank adopts the standards of
green buildings in its premises’ operations manual.
Water consumption is controlled through water
restrictors and other devices. Waste management sys-
tems (electronic and paper waste) are in place, paper
waste is sold to paper recycling startups, and biode-
gradable plastic is used. The Bank also encourages
carpooling through a tailored CIB application.
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Evironmental, Social, and Governance (ESG) >> Environmental Sustainability
Sound Levels at Key Branches
100
50
0
Giza
Downtown
El Nasr
El Shams
Sultan Hussein
Sound Level Meter Avg. (dB)
(Before)
Sound Level Meter Avg. (dB)
(After)
Natural and Cultural House of Zawara, Wadi
El Rayan/Fayoum
Investing in the first open Natural and Cultural
House in Egypt at Zewara camp located in the
Wadi El Rayan Protected Area in Fayoum falls
under CIB’s broader sustainability strategy, as
serving communities is an integral part of the
Bank’s environmental responsibility. The project
is executed in collaboration with the UNDP, the
Egyptian Italian Environmental Project (EIEP),
and the Ministry of Environment. It will intro-
duce a new eco-tourism destination that plays
on the natural and cultural diversity of the area,
from prehistoric times to date.
Aside from its positive social, environmental, and
economic impacts, the project provides CIB with
the opportunity to align its internal environmen-
tal initiatives with external community invest-
ment and offers the Bank the opportunity to part-
ner with leading global entities such as the UNDP
to harness key synergies and collaborations.
Sustainable Partnerships
2019 featured recognition from the different stake-
holders of the Bank’s initiatives and sequences.
UNEP FI Responsible Banking Principles
Being a member of the UN Environmental Pro-
gram - Finance Initiative (UNEP-FI), CIB worked
with other leading domestic, regional, and in-
ternational financial institutions to promote
sustainable practices in the global financial sec-
tor. The Bank participated along with 29 other
financial institutions to develop the UNEP-FI’s
Principles for Responsible Banking (PRB), which
are the first principles addressed specifically for
banking institutions to encompass social, envi-
ronmental, and governance practices as part of
their day-to-day operations.
CIB became one of the founding signatories of the
Principles for Responsible Banking, committing
to strategically align its business with the Sus-
tainable Development Goals and the Paris Agree-
ment on Climate Change. CIB joins a coalition of
130 banks worldwide, representing over USD 47
trillion in assets, in committing to taking on a
crucial role in achieving a sustainable future.
Digital Economy Task Force (DETF)
CIB is the sole representative of Egypt’s private
sector in the Digital Economy Task Force (DETF):
a joint venture between the African Union and
the European Union. This invitation cements
CIB’s position as a leader in the development of
the financial sector, and the digitalization of
banking services, ultimately leading to financial
inclusion. The DETF consists of multiple stake-
holders from government, civil society, financial
institutions, development agencies, and the pri-
vate sector gathered to achieve cross-border inte-
gration and cooperation in Africa. Through this
platform, the DETF seeks to establish its goals by
developing policies and recommendations to cre-
ate alignment across the national, regional, and
continental levels and ensure synergies between
the initiatives under implantation. This platform
enables CIB to play a pivotal role in the African
continent’s digital transformation and Egypt’s
national and regional aspiration.
Sustainability Indices
CIB is a constituent in the Financial Times Sus-
tainability Index (FTSE4 Good) for the fourth
consecutive year. The Bank has also been ranked
first on the EGX Sustainability Index 2019 for the
fifth year in a row. CIB is one of the companies
listed in the CDP (Carbon Disclosure Project), a
climate change program aimed at reducing com-
panies’ greenhouse gas emissions and mitigate
climate change risk. CDP recognizes companies
with high-quality disclosure in its annual scoring
process. The Bank was also included in the 2020
Bloomberg Gender-Equality Index for the second
year running.
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Evironmental, Social, and Governance (ESG)
Social
Development
33.44 EGP
MN
allocated to Al Nas Hospital – Al Joud
Foundation
As Egypt’s leading private sector bank, CIB strives
to create a positive impact on the local community.
Accordingly, it has undertaken a number of initia-
tives to promote inclusive and sustainable develop-
ment across the country as well as provide support
to underserved segments of the community through
the Bank’s corporate social responsibility program,
the CIB Foundation, and its dedication to support-
ing Egyptian squash champions.
Corporate Social Responsibility
Corporate social responsibility (CSR) is at the heart
of CIB’s core values. This year, we’ve diversified our
community development activities by expanding
our scope to include supporting sports, fine art, cul-
ture, and social welfare. We’ve implemented various
CSR projects and provided support to initiatives
carried out by other organizations.
Social Activities
KidZania
CIB and KidZania’s partnership began in 2013, and
since then, the Bank has organized several trips each
year to KidZania for more than 150 underprivileged
and special needs children, as well as children with
health conditions. Through the CIB Foundation’s
sponsorship, the trips provided children with a fun
setting where they learned about different banking
operations, such as debit cards, issuing cheques,
and depositing and withdrawing money using Kid-
Zania’s official currency: Kidzos.
Awareness Day in Egypt, supporting the integration
of people with disabilities into society. Additionally,
the Bank’s Smart Village headquarters and select
branches were lit in blue in solidarity on World Au-
tism Awareness Day.
Beena
Beena is a protocol signed between CIB and the
Ministry of Social Solidarity to encourage active
youth participation in the community and monitor
the development of social care services. The Bank
has been the main partner and financial sponsor
of Beena for four consecutive years. This initiative
successfully attracted thousands of youths around
Egypt who volunteered with orphans, senior citi-
zens, and individuals with special needs.
Cultural Activities
In 2019, CIB’s CSR activities branched into the art
and culture fields, stemming from the belief that the
country can only advance when cultural and artis-
tic activities are readily available for all members of
society. This year, CIB has increased and diversified
its support of artistic endeavors throughout Egypt.
El Sawy Culture Wheel
In 2019, CIB continued its long-lasting sponsorship of
El Sawy Culture Wheel, supporting its various intellec-
tual, cultural, and social activities, including concerts
by local and international artists, cultural nights, art
exhibitions, and documentary films.
Autism International Day/ADVANCE
This year, the Bank continued its sponsorship of the
Egyptian Advance Society for Persons with Autism
and Other Disabilities (ADVANCE)’s annual cer-
emony. We also sponsored the 2019 World Autism
Cairo International Biennale, “Towards the East”
The 2019 Biennial was the first following an eight-
year hiatus where 80 artists representing 50 coun-
tries participated. The artistic works of the festival
were hosted in the historic and cultural locations
throughout Cairo, including the Palace of Arts, Ai-
sha Fahmy Palace, the Museum of Modern Egyptian
Art, and the Zamalek Art Complex. The Biennale
comes as part of significant efforts to bring back to
Egypt stalled international events, cementing the
country’s cultural role and leadership.
Reimagined Narratives
This is a successful series of annual art exhibitions
held at different heritage sites across Egypt, spon-
sored by CIB in 2019 for the third year in a row, and
held under the auspices of the Egyptian Ministry of
Antiquities. This year, the exhibition was held for the
first time at the UNESCO World Heritage Site in His-
toric Cairo, where it transformed several locations
in Moez Street into open art spaces, housing over 20
contemporary Egyptian artists and their work.
Alex Workshop Center
This year marked the 20th anniversary of the Alex
Workshop Center, and CIB supported the ceremony
and workshops held to mark the occasion. The cen-
ter has been a pillar of the Alexandrian community,
supporting local artists, artists with special needs,
and other members of the community to safeguard
the artistic heritage of the city and spread art
throughout the city.
CIB Foundation
Established in 2010 as a non-profit organization under
the Ministry of Social Solidarity Decree No. 588, the
CIB Foundation is dedicated to improving healthcare
and nutrition services extended to children of un-
derprivileged families with limited access to quality
healthcare by developing life-changing community
initiatives. Our efforts include not only the donation
of money, but also the monitoring of projects’ impact.
Through extensive processes, we work with private,
public, and non-governmental healthcare providers
that offer free-of-charge services to ensure the widest
community reach and to maximize the value of our
work, achieving positive and sustainable results.
The CIB Foundation, supported by 1.5% of CIB’s annual
net profit of 2019 from the generous CIB shareholders
and donations made to its fundraising account, is gov-
erned by a seven-member board of trustees. 100% of the
proceeds are channeled towards community projects
with the aim of improving child healthcare services.
The Foundation seeks to ensure that its resources are
spent efficiently to reach the greatest number of benefi-
ciaries through the coordinated efforts of the Founda-
tion’s Board of Trustees, staff, and CIB volunteers.
Over the years, the CIB Foundation has been recog-
nized for the work it does with local communities,
receiving multiple awards that attest to our success in
creating meaningful and sustainable impact. In 2019,
CIB received the “Middle East’s Best Bank for Corpo-
rate Responsibility” award by Euromoney.
Approved Projects in 2019
In 2019, the Board approved a number of new proj-
ects in addition to its ongoing efforts to improve
the quality of child healthcare services available
across the country.
Mabara El Maadi Hospital
In February 2019, the Board allocated EGP 1.63
million to purchase equipment to operate four new
incubators at the Mabara El Maadi Hospital NICU in
collaboration with Garden City Cosmopolitan Lions
Club. The project will enable the hospital to serve
1,000-1,200 newborns annually.
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Evironmental, Social, and Governance (ESG) >> Social Development
CIB diversified its community
development activities by
expanding its scope to
supporting sports, fine art,
culture, and social welfare.
Al Nas Hospital – Al Joud Foundation
The Board allocated EGP 33.44 million in April
2019 to exclusively sponsor, outfit, and operate 15
cardiac pediatric intensive care units through the
purchasing of medical equipment while covering
operating costs for six months, as well as sponsor-
ing 40 pediatric open-heart surgeries. The units are
expected to serve 200 beneficiaries, with the num-
ber increasing to meet its full capacity of 1,200 by
the third year. Al Nas Hospital, owned by Al Joud
Foundation, is located in Shubra El Kheima and
will operate in line with international standards. It
will have a bed capacity of 557 and offer its services
free of charge to underprivileged communities.
6/6 Eye Exam Convoys
In April 2019, the Board allocated EGP 21.57 mil-
lion to fund the deployment of 100 eye exam con-
voys to provide free eye examinations to 80,000
students in underprivileged primary schools in the
Beni Suef and Minya governorates. In addition to
the exams, an awareness campaign was launched
about personal hygiene and ophthalmic health.
The children also received a backpack with a hy-
giene kit, coloring books, and coloring pencils.
This initiative was launched in collaboration with
the Gozour Foundation for Development, which has
been a partner of the CIB Foundation since 2012. To
date, the CIB Foundation has sponsored a total of
341 convoys in 271 public schools, benefiting 201,283
students in more than 20 governorates.
Children’s Cancer Hospital 57357
Building on its longstanding partnership with the
Children’s Cancer Hospital 57357, the Foundation
allocated EGP 20 million in April 2019, which en-
abled the hospital to acquire an integrated system
that connects, manages, and monitors infusion and
syringe pumps during chemotherapy sessions. This
is crucial to the hospital as each patient requires a
minimum of two syringe and infusion pumps per
session. The Foundation will purchase 690 infusion
pumps and 216 syringe pumps, as well as auxil-
iary equipment. This initiative is expected to benefit
more than 9,000 children annually.
Outfitting and Expanding the Pediatric Dialysis
Unit – Sohag University Hospital
The Board allocated EGP 16.87 million in April
2019 to expand and outfit Sohag University Hos-
pital’s pediatric dialysis unit. As the largest unit
serving children with kidney diseases in Upper
Egypt, there was a pressing need for the hospital to
expand. The new dialysis unit will feature an ICU, a
plasma separation room, 16 new dialysis machines,
and a central delivery system that will lower infec-
tion rates. It is expected to serve approximately
5,000 children each year.
Outfitting and Expanding the Pediatric Surgery
Unit - South Valley University Hospital in Qena
The Board allocated EGP 14.75 million in April 2019 to
establish a pediatric surgery unit at the South Valley
University Hospital, which serves many governor-
ates in Upper Egypt and the Red Sea. The unit will be
equipped with state-of-the-art facilities, including a
surgical theatre, a pediatric ward (eight beds), an ICU
(two beds), and a diagnostic unit. The hospital, one
of few in the region, will work to minimize the risk of
traveling for critically ill patients and to increase the
capacity of the Emergency and Accidents Department
to operate on 600 children instead of 150 each year.
Benha University Hospital
The Foundation granted Benha University Hospital
EGP 12.48 million to equip it with 40 incubators
and 10 pediatric ICU beds. This planned expansion
will enable the hospital to serve approximately
3,500 children each year in Benha and the sur-
rounding areas.
Cairo University Hospitals - Faculty of Medicine,
Cairo University
The Foundation allocated EGP 11.6 million to
equip Cairo University’s Department of Radiology
with a state-of-the-art CT Scanner (128-slice) to
detect congenital defects and tumors in the ner-
vous, motor, digestive, urinary and reproductive
systems along with examinations of heart arter-
ies. The device is expected to provide scans for
6,000 children each year.
Pediatric Open-Heart Surgeries Project – Magdi
Yacoub Foundation (MYF)
To support the operations of the Aswan Heart Cen-
ter as it addresses critical cases, the Foundation
allocated EGP 10 million to help the center perform
100 pediatric open-heart surgeries.
Ain Shams University Children’s Hospital Medi-
cal Staff Capacity Building in Collaboration with
Great Ormond Street Hospital (GOSH)
The Foundation will fund a five-year training pro-
gram for 150 members of the Ain Shams medical
staff team with a total budget of GBP 880,000 in
partnership with Great Ormond Street Hospital
(GOSH) in London. This initiative follows the up-
grade of the hospital’s facilities and equipment in
line with international standards.
Following the program, Ain Shams University
Children’s Hospital is expected to double its ca-
pacity and serve an additional 67,200 children
each year along with enhancing its overall level
of care.
Outfitting the Pediatric Ophthalmic Clinic – Al-
exandria University Hospitals
The Board approved a budget of EGP 4.64 mil-
lion to outfit the pediatric ophthalmic clinic at
Alexandria University Hospital, considered to be
a center of excellence that serves underprivileged
families in the Alexandria and Delta regions. This
initiative is expected to benefit 8,750 children
each year.
Yahiya Arafa Children’s Charity Foundation
The Foundation along with its longstanding part-
ner, the Yahiya Arafa Children’s Charity Founda-
tion, sponsored the annual operating costs of Ain
Shams University Hospital’s pediatric congenital
heart defect unit, pediatric heart surgery unit,
women and obstetrics hospital’s neonatal unit,
children’s hospital’s pediatric surgery unit and
the children’s hospital’s neonatal unit with a
budget of EGP 4 million. These units serve 14,500
children each year.
Outfitting and Operating 2 Mobile Clinics – Raei
Masr Foundation for Development
In April 2019, the Board allocated EGP 3.52 million to
launch two mobile clinics providing comprehensive
medical services including pediatrics, ophthalmolo-
gy, and internal medicine to children in remote areas
of Upper Egypt. The clinics will provide the children
with checkups as well as medical referrals for special-
ized cases and medication. The clinics are expected
to examine more than 96,000 children each year.
Egyptian Clothing Bank (ECB)
In April 2019, the Foundation allocated EGP 3.38
million to fund its annual collaboration for the sixth
year with the Egyptian Clothing Bank, which seeks to
supply children across all 27 governorates with warm
clothing during the winter months. Through the fund,
45,000 winter training suits will be distributed among
children in underprivileged areas across the country.
Sporting Students’ Hospital
The Foundation granted the Sporting Students’
Hospital EGP 3 million to acquire a new six-color
flow cytometry device that assists in the accurate
diagnosis of leukemia and cancer in the lymph
nodes. The device is expected to help diagnose 1,200
children each year.
Pediatric Burn Patient Surgeries
The Foundation allocated EGP 2 million in April
2019 to fund its second collaboration with the Ahl
Masr Foundation to cover the costs of surgeries for
more than 200 pediatric burn patients at a number
of hospitals, including El Kasr El Eini, Ain Shams
Specialized Hospital, El Demerdash Hospital and
others. This collaboration comes in response to a
severe lack of medical care available for burn vic-
tims across Egypt, with children under 18 years old
making up approximately one-quarter of the total
number of victims.
True Light Society Association for the Visually
Impaired
In collaboration with the True Light Society Associ-
ation, which seeks to integrate children with visual
disabilities into society, the Foundation allocated
EGP 1.23 million to fund the project. The project’s
integration aims to culturally and athletically assist
visually impaired children in their general life needs
and to incorporate visually impaired children into
the public schooling system. Equipment provided
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Evironmental, Social, and Governance (ESG) >> Social Development
by the Foundation includes Braille typewriters and
books, visual assistants, school supplies, and others.
Training programs are also made available for the
children and their parents. This project will benefit
470 children with visual impairments.
MOVE Foundation for Children with Cerebral Palsy
Building on its longstanding partnership with
the MOVE Foundation, the Board allocated EGP
1.2 million to cover the operating costs of the
organization for one year to help accommodate
more children seeking support from the MOVE
Foundation. This fund is expected to cover costs
to provide care for 100 children with cerebral
palsy. The MOVE Foundation has positively im-
pacted the lives of approximately 250,000 chil-
dren with cerebral palsy living in Egypt since its
establishment in 2004.
Maxillofacial Unit – Faculty of Dentistry Cairo
University
The Foundation allocated EGP 90,000 to replace
Cairo University Hospital’s sterilization device in its
maxillofacial unit, further to the upgrades the unit
received in 2013, including two dental units, two
electric suction motors, an autoclave sterilizer, and
a dental cabinet, worth a total of EGP 370,000. The
Foundation also provided EGP 90,000 to cover the
maxillofacial unit’s materials and consumables. The
unit serves approximately 540 children each year.
Our Kids Our Future
The Board approved the allocation of EGP 4.1
million to fund a project in partnership with the
Ibrahim A. Badran Foundation, which will deploy
48 medical convoys in underserved regions in the
Fayoum Governorate. The convoys will offer medi-
cal services from a team of qualified doctors in vari-
ous disciplines who will extend medical services to
30,000 children each year.
Al-Hassan Foundation for Differently Abled
Inclusion
In line with the Foundation’s commitment to support-
ing children with special needs, the Board allocated
EGP 4 million to provide 100 children with wheelchairs
in cooperation with the Al-Hassan Foundation for Dif-
ferently Abled Inclusion. These wheelchairs, designed
for permanent users, are tailor-made in Germany
based on each child’s needs. Each wheelchair can serve
the child for five years, after which the Foundation may
redistribute to other children.
Ongoing Projects
In addition, the Foundation has maintained the
operation of a number of ongoing projects over
the course of the year, benefiting underprivi-
leged children in collaboration with a number
of partners.
Children’s Right to Sight Program
Over the course of 2019, the CIB Foundation donated
around EGP 1.62 million to cover 394 surgeries as
part of the fifth round of the Children’s Right to
Sight (CRTS) program in collaboration with the
Rotary Club of Kasr El Nile. The aim of this initiative
is to fund between 500-600 eye surgeries worth a
total of EGP 2 million to help eradicate blindness in
children and infants.
Pediatric Open-Heart Surgeries Project – Magdi
Yacoub Foundation (MYF)
In July 2018, the Foundation allocated EGP 7 mil-
lion to the Magdi Yacoub Heart Foundation to
cover the costs of 70 pediatric open-heart surger-
ies, in line with its commitment and support of
the Magdi Yacoub Foundation’s efforts to reduce
the number of children on the open-heart surgery
waitlist. The first tranche, worth EGP 3.5 million,
was disbursed in October 2018, with the remainder
donated in January 2019.
Children’s Cancer Hospital 57357
Building on the longstanding partnership the
Foundation has had with the Children’s Cancer
Hospital 57357, the Board allocated EGP 4 mil-
lion to fund key activities for the hospital’s Cairo
and Tanta branches, including pathology, blood
banks, radiology laboratories, medication, ra-
diotherapy, nuclear medicine, and supplies. The
Foundation also funded an initiative with a total
budget of EGP 18.73 million to purchase 33 new
monitors and four central station units to support
the surgical intensive care unit, the intensive care
unit, and the bone marrow transplant unit, which
will be connected with the hospital’s information
system to automate reports on the status of pa-
tients’ vital signs.
Children Without Virus C Program
The Foundation has dedicated over EGP 5.1 mil-
lion to fund the Children Without Hepatitis C
program in collaboration with the Egyptian Liver
Care Society. The Foundation disbursed EGP
1.11 million to cover x-rays and preventative and
The Foundation maintained
a number of ongoing
projects over the year
benefiting underprivileged
children.
therapeutic supplies for infected children in 2018,
with an additional EGP 600,000 in 2019 to cover
the cost of medication for 377 infected children.
Abou El-Reesh Children’s Hospital
In 2018, the Board approved EGP 10.8 million to
purchase a fluoroscopy x-ray machine and a lapa-
roscopy and thoracoscopy machine for the Abou El
Reesh Children’s Hospital. The fund was disbursed
in full by September 2019.
MOVE Foundation for Children with Cerebral Palsy
In April 2018, the Foundation allocated EGP
608,000 to fund the operating costs of the MOVE
Foundation’s headquarters. The fund was dis-
bursed in full by July 2019.
6/6 Eye Exam Convoys
Throughout 2018 and until January 2019, the
Foundation disbursed the final tranches of an
EGP 50.5 million contribution to fund 264 eye
exam convoys across the governorates of Sohag,
Qena, Luxor and Aswan, benefiting 158,400 chil-
dren over a three-year period.
Together for Change Project
The Foundation completed in February 2019 an
EGP 1.5 million partnership with the Sawiris Foun-
dation for Social Development, Star Care Founda-
tion, and Assuit Business Women Association to
implement a number of projects catering to the de-
velopment of the local community. These projects
include the renovation of community health cen-
ters, capacity building training for medical staff
and teachers, the support for students, organizing
health awareness campaigns and sports and rec-
reational activities, as well as economic empower-
ment opportunities in Sohag, Assiut, and Qena.
Gift of Life Project
Building on the success of previous collaborations
in 2017 and 2018, the Board approved the allocation
of EGP 3.7 million in October 2018 to support a third
round of open-heart surgeries for 100 underprivi-
leged children with congenital heart diseases at the
El Kasr El Aini Hospital, in collaboration with the
Rotary Club of Giza Metropolitan.
National Hepatology and Tropical Medicine Re-
search Institute
In August 2018, the Foundation donated over EGP
91,000 to cover the first tranche of an EGP 4.1 mil-
lion project to fund the treatment of 400 children
with hepatitis-C at the National Hepatology and
Tropical Medicine Research Institute (NHTMRI).
In February 2019, the Foundation disbursed EGP
109,800, covering the treatment of 12 children.
The National Foundation for Family and Com-
munity Development
The Board approved the allocation of EGP 726,237 to
outfit the National Foundation for Family and Com-
munity Development’s specialized center for the
rehabilitation of autistic children, which is expected
to serve approximately 250 children each month.
Faculty of Oral and Dental Medicine, Cairo Uni-
versity
The Foundation allocated EGP 7.5 million in July
2018 to fund the purchase of equipment and sup-
plies for the Pediatric Dentistry Clinic in El Kasr
El Aini. In addition, the fund will allow for the
establishment of another clinic in Sheikh Zayed
to enhance the services available to children,
including those with special needs. The clinic
treats more than 95,000 children each year and
is one of the country’s few providers of dental
services for children with special needs. The de-
partment also offers several training programs
for undergraduate, graduate, and continuing
education students.
Volunteering/Entertainment Events
In addition to the projects it has funded in partner-
ship with a number of entities, the Foundation also
hosts several events over the year to benefit under-
privileged children across the country.
Drawing Events
In February 2019, the Foundation organized three
drawing events for underprivileged children under
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Evironmental, Social, and Governance (ESG) >> Social Development
the theme Discovering Egypt through the Eyes of
Our Children. The events took place at the Ahl Masr
Foundation for Burn Victims, MOVE Foundation
for Children with Cerebral Palsy, and the Children’s
Cancer Hospital 57357.
Orphans’ Day
On 7 April 2019, the Foundation celebrated Or-
phans’ Day at the EGX headquarters in Downtown
Cairo. The Foundation supplied a mobile dental
clinic to provide the 50 children participating with
dental services.
Blood Donation Campaigns
The Foundation held a blood drive on World Blood
Donor Day across its corporate offices to encour-
age CIB staff and customers to contribute to saving
thousands of lives across the country. The drive col-
lected 242 bags of blood, which can be used to help
more than 726 individuals.
CIB Family Bag Packing Event
In February 2019, the Foundation held an event for
CIB staff and families to participate in the packing
of more than 5,000 health and hygiene kits for ben-
eficiaries of the 6/6 Eye Exam Caravan.
57357 Ramadan Decoration
Under the slogan “Bring a Smile to a Child This
Ramadan,” CIB employees decorated the Children’s
Cancer Hospital 57357 and brought the Ramadan
spirit to the patients. During the event, the volun-
teers used Ramadan themed decorations and lan-
terns and distributed giveaways to the children and
their families.
Supporting Squash: Best Bank – Best
Players
In 2019, CIB continued to positively impact local
communities by strengthening our support for
sports in Egypt and nurturing the country’s ath-
letic talents. Squash-related initiatives were again
at the core of CIB’s CSR agenda, and we broadened
our support to generate more opportunities and
value for a wider community.
At CIB, we recognized early on the true poten-
tial of Egypt’s squash players, who are not only
dominating world rankings, but completely revo-
lutionizing how the game is played. This year, we
broadened our support of the sport to capitalize
on the traction its players are carving out global-
ly. We believe supporting these talents generates
more opportunities and value for the Egyptian
athletic community and raises Egypt’s profile on
the world stage.
Egyptian players have introduced a dynamic new
style of squash that emphasizes offense and has en-
tertained spectators worldwide while bringing in a
flood of titles and trophies. Egypt has produced five
world number ones in the men’s game and three in
the women’s game. Six Egyptian players are among
the world’s top 10 men players, and five Egyptians
are among the top 10 women as of December 2019.
The country’s dominant position in the game stems
from a tight-knit squash community, which embod-
ies the values that CIB strives to instill in its own
staff and promote to the wider Egyptian commu-
nity. Young players from all walks of life have the
opportunity to display their excellence on the global
stage thanks to steely perseverance, openness to
competition, support from peers, and the availabil-
ity of resources.
Squash Tournament Sponsorships
CIB has expanded its squash-related sponsorships
to open doors for more Egyptian athletes to prog-
ress in the PSA world rankings.
The most notable sponsorship in 2019 was the CIB
PSA Women’s World Championship and the CIB
Egyptian Squash Open Men’s Platinum, which took
place simultaneously in front of the Great Pyramid
of Giza, and brought together 64 female athletes
and 48 male athletes. In a groundbreaking move,
the women’s event had a bigger prize purse than
the men’s: the women’s squash world champion
prize was USD 430,000, while the men’s prize was
USD 185,000. The tournament made significant
international waves in both the squash com-
munity and sporting arena worldwide due to the
unprecedented move toward women’s equality and
received significant media pickup.
CIB is committed to becoming title sponsors of fu-
ture tournaments in Egypt in 2020 and 2021.
Sponsoring the Egyptian Squash Federation
CIB maintained its sponsorship of the Egyptian Squash
Federation for the eighth consecutive year. The Bank
also expanded its commitment by sponsoring the
National Women’s and Junior Squash Teams. This
support has played a direct role in the national teams’
Ali Farag
Karim Abdel Gawad
Nour El-Tayeb
Hania El-Hammamy
Tarek Momen
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Evironmental, Social, and Governance (ESG) >> Social Development
accomplishments throughout the year, including the
National Junior Squash Team’s winning the World Ju-
nior Squash Championship in India for the sixth time
since 1994. The National Women’s Squash Team was
named Women’s World Team Champion in China, suc-
cessfully retaining their title.
Currently, Egyptian players hold the Men’s World Team
Championship, the Women’s World Team Champion-
ships, and the Juniors’ World Team Championship titles.
Sponsoring Egyptian Athletes
In support of young players leading the world’s
squash rankings, CIB has tailored special sponsor-
ships to help eight talented players maintain their
rankings and continue representing the country
around the world. As of December 2019, the follow-
ing players were recipients of these sponsorships:
• Ali Farag: #1 on the Men’s PSA World Squash
List — Since graduating from Harvard University
with a degree in Mechanical Engineering in 2014,
the 27-year-old has established himself as one of the
most popular players on the PSA World Tour and is
now ranked first in the world. Ali reached the final
in all but one of his first seven tournaments in the
2018/19 campaign. He came in second at the Chan-
nel VAS, Hong Kong Open, and Black Ball Open, but
won at the Oracle NetSuite, Qatar Classic, and the
Tournament of Champions, moving him to the #1
spot in the world for the first time in his career in
March 2019.
• Nour El-Tayeb: #4 on the Women’s PSA World
Squash List — One of the most consistent female
players and a crowd favorite, Nour is known for
her acrobatic diving abilities. Nour reached the
final of the PSA World Championships for the first
time in her career but lost out to compatriot Nour
El Sherbini in the final. She also had semifinal ap-
pearances at the DPD Open, Manchester Open, and
British Open in 2019, cementing her #4 ranking.
• Karim Abdel Gawad: #3 on the Men’s PSA
World Squash List — Karim Abdel Gawad has
firmly established himself as one of the world’s
leading players after a breakthrough start to
the 2016-2017 season. Karim was victorious at
both the Pakistan Open and Black Ball Open,
before reaching the last four of the Tournament
of Champions to start 2019. He also reached the
semifinals of the Grasshopper Cup, DPD Open
and the British Open in a good run at the end of
the season, which also included an appearance
in the final of the El Gouna International, along
with a victory at the season-ending World Tour
Finals in Cairo.
• Tarek Momen: #4 on the Men’s PSA World
Squash List and current world champion —
Tarek Momen reached his first Tour final at the
2006 Thessaloniki Open but lost to Borja Golan
He’s won twice in the 2018-19 season, in the
Channel VAS Championships and the CCI Inter-
national. He also reached the final of the World
Championships for the first time in the 2018-19
season, along with also finishing runner-up at
the Citigold Wealth Management Canary Wharf
Classic and the Grasshopper Cup.
• Hania El-Hammamy: #10 on the Women’s PSA
World Squash List — Hania El Hammamy is a
rising force in the women’s game and is already
a record-breaker despite her young age. She’s the
first person born this century to win a PSA World
Tour title. At the start of 2019, Hania won the
British Junior Open and successfully reached the
second round of the Tournament of Champions.
She also won her following two events, with the
second being the biggest title of her career to date
— the Edinburgh Sports Club Open trophy — be-
fore then winning the Bahl and Gaynor Cincinnati
Cup. Hania also made the last eight of the Black
Ball Open, as well as breaking into the top 16 of the
World Rankings for the first time.
• Mohamed Abouelghar: #8 on the Men’s PSA
World Squash List — Mohamed Abouelghar
joined the PSA World Tour in 2009 and won his
first title at the Royal Jordanian Squash Open
in 2010. In 2019, Mohamed won the Motor City
Open and reached the semifinals of both the
Canada Cup and the Grasshopper Cup, as he
moved to the World No.7 spot, his highest ever
place in the rankings. He finished his campaign
with a runner-up finish at the World Tour Finals.
• Marwan ElShorbagy: #9 on the Men’s PSA
World Squash List — The youngest ElShorb-
agy brother shot to prominence by winning
both the under-17 and under-19 British Junior
Opens. He reached the semifinals of both
the Motor City Open and the Canada Cup in
2019, before reaching the quarter-finals of
the Canary Wharf Classic and the DPD Open.
He also won the Wimbledon Club Squash
Squared Open in May 2019.
Nouran Gohar
Raneem El Welily
Marwan Elshorbagy
Mohamed Abouelghar
Salma Hany
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137
CIB continued its partnership
with Wadi Degla Clubs to
support young Egyptian
squash athletes.
Evironmental, Social, and Governance (ESG) >> Social Development
• Salma Hany: #14 on the Women’s PSA World
Squash List — Salma Hany is an up-and-
coming young player from Alexandria, who
drew in fans during 2012 and 2013 for a num-
ber of impressive performances. She finished
runner-up at the Macau Open in 2018 and
made the semis of the Carol Weymuller once
again, followed by a last-eight appearance in
the 2019 Tournament of Champions.
Partnership with Wadi Degla Clubs’ Darwish
Squash Academy
CIB continued its partnership with Wadi Degla
Clubs to support young Egyptian squash athletes
by developing their skills and enhancing their in-
ternational rankings. The partnership is part and
parcel of the Bank’s strategy to support up-and-
coming talents from the ground up and builds on
our pioneering role in this area. The additional
athletes representing Wadi Degla and sponsored
by CIB are:
• Raneem El Welily: #1 on the Women’s PSA
World Squash List — Raneem El Welily has
emerged as one of the most skillful players
on the PSA Women’s World Tour since she
turned professional in 2002. Raneem reached
the finals in all but two events during the
2018-2019 season; the World Championships
and the British Open. Raneem consecutively
won the CIB Black Ball Open, DPD Open, and
the El Gouna International. She then finished
the campaign by securing the PSA World Tour
Finals title.
• Nouran Gohar: #3 on the Women’s PSA
World Squash List — Nouran Gohar won her
first Tour title at the Prague Open in Decem-
ber 2013 at just 16-years-of-age. During the
2018-2019 campaign, she made her way back
into the top five in the rankings, starting with
semifinal appearances at the Hong Kong Open
and the CIB Black Ball Open. She reached the
final of the El Gouna International and won
the British Open to take her first crown at the
“Wimbledon of Squash.”
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Evironmental, Social, and Governance (ESG)
Corporate
Governance
In its mission to become the best financial institu-
tion in Egypt, CIB strives to apply international best
practices in the area of corporate governance. The
Bank is wholly committed to the principles and cor-
porate values that distinguish the finest governance
structures. CIB’s corporate governance structure
is anchored both in a highly professional executive
directors and a distinguished group of independent
non-executive directors (NED), as well as its experi-
enced management team.
The Bank’s governance framework ensures that
timely, transparent, and accurate disclosures are
made available with respect to material information
regarding the Bank, its ownership, operations, and
financial performance. It also advocates the equal
treatment of all shareholders with sound protection
for their voting rights. The Bank continues to uphold
its mandate to create value for shareholders in a sus-
tainable and value-based manner.
Besides the support provided by the committees,
CIB’s BoD is also supported by internal and external
auditors, as well as other internal control depart-
ments (Risk, Compliance, Internal Audit, and Legal).
Work carried out by these functions is fully utilized
by the BoD to ensure the Bank adheres to interna-
tional standards of corporate governance.
CIB’s governance framework aims to sustain the
success of the Bank’s business and operations,
backed by a concrete set of policies and procedures
relevant to the scope, size, and complexity of CIB’s
business. The BoD thus works to ensure proper im-
plementation of internal and external regulations
and to mitigate all possible risks.
These mandates are complemented by a set of gov-
ernance policies designed to promote a corporate
culture that emphasizes building trust with key
stakeholders. Such a culture is aligned with the
Bank’s purpose and business strategy while promot-
ing integrity within the Bank.
The Code of Corporate Governance is a cornerstone
of CIB’s governance policy framework, aiming to en-
hance long-term value for shareholders, employees,
and other stakeholders. The Code of Conduct sets out
the standards of behavior expected from all employ-
ees, providing staff, senior management, and the BoD
with a comprehensive frame of reference regarding
their rights and duties. The code further enshrines
the principles of equal employment opportunity and
gender equality.
CIB’s Conflict of Interest policy guarantees that all
staff and board members remain aware of and forth-
coming about any conflict of interest between the
Bank and their personal, professional, and business
interests, providing guidance on how to handle those
cases.
The Bank’s Whistle-Blowing Policy encourages staff
to report suspected violations of the law or Bank poli-
cies as well as any wrongdoing, while guaranteeing
a supportive and encouraging environment for those
who speak out. The Bank handles cases of whistle-
blowing, be they from internal or external sources,
very seriously and at a senior level.
CIB’s Conduct Risk Policy makes clear the Bank’s
relationship with customers and our duties toward
them. It also outlines the Bank’s approach to the
78%
NED directors
CIB’s corporate governance
structure is anchored in a team
of highly professional executive
directors and a distinguished
group of independent non-
executive directors.
management of conduct risk. CIB considers that the
most effective way to avoid conduct risk is to embed a
culture of integrity and high ethical standards across
the organization.
This comprehensive policy structure reflects CIB’s
prioritization of a strong governance framework, one
that is fully backed by each of the Bank’s BoD mem-
bers and firm leadership and vision.CIB’s experienced
executive management team plays an important
role in the governance of the Bank by faithfully and
efficiently executing the strategy set by the BoD and
properly implementing the Bank’s policies.
Board of Directors
CIB is headed by a competent BoD, which provides
the Bank with the necessary leadership and experi-
ence to manage its business with integrity, efficiency,
and, most importantly, excellence. The Bank’s BoD
structure is in line with international best practices
and allows for the position of a lead director. CIB’s
BoD enjoys an optimal mix of skills, experience, and
diversity in terms of gender and nationality. Some
78% of the BoD are NEDs and 22% of the members are
women.
The BoD ensures that the Bank’s accounts and
financial statements are fair, balanced, and under-
standable and provides information necessary to
shareholders to asses CIB’s position, performance,
business model, and strategy.
overseeing the implementation of said strategy, pro-
viding oversight of senior management, ensuring the
effectiveness of the Bank’s internal control systems,
managing risk, and securing CIB’s institutional
reputation and long-term sustainability. Moreover,
the board is responsible for setting compensation
and performance goals and manages the director
nomination, evaluation, and succession planning. It
oversees CIB’s economic, social, and environmental
sustainability initiatives, performing its duties with
entrepreneurial leadership, a sound strategy, and risk
management oversight to ensure risks are properly
assessed and managed.
Changes to the Board of Directors during
2019
In October 2019, two new independent members of
the board were appointed. Mr. Paresh Sukthankar
and Mr. Rajeev Kakar, who joined as non-executive
directors, come to CIB with a wealth of experience in
the banking sector and a successful track record of
achievements.
In addition, in compliance with CBE regulations and
corporate governance directives, Mr. Yasser Hashem
and Dr. Sherif Kamel both concluded six years of
service on the board. Their tenure was instrumental
to CIB’s transformation and success. CIB’s executive
management and BoD would like to extend their
sincere appreciation and gratitude for their valued
guidance and dedication to the Bank.
The BoD primarily focuses on CIB’s long-term finan-
cial and non-financial success, and seeks the best
interests of all related stakeholders. The board is
also responsible for setting CIB’s strategic objectives,
CIB’s BoD consists of nine members who possess an
appropriate balance of experience, competencies,
and individual qualifications. These collective quali-
ties give the Bank a distinct competitive edge. Over
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Evironmental, Social, and Governance (ESG) >> Corporate Governance
The BoD provides the Bank with the necessary
leadership and experience to manage its business
with integrity, efficiency, and excellence.
67%
independent directors
22%
BoD members are women
the course of 2019, with these changes, CIB’s BoD met
eight times. Being the single largest shareholder in
CIB through its wholly-owned subsidiaries, Fairfax
Financial Holding Ltd currently holds 6.55% of CIB’s
local shares, following its transaction with Actis in
May 2014. Fairfax Financial Holdings Ltd appoints one
representative to the Bank’s BoD.
Board Committees
Backed by an experienced executive management
team, CIB’s highly qualified BoD is also supported
by specialized Board Committees. Committees are
chaired by the NEDs, who brief the BoD on major
points raised by their respective committee. CIB’s
BoD has seven standing committees and a task
force that assist in fulfilling its responsibilities; five
non-executive and two executive committees. Each
committee chairperson is responsible for briefing the
BoD on the major issues raised by the committee that
he or she chairs. Such briefings enable the members
of the BoD to carry out their duties in an effective
manner. Each committee operates under a written
charter that sets out its responsibilities and composi-
tion requirements, reporting to the BoD on a regular
basis. Separate committees may be set up by the BoD
to consider specific issues when the need arises.
Non-Executive Committees
Audit Committee
Responsibilities: This Committee was estab-
lished to offer effective oversight of the integrity
of the Bank’s financial reporting process, the ef-
fectiveness of the Bank’s internal control system,
and its compliance with all statutory require-
ments. The Committee is also responsible for
overseeing and reviewing the performance of the
Bank’s internal audit and compliance functions,
as well as the work of the Bank’s external audi-
tors to ensure the independence and objectivity of
each and the quality of the audit and compliance
processes. The Committee met five times in 2019.
Chair: Mr. Jawaid Mirza
Members: Mrs. Magda Habib,
Mr.Paresh Sukthankar
2019 Audit Committee Highlights: As delegated by
the BoD, the Board Audit Committee during 2019 has
overseen the integrity of the Bank statement, Bank
compliance with legal, regulatory requirements, the
external auditor’s qualifications, independence and
the performance of the Bank’s internal audit and
compliance functions. During the year, two com-
mittee members stepped down after concluding six
years, because their terms, as mandated by regulator,
expired. Vacancies were filled promptly to ensure a
quorum for all meetings.
Governance and Nomination Committee
Responsibilities: This Committee advises the BoD
on the general oversight of governance matters and
ensures the promotion of a sound governance culture
within the BoD and the Bank. This entails a periodic
review of the Bank’s corporate governance structure
and recommending changes, when and if necessary,
to the BoD. The Committee also sits as the Nomina-
tion Committee with the primary objective of setting
criteria for selecting new directors and assisting the
BoD in identifying individuals qualified to become
BoD members and recommending director nominees
to shareholders. Besides these functions, the Com-
mittee provides advice and assistance to the BoD,
when necessary, with respect to a potential successor
to the Bank’s Chief Executive Officer. The committee
met six times in 2019.
Chair: Mr. Jawaid Mirza
Members: All non-executive directors
2019 Governance and Nomination Committee
Highlights: The Board meets regularly to discuss
the monitoring and promotion of a healthy corpo-
rate culture guided in this respect by the advice and
recommendations provided by the GNC upon its
periodic review of the Bank’s corporate governance
structure. To assist the Board’s aim to operate as
effectively as possible and to govern the operations
of the Bank to be executed in accordance with
international governance best practices, the GNC
reviewed in 2019 the Bank’s Corporate Governance
Framework and all related policies. These policies
comprise the following documents: The Principles
of Corporate Governance Code, the Code of Con-
duct, Conflict of Interest Policy, Whistle Blowing
Policy, and the Disclosure Policy.
The results of the Board of Directors’ annual assess-
ment affirmed that the Board discussions are con-
ducted openly and transparently, which creates an
environment for sustainable and robust debate.
The GNC worked to further strengthen the balance
of independent Non-Executives on the Board. In
October 2019, two directors stepped down after com-
pleting six years of service in the Board, and two inde-
pendent NEDs were appointed the same month. The
GNC ensured that the newly appointed candidates
received proper induction, and the new formation
of the Non-executive Board’s Committee was done
to accommodate the new directors and leverage on
their knowledge and experience.
In addition, all directors attended a special session
conducted by IMD Global Board Center on Corporate
Governance best practices, including the success and
failures of various global organizations on the adop-
tion of codes and practices of corporate governance.
Finally, in performing their fiduciary responsibili-
ties, the Directors of the Board diligently exercise
duty of care, duty of loyalty, and duty of compli-
ance to the laws and regulations, as well as, the
disclosure with reasonable accuracy at any time
the financial position of the Bank and ensures
that the financial statements comply with the
prevailing regulations.
Compensation Committee
Responsibilities: This Committee was established to
provide guidance to the BoD with regards to the ap-
propriate compensation for the BoD and the Bank’s
executive officers and to ensure that compensation
is consistent with the Bank’s objectives, strategy, and
control environment. The Committee ensures that
clear policies for the Bank’s salaries and compensa-
tion schemes are in place and that they are effective
at attracting and retaining the best caliber profes-
sionals. The Committee met three times in 2019.
Chair: Mr. Bijan Khosrowshahi
Members: All non-executive directors
2019 Compensation Committee Highlights:
During 2019, the Committee assessed the execu-
tive officers’ and expatriates’ performance for the
year 2018 and recommended the appropriate
compensation accordingly. The Committee also
reviewed and approved the overall bank’s variable
compensation guidelines for the year 2018 and
2019 salary increases.
Risk Committee
Responsibilities: This Committee oversees risk
exposure management functions and assesses
management’s compliance with the risk strate-
gies and policies approved by the BoD through
periodic reports submitted by the Risk Manage-
ment Group. The Committee makes recommen-
dations to the BoD regarding risk management
strategies and policies (including those related
to capital adequacy,
liquidity management,
various types of risk: Credit, Market, Operation,
Compliance, Reputation, and any other risks the
Bank might be exposed to). The Committee met
four times in 2019.
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143
Evironmental, Social, and Governance (ESG) >> Corporate Governance
Chair: Mr. Mark Richards
Members: - Dr. Amani Abou-Zeid
Mr.Paresh Sukthankar
Mr.Rajeev Kakar
2019 Risk Committee Highlights: During 2019, pe-
riodic information and reports have been submitted
by the Business and Risk Groups related to Credit,
Market, Liquidity, Operational, Legal, Compliance,
Reputation, and other risks. The BRC has fully
understood and endorsed the Bank’s current risk
position and ensured the adequacy of the Risk Man-
agement structure, organization, effective process
for identifying, assessing and mitigating risks, and
the existing Risk measurement methodologies.
The Committee has concurred on the Risk related Poli-
cies and made the necessary recommendations to the
Board of Directors. It also reviewed the adequacy of
the Bank’s Capital (Economic and Regulatory) and the
Risk Appetite as proposed by Management.
During the year, two committee members stepped
down after concluding six years of service on the
Board, as mandated by regulations, and accordingly,
the vacancies were filled promptly to ensure a quorum
for all meetings.
Operations and Technology Committee
Responsibilities: This Committee was established to
provide oversight of the Bank’s operations, technology
strategy, and significant investments in support of
this strategy, as well as operations and technology risk
management. The Committee met four times in 2019.
Chair: Mrs. Magda Habib:
Members: Mr. Jawaid Mirza
Mr. Rajeev Kakar
The General Assembly
provides a platform for
shareholders to engage with
the Board of Directors and
exercise their voting rights.
Application Management, Physical Security, Vendor
Management, Cyber Security Risks, Model Risk, and
Compliance Risk with key focus on the KYC update
efforts. The committee continued its oversight on the
different Key service indicators and KPIs within Retail
and Institutional Banking Operations. Guidance and
focus were also given to the Process Re-Engineering
Activities in terms of the approach, objectives, and
expected outcomes. The committee reviewed and
validated, requesting different business cases for some
2020 submitted budget items in-line with the different
business strategies and plans.
Corporate Sustainability Task Force
Responsibilities: This task force was established to
ensure that CIB’s activities reflect the Bank’s business
approach of balancing the strategic goal of increasing
profitability with serving the broader socio-economic
and environmental interests. The task force met four
times in 2019.
Chair: Dr. Amani Abou-Zeid
Members: Corporate Sustainability Team
Executive Committees
2019 Operations and Technology Committee High-
light: During 2019, the Committee’s activities involved
maintaining oversight of the Operations and Technol-
ogy 2019 strategy and associated budget for the differ-
ent business segments and IT. The committee provided
feedback, follow-up, and oversight on the different
business strategic projects. The committee tracked
the closure and updates of the key Operations and
IT Non-Financial risks involving Disaster Recovery,
Management Committee
Responsibilities: The Committee is responsible for
executing the Bank’s strategy as approved by the
BoD. The Committee manages the day-to-day func-
tions of the Bank to ensure alignment with strategy,
effective controls, risk assessment, and efficient use
of the Bank’s resources. The Committee also moni-
tors the Bank’s strategic associates and subsidiaries.
The Committee met 30 times in 2019.
9
highly qualified
BoD members
5
NED committees
• Appointment of the external auditor
• Appointment, suspension, or dismissal of the
members of the BoD
• Issuance of shares or rights to shares, restriction
or exclusion of preemptive rights of sharehold-
ers, and repurchase or cancellation of shares
• Amendments to the Articles of Association
External Auditor
The Board Audit Committee recommends the
appointment and/or termination of the external
auditor, which is approved at the General Assem-
bly Meeting of Shareholders. Moreover, the Board
Audit Committee evaluates the performance of
the external auditor and endorses the prepared
financial statements to ensure they reflect the
Bank’s performance and faithfully reveal its
genuine financial position. In adherence to CBE
regulations, external auditors are reappointed ev-
ery five years to ensure objectivity and exposure
to new practices.
Chair: Mr. Hussein Abaza
Voting Members:
Mr. Ahmed Issa – CEO Consumer Banking
Mr. Amr El Ganainy – CEO Institutional Banking
Mr. Mohamed Sultan – Chief Operating Officer
Ms. Pakinam Essam – Chief Risk Officer
High Lending and Investment Committee
Responsibilities: This Committee is responsible for
managing the assets side of the balance sheet and its
provisioning. Under the authorities delegated to the
Committee as stipulated in the Bank’s Credit and In-
vestment Policies, it is empowered to make decisions
respecting asset allocation. The Committee convened
weekly throughout 2019 and met 56 times.
Chair: Mr. Hussein Abaza
Members: CIB Senior Management
Shareholders’ Rights
CIB’s Annual General Meeting of Shareholders is
held in March each year, no later than six months
after the end of the Bank’s financial year. Addi-
tional Extraordinary General Shareholder meet-
ings may be convened at any time by the BoD. The
General Assembly provides a platform for share-
holders to engage with the Board of Directors,
ask questions, and exercise their voting rights.
Shareholder consent is required for key decisions
such as:
• Adoption of financial statements
• Voting on proposed dividends by the BoD
• Significant changes to the Bank’s corporate
governance practices
• Remuneration policy
• Remuneration of Non-Executive Directors
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145
Subsidiaries
& Associates
CIB offers a full suite of services
that range from security solutions to
innovative fintech offerings through
one wholly-owned subsidiary and two
strategic associates.
Zaki the Bot
Your Personal Virtual Assistant
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Of course, do you want to transfer money
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or a customer without a bank account?
Another CIB account.
You can do this through the following
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Smart Wallet
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146
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147
Subsidiaries and Associates
CVentures
Established in 2018, CVentures is Egypt’s first cor-
porate venture capital firm focused primarily on
investing in companies creating meaningful change
in financial services.
2019 Highlights
In 2019, CVentures dedicated considerable re-
sources to building and fostering key industry
relationships across three main areas of focus:
• Building a robust pipeline of fintech companies
• Expanding its network across a variety of dif-
ferent technology hubs and entrepreneurship
ecosystems
• Promoting CVentures through the active par-
ticipation in local and cross-border events and
engaging with mature startup founders, early-
stage technology investors, and innovation
executives
CVentures implemented a patient deployment
strategy during its first year of operation and
has completed its first transaction. Additionally,
CVentures is currently in advanced negotiations
with multiple investment targets raising Seed and
Series A investment rounds across various fintech
verticals in areas including, but not limited to,
digital banking, micro-lending, payments, remit-
tances, accounting, and banking software to serve
both strategic and financial objectives.
2020 Forward-Looking Strategy
CVentures will continue to actively grow its portfo-
lio while targeting above industry-average returns,
complement CIB’s innovation agenda, and expand
its regional and global footprint.
CVentures’ direct access to one of Africa’s most
populous countries presents clear partnership
opportunities. In light of mutual and aligned in-
terests with stakeholders, CVentures is in a good
position to provide its portfolio with the necessary
support required to achieve short- and long-term
value creation.
CVentures will continue to
actively grow its portfolio
while targeting above
industry-average returns.
CIB
CIB Social Insurance Fund
CIB Social Community
99.998%
0.001%
0.001%
Website: www.cventureseg.com
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more about CVentures, CIB’s venture capital
arm dedicated solely to helping businesses
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help you, click through to their website here.
148
Annual Report 2019
Annual Report 2019
149
Subsidiaries and Associates
Falcon
Group
Established in 2006 as a joint venture between CIB,
the CIB Employees Fund, Al-Ahly for Marketing,
and other private entities, Falcon Group manage-
ment’s strategy is centered on service excellence.
The company provides a plethora of services includ-
ing, but not limited to, security services, money
transfer, technical systems and security products,
public services and project management, and tour-
ism and concierge services for a variety of sectors.
The group provides state-of-the-art, holistic so-
lutions tailored to every client’s requirements.
Falcon Group’s key strength lies in its single-point-
of-contact solutions that allow it to provide consis-
tent services of the highest quality, with the lowest
possible risk, flexibility at a reasonable cost.
Falcon for Security Services
Falcon for Security Services has been the main secu-
rity service provider for several top-tier government
and non-government organizations, including the
United Nations and a number of embassies in Egypt.
With a portfolio of over 754 clients, the company
provides services such as property protection, event
security, corporate security and training, personal
protection, as well as safety and industrial training
to some of the biggest companies in Egypt. It values
clients as business partners and is dedicated to
providing them with the highest quality of service,
treating their goals and objectives as its own.
2019 Achievements
In 2019, Falcon for Security Services worked with
numerous prominent institutions and added new
segments of clients by securing several projects
such as the new conference hall, Porto Sokhna, El
Zamalek Sporting Club, multiple metro stations
across Cairo and all free zones across the country.
Falcon for Security Services increased its provision
of security services for public events by 100% in
CIB
Others
32.5%
67.5%
2019, covering events such as the Egypt Can Con-
ference, Auto Mac Formula, African Champions
League matches, China Trade Fair and Edex.
The company achieved a market share of 70% during
2019 and aspires to maintain its market leadership by
growing both organically and through acquisitions.
2020 Forward-looking Strategy
As part of the group’s goal of providing top-notch
solutions, Falcon companies plan to use managed
service providers for their activities. The group
also expects to target a number of prominent
institutions and clients including banks, embas-
sies, and hospitals while expanding its product
and service offering to ensure clients remain fully
satisfied and confident in the group as their go-to
service provider. In 2020, the group plans to ex-
pand its market presence by 25%.
Falcon for Public Services and Project
Management
Falcon for Public Services and Project Manage-
ment operates all facility systems to the comfort
and satisfaction of facility occupants. The company
offers general cleaning, landscaping, façade clean-
ing, and marble polishing of the highest quality,
efficiency, and cost effectiveness. In 2019, Falcon
for Public Services and Project Management held a
market share of 20%, serving a large client base out
of 330 different locations.
2019 Achievements
Through considerable efforts to build solid relation-
ships and gain the trust and confidence of public and
private institutions, the company succeeded in sign-
ing on several new clients including the new confer-
ence hall, Toshiba El Araby Group, and Cequens.
It renewed existing contracts such as with the Port
Said Security Directorate, the Embassy of the Sul-
tanate of Oman, the Embassy of the State of Kuwait,
Mall of Arabia, FLO Water, and the Parliament.
2020 Forward-looking Strategy
Over the next year, the company plans to sign several
sizeable contracts with government agencies as they
continue to carefully select, train, and supervise their
professionals and staff to ensure they meet client
needs and provide exceptional levels of performance.
Falcon for Cash in Transit Services
Falcon’s Cash in Transit division works with repu-
table banks and companies in Egypt, providing
CIT services, ATM replenishment, maintenance,
vaulting, cash management, and valuables trans-
portation through a highly qualified team.
2019 Achievements
In 2019, Falcon signed new contracts to increase
its market presence. Operationally, it was able
to successfully serve a total of 1,450 ATMs
throughout the year and added six armored
vehicles to its fleet bringing the total to 20. The
company also increased its cash volumes by
20% over the year.
2020 Forward-looking Strategy
The company plans to grow its market share by
providing new services for retail, having already
integrated new solutions to collect cash from
shopping centers. It will also use the latest tech-
nology to further improve its ATM services and
managed cash offerings as part of its strategy to
streamline its operations. The company is also
investing considerable resources to train its team
members to ensure they consistently provide the
highest level of service to clients.
Falcon Tech
Falcon Security Systems designs, implements, and
maintains all integrated electronic systems in the field
of technical security for facilities and individuals.
In 2019, Falcon Tech expanded its market share to
70% by signing several new contracts to provide
security systems to airports, commercial malls,
and universities across Egypt.
2019 Achievements
Throughout 2019, the company signed several new
clients, including the Ministry of Armed Forces,
the General Intelligence, several new CIB branches,
a number of ports in Alexandria, Damietta, and the
Red Sea as well as the Egyptian Post.
Falcon for PR and Communications
(Tawasul)
Falcon for PR and Communications (Tawasul)
specializes in communication services and con-
sultancy as well as event and conference manage-
ment. The division also offers media services.
Website: www.falcongroupinternational.org
150
Annual Report 2019
Annual Report 2019
151
Subsidiaries and Associates
Fawry
Plus
Fawry Plus was established in 2017 as a joint ven-
ture between CIB, Banque Misr, Fawry, and ACIS
with the aim of becoming Egypt’s first banking
agent and actively working toward achieving
financial inclusion. Fawry Plus seeks to provide
a wide array of banking and financial services to
consumers and businesses through a network of
retail branches across Egypt, with a focus on urban
and underserved regions.
Fawry Plus branches provide banking services in-
cluding limited KYC services as well as a document
collection services for mobile wallet registration,
prepaid and credit card issuance, loan issuance, and
account opening. Other services include mail and
bank correspondence collection, loan and credit
card payments, cash withdrawals and deposits, as
well as various bill payments including utilities,
telecom, subscription fees, taxes, and fines.
2019 Highlights
In 2019, Fawry Plus opened an additional 12
branches, bringing the total number of operating
branches to 77. It also witnessed a growth of more
than 80% in revenues, resulting from the expan-
sion in its operations. Fawry Plus also secured
partnerships with four banks to provide wallet
registration services.
2020 Forward-Looking Strategy
Fawry Plus seeks to become the banking destina-
tion of choice for customers in 2020, attracting
customers through the convenience of its branch-
es, which are less crowded, more accessible, and
operate longer working hours than banks.
CIB
Others
23.5%
76.5%
The company will also seek to expand its scope of
services through a multitude of avenues. It will en-
ter into partnerships with some of Egypt’s leading
banks, financial institutions, and industry players
to offer their services through Fawry Plus. In addi-
tion, it will focus on serving the e-commerce indus-
try through offering cash management and logistics
solutions, including setting up branches as drop-off/
pick-up stations. Fawry Plus aims to double its cash
management services to EGP 50 billion in 2020 from
the EGP 25 billion recorded in 2019.
Website: www.fawryplus.com
Hello, I am Zaki and how can I help
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Fawry Plus can help you do a
number of things, from bill
payments to document
collections, and limited KYC
services. Would you like me to
locate the nearest branch for you?
152
Annual Report 2019
Annual Report 2019
153
Financial
Statements
Zaki the Bot
Your Personal Virtual Assistant
I want to start saving, but I’m
not sure where to start.
CIB offers a wide range of ssavings products.
We have savings accounts, deposits, and
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FINANCIAL STATEMENTS: SEPARATE
156
Annual Report 2019
Annual Report 2019
157
FINANCIAL STATEMENTS: SEPARATE
Separate balance sheet as at
December 31,2019
Separate income statement for the year
ended December 31, 2019
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
Profits (Losses) on financial investments
Administrative expenses
Other operating (expenses) income
Intangible assets amortization
Impairment release (charges) for credit losses
Profit before income tax
Income tax expense
Deferred tax assets (Liabilities)
Net profit for the year
Earning per share
Basic
Diluted
Assets
Cash and balances with central bank
Due from banks
Loans and advances to banks, net
Loans and advances to customers, net
Derivative financial instruments
Investments
- Financial investments securities
- Investments in associates and subsidiaries
Other assets
Intangible assets
Deferred tax assets (Liabilities)
Property, plant and equipment
Total assets
Liabilities and equity
Liabilities
Due to banks
Due to customers
Derivative financial instruments
Current tax liabilities
Other liabilities
Other loans
Provisions
Total liabilities
Equity
Issued and paid up capital
Reserves
Reserve for employee stock ownership plan (ESOP)
Retained earnings *
Total equity
Total liabilities and equity
Notes
Dec. 31, 2019
Dec. 31, 2018
EGP Thousands
15
16
18
19
20
21
22
23
40
31
24
25
26
20
28
27
29
30
33
33
33
28,273,962
28,353,366
625,264
119,321,103
216,383
197,541,651
63,953
9,747,939
-
350,339
2,202,698
386,696,658
11,810,607
304,483,655
282,588
4,639,364
8,396,487
3,272,746
2,011,369
334,896,816
14,690,821
24,342,314
963,152
11,803,555
51,799,842
386,696,658
20,058,974
46,518,892
67,703
106,309,205
52,289
157,585,611
68,633
9,563,218
238,715
308,370
1,651,875
342,423,485
7,259,819
285,340,472
132,858
3,625,579
6,501,553
3,721,529
1,694,607
308,276,417
11,668,326
12,184,667
738,320
9,555,755
34,147,068
342,423,485
The accompanying notes are an integral part of these financial statements.
(Audit report attached)
* Including net profit for the current year
158
Annual Report 2019
Hisham Ezz Al-Arab
Chairman and Managing Director
6
7
8
9
21
10
11
12
13
31 - 13
14
EGP Thousands
Notes
Dec. 31, 2019
Dec. 31, 2018
42,600,957
(21,022,838)
21,578,119
37,403,709
(19,260,190)
18,143,519
3,451,688
(1,170,893)
2,280,795
53,423
688,059
450,697
(5,044,937)
(1,794,540)
(238,715)
(1,435,460)
16,537,441
(4,639,364)
(94,522)
11,803,555
3,402,616
(991,957)
2,410,659
25,958
1,089,076
402,067
(4,222,779)
(1,589,675)
(130,208)
(3,076,023)
13,052,594
(3,625,579)
128,740
9,555,755
7.33
7.28
5.94
5.89
Hisham Ezz Al-Arab
Chairman and Managing Director
Annual Report 2019
159
FINANCIAL STATEMENTS: SEPARATE
Separate statement of other
comprehensive income for the year ended
December 31, 2019
Net profit for the year
Other comprehensive income items that will not be reclassified to the
Profit or Loss:
Net change in fair value of debt instruments measured at fair value through
other comprehensive income
Other comprehensive income items that is or may be reclassified to the
profit or loss:
Net change in fair value of debt instruments measured at fair value through
other comprehensive income
Expected credit loss for fair value of debt instruments measured at fair value
through other comprehensive income
Total other comprehensive income for the year
EGP Thousands
Dec. 31, 2019
Dec. 31, 2018
11,803,555
9,555,755
212,967
57,026
5,944,586
(2,164,847)
(184,921)
-
17,776,187
7,447,934
160
Annual Report 2019
Separate cash flow for the year ended
December 31, 2019
Cash flow from operating activities
Profit before income tax
Adjustments to reconcile net profit to net cash provid-
ed by operating activities
Fixed assets depreciation
Impairment charge for credit losses (Loans and advances to
customers)
Other provisions charges
Impairment charge for credit losses (due from banks)
Impairment charge for credit losses ( financial investments)
Impairment charge for other assets
Exchange revaluation differences for financial assets at fair
value through OCI
Intangible assets amortization
Impairment charge financial assets at fair value through OCI
Exchange differences in financial investments in subsidiary
Utilization of other provisions
Other provisions no longer used
Exchange differences of other provisions
(Profits) losses from selling property, plant and equipment
(Profits) losses from selling financial investments
Shares based payments
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
Financial assets at fair value through P&L
Derivative financial instruments
Loans and advances to banks and customers
Other assets
Due to banks
Due to customers
Income tax obligations paid
Other liabilities
Net cash provided from operating activities
Cash flow from investing activities
Payment for purchases of subsidiary and associates
"Payment for purchases of property, plant, equipment and
branches constructions"
Proceeds from selling property, plant and equipment
Proceeds from redemption of financial assets at amortized cost
Payment for purchases of financial assets at amortized cost
Payment for purchases of financial assets at fair value
through OCI
Proceeds from selling financial assets at fair value through OCI
Net cash used in investing activities
Notes
Dec. 31, 2019
Dec. 31, 2018
EGP Thousands
16,537,441
13,052,594
24
12
29
12
12
23
20
21
22
29
29
29
11
21
15
41
21
20
18 - 19
42
25
26
28
11
21
21
21
576,544
1,610,878
461,869
9,503
(184,921)
(93,313)
1,593,030
238,715
-
4,680
(28,135)
(6,910)
(110,062)
(1,439)
(497,894)
464,539
390,830
3,076,023
101,501
-
-
316,763
(102,991)
130,208
39,561
(465)
(2,114)
(17,670)
(2,269)
(1,045)
(441,628)
408,346
20,574,525
16,947,644
(8,870,547)
-
2,318,924
(2,910)
(14,533,328)
162,502
4,550,788
19,143,183
(3,625,579)
1,894,934
21,612,492
-
(1,301,415)
1,439
43,937,957
(76,516,842)
(13,661,577)
4,640,524
4,557,492
(66,141)
(21,255,952)
(2,263,465)
5,381,901
34,573,102
(2,778,973)
1,025,022
27,099,577
(10,575)
(874,708)
1,045
5,532,271
(33,995,313)
(50,954,311)
(12,670,761)
54,855,966
(29,977,206)
2,059,341
(39,958,700)
Annual Report 2019
161
FINANCIAL STATEMENTS: SEPARATE
Separate cash flow for the year ended
December 31, 2019 (Cont.)
Notes
Dec. 31, 2019
Dec. 31, 2018
EGP Thousands
Cash flow from financing activities
Increase (decrease) in long term loans
Dividend paid
Capital increase
Net cash used in (provided from) 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
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 with maturities more than three months
Treasury bills with maturity more than three months
Total cash and cash equivalent
27
15
16
17
15
(448,783)
(2,700,544)
105,413
(3,043,914)
46,793
(2,143,177)
50,315
(2,046,069)
(11,408,628)
(14,905,192)
34,303,645
22,895,017
49,208,837
34,303,645
28,273,962
28,370,183
27,634,062
(22,397,310)
(10,593,903)
(28,391,977)
22,895,017
20,058,974
46,518,892
41,999,252
(13,526,763)
(10,733,386)
(50,013,324)
34,303,645
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Annual Report 2019
Annual Report 2019
163
FINANCIAL STATEMENTS: SEPARATE
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Proposed appropriation account for the
year ended December 31, 2019
Net profit after tax
Profits selling property, plant and equipment transferred to capital reserve
according to the law
Bank risk reserve
Available net profit for distributing
To be distributed as follows:
Legal reserve
General reserve
Dividends to shareholders
Staff profit sharing
Board members remuneration
CIB's foundation
Total
EGP Thousands
Dec. 31, 2019
Dec. 31, 2018
11,803,555
9,555,755
(1,439)
(1,258)
11,800,858
590,106
7,840,287
1,836,353
1,180,086
177,013
177,013
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(1,045)
(842)
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164
Annual Report 2019
Annual Report 2019
165
FINANCIAL STATEMENTS: SEPARATE
Notes to the separate financial statements
for the year ended December 31, 2019
1. General information
Commercial International Bank (Egypt) S.A.E. provides retail, corporate and investment banking services in various
parts of Egypt through 180 branches, and 27 units employing 6900 employees on the statement of financial position 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 Egyptian stock exchange.
Financial statements have been approved by board of directors on February 3, 2020.
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.
Also according to the instructions for applying the International Standard for Financial Reports (9) issued by the Central
Bank of Egypt on February 26, 2019, reference is made to what was not mentioned in the instructions of the Central Bank
of Egypt to the Egyptian Accounting Standards.
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 issued in 2006 and its amendments and
in accordance with the Central Bank of Egypt regulations approved by the Board of Directors on December 16, 2008, also
according to the instructions for applying the International Standard for Financial Reports (9) issued by the Central Bank
of Egypt on February 26, 2019, reference is made to what was not mentioned in the instructions of the Central Bank of
Egypt to the Egyptian Accounting Standards, the affiliated companies are entirely included in the consolidated financial
statements and these companies are the companies that the Bank - directly or indirectly – has more than half of the vot-
ing 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 separate financial statements of the Bank should be read with its consolidated financial statements, for the year
ended on December 31, 2019 to get complete information on the Bank’s financial position, results of operations, cash flows
and changes in ownership rights.
In January 2019 and in accordance with the instructions of the Central Bank, the Bank did not restate the comparative
figures and recognized the effect of the application of IFRS 9 on the profit as of the date of application. Clarification of the
impact of application of IFRS 9 clarifies further information on the impact of the application.
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.
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.
• Items of other comprehensive income with equity in relation to investments in equity instruments at fair value through
comprehensive income.
• Other operating revenues (expenses) from the remaining assets and liabilities.
Changes in the fair value of financial instruments of a monetary nature in foreign currencies that are classified as finan-
cial investments at fair value through comprehensive income (debt instruments) are analyzed between valuation differ-
ences that resulted from changes in the cost consumed for the instrument and differences that resulted from changing the
exchange rates in effect and differences caused by changing the fair value For the instrument, the evaluation differences
related to changes in the cost consumed are recognized in the income of loans and similar revenues and in the differences
related to changing the exchange rates in other operating income (expenses) item, and are recognized in the items of
comprehensive income right The ownership of the difference in the change in the fair value (fair value reserve / financial
investments at fair value through comprehensive income).
Valuation differences arising from the measurement of items of a non-monetary nature at fair value through profit and
losses resulting from changes in the exchange rates used to translate those items include, and then are recognized in the
income statement by the total valuation differences resulting from the measurement of equity instruments classified
at fair value through Profits and losses, while the total valuation differences resulting from the measurement of equity
instruments at fair value through comprehensive income are recognized within other comprehensive income items in
equity, fair value reserve item for financial investments at fair value through comprehensive income.
166
Annual Report 2019
Annual Report 2019
167
FINANCIAL STATEMENTS: SEPARATE
Financial policies applied as of December 31, 2018
2.5. Financial assets
The Bank classifies its financial assets in the following categories:
• Financial assets designated at fair value through profit or loss (FVTPL).
• Loans and receivables.
• Held to maturity financial 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 loss (FVTPL)
This category is divided into two sub-categories:
• Financial assets held for trading.
• Financial assets designated at fair value through profit and loss (FVTPL) at inception.
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 a part of a portfolio of identified financial instruments that are managed together, and
for which there is evidence of an actual recent 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 (FVTPL) 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.
• 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 as available for sale, the value is measured at cost less impairment.
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.
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Changes in accounting policies
IFRS 9 Effective 1 January 2019 in accordance with the Central Bank of Egypt regulations issued on 26 February 2019
The requirements in IFRS 9 represent a material change from the requirements of EAS number 26 Financial Instruments:
Recognition and Measurement. The new standard leads to fundamental changes in the accounting of financial assets and
some aspects of accounting of financial liabilities.
The principal changes in the accounting policies resulting from the adoption of IFRS 9 are summarized below
Classification of financial assets and liabilities
IFRS 9 includes three categories of major classifications of financial assets: measured at amortized cost and fair value
through other comprehensive income and fair value through profit or loss. The classification of IFRS 9 is generally based on
the business model through which the financial asset is managed and its contractual cash flows. The Standard excludes the
current categories of EAS number 26 which include held-to-maturity investments and held for trading and available for sale.
• IFRS 9 replaces the "recognized loss" model in EAS number 26 with the "expected credit loss" model. The new impairment
model also applies to certain credit and financial collateral contracts but does not apply to equity investments under IFRS
(IFRS 9), credit losses are recognized before they are achieved, other than EAS number 26
Financial policies applied as of 1 January 2019
Financial assets and liabilities
1. Initial Recognition
All "regular" purchases and sales of financial assets are recognized on the trade date, the date on which the bank com-
mits to purchase or sell the asset. Regular purchases and sales are the purchases and sales of financial assets that require
delivery of assets within the time frame generally provided by law or by market norms.
Financial assets or liabilities are measured initially at fair value plus, in the case of an item not carried at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition or issue.
2. Measurement and Classification
Financial assets - Policy effective 1 January 2019.
On initial recognition, financial assets are classified as measured at cost, carried at fair value through other comprehen-
sive income or at fair value through profit or loss. Financial assets are measured at amortized cost when each of the fol-
lowing officers is satisfied and is not classified as at fair value through profit or loss:
• Assets are retained in a business model that is intended to hold assets in order to collect contractual cash flows;
• The contractual terms of the financial assets on specific dates result in cash flows which are only payments on the original
The following are the principal changes in the accounting policy: Impairment of financial assets:
amount and interest on the original amount outstanding.
Default Definition as per IFRS 9
Default is not specifically defined within IFRS 9. However the following guidance is available within the Standard:
Debt instruments are measured at fair value through other comprehensive income only when both of the following condi-
tions are met and are not classified as at fair value through profit or loss:
‘’When defining default for the purposes of determining the risk of a default occurring, an entity shall apply a default defini-
tion that is consistent with the definition used for internal credit risk management purposes for the relevant financial instru-
ment and consider qualitative indicators (for example, financial covenants) when appropriate. However, there is a rebuttable
presumption that default does not occur later than when a financial asset is 90 days past due (DPD) unless an entity has
reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
The definition of default used for these purposes shall be applied consistently to all financial instruments unless informa-
tion becomes available that demonstrates that another default definition is more appropriate for a particular financial
instrument.’
• The Bank applies a three-stage approach to measure expected credit losses for financial assets carried at amortized cost
and debt instruments classified as at fair value through other comprehensive income. Assets are transferred through the
following three stages on the basis of changes in the quality of credit ratings since the initial recognition of these assets:
Assets are retained in the business model, which is intended to achieve both the collection of contractual cash flows and
the sale of financial assets. The contractual terms of the financial assets on specific dates result in cash flows that are only
payments on the original amount and interest on the original amount outstanding.
Upon initial recognition of equity investments that are not held for trading, the Bank may elect irrevocably to present
changes in fair value in other comprehensive income. This choice is made on an investment-by-investment basis.
All other financial assets are classified at fair value through profit or loss.
Business model
The Bank assesses the objective of the business model in which the asset is maintained at the business portfolio level. This
method better reflects how business is managed and how information is presented to management. The following infor-
mation is taken into consideration
• Stage 1: expected credit losses over 12 months
Debt instruments and equity instruments are classified and measured as follows:
For exposures where there has been no significant increase in credit risk since initial recognition, the portion of expected
long-term credit losses associated with the probability of default over the next 12 months is recognized.
• Stage 2: Unrealized credit losses over life - non-credit risk For credit exposures where there has been a significant increase
in credit risk since initial recognition, but not credit default, expected credit losses are recognized over the life of the asset.
Significant Increase in Credit Risk (SICR):
CIB will use the following indicators to identify any significant increase in credit risks.
Financial Instrument
Equity Instruments
For Corporate and Business Banking Risk Rating, Transition in Risk Ratings, Delinquency Status, Industry and Restruc-
tured status.
Debt Instruments / Loans & Facilities
Methods of Measurement according to Business Models
Amortized Cost
Not Applicable
Business Model
of Assets held
for Collecting
Contractual
Cash Flows
Fair Value
Through Comprehensive
Income
An irrevocable election at
Initial Recognition
Through Profit or Loss
Normal treatment of equity
instruments
Business Model of Assets
held for Collecting Contrac-
tual Cash Flows & Selling
Business Model of Assets
held for Trading
For Retail Delinquency Status, Watch list, Individual Profile, Restructured status.
• Stage 3: Expected Long-Term Credit Losses Financial assets are credit risk when one or more events have occurred that
have a detrimental effect on the estimated future cash flows of those financial assets. Due to the use of the same standards
in IAS 39, the Bank's methodology for specific provisions remains unchanged.
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The Bank prepares, documents and approves Business Models in accordance with the requirements of IFRS 9 and reflects
the Bank's strategy for managing financial assets and cash flows as follows:
Financial asset
Business model
Basic characteristics
Financial assets at amortized
cost
Business model for financial assets
held to collect contractual cash flows
Financial assets at fair value
through other comprehensive
income
Business model of financial assets held
to collect cash flows and sales
Financial assets at fair value
through profit or loss
Other business models include trading
- management of financial assets at
fair value - maximizing cash flows by
selling)
•
• The objective of the business model
is to retain the financial assets to
collect the contractual cash flows
of the principal amount of the
investment and the proceeds.
Sale is an exceptional event for the
purpose of this model and under
the terms of the criterion of a
deterioration in the creditworthi-
ness of the issuer of the financial
instrument.
Lowest sales in terms of turnover
and value.
•
• The Bank makes clear and reliable
documentation of the reasons for
each sale and its compliance with
the requirements of the Standard.
•
Both the collection of contractual
cash flows and sales are complemen-
tary to the objective of the model.
• High sales (in terms of turnover and
value) compared to the business
model retained for the collection of
cash flows.
•
•
The objective of the business model
is not to retain the financial asset
for the collection of contractual or
retained cash flows for the collection
of contractual cash flows and sales.
Collecting contractual cash flows
is an incidental event for the model
objective.
• Management of financial assets at
fair value through profit or loss to
avoid inconsistency in accounting
measurement.
• The Bank assesses the objective of the business model at the portfolio level where the financial asset is retained as reflect-
ing the way the business is managed and the manner in which the management is provided. The information to be taken
into account when evaluating the objective of the business model is as follows:
• The documented policies and objectives of the portfolio and the implementation of these policies in practice. In particular,
whether the management strategy focuses only on the collection of the contractual cash flows of the asset and maintaining a
specific rate of return to meet the maturities of the financial assets with the maturity dates of the liabilities that finance these
assets or generate cash flows through the sale of these assets.
• How to evaluate and report on portfolio performance to senior management.
• Risks affecting the performance of the business model, including the nature of the financial assets held within that model
and the manner in which these risks are managed.
• How to assess the performance of business managers (fair value, return on portfolio, or both).
Translation copied
• The periodicity, value and timing of sales in prior periods, the reasons for such transactions, and expectations regarding
future selling activities. However, information on sales activities is not taken into account separately, but as part of a com-
prehensive assessment of how the Bank's objective of managing financial assets and how to generate cash flows is achieved.
• Financial assets held for trading or managed and their fair value performance are measured at fair value through profit
or loss as they are not held to collect contractual cash flows or to collect contractual cash flows and sell financial assets
together.
• Assess whether the contractual cash flows of an asset represent payments that are limited to the principal of the instru-
ment and the proceeds:
For the purpose of this valuation, the Bank recognizes the original amount of the financial instrument at the fair value of
the financial asset at initial recognition. The return is defined as the time value of money and the credit risk associated
with the original amount over a specified period of time and other basic lending risk and costs (such as liquidity risk and
administrative costs) as well as profit margin.
To assess whether the contractual cash flows of an asset are payments that are limited only to the asset of the financial in-
strument and the yield, the Bank takes into consideration the contractual terms of the instrument. This includes assessing
whether the financial asset includes contractual terms that may change the timing or amount of contractual cash flows,
thereby not meeting that requirement. In order to conduct such an assessment, the Bank shall consider:
• Potential events that may change the amount and timing of cash flows.
• Leverage characteristics (rate of return, maturity, currency type ...).
• Terms of accelerated payment and term extension.
• Conditions that may limit the ability of the Bank to claim cash flows from certain assets.
• Features that may be adjusted against the time value of money (re-setting the rate of return periodically).
Reclassification
Financial assets are not recognized after initial recognition, unless the Bank changes the business model to manage fi-
nancial assets
3. Disposal
Financial assets
The Bank derecognizes the financial assets at the end of the contractual rights of the cash flows from the financial asset or
transfers its rights to receive the contractual cash flows in accordance with the transactions in which all significant risks
and rewards of ownership relating to the transferred financial asset are transferred or when the Bank has not transferred
or retained all the risks The fundamental benefits of ownership and did not retain control of financial assets.
When the financial asset is derecognized, the difference between the carrying amount of the financial asset (or the car-
rying amount allocated to the financial asset excluded) and the total of the consideration received (including any new
acquired asset) In other comprehensive income is recognized in profit or loss.
Effective January 1, 2019, any gain / loss recognized in other comprehensive income in respect of investment securities in
equity securities is not recognized in profit or loss on disposal of such securities. Any interest on the transferred financial
assets that are eligible for disposal that are created or retained by the Group as a separate asset or liability is recognized.
If the terms of the financial assets are modified, the Bank assesses whether the cash flows of the financial assets are
substantially different. If there are significant differences in cash flows, the contractual rights to the cash flows from the
original financial assets are past due. In this case, the original financial assets are derecognized and the new financial
assets are recognized at fair value.
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The financial asset (in whole or in part) is derecognized when:
• Expiration of rights to receive cash flows from the original;
(A) The Bank has transferred substantially all the risks and rewards of the asset or (b) has not transferred or retained All
the material risks and benefits of the assets but transferred control over the assets.
Financial Liabilities
A financial liability is derecognized when the obligation under the obligation is discharged, canceled or expires.
Investments held for trading - effective until 31 December 2018
Investments held for trading are subsequently measured at fair value with any gain or loss arising from the change in fair
value included in the consolidated statement of income or loss in the period in which they arise. Interest earned or divi-
dends received are included in net trading income.
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.
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
Classification of financial assets carried at fair value through profit or loss – applied
transaction (cash flow hedge)
Effective 1 January 2019
The Bank classifies certain financial assets as at fair value through profit or loss
Profits or losses because assets were valued, managed and internally recorded on a fair value basis. The Bank has classified
certain financial assets at fair value through profit or loss.
Financial assets classified at fair value through statement of profit or loss – applied Until 31 December 2018
Financial assets classified in this category are classified by the management as evidence
When the following criteria are met:
• The classification eliminates or substantially reduces the difference in the transaction that may arise from the measure-
ment of assets or liabilities or the recognition of gains or losses on different grounds; or
• Assets are part of a group of financial assets that are managed and their performance evaluated on a fair value basis, in
accordance with documented management risk or investment strategy; or
• Financial instruments include embedded derivatives, unless embedded derivatives do not substantially change cash flows
and should not be recorded as a separate item.
Financial assets carried at fair value through the consolidated statement of income or loss are recognized at fair value
in the consolidated statement of financial position. Changes in fair value are recognized in net gain or loss on financial
assets designated at fair value through profit or loss. Interest earned on interest income is accrued, whereas income from
equity is recognized in other income. The Group has not classified any financial assets at fair value through profit or loss.
Deposits and amounts due from banks and other financial institutions
These are stated at cost, adjusted for effective fair value hedges, net of any amounts written off and provision for impairment.
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,
• 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.
Fair value hedge
2.7.1.
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.
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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.
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.
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.
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.
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:
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 - Financial policies applied till 31 December 2018
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.
• 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.
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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, until 31-December-2018. 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 settlement 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
Vehicles
Computers and core systems
Fixtures and fittings
20 years.
3 years, or over the period of the lease
if less
3/5 years.
5 years
5 years
3/10 years
3 years
TThe 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.
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.
2.15.1 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.
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.
178
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179
FINANCIAL STATEMENTS: SEPARATE
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.
When a provision is wholly or partially no longer required, it is reversed through profit or loss under other operating in-
come (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 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.
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.
2.23. Comparatives
Comparative figures have been adjusted to conform with changes in the presentation of the current period where necessary.
2.24. Non-current assets held for sale
A non-current asset (or disposal group) to be classified as held for sale if its carrying amount will be recovered principally
through a sale transaction rather than through continuing use.
Determining whether (and when) an asset stops being recovered principally through use and becomes recoverable prin-
cipally through sale.
For an asset (or disposal group) to be classified as held for sale:
(a) It must be available for immediate sale in its present condition, subject only to terms that are usual and customary
for sales of such assets (or disposal groups);
(b) Its sale must be highly probable;
The standard requires that non-current assets (and, in a 'disposal group', related liabilities and current assets,) meeting its
criteria to be classified as held for sale be:
(a) Measured at the lower of carrying amount and fair value less costs to sell, with depreciation on them ceasing; and
(b) Presented separately on the face of the statement of financial position with the results of discontinued operations
presented separately in the income statement.
2.25. Discontinued operation
Discontinued operation as 'a component of an entity that either has been disposed of, or is classified as held for sale, and
(a) Represents a separate major line of business or geographical area of operations,
(b) Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations
CIB owns a private insurance fund for financing end of service benefits, pensions and medical insurance for employees
under the supervision of the Ministry of Social Solidarity.
or
(c) Is a subsidiary acquired exclusively with a view to resale.
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.
When presenting discontinued operations in the income statement, the comparative figures should be adjusted as if the
operations had been discontinued in the comparative period.
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181
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, accep-
tance 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 financial 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.
The Bank’s risk management policies are designed to identify and analyze these risks, to set appropriate risk limits and
controls, 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
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, which
are based on losses that have been incurred on the balance sheet date (the ‘incurred loss model’) rather than expected
losses (note 3.1,5) 31-December-2018.
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
182
Annual Report 2019
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 mapping 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 gen-
erally unsecured. In addition, in order to minimize the credit loss the Bank will seek additional collateral from the coun-
terparty 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.
Annual Report 2019
183
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.
Impairment and provisioning policies
3.1.3.
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, 2019
December 31, 2018
Loans and
advances (%)
Impairment
provision (%)
Loans and
advances (%)
Impairment
provision (%)
85.63
6.88
3.5
3.99
19.27
8.76
28.15
43.82
78.61
11.65
5.68
4.06
12.61
17.85
33.18
36.36
The internal rating tools assists management to determine whether objective evidence of impairment exists, 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. Model 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 instructions for the implementation of the Interna-
tional Financial Reporting Standard (9) issued by the Central Bank of Egypt on February 26, 2019. 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 to CBE ratings and rates of provi-
sions needed for assets impairment related to credit risk:
CBE Rating
Categorization
Provision%
Internal rating
Categorization
1
2
3
4
5
6
7
8
9
10
Low risk
Average risk
Satisfactory risk
Reasonable risk
Acceptable risk
Marginally acceptable
risk
Watch list
Substandard
Doubtful
Bad debts
0%
1%
1%
2%
2%
3%
5%
20%
50%
100%
1
1
1
1
1
2
Performing loans
Performing loans
Performing loans
Performing loans
Performing loans
Regular watching
3
Watch list
4 Non performing loans
4 Non performing loans
4 Non performing loans
Starting 1st of Jan 2019 and after implementing CBE regulations for IFRS 9, Customer Loans has been reclassified into 3
stages based on each facility credit characteristics. Credit characteristics that used to determine the staging is different
from ORR customer classification
184
Annual Report 2019
Annual Report 2019
185
FINANCIAL STATEMENTS: SEPARATE
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3.1.5. Maximum exposure to credit risk before collateral held
In balance sheet items exposed to credit risk
Cash and balances with central bank
Due from banks
Gross loans and advances to banks
Less:Impairment provision
Gross loans and advances to customers
Individual:
- Overdraft
- Credit cards
- Personal loans
- Mortgages
Corporate:
- Overdraft
- Direct loans
- Syndicated loans
- Other loans
Unamortized bills discount
Impairment provision
Unearned interest
Derivative financial instruments
Financial investments:
-Debt instruments
Other assets (Accrued revenues)
Total
Off balance sheet items exposed to credit risk
Financial guarantees
Customers acceptances
Letters of credit (import and export)
Letter of guarantee
Total
Dec. 31, 2019
28,273,962
28,353,366
629,780
(4,516)
EGP Thousands
Dec. 31, 2018
20,058,974
46,518,892
70,949
(3,246)
1,462,439
4,264,204
20,219,305
1,330,323
19,100,709
51,163,302
33,642,235
61,578
(55,197)
1,635,910
3,540,849
17,180,864
876,372
13,992,595
49,179,820
32,899,950
125,429
(65,718)
(11,825,887)
(13,040,828)
(41,908)
216,383
(16,038)
52,289
196,046,335
112,213,297
4,011,196
4,509,514
376,847,609
289,729,874
6,085,760
3,188,757
5,866,630
61,143,216
76,284,363
7,962,043
1,050,573
4,178,288
66,166,953
79,357,857
The above table represents the Bank's Maximum exposure to credit risk on December 31, 2019, before taking into account
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.
186
Annual Report 2019
Annual Report 2019
187
FINANCIAL STATEMENTS: SEPARATE
As shown above, 31.83% of the total maximum exposure is derived from loans and advances to banks and customers while
investments in debt instruments represent 59.55%.
Expected credit losses
Management is confident in its ability to continue to control and sustain minimal exposure of credit risk resulting from
both the bank's loans and advances portfolio and debt instruments based on the following:
• 92.51% of the loans and advances are concentrated in the top two grades of the internal credit risk rating system.
• Loans and advances assessed individualy are valued EGP 5,261,976 thousand.
• The Bank has implemented more prudent processes when granting loans and advances during the financial year ended
on December 31, 2019.
• 97.54% of the investments in debt Instruments are Egyptian sovereign instruments.
3.1.6. Loans and advances
Loans and advances are summarized as follows:
Stage 1:
Expected
credit losses
over 12 months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
96,469
10,394
210,068
1,208,722
5,325,121
4,975,113
1,305,191
5,335,515
5,185,181
Dec.31, 2019
Individuals
Institutions
and Business
Banking
Total
EGP Thousands
Individually
impaired
-
-
-
Total
316,931
11,508,956
11,825,887
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Loans and
advances to
customers
120,937,024
5,045,095
5,261,976
Loans and
advances to
banks
Loans and
advances to
customers
Loans and
advances to
banks
629,780
110,351,697
70,949
-
-
4,224,632
4,855,460
-
-
131,244,095
629,780
119,431,789
70,949
Neither past due nor impaired
Past due but not impaired
Individually impaired
Gross
Less:
Impairment provision
Unamortized bills discount
Unearned interest
Net
119,321,103
625,264
11,825,887
55,197
41,908
4,516
-
-
-
-
-
-
13,040,828
65,718
16,038
3,246
-
-
106,309,205
67,703
Loans and advances to banks divided by stages:
Stage 1:
Expected
credit losses
over 12 months
-
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
629,780
(4,516)
625,264
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
-
Dec.31, 2019
Time and term loans
Expected credit losses
Net
Expected credit losses divided by internal classification:
Corporate and Business Banking loans:
Impairment provision losses for loans and advances reached EGP 11,830,403 thousand.
During the year, the Bank’s total loans and advances increased by 10.35%.
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.
Total balances of loans and facilities divided by stages:
Stage 1:
Expected
credit losses
over 12 months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
26,734,506
339,408
202,357
63,749,864
35,158,341
5,059,619
90,484,370
35,497,749
5,261,976
Dec.31, 2019
Individuals
Institutions
and Business
Banking
Total
EGP Thousands
Individually
impaired
-
-
-
Total
27,276,271
103,967,824
131,244,095
Dec.31, 2019
Performing
loans (1-5)
Regular watch-
ing (6)
Watch list (7)
Non-per-
forming loans
(8-10)
Stage 1:
Expected
credit losses
over 12
months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
Scope of
probability
of default (PD)
Individually
impaired
1%-14%
1,041,456
1,137,990
15%-21%
21%-28%
100%
167,266
867,786
3,319,345
-
-
-
4,975,113
-
-
-
EGP Thousands
Total
629,780
(4,516)
625,264
EGP Thousands
Total
2,179,446
1,035,052
3,319,345
4,975,113
-
-
-
-
188
Annual Report 2019
Annual Report 2019
189
FINANCIAL STATEMENTS: SEPARATE
Individual Loans:
Impact of IFRS 9 application:
Stage 1:
Expected
credit losses
over 12
months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
Scope of
probability
of default (PD)
Individually
impaired
(0% - 5%)
95,234
(5% - 10%)
1,235
(10% above)
100%
-
-
-
-
10,394
-
-
-
-
210,068
-
-
-
-
Dec.31, 2019
Performing
loans (1-5)
Regular watch-
ing (6)
Watch list (7)
Non-per-
forming loans
(8-10)
The total balances of loans and facilities divided according to the internal classification:
Corporate and Business Banking loans:
Stage 1:
Expected
credit losses
over 12
months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
Scope of
probability
of default (PD)
Individually
impaired
1%-12%
61,291,934
24,935,477
12%-21%
2,457,930
5,944,147
21%-27%
100%
-
-
4,278,717
-
5,059,619
-
-
-
-
-
-
-
Dec.31, 2019
Performing
loans (1-5)
Regular watch-
ing (6)
Watch list (7)
Non-per-
forming loans
(8-10)
Individual Loans:
Stage 1:
Expected
credit losses
over 12
months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
Scope of
probability
of default (PD)
Individually
impaired
(0% - 5%)
26,059,247
(5% - 10%)
675,259
(10% above)
100%
-
-
-
-
339,408
-
-
-
-
202,357
-
-
-
-
Dec.31, 2019
Performing
loans (1-5)
Regular watch-
ing (6)
Watch list (7)
Non-perform-
ing loans
(8-10)
Effect of applying IFRS 9 *
Balance at
31/12/2018
under IAS 39
Financial
investments
Due from
banks
Loans to
customers
and banks
Opening
balance at
1/1/2019
under IFRS 9
(13,044,074)
(599,314)
(7,314)
716,325
(12,934,377)
Begining balance
Charges/(Reversals) PL
Write off
Recovery
F.X Revaluation
Ending Balance
The following table provides information on the quality of financial assets during the financial period:
Dec.31, 2019
Due from banks
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
Individual Loans:
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
19,284,999
9,085,184
-
-
28,370,183
(16,817)
28,353,366
Stage 1
12 months
26,059,247
675,259
-
-
26,734,506
(96,469)
26,638,037
-
-
-
-
-
-
-
Stage 2
Life time
-
-
339,408
-
339,408
(10,394)
329,014
-
-
-
-
-
-
-
Stage 3
Life time
-
-
-
202,357
202,357
(210,068)
(7,711)
Balance at
31/12/2019
under IFRS 9
(12,934,377)
(1,435,460)
1,380,772
(459,633)
1,187,085
(12,261,613)
EGP Thousands
Total
19,284,999
9,085,184
-
-
28,370,183
(16,817)
28,353,366
EGP Thousands
Total
26,059,247
675,259
339,408
202,357
27,276,271
(316,931)
26,959,340
EGP Thousands
Total
95,234
1,235
10,394
210,068
EGP Thousands
Total
86,227,411
8,402,077
4,278,717
5,059,619
EGP Thousands
Total
26,059,247
675,259
339,408
202,357
190
Annual Report 2019
Annual Report 2019
191
FINANCIAL STATEMENTS: SEPARATE
Corporate and Business Banking loans:
Individual Loans:
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
61,291,934
2,457,930
-
-
63,749,864
(1,208,722)
62,541,142
24,935,477
5,944,147
4,278,717
-
35,158,341
(5,325,121)
29,833,220
-
-
-
5,059,619
5,059,619
(4,975,113)
84,506
Financial Assets at Fair value through OCI
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
59,915,108
28,905,614
-
-
88,820,722
(414,395)
88,406,327
-
-
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Total
86,227,411
8,402,077
4,278,717
5,059,619
103,967,824
(11,508,956)
92,458,868
EGP Thousands
Total
59,915,108
28,905,614
-
-
88,820,722
(414,395)
88,406,327
The following table shows changes in expected ECL losses between the beginning and end of the year as a result
of these factors:
Dec.31, 2019
Due from banks
Provision for credit losses on 1
January 2019
New financial assets purchased or
issued
Matured or disposed financial assets
Transferred to stage 1
Transferred to stage 2
Transferred to stage 3
"Changes in the probability of default
and loss in case
of default and the exposure at de-
fault"
Changes to model assumptions and
methodology
Write off during the year
Cumulative foreign currencies trans-
lation differences
Ending balance
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
160
16,816
(158)
-
-
-
(1)
-
-
-
16,817
7,155
-
(7,155)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Total
7,315
16,816
(7,313)
-
-
-
(1)
-
-
-
16,817
Provision for credit losses on 1
January 2019
Impairment during the year
Write off during the year
Recoveries
Cumulative foreign currencies trans-
lation differences
Ending balance
Corporate and Business Banking loans:
Stage 1
12 months
72,092
24,377
-
-
-
96,469
Stage 2
Life time
24,843
(14,449)
-
-
-
Stage 3
Life time
127,376
140,974
(118,486)
60,204
-
EGP Thousands
Total
224,311
150,902
(118,486)
60,204
-
10,394
210,068
316,931
Provision for credit losses on 1
January 2019
New financial assets purchased or
issued
Matured or disposed financial assets
Transferred to stage 1
Transferred to stage 2
Transferred to stage 3
"Changes in the probability of default
and loss in case
of default and the exposure at de-
fault"
Changes to model assumptions and
methodology
Recoveries
Write off during the year
Cumulative foreign currencies trans-
lation differences
Ending balance
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
EGP Thousands
Total
691,013
6,700,083
4,709,096
12,100,192
751,746
(364,309)
158,357
(3,937)
1,472
1,074,222
(899,007)
(359,174)
9,427
(2,560,546)
-
1,825,968
(772,859)
-
-
2,409,875
(2,036,175)
(200,817)
5,490
(149,199)
93,395
1,509,405
3,051
1,605,851
5,845
401,743
-
407,588
-
-
-
-
399,429
(1,262,286)
399,429
(1,262,286)
(124,860)
(551,032)
(511,193)
(1,187,085)
1,208,722
5,325,121
4,975,113
11,508,956
192
Annual Report 2019
Annual Report 2019
193
FINANCIAL STATEMENTS: SEPARATE
Financial Assets at Fair value through OCI
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
Provision for credit losses on 1
January 2019
New financial assets purchased or
issued
Matured or disposed financial assets
Transferred to stage 1
Transferred to stage 2
Transferred to stage 3
"Changes in the probability of default
and loss in case
of default and the exposure at de-
fault"
Changes to model assumptions and
methodology
Write off during the year
Cumulative foreign currencies trans-
lation differences
Ending balance
595,511
183,940
(282,223)
931
-
-
(83,764)
-
-
-
414,395
3,803
-
(773)
(3,030)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Total
599,314
183,940
(282,996)
(2,099)
-
-
(83,764)
-
-
-
414,395
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194
Annual Report 2019
Annual Report 2019
195
FINANCIAL STATEMENTS: SEPARATE
Loans and advances restructured
Restructuring activities include rescheduling arrangements, applying obligatory management programs, modifying 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, which 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, 2019
Dec.31, 2018
4,682,243
4,682,243
7,673,956
7,673,956
3.1.8. Financial investments:
The following table represents an analysis of financial investment balances by rating agencies at the end of the year based
on Standard & Poor's valuation and its equivalent.
Stage 1:
Expected
credit losses
over 12 months
-
-
-
107,225,613
-
107,225,613
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
-
-
-
-
-
-
-
-
-
-
Dec. 31, 2019
Amortized
cost
AAA
AA+ to -AA
A to -A+
Less than -A
Not rated
Total
Dec. 31, 2019
Fair value
through OCI
AAA
AA+ to -AA
A+ to -A
Less than -A
Not rated
Total
Stage 1:
Expected
credit losses
over 12 months
-
-
-
88,820,722
-
88,820,722
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Total
-
-
-
107,225,613
-
107,225,613
EGP Thousands
Total
-
-
-
88,820,722
-
88,820,722
Individually
impaired
-
-
-
-
-
-
Individually
impaired
-
-
-
-
-
-
The following table shows the analysis of impairment on credit losses of financial investments by rating agencies at the
end of the year based on Standard & Poor's valuation and its equivalent.
Dec. 31, 2019
Fair value
through OCI
AAA
AA+ to -AA
A+ to -A
Less than -A
Not rated
Total
Stage 1:
Expected
credit losses
over 12 months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
-
414,395
-
414,395
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
414,395
-
414,395
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 year. The Bank has allocated exposures to regions based on the country of domicile of its counterparties.
Dec.31, 2019
Cash and balances with central bank
Due from banks
Gross loans and advances to banks
Less:Impairment provision
Gross loans and advances to
customers
Individual:
- Overdrafts
- Credit cards
- Personal loans
- Mortgages
Corporate:
- Overdrafts
- Direct loans
- Syndicated loans
- Other loans
Unamortized bills discount
Impairment provision
Unearned interest
Derivative financial instruments
Financial investments:
-Debt instruments
Total
Cairo
28,273,962
28,353,366
629,780
(4,516)
894,272
3,355,501
13,109,677
1,243,652
17,361,940
34,218,971
31,194,568
50,578
(55,197)
(9,741,062)
(41,908)
216,383
Alex, Delta and
Sinai
Upper Egypt
-
-
-
-
442,103
782,472
6,039,542
78,135
1,092,048
11,970,680
2,285,914
11,000
-
(1,620,679)
-
-
-
-
-
-
126,064
126,231
1,070,086
8,536
646,721
4,973,651
161,753
-
-
(464,146)
-
-
EGP Thousands
Total
28,273,962
28,353,366
629,780
(4,516)
1,462,439
4,264,204
20,219,305
1,330,323
19,100,709
51,163,302
33,642,235
61,578
(55,197)
(11,825,887)
(41,908)
216,383
196,046,335
345,106,302
-
21,081,215
-
6,648,896
196,046,335
372,836,413
196
Annual Report 2019
Annual Report 2019
197
FINANCIAL STATEMENTS: SEPARATE
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3.2. Market risk
Market risk represnts as fluctuations in fair value, future cash flow, foreign exchange rates and commodity prices,
interest rates, credit spreads and equity prices, and it may reduce the Bank’s income or the value of its portfolios. The
bank assigns the market risk management department to measure, monitor and control the market risk. In addition,
regular reports are submitted to the Asset and Liability "Management Committee (ALCO), Board Risk Committee and
the heads of each business unit."
The bank separates exposures to market risk into trading or non-trading portfolios.
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 and 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 certain ‘holding period’ until positions can be closed (1 Day). The Bank assesses 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 VaR Lim-
its, for the trading book, which have been approved by the board, and are monitored and reported on a daily basis to the
Senior Management.
In addition, monthly limits compliance is reported to the ALCO.
The Bank has developed the internal model to calculate VaR, however, it 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 Standardized 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, the bank computes on a daily basis trading Stressed VaR, combined with the trading 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.
198
Annual Report 2019
Annual Report 2019
199
FINANCIAL STATEMENTS: SEPARATE
3.2.2. Value at risk (VaR) Summary
Total VaR by risk type
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Medium
410
604,814
609,137
4,346
4,858
76
605,585
High
Low
2,426
1,176,577
1,186,564
9,949
9,696
122
1,178,349
50
274,079
271,813
183
1,487
44
274,303
Medium
231
453,569
429,195
24,374
7,030
119
455,104
High
Low
1,482
645,193
586,852
58,341
11,507
267
647,983
20
238,077
232,882
5,195
1,969
55
238,493
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Medium
410
4,346
4,346
4,858
76
5,839
High
2,426
9,949
9,949
9,696
122
10,382
Low
50
183
183
1,487
44
3,475
Medium
231
24,374
24,374
7,030
119
26,165
High
1,482
58,341
58,341
11,507
267
60,912
Low
20
5,195
5,195
1,969
55
5,611
Foreign exchange risk
Interest rate risk
- For non trading purposes
- For trading purposes
Portfolio managed by others risk
Investment fund
Total VaR
Trading portfolio VaR by risk type
Foreign exchange risk
Interest rate risk
- For trading purposes
Funds managed by others risk
Investment fund
Total VaR
Non trading portfolio VaR by risk type
Dec.31, 2019
Dec.31, 2018
Medium
High
Low
Medium
High
Low
EGP Thousands
Interest rate risk
- For non trading purposes
Total VaR
609,137
609,137
1,186,564
1,186,564
271,813
271,813
429,195
429,195
586,852
586,852
232,882
232,882
The increase in the value at risk, especially the rate of return, is associated with the increase in interest rate sensitivity
in the global financial markets. The three previous outcomes of the VAR were calculated independently from the centers
involved and historical market movements. The aggregate value at risk for trading and non-trading is not the Bank's risk
value because of the correlation between types of risk and types of portfolios and the consequent variety of impact.
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 exchange rate risk and financial instruments
at carrying amounts, categorized by currency.
Dec.31, 2019
EGP
USD
EUR
GBP
Other
Total
Equivalent EGP Thousands
Financial assets
Cash and balances with central bank
Gross due from banks
Gross loans and advances to banks
Gross loans and advances to customers
Derivative financial instruments
Financial investments
Gross financial investment securities* 172,199,545
- Investments in associates and
subsidiaries
Total financial assets
24,810,156
651,997
-
76,258,644
76,939
23,850
2,022,378
24,997,111
629,780
50,732,541
139,444
550,291
1,865,300
-
4,175,708
-
42,833
789,250
-
77,202
-
848,304
66,525
-
-
-
28,273,962
28,370,183
629,780
131,244,095
216,383
25,001,742
1,810,704
40,103
-
-
-
-
199,011,991
-
63,953
274,021,131 103,563,099
8,402,003
909,285
914,829 387,810,347
Financial liabilities
Due to banks
Due to customers
Derivative financial instruments
Other loans
Total financial liabilities
Net on-balance sheet financial
position
81,980
216,311,683
205,915
64,446
216,664,024
11,644,652
78,428,221
76,673
3,208,300
93,357,846
73,058
8,479,582
-
-
8,552,640
10,890
867,498
-
-
878,388
27
396,671
-
-
11,810,607
304,483,655
282,588
3,272,746
396,698 319,849,596
57,357,107
10,205,253
(150,637)
30,897
518,131
67,960,751
* After adding Reverse repos and deducting Repos.
200
Annual Report 2019
Annual Report 2019
201
FINANCIAL STATEMENTS: SEPARATE
Interest rate risk
3.2.4.
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 the 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, 2019
Financial assets
Cash and balances with
central bank
Gross due from banks
Gross loans and ad-
vances to banks
Gross loans and ad-
vances to customers
Derivatives financial
instruments (including
IRS notional amount)
Financial investments
Gross financial invest-
ment securities*
- Investments in associ-
ates and subsidiaries
Total financial assets
Financial liabilities
Due to banks
Due to customers
Derivatives financial
instruments (including
IRS notional amount)
Other loans
Total financial
liabilities
Total interest re-
pricing gap
Up to1
Month 1-3 Months
3-12
Months
1-5 years
Over 5
years
Non-
Interest
Bearing
Total
-
-
-
18,576,895
9,085,184
706,644
658
173,793
455,329
-
-
-
-
-
-
28,273,962
28,273,962
1,460
28,370,183
-
629,780
85,681,987
15,769,768
14,670,005
11,728,367
3,393,968
-
131,244,095
402,984
1,604,150
704,698
6,385,125
-
-
9,096,957
2,485,199
37,674,269
77,869,613
43,231,169
36,383,640
1,368,101
199,011,991
-
-
-
-
-
63,953
63,953
107,147,723
64,307,164
94,406,289
61,344,661
39,777,608
29,707,476 396,690,921
5,505,976
178,825,678
320,830
30,449,392
5,694,732
15,856,268
-
34,834,663
-
257,371
289,069
44,260,283
11,810,607
304,483,655
3,182,215
4,175,946
125,307
4
1,679,690
2,868
3,250,787
14,091
5,000
-
-
-
9,163,162
3,272,746
187,516,737 38,196,955 21,690,398 34,839,667
1,937,061
44,549,352 328,730,170
(80,369,014) 26,110,209 72,715,891 26,504,994
37,840,547 (14,841,876)
67,960,751
* After adding Reverse repos and deducting Repos.
3.3. Liquidity risk
Liquidity risk is the risk that the Bank is unable to meet its payment obligations associated with its financial liabilities
when they fall due and to replace funds when they are withdrawn. The consequence may be the failure to meet obligations
to repay depositors and fulfill commitments to lend.
Liquidity Risk Management Organization and Measurement Tools
Liquidity Risk is governed by Asset and Liability Committee (ALCO) and Board Risk Committee (BRC) subject to provi-
sions of Treasury Poilcy Guide (TPG).
Board Risk Committee (BRC): Provides oversight of risk management functions and assesses compliance to the set risk
strategies and policies approved by the Board of Directors (BoD) through periodic reports submitted by the Risk Group.
The committee makes recommendations to the BoD with regards to risk management strategies and policies (including
those related to capital adequacy, liquidity management,various types of risks: credit, market, operation, compliance,
reputation and any other risks the Bank may be exposed to).
Asset & Liability Committee (ALCO): Optimises the allocation of assets and liabilities, taking into consideration expec-
tations of the potential impact of future interest rate fluctuations, liquidity constraints, and foreign exchange exposures.
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 BoD.
Treasury Policy Guide (TPG): The purpose of the TPG is to document and communicate the policies that govern the
activities performed by the Treasury Group and monitored by Risk Group.
The main measures and monitoring tools used to assess the Bank’s liquidity risk include regulatory and internal ratios,
gaps, Basel III liquidity ratios, asset and liability gapping mismatch, stress testing, and funding base concentration. More
conservative internal targets and Risk Appetite indicators (RAI) against regulatory requirements are set for various mea-
sures of Liquidity and Funding Concentration Risks.At the end of year, the Basel III Liquidity Coverage Ratio (LCR) and
Net Stable Funding Ratio (NSFR) remained strong and well above regulatory requirements.
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, and includes projecting cash flows by major currency under
various stress scenarios and considering the level of liquid assets necessary in relation thereto:
• Maintaining 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 CBE regulations.
• 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 projections is an analysis of the
contractual maturity of the financial liabilities and the expected collection date of the financial assets.
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 by currency, provider,
product and term.
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203
FINANCIAL STATEMENTS: SEPARATE
3.3.3. Non-derivative cash flows
The table below presents the cash flows payable by the Bank under non-derivative financial liabilities by remaining con-
tractual maturities and the maturities assumption for non contractual products on the basis of their behaviour studies,
at balance sheet date.
The table below analyses the Bank’s derivative undiscounted financial liabilities into maturity groupings based on the re-
maining period of the balance sheet to the contractual maturity date will be settled on a net basis. The amounts disclosed
in the table are the contractual undiscounted cash flows:
Dec.31, 2019
Financial liabilities
Due to banks
Due to customers
Other loans
Total liabilities (contractual
and non contractual maturity
dates)
Total financial assets
(contractual and non
contractual maturity dates)
Dec.31, 2018
Financial liabilities
Due to banks
Due to customers
Other loans
Total liabilities (contractual
and non contractual maturity
dates)
Total financial assets
(contractual 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 Thousands
5,795,044
34,976,355
2,868
320,830
25,769,297
42,488
5,694,733
71,077,755
14,090
-
161,953,222
1,257,765
-
10,707,026
1,955,535
11,810,607
304,483,655
3,272,746
40,774,267
26,132,615
76,786,578
163,210,987
12,662,561
319,567,008
39,156,322
30,113,707
85,349,273
167,623,442
67,757,445
390,000,189
Up to 1
month
One to three
months
Three
months to
one year
One year to
five years
Over five
years
Total
EGP Thousands
6,632,843
29,932,979
33,380
626,976
23,750,618
10,000
-
72,467,784
87,286
-
145,207,840
443,188
-
13,981,251
3,147,675
7,259,819
285,340,472
3,721,529
36,599,202
24,387,594
72,555,070
145,651,028
17,128,926
296,321,820
41,324,915
40,718,467
74,369,489
141,260,576
49,075,657
346,749,104
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.
3.3.4. Derivative cash flows
The Bank’s derivatives include:
Foreign exchange derivatives: exchange traded options and over-the-counter (OTC) ,exchange traded forwards currency
options that will be settled on a gross basis interest rate derivatives: interest rate swaps, forward rate agreements, OTC
and exchange traded interest rate options, other interest rate contracts and exchange traded futures .
Up to 1
month
One to three
months
Three
months to
one year
One year to
five years
Over five
years
Total
EGP Thousands
29,879
182
30,061
51,676
-
51,676
124,360
947
125,307
-
-
-
-
75,544
75,544
205,915
76,673
282,588
Dec.31, 2019
Liabilities
Derivatives financial
instruments
- Foreign exchange derivatives
- Interest rate derivatives
Total
Off balance sheet items
Dec.31, 2019
Up to 1 year
1-5 years
Over 5 years
Total
EGP Thousands
Letters of credit, guarantees and
other commitments
Total
Dec.31, 2019
Credit facilities commitments
Total
50,210,710
14,264,820
5,723,073
70,198,603
50,210,710
14,264,820
5,723,073
70,198,603
Up to 1 year
4,030,911
4,030,911
1-5 years
2,826,599
2,826,599
Total
6,857,510
6,857,510
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
Financial investments:
Amortized cost
Total financial assets
Financial liabilities
Due to banks
Due to customers
Other loans
Total financial liabilities
Book value
Fair value
Dec.31, 2019
Dec.31, 2018
Dec.31, 2019
Dec.31, 2018
28,353,366
629,780
131,244,095
46,518,892
70,949
119,431,789
28,370,754
629,780
128,740,476
46,859,224
70,949
115,452,376
107,225,613
267,452,854
73,630,764
239,652,394
106,016,744
263,757,754
72,539,003
234,921,552
11,810,607
304,483,655
3,272,746
319,567,008
7,259,819
285,340,472
3,721,529
296,321,820
11,702,778
302,292,025
3,272,746
317,267,549
7,069,442
280,729,572
3,721,529
291,520,543
The fair value is considered in the previous note from the second and third level in accordance with the fair value standard
204
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205
FINANCIAL STATEMENTS: SEPARATE
Due from banks
The fair value of floating rate placements and overnight deposits is their carrying amount. The estimated fair value of
floating 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 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.
Fair values of financial instruments
The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities.
Financial Investments
Investment securities include only interest-bearing assets, financial assets at amortized cost, and fair value through OCI.
Quantitative disclosures fair value measurement hierarchy for assets as at 31 December 2019:
instruments:
Level 1 - Quoted prices in active markets for the same instrument (i.e. without modification or repacking);
Level 2 - Quoted prices in active markets for similar assets and liabilities or other valuation techniques for which all sig-
nificant inputs are based on observable market data; and
Level 3 - Valuation techniques for which any significant input is not based on observable market data.
Dec.31, 2019
Date of
Valuation
Total
Quoted
prices
in active
markets
(Level 1)
Significant
observable
inputs (level 2)
Valuation
techniques
(level 3)
Fair value measurement using
Measured at fair value:
Financial assets
Financial Assets at Fair value
through P&L
Financial Assets at Fair value
through OCI
Total
Derivative financial instruments
Financial assets
Financial liabilities
Total
Assets for which fair values are disclosed:
Amortized cost
Loans and advances to banks
Loans and advances to custom-
ers
Total
31-Dec-19
31-Dec-19
31-Dec-19
31-Dec-19
31-Dec-19
31-Dec-19
31-Dec-19
216,383
282,588
498,971
106,016,744
629,780
128,740,476
235,387,000
Liabilities for which fair values are disclosed:
Other loans
Due to customers
Total
31-Dec-19
31-Dec-19
3,272,746
302,292,025
305,564,771
418,781
418,781
-
89,897,257
61,689,580
28,207,677
90,316,038
62,108,361
28,207,677
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
216,383
282,588
498,971
106,016,744
-
-
629,780
-
128,740,476
106,016,744
129,370,256
3,272,746
-
3,272,746
-
302,292,025
302,292,025
Fair value of financial assets and liabilities
Loans and advances to banks
Loans and advances to banks are represented in loans that do not consider 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 dis-
counted using the current market rate to determine fair value.
Fair value for amortized cost assets is based on market prices or broker/dealer price quotations.
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:
• Complying with the legally imposed capital requirements in Egypt.
• Protecting the Bank’s ability to continue as a going concern and enabling the generation of yield for shareholders and other
parties dealingwith 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 monthly 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 12.75%, calculated as the ratio between total value of the capital
elements, and the risk-weighted assets and contingent liabilities of the Bank (credit risk, market risk and opertional risk).
While taking into consideration the conservation buffer.
Tier one:
Tier one comprises 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, interim profits and deducting previously recog-
nized goodwill and any retained losses
Tier two:
Tier two represents the gone concern capital which is compposed of general risk provision according to stage one ECL
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 remaining five years to maturity) and 45% of the
increase in fair value than book value for financial assets fair value through OCI , amortized cost , subsidiaries and associ-
ates 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.
206
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207
For December 2019 NSFR ratio record 217.35% (LCY 255.43% and FCY 156.14%), and LCR ratio record 611.44% (LCY
757.42% and FCY 230.87%).
For December 2018 NSFR ratio record 209.70% (LCY 243.36% and FCY 165.61%), and LCR ratio record 601.53% (LCY
667.84% and FCY 338.82%).
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.
4.1. Fair value of derivatives
The fair value of financial instruments that are not quoted in active markets are determined by using valuation tech-
niques. these valuation techniques (as models) are validated and periodically reviewed by qualified personnel indepen-
dent 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. For practicality purposes, 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 assump-
tions about these factors could affect reported fair value of financial instruments.
FINANCIAL STATEMENTS: SEPARATE
Assets risk weight scale ranging from zero to 400% is 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 adjustments
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 summarize the compositions of teir 1, teir 2 , the capital adequacy ratio and leverage ratio .
1-The capital adequacy ratio
Tier 1 capital
Share capital (net of the treasury shares)
Reserves
IFRS 9 Reserve
Retained Earnings (Losses)
Total deductions from tier 1 capital common equity
Net profit for the year
Total qualifying tier 1 capital
Tier 2 capital
45% of special reserve
Subordinated Loans
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 (%)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Restated**
11,668,326
14,829,948
1,411,549
55,089
(4,754,596)
6,879,563
30,089,879
49
3,582,720
1,879,734
5,462,503
35,552,382
156,952,618
5,959,133
23,292,505
186,204,256
19.09%
14,690,821
24,661,076
-
81,328
(807,709)
8,430,530
47,056,046
-
3,208,300
1,740,919
4,949,219
52,005,265
169,831,103
766,516
28,851,964
199,449,583
26.07%
*Based on consolidated financial statement figures and in accordance with Central Bank of Egypt regulation issued on 24 December 2012.
**After 2018 profit distribution.
2-Leverage ratio
Total qualifying tier 1 capital
On-balance sheet items & derivatives
Off-balance sheet items
Total exposures
*Percentage
EGP Thousands
Dec.31, 2019
Dec.31, 2018
47,056,046
409,689,485
46,195,165
455,884,650
10.32%
Restated**
30,089,879
346,163,131
45,407,765
391,570,896
7.68%
*Based on consolidated financial statement figures and in accordance with Central Bank of Egypt regulation issued on 14 July 2015.
**After 2018 profit distribution.
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209
FINANCIAL STATEMENTS: SEPARATE
5. Segment analysis
5.1. By business segment
The Bank is divided into four 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 –Including other banking business, such as Assets Management.
Transactions between the business segments are on normal commercial terms and conditions.
Dec.31, 2019
Revenue according to
business segment
Expenses according to
business segment
Profit before tax
Tax
Profit for the year
Total assets
Dec.31, 2018
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 Thousands
Asset
Liability
Mangement
Total
9,756,652
2,234,547
5,292,706
7,121,674
816,595
25,222,174
(4,737,534)
(898,119)
(152,895)
(2,882,762)
(13,423)
(8,684,733)
5,019,118
(1,436,735)
3,582,383
103,509,368
1,336,428
(382,556)
953,872
1,398,063
5,139,811
(1,471,285)
3,668,526
200,721,627
4,238,912
(1,213,400)
3,025,512
26,524,730
803,172
(229,910)
573,262
54,542,870
16,537,441
(4,733,886)
11,803,555
386,696,658
Corporate
banking
SME's
Investment
banking
Retail
banking
Asset
Liability
Mangement
Total
8,999,279
2,452,934
3,870,401
6,163,506
639,484
22,125,604
(5,516,282)
(739,340)
(427,332)
(2,373,798)
(16,258)
(9,073,010)
3,482,997
(933,068)
2,549,929
102,743,816
1,713,594
(459,085)
1,254,509
2,159,095
3,443,069
(922,426)
2,520,643
165,584,686
3,789,708
(1,015,293)
2,774,415
22,693,303
623,226
(166,967)
456,259
49,242,585
13,052,594
(3,496,839)
9,555,755
342,423,485
5.2. By geographical segment
Dec.31, 2019
Revenue according to geographical
segment
Expenses according to geographical
segment
Profit before tax
Tax
Profit for the year
Total assets
Dec.31, 2018
Revenue according to geographical
segment
Expenses according to geographical
segment
Profit before tax
Tax
Profit for the year
Total assets
6. Net interest income
Cairo
21,218,087
Alex, Delta &
Sinai
3,309,436
Upper Egypt
694,651
(7,293,433)
(1,143,218)
(248,082)
13,924,654
(3,985,969)
9,938,685
2,166,218
(620,086)
1,546,132
446,569
(127,831)
318,738
EGP Thousands
Total
25,222,174
(8,684,733)
16,537,441
(4,733,886)
11,803,555
358,860,383
21,081,215
6,755,060
386,696,658
Cairo
17,766,245
Alex, Delta &
Sinai
3,424,556
Upper Egypt
934,803
(7,545,066)
(1,304,228)
(223,716)
10,221,179
(2,738,280)
7,482,899
2,120,328
(568,053)
1,552,275
711,087
(190,506)
520,581
Total
22,125,604
(9,073,010)
13,052,594
(3,496,839)
9,555,755
316,635,596
19,340,837
6,447,052
342,423,485
Interest and similar income
- Banks
- Clients
Total
Treasury bills and bonds
Reverse repos
Financial investments at amortized cost and fair value through OCI
Total
Interest and similar expense
- Banks
- Clients
Total
Financial instruments purchased with a commitment to re-sale (Repos)
Other loans
Total
Net interest income
EGP Thousands
Dec.31, 2019
Dec.31, 2019
3,308,719
14,630,606
17,939,325
24,277,671
-
383,961
42,600,957
(597,877)
(19,893,762)
(20,491,639)
(232,055)
(299,144)
(21,022,838)
21,578,119
3,338,266
15,274,649
18,612,915
18,582,089
2,519
206,186
37,403,709
(840,233)
(18,001,197)
(18,841,430)
(112,366)
(306,394)
(19,260,190)
18,143,519
210
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211
FINANCIAL STATEMENTS: SEPARATE
7. Net fee and commission income
11. Other operating (expenses) 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
8. Dividend income
Financial assets at fair value through P&L
Financial assets at fair value through OCI
Total
9. Net trading income
Profit (Loss) from foreign exchange
Profit (Loss) from forward foreign exchange deals revaluation
Profit (Loss) from interest rate swaps revaluation
Profit (Loss) from currency swap deals revaluation
Profit (Loss) from financial assets at fair value through P&L
Total
10. Administrative expenses
Staff costs
Wages and salaries
Social insurance
Other benefits
Other administrative expenses *
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
1,258,672
141,907
2,051,109
3,451,688
(1,170,893)
(1,170,893)
2,280,795
1,456,930
140,247
1,805,439
3,402,616
(991,957)
(991,957)
2,410,659
EGP Thousands
Dec.31, 2019
Dec.31, 2018
7,307
46,116
53,423
9,951
16,007
25,958
EGP Thousands
Dec.31, 2019
Dec.31, 2018
749,591
(85,657)
(29,521)
3,238
50,408
688,059
668,071
(38,904)
(20,865)
8,179
472,595
1,089,076
EGP Thousands
Dec.31, 2019
Dec.31, 2018
(2,604,675)
(95,408)
(108,367)
(2,236,487)
(5,044,937)
(2,237,595)
(78,841)
(61,976)
(1,844,367)
(4,222,779)
*The expenses related to the activity for which the bank obtains a commodity or service, donations and depreciation.
212
Annual Report 2019
Profits (losses) from non-trading assets and liabilities revaluation
Profits from selling property, plant and equipment
Release (charges) of other provisions
Other income/expenses
Total
12. Impairment release (charges) for credit losses
Loans and advances to customers
Due from banks
Financial securities
Total
13. Adjustments to calculate the effective tax rate
Profit before tax
Tax rate
Income tax based on accounting profit
Add / (Deduct)
Non-deductible expenses
Tax exemptions
Withholding tax
Income tax / Deferred tax
Effective tax rate
14. Earning per share
Net profit for the year, available for distribution
Board member's bonus
Staff profit sharing
Profits shareholders' Stake
Weighted Average number of shares
Basic earning per share
By issuance of ESOP earning per share will be:
Average number of shares including ESOP shares
Diluted earning per share
EGP Thousands
Dec.31, 2019
Dec.31, 2018
91,979
1,439
(361,649)
(1,526,309)
(1,794,540)
59,863
1,045
(400,596)
(1,249,987)
(1,589,675)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
(1,610,878)
(9,503)
184,921
(1,435,460)
(3,076,023)
-
-
(3,076,023)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
16,537,441
22.50%
3,720,924
1,465,811
(1,493,292)
1,040,443
4,733,886
28.63%
13,052,594
22.50%
2,936,834
872,323
(314,359)
2,041
3,496,839
26.79%
EGP Thousands
Dec.31, 2019
Dec.31, 2018
11,800,858
(177,013)
(1,180,086)
10,443,759
1,424,525
7.33
1,435,391
7.28
9,553,868
(143,308)
(955,387)
8,455,173
1,424,525
5.94
1,435,391
5.89
Annual Report 2019
213
FINANCIAL STATEMENTS: SEPARATE
15. Cash and balances with central bank
Cash
Obligatory reserve balance with CBE
- Current accounts
Total
Non-interest bearing balances
16. Due from banks
Current accounts
Deposits
"Effect of applying
IFRS 9 "
Expected credit losses
Total
Central banks
Local banks
Foreign banks
Total
Non-interest bearing balances
Floating interest bearing balances
Fixed interest bearing balances
Total
Current balances
Due from banks
Gross due from banks
Expected credit losses
Net due from banks
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
214
Annual Report 2019
EGP Thousands
Dec.31, 2019
Dec.31, 2018
5,876,652
6,532,211
22,397,310
28,273,962
28,273,962
13,526,763
20,058,974
20,058,974
Governmental bonds
Governmental bonds
Repo
Total
Net
EGP Thousands
Dec.31, 2019
Dec.31, 2018
18. Loans and advances to banks, net
"Treasury bills and other government securities are classified to financial instruments through other comprehensive in-
come when applying IFRS 9 Note 21"
EGP Thousands
Dec.31, 2019
58,769,618
(2,406,225)
(2,406,225)
56,363,393
EGP Thousands
Dec.31, 2019
Dec.31, 2018
629,780
70,949
(4,516)
625,264
625,264
625,264
(3,246)
67,703
67,703
67,703
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Time and term loans
Impairment provision
Net
Current balances
Net
Analysis for impairment provision of loans and advances to banks
Beginning balance
Release during the year
Exchange revaluation difference
Ending balance
(3,246)
(1,270)
-
(4,516)
Analysis for impairment provision of loans and advances to banks
Beginning Balance
Addition during the year
Deduction during the year
Ending balance
Below is an analysis of outstanding balance:
(70)
(3,140)
(36)
(3,246)
Stage 2
(3,246)
(1,270)
-
(4,516)
Balance
625,264
Rating
B -
Annual Report 2019
215
3,704,142
24,666,041
(7,314)
(9,503)
28,353,366
9,945,682
1,348,559
17,059,125
28,353,366
1,460
9,085,184
19,266,722
28,353,366
28,353,366
4,168,973
42,349,919
-
-
46,518,892
25,397,558
4,109,576
17,011,758
46,518,892
1,724
10,203,376
36,313,792
46,518,892
46,518,892
Stage 1
28,370,183
(16,817)
28,353,366
EGP Thousands
Dec.31, 2019
Dec.31, 2018
6,025
749,625
29,112,513
(1,470,340)
28,397,823
(763,761)
(763,761)
27,634,062
-
3,669,700
49,441,511
(3,097,887)
50,013,324
(8,014,072)
(8,014,072)
41,999,252
FINANCIAL STATEMENTS: SEPARATE
19. Loans and advances to customers, net
Individual
- Overdraft
- Credit cards
- Personal loans
- Real estate 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
"Effect of applying
IFRS 9 "
Impairment provision
Unearned interest
Net loans and advances to customers
Distributed to
Current balances
Non-current balances
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
1,462,439
4,264,204
20,219,305
1,330,323
27,276,271
19,100,709
51,163,302
33,642,235
61,578
103,967,824
131,244,095
(55,197)
716,325
(12,542,212)
(41,908)
119,321,103
51,682,809
67,638,294
119,321,103
1,635,910
3,540,849
17,180,864
876,372
23,233,995
13,992,595
49,179,820
32,899,950
125,429
96,197,794
119,431,789
(65,718)
-
(13,040,828)
(16,038)
106,309,205
44,549,290
61,759,915
106,309,205
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20. Derivative financial instruments
20.1. Derivatives
The Bank uses the following financial derivatives for non hedging purposes.
Forward contracts represent commitments to buy foreign and local currencies including unexecuted spot transactions.
Future contracts for foreign currencies and/or interest rates represent contractual commitments to receive or pay net on
the basis of changes in foreign exchange rates or interest rates, and/or to buy/sell foreign currencies or financial instru-
ments in a future date with a fixed contractual price under active financial market.
Credit risk is considered low, and future interest rate contract represents future exchange rate contracts negotiated for case
by case, These contracts require 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 are exchange of currencies or interest (fixed rate versus variable rate for example) or both (meaning foreign ex-
change 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 fulfill
their liabilities. This risk is monitored continuously through comparisons of fair value and contractual amount, and in order
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 represent contractual agreements for the buyer (issuer) to
the seller (holders) as a right not an obligation whether to buy (buy option) or sell (sell option) at a certain day or within
certain year for a predetermined 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 is exposed to credit risk for
purchased options contracts only and in the line of its book cost which represent its fair value.
The contractual value for some derivatives options is considered a base to analyze the realized financial instruments on
the balance sheet, but it doesn’t provide an indicator for the projected cash flows of the fair value for current instruments,
and those amounts don’t reflects credit risk or interest rate risk.
Derivatives in the Bank's benefit that are classified as (assets) are conversely considered (liabilities) as a result of the
changes in foreign exchange prices or interest rates related to these derivatives. Contractual / expected total amounts of
financial derivatives can fluctuate from time to time as well as the range through which the financial derivatives can be
in benefit for 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.
20.1.1. For trading derivatives
Foreign currencies derivatives
- Forward foreign exchange contracts
- Currency swap
- Options
Total (1)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Notional
amount
8,315,292
4,904,151
1,365
Assets
Liabilities
52,183
24,756
-
76,939
189,833
16,082
-
205,915
Notional
amount
5,360,272
3,628,415
-
Assets
Liabilities
21,112
18,243
-
39,355
73,105
12,807
-
85,912
218
Annual Report 2019
Annual Report 2019
219
FINANCIAL STATEMENTS: SEPARATE
20.1.2. Fair value hedge
21. Financial investments securities
Interest rate derivatives
- Governmental debt instruments hedging
- Customers deposits hedging
Total (2)
Total financial derivatives (1+2)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Notional
amount
-
8,880,574
-
-
Assets
Liabilities
-
139,444
139,444
216,383
-
76,673
76,673
282,588
Notional
amount
662,803
7,103,638
-
-
Assets
Liabilities
-
12,934
12,934
52,289
9,164
37,782
46,946
132,858
20.2. Hedging derivatives
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
9,146 thousand at December 31, 2018 , Resulting in gains from hedging instruments at December 31, 2018 EGP 16,832 thousand.
Losses arose from hedged items at December 31, 2019 reached EGP 29,742 thousand against losses of EGP 34,193 thousand at
December 31, 2018.
The Bank uses interest rate swap contracts to cover part of the risk of potential increase in fair value of its fixed rate customer
deposits in foreign currencies. Net derivative value resulting from the related hedging instruments is EGP 62,771 thousand at
the end of December 31, 2019 against EGP 24,848 thousand at December 31, 2018, resulting in gains from hedging instruments
at December 31, 2019 of EGP 87,619 thousand against losses of EGP 90,306 thousand at December 31, 2018. Losses arose from the
hedged items at December 31, 2019 reached EGP 171,993 thousand against losses EGP 94,856 thousand at December 31 , 2018.
Movement of financial investment securities:
Beginning balance
Addition
Deduction
Exchange revaluation differences for foreign financial assets
Profit (losses) from fair value difference
Available for sale impairment charges
Ending Balance as of Dec.31, 2018
Beginning balance
Effect of applying IFRS 9
Addition *
Deduction
Exchange revaluation differences for foreign financial assets
Profit (losses) from fair value difference **
Ending Balance as of Dec.31, 2019
Available for
sale financial
investments
30,474,781
12,670,761
(1,872,988)
102,991
(2,118,094)
(39,561)
39,217,890
Financial
Assets at Fair
value through
OCI
39,217,890
42,268,972
58,210,468
(54,358,072)
(1,588,099)
6,146,098
89,897,257
Held to
maturity
financial
investments
45,167,722
33,995,313
(5,532,271)
-
-
-
73,630,764
Amortized cost
73,630,764
1,020,895
76,516,842
(43,937,957)
(4,931)
-
107,225,613
Financial
Assets at Fair
value through
P&L
Financial
Assets at Fair
value through
OCI
Amortized cost
Total
EGP Thousands
-
-
-
418,781
56,363,393
4,823,267
502,920
-
107,225,613
-
-
-
163,589,006
4,823,267
502,920
418,781
-
27,634,062
-
27,634,062
-
-
-
-
418,781
-
-
344,929
228,686
89,897,257
Trading
financial
investments
Available for
sale financial
investments
37,387,013
1,228,032
458,094
-
-
-
-
-
107,225,613
Held to
maturity
financial
investments
73,598,251
-
-
-
-
-
344,929
228,686
197,541,651
EGP Thousands
Total
113,255,344
1,228,032
458,094
429,249
Dec.31, 2019
Investments listed in the market
Governmental bonds
Other bonds
Equity instruments
Portfolio managed by others
Investments not listed in the market
"Treasury bills and other governmen-
tal notes"
Governmental bonds
Other bonds
Equity instruments
Mutual funds
Total
Dec.31, 2018
Investments listed in the market
Governmental bonds
Other bonds
Equity instruments
Portfolio managed by others
Investments not listed in the market
"Treasury bills and other
governmental notes"
Governmental bonds
Other bonds
Equity instruments
Mutual funds
Total
2,270,080
-
-
429,249
-
-
-
-
38,376
2,737,705
-
41,999,252
41,999,252
-
-
46,073
98,678
39,217,890
-
-
-
32,513
115,630,016
-
-
46,073
169,567
157,585,611
Stage 1
39,217,890
50,679,367
89,897,257
Movement of financial Assets at Fair value through OCI
Beginning Balance
Addition during the year
Ending balance
disclosure and measurement of financial assets and financial liabilities:
* Including amount of EGP 7,256,157 treasury bills less than 3 months.
** Does not include the hedging amount of Euro bonds with an amount of EGP Thousand 11,455.
220
Annual Report 2019
Annual Report 2019
221
FINANCIAL STATEMENTS: SEPARATE
The following table shows the financial assets and the net financial commitments according to the business model clas-
sification:
22. Investments in associates and subsidiaries
Debt financial
Assets at Fair
value through
OCI
Equity financial
Assets at Fair
value through
OCI
Financial
Assets at Fair
value through
P&L
Amortized cost
Dec.31, 2019
Cash and balances with
central bank
Due from banks
Treasury bills
Loans and advances to
customers, net
Derivative financial
instruments
Financial Assets at Fair value
through OCI
Amortized cost
Financial Assets at Fair value
through P&L
Total 1
Due to banks
Due to customers
Derivative financial
instruments
Other loans
Other provisions
Total 2
-
-
-
-
-
28,273,962
28,353,366
-
-
-
27,634,062
119,321,103
-
-
-
107,225,613
-
283,174,044
11,810,607
304,483,655
-
3,272,746
2,011,369
321,578,377
216,383
61,186,660
1,076,535
-
-
-
-
89,037,105
-
-
1,076,535
-
-
282,588
-
-
282,588
-
-
-
-
Total book
value
28,273,962
28,353,366
27,634,062
119,321,103
216,383
62,263,195
107,225,613
418,781
373,706,465
11,810,607
304,483,655
282,588
3,272,746
2,011,369
321,860,965
-
-
-
-
-
-
-
418,781
418,781
-
-
-
-
-
-
21.1. Profits (Losses) on financial investments
Profit (Loss) from selling FVOCI financial instruments
Released (Impairment) charges of equity instruments
Released (Impairment) charges of FVOCI equity instruments
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
497,894
(1,533)
(45,664)
450,697
441,628
(39,561)
-
402,067
Company's
country
Company's
assets
Company's
liabilities
(without
equity)
Company's
revenues
Company's
net profit
Investment
book value
Stake %
EGP Thousands
Egypt
37,240
1,259
470
3,467
40,103
99.99
Egypt
Egypt
42,920
45,557
17,399
(19,917)
14,100
741,875
501,413
511,163
22,437
9,750
23.50
32.50
822,035
548,229
529,032
5,987
63,953
Company's
country
Company's
assets
Company's
liabilities
(without
equity)
Company's
revenues
Company's
net profit
Investment
book value
Stake %
EGP Thousands
Egypt
Egypt
Egypt
-
-
-
-
-
-
-
-
44,783
99.99
14,100
23.50
32.50
860,057
640,554
926,624
72,954
9,750
860,057
640,554
926,624
72,954
68,633
Dec.31, 2019
Subsidiaries
- CVenture Capital
Associates
- Fawry plus
- International Co. for
Security and Services
(Falcon)
Total
Dec.31, 2018
Subsidiaries
- CVenture Capital
Associates
- Fawry Plus
- International Co. for
Security and Services
(Falcon)
Total
23. Other assets
Accrued revenues
Prepaid expenses
Advances to purchase of fixed assets
Accounts receivable and other assets (after deducting the provision)*
Assets acquired as settlement of debts
Insurance
Gross
Impairment of other assets
Net
EGP Thousands
Dec.31, 2019
Dec.31, 2018
4,011,196
217,484
942,781
4,333,966
356,382
36,130
9,897,939
(150,000)
9,747,939
4,509,514
186,797
768,733
3,790,709
276,520
30,945
9,563,218
-
9,563,218
*A provision with amount EGP 119 million has been charged against pending installments, and with amount EGP 212 million has been
released.
This item includes other assets that are not classified under specific items of balance sheet assets, such as: accrued income
and prepaid expenses, amounts paid in advance relating to taxes on bills and bonds, custodies, debit accounts under
settlement and any balance that has no place in another asset category.
222
Annual Report 2019
Annual Report 2019
223
FINANCIAL STATEMENTS: SEPARATE
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25 . Due to banks
Current accounts
Deposits
Total
Central banks
Local banks
Foreign banks
Total
Non-interest bearing balances
Floating bearing interest balances
Fixed interest bearing balances
Total
Current balances
26. Due to customers
Demand deposits
Time deposits
Certificates of deposit
Saving deposits
Other deposits
Total
Corporate deposits
Individual deposits
Total
Non-interest bearing balances
Floating interest bearing balances
Fixed interest bearing balances
Total
Current balances
Non-current balances
Total
.
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EGP Thousands
Dec.31, 2019
Dec.31, 2018
420,500
11,390,107
11,810,607
111,967
10,476,614
1,222,026
11,810,607
289,069
4,908,538
6,613,000
11,810,607
11,810,607
503,539
6,756,280
7,259,819
190,801
6,009,778
1,059,240
7,259,819
257,355
89,568
6,912,896
7,259,819
7,259,819
EGP Thousands
Dec.31, 2019
Dec.31, 2018
98,755,641
47,878,915
85,344,897
68,579,440
3,924,762
304,483,655
120,588,414
183,895,241
304,483,655
44,260,283
39,592,933
220,630,439
304,483,655
217,393,918
87,089,737
304,483,655
92,465,717
43,561,846
81,059,934
62,812,279
5,440,696
285,340,472
116,885,763
168,454,709
285,340,472
48,741,931
23,738,113
212,860,428
285,340,472
202,169,757
83,170,715
285,340,472
224
Annual Report 2019
Annual Report 2019
225
FINANCIAL STATEMENTS: SEPARATE
27. Other loans
Interest rate
%
Maturity date
Maturing
through next
year
EGP Thousands
Balance on
Balance on
Dec.31, 2019 Dec.31, 2018
Agricultural Research and Develop-
ment Fund (ARDF)
Social Fund for Development (SFD)
European Bank for Reconstruction
and Development (EBRD) subordi-
nated Loan
International Finance Corporation
(IFC) subordinated Loan
Balance
3.5 - 5.5
depends on
maturity date
3 months T/D
or 9% which is
more
3 months libor
+ 6.2%
3 months libor
+ 6.2%
3-5 years*
56,578
61,578
125,429
04/01/2020*
2,868
2,868
13,380
10 years
10 years
-
-
1,604,150
1,791,360
1,604,150
1,791,360
59,446
3,272,746
3,721,529
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* Represents the date of loan repayment to the lending agent.
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28. Other liabilities
Accrued interest payable
Accrued expenses
Accounts payable
Other credit balances
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
1,090,649
1,027,526
6,097,077
181,235
8,396,487
1,347,397
733,218
4,101,884
319,054
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226
Annual Report 2019
Annual Report 2019
227
FINANCIAL STATEMENTS: SEPARATE
30. Equity
30.1. Capital
The authorized capital reached EGP 50 billion according to the extraordinary general assembly decision on 12 June 2019.
31 . Deferred tax assets (Liabilities)
Deferred tax assets and liabilities are attributable to the following:
• Increase issued and Paid in Capital by amount EGP 105,413 thousand on November 18,2019 to reach EGP 14,690,821 thou-
sand according to Board of Directors decision on February 4, 2019 by issuance of tenth tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 2,917,082 thousand on February 14, 2019 to reach 14,585,408 according
to Ordinary GeneralAssembly Meeting decision on March 4 ,2018 by distribution of a one share for every four outstanding
shares by capitalizing on the General Reserve.
• Increase issued and Paid in Capital by amount EGP 50,315 thousand on August 02,2018 to reach EGP 11,668,326 thousand
(against EGP11,618,011 thousand in 2017) according to Board of Directors decision on January 31, 2018 by issuance of ninth
tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 79,351 thousand on May 24,2017 to reach EGP 11,618,011 thousand ac-
cording toBoard of Directors decision on November 9, 2016 by issuance of eighth tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 68,057 thousand on April 19,2016 to reach EGP 11,538,660 thousand
according to Board of Directors decision on November 10, 2015 by issuance of seventh tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 2,294,121 thousand on December 10, 2015 to reach 11,470,603 accord-
ing to Ordinary General Assembly Meeting decision on March 12 ,2015 by distribution of a one share for every four out-
standing shares by capitalizing on the General Reserve.
• Increase issued and Paid in Capital by amount EGP 94,748 thousand on April 5,2015 to reach EGP 9,176,482 thousand ac-
cording to Board of Directors decision on November 11, 2014 by issuance of sixth tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 79,299 thousand on March 23,2014 to reach EGP 9,081,734 thousand
according to Board of Directors decision on December 10, 2013 by issuance of fifth tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 3,000,812 thousand on December 5, 2013 according to Extraordinary
General Assembly Meeting decision on July 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.
• The Extraordinary General Assembly approved in the meeting of March 21,2016 continue 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 10% of issued and paid- in capital at par value ,through 10 years starting year 2016 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 of this divi-
dend, which includes staff profit share and remuneration of the Board of Directors stated in the law.
30.2. Reserves
According to The Bank status 5% of net profit is used to increase the legal reseve to reaches 50% of The Bank's issued and
paid in capital.
Central Bank of Egypt concurrence for usage of special reserve is required.
Fixed assets (depreciation)
Other provisions (excluded loan loss, contingent liabilities and income tax
provisions)
Intangible Assets
Other investments impairment
Reserve for employee stock ownership plan (ESOP)
Interest rate swaps revaluation
Trading investment revaluation
Forward foreign exchange deals revaluation
Balance
Movement of Deferred Tax Assets and Liabilities:
Beginning Balance
Effect of applying IFRS 9
Additions / disposals
Ending Balance
Assets
(Liabilities)
Dec.31, 2019
EGP Thousands
Assets
(Liabilities)
Dec.31, 2018
(79,162)
146,675
-
76,407
216,709
6,642
(35,477)
18,545
350,339
(49,750)
53,552
53,657
65,788
166,122
4,695
7,394
6,912
308,370
Assets
(Liabilities)
Dec.31, 2019
Assets
(Liabilities)
Dec.31, 2018
308,370
136,491
(94,522)
350,339
179,630
-
128,740
308,370
32. Share-based payments
According to the extraordinary general assembly meeting on June 26, 2006, the Bank launched new Employees Share
Ownership 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 instru-
ments is measured using the Black-Scholes pricing model.
Details of the rights to share outstanding during the year 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
Dec.31, 2019
No. of shares in
thousand
Dec.31, 2018
No. of shares in
thousand
29,697
9,152
(880)
(10,541)
27,428
26,600
10,422
(1,035)
(6,290)
29,697
228
Annual Report 2019
Annual Report 2019
229
FINANCIAL STATEMENTS: SEPARATE
Details of the outstanding tranches are as follows:
33.2. Legal reserve
Maturity date
Exercise price
Fair value
EGP
EGP
2020
2021
2022
Total
10.00
10.00
10.00
52.44
54.51
50.53
No. of shares in
thousand
8,685
9,850
8,893
27,428
The fair value of granted shares is calculated using Black-Scholes pricing model with the following:
Exercise price
Current share price
Expected life (years)
Risk free rate %
Dividend yield%
Volatility%
13th tranche
12th tranche
10
59.26
3
18.14%
1.70%
25%
10
77.35
3
15.54%
1.29%
26%
Volatility is calculated based on the daily standard deviation of returns for the last five years.
33. Reserves and retained earnings
Legal reserve
General reserve
Capital reserve
Retained earnings
Special reserve
Reserve for financial assets at fair value through OCI
Reserve for employee stock ownership plan
Banking risks reserve
IFRS 9 risk reserve
General risk reserve
Ending balance
33.1. Banking risks reserve
Beginning balance
Transferred to bank risk reserve
Ending balance
EGP Thousands
Dec.31, 2019
Dec.31, 2018
2,188,029
16,474,429
13,466
11,803,555
-
4,111,781
963,152
5,164
-
1,549,445
37,109,021
1,710,293
12,776,215
12,421
9,555,755
20,645
(3,750,779)
738,320
4,323
1,411,549
-
22,478,742
EGP Thousands
Dec.31, 2019
Dec.31, 2018
4,323
841
5,164
3,634
689
4,323
Beginning balance
Transferred to legal reserve
Ending balance
33.3. Reserve for financial assets at fair value through OCI
Beginning balance
Net unrealised gain/(loss) on financial assets at fair value through OCI
Effect of applying IFRS 9
Release provision for impairment of debt instruments investments
Ending balance
33.4. Retained earnings
Beginning balance
Transferred to reserves
Dividend paid
Net profit for the year
Transferred ( from) to bank risk reserve
Ending balance
33.5. Reserve for employee stock ownership plan
Beginning balance
Transferred to reserves
Cost of employees stock ownership plan (ESOP)
Ending balance
EGP Thousands
Dec.31, 2019
Dec.31, 2018
1,710,293
477,736
2,188,029
1,332,807
377,486
1,710,293
EGP Thousands
Dec.31, 2019
Dec.31, 2018
(3,750,779)
6,157,553
1,889,928
(184,921)
4,111,781
(1,642,958)
(2,107,821)
-
-
(3,750,779)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
9,555,755
(6,854,370)
(2,700,544)
11,803,555
(841)
11,803,555
6,138,790
(3,994,924)
(2,143,177)
9,555,755
(689)
9,555,755
EGP Thousands
Dec.31, 2019
Dec.31, 2018
738,320
(239,707)
464,539
963,152
489,334
(159,360)
408,346
738,320
230
Annual Report 2019
Annual Report 2019
231
FINANCIAL STATEMENTS: SEPARATE
33.6. General risk reserve
35.3. Letters of credit, guarantees and other commitments
Beginning balance
Effect of applying IFRS 9
Transferred to general risk reserve
Ending balance
EGP Thousands
Dec.31, 2019
General risk
reserve
-
117,251
1,432,194
1,549,445
In accordance with the instructions issued by the Central Bank of Egypt on February 26, 2019, IFRS 9 has been effective
from 1 January 2019. The Bank has measured the effect of applying the Standard as follows in accordance with the above
instructions.
34. 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 with maturities more than three months
Treasury bills with maturities more than three months
Total
35. Contingent liabilities and commitments
35.1. Legal claims
EGP Thousands
Dec.31, 2019
Dec.31, 2018
28,273,962
28,370,183
27,634,062
(22,397,310)
(10,593,903)
(28,391,977)
22,895,017
20,058,974
46,518,892
41,999,252
(13,526,763)
(10,733,386)
(50,013,324)
34,303,645
• There is a number of existing cases against the bank on December 31, 2019 without provision as the bank doesn't expect to
incur losses from it.
• A provision for legal cases that are expected to generate losses has been created. (Disclosure No. 29)
35.2. Capital commitments
35.2.1. Financial investments
The capital commitments for the financial investments reached on the date of financial position EGP 148,361 thousand
as follows:
Financial Assets at Fair value through OCI
Financial investments in subsidiaries
Investments
value
160,415
160,412
Paid
132,362
40,103
Remaining
28,053
120,309
35.2.2. Fixed assets and branches constructions
The 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 911,159 thousand.
Letters of guarantee
Letters of credit (import and export)
Customers acceptances
Total
35.4. Credit facilities commitments
Credit facilities commitments
36. Mutual funds
Osoul fund
EGP Thousands
Dec.31, 2019
Dec.31, 2018
61,143,216
5,866,630
3,188,757
70,198,603
66,166,953
4,178,288
1,050,573
71,395,814
EGP Thousands
Dec.31, 2019
Dec.31, 2018
6,857,510
9,173,782
• CIB established an accumulated return mutual fund under license no.331 issued from capital market authority on Febru-
ary 22, 2005. CI Assets Management Co.- Egyptian joint stock co - manages the fund.
• The number of certificates issued reached 3,205,040 with redeemed value of EGP 1,324,387 thousands.
• The market value per certificate reached EGP 413.22 on December 31, 2019.
• The Bank portion got 137,112 certificates with redeemed value of EGP 56,657 thousands.
Istethmar fund
• CIB bank established the second accumulated return mutual fund under license no.344 issued from capital market au-
thority on February 26, 2006. CI Assets Management Co.- Egyptian joint stock co - manages the fund.
• The number of certificates issued reached 421,394 with redeemed value of EGP 80,718 thousands.
• The market value per certificate reached EGP 191.55 on December 31, 2019.
• The Bank portion got 50,000 certificates with redeemed value of EGP 9,578 thousands.
Aman fund ( CIB and Faisal Islamic Bank Mutual Fund)
• CIB and Faisal Islamic Bank established an accumulated return mutual fund under license no.365 issued from capital
market authority on July 30, 2006. CI Assets Management Co.- Egyptian joint stock co - manages the fund.
• The number of certificates issued reached 291,583 with redeemed value of EGP 29,336 thousands.
• The market value per certificate reached EGP 100.61 on December 31, 2019.
• The Bank portion got 27,690 certificates with redeemed value of EGP 2,786 thousands.
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 91,376 with redeemed value of EGP 21,947 thousands.
• The market value per certificate reached EGP 240.18 on December 31, 2019.
• The Bank portion got 50,000 certificates with redeemed value of EGP 12,009 thousands.
232
Annual Report 2019
Annual Report 2019
233
FINANCIAL STATEMENTS: SEPARATE
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 86,779 with redeemed value of EGP 24,495 thousands.
• The market value per certificate reached EGP 282.27 on December 31, 2019.
• The Bank portion got 50,000 certificates with redeemed value of EGP 14,114 thousands.
Takamol fund
• CIB bank established an accumulated return mutual fund under license no.431 issued from financial supervisory author-
ity on February 18, 2015. CI Assets Management Co.- Egyptian joint stock co - manages the fund.
• The number of certificates issued reached 140,659 with redeemed value of EGP 25,921 thousands.
• The market value per certificate reached EGP 184.28 on December 31, 2019.
• The Bank portion got 50,000 certificates with redeemed value of EGP 9,214 thousands.
39. Tax status
Corporate income tax
• Settlement of corporate income tax since the start of activity till 2017
• 2018 examined & paid
• The yearly income tax return is submitted in legal dates
Salary tax
• Settlement of salary tax since the start of activity till 2018
Stamp duty tax
• The period since the start of activity till 31/07/2006 was examined & paid, disputed points have been transferred to the
court for adjudication
• The period from 01/08/2006 till 31/12/2018 was examined & paid in accordance with the protocol signed between the Fed-
eration of Egyptian Banks & the Egyptian Tax Authority
37. Transactions with related parties
All banking transactions with related parties are conducted in accordance with the normal banking practices and regula-
tions applied to all other customers without any discrimination.
40. Intangible assets:
37.1. Loans, advances, deposits and contingent liabilities
Loans and advances
Deposits
Contingent liabilities
37.2. Other transactions with related parties
International Co. for Security & Services
CVenture Capital
Fawry plus
38. Main currencies positions
Egyptian pound
US dollar
Sterling pound
Japanese yen
Swiss franc
Euro
EGP Thousands
9,581
83,921
1,261
Book value
Amortization
Net book value
EGP Thousands
Dec.31, 2019
Dec.31, 2018
651,041
(651,041)
-
651,041
(412,326)
238,715
According to CBE's regulation issued on Dec 16, 2008, an annual amortization of 20% has been applied on intangible as-
sets starting from acquisition date.
Cashflow disclosures
EGP Thousands
Income
Expenses
38
28
553
296,717
568
-
EGP Thousands
Dec.31, 2019
Dec.31, 2018
(387,742)
(79,511)
248
6
484
32,890
(636,384)
578,745
2,189
(20)
658
37,144
Main currencies positions above represents what is recognized in the balance sheet position of the Central Bank of Egypt.
234
Annual Report 2019
Annual Report 2019
235
FINANCIAL STATEMENTS: SEPARATE
41. Treasury bills and other governmental notes - net increase (decrease)
Dec.31, 2018
91 Days
maturity
Unearned
interest
Net
182 Days
maturity
Unearned
interest
Net
364 Days
maturity
Unearned
interest
Net
Total unearned
interest
Net
Change
Dec.31, 2018
Dec.31, 2017
Total
Net
Total
Net
Change
-
-
3,669,700
(86,343)
49,441,511
(3,011,544)
-
-
-
-
-
1,289,425
(87,067)
3,583,357
1,202,358
(2,380,999)
57,602,997
(4,151,507)
Total other assets by end of 2017
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Total 1
Total other assets by end of 2018
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Unrealized amount from avilable for sale investments
Impairment charge for other assets
Total 2
Change (1-2)
46,429,967
53,451,490
7,021,523
(3,097,887)
(4,238,574)
43. Important Events
EGP Thousands
Dec.31, 2018
6,886,807
(45,083)
(522,211)
6,319,513
9,563,218
(276,520)
(768,733)
(251,750)
316,763
8,582,978
(2,263,465)
50,013,324
54,653,848
42. Other assets - net increase (decrease)
Total other assets by end of 2018
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Total 1
Total other assets by end of period
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Impairment charge for other assets
Total 2
Change (1-2)
The Board of Directors and CBE have approved, on 4 November 2019 & 16 January 2020 respectively, to gain a control stake
in a Kenyan bank, and CIB is currently in the process of fulfilling the necessary approvals from all supervisory and oth-
erwise relevant authorities in Kenya.
4,640,524
EGP Thousands
Dec.31, 2019
9,563,218
(276,520)
(768,733)
8,517,965
9,747,939
(356,382)
(942,781)
(93,313)
8,355,463
162,502
236
Annual Report 2019
Annual Report 2019
237
FINANCIAL STATEMENTS: CONSOLIDATED
238
Annual Report 2019
Annual Report 2019
239
FINANCIAL STATEMENTS: CONSOLIDATED
Consolidated balance sheet as at
December 31, 2019
Consolidated income statement for the
year ended December 31, 2019
Notes
Dec. 31, 2019
Dec. 31, 2018
EGP Thousands
Notes
Dec. 31, 2019
Dec. 31, 2018
EGP Thousands
Assets
Cash and balances with central bank
Due from banks
Loans and advances to banks, net
Loans and advances to customers, net
Derivative financial instruments
Investments
- Financial investments securities
- Investments in associates
Other assets
Intangible assets
Deferred tax assets (Liabilities)
Property, plant and equipment
Total assets
Liabilities and equity
Liabilities
Due to banks
Due to customers
Derivative financial instruments
Current tax liabilities
Other liabilities
Other loans
Provisions
Total liabilities
Equity
Issued and paid up capital
Reserves
Reserve for employee stock ownership plan (ESOP)
Retained earnings *
Total equity
Total liabilities and equity
15
16
18
19
20
21
22
23
40
31
24
25
26
20
28
27
29
30
33
33
33
28,273,962
28,353,366
625,264
119,321,103
216,383
197,541,651
107,693
9,748,143
-
350,339
2,204,464
386,742,368
11,810,607
304,448,455
282,588
4,639,364
8,396,794
3,272,746
2,011,369
334,861,923
14,690,821
24,344,815
963,152
11,881,657
51,880,445
386,742,368
20,058,974
46,518,892
67,703
106,309,205
52,289
157,585,611
106,558
9,563,018
238,715
308,370
1,651,875
342,461,210
7,259,819
285,296,869
132,858
3,625,579
6,501,553
3,721,529
1,694,607
308,232,814
11,668,326
12,184,667
738,320
9,637,083
34,228,396
342,461,210
The accompanying notes are an integral part of these financial statements.
(Audit report attached)
* Including net profit for the current year
240
Annual Report 2019
Hisham Ezz Al-Arab
Chairman and Managing Director
Continued Operations
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
Profits (Losses) on financial investments
Administrative expenses
Other operating (expenses) income
Intangible assets amortization
Impairment release (charges) for credit losses
Bank's share in the profits of associates
Profit before income tax
Income tax expense
Deferred tax assets (Liabilities)
Net profit for the year
Bank shareholders
Earning per share
Basic
Diluted
6
7
8
9
21
10
11
12
13
31 - 13
14
42,600,957
(21,022,338)
21,578,619
37,403,709
(19,260,190)
18,143,519
3,451,688
(1,170,893)
2,280,795
53,423
688,059
450,697
(5,048,922)
(1,794,750)
(238,715)
(1,435,460)
1,135
16,534,881
(4,639,364)
(94,522)
11,800,995
11,800,995
3,402,616
(991,957)
2,410,659
25,958
1,089,076
402,067
(4,223,959)
(1,589,675)
(130,208)
(3,076,023)
27,419
13,078,833
(3,625,579)
128,740
9,581,994
9,581,994
7.33
7.28
5.94
5.89
Hisham Ezz Al-Arab
Chairman and Managing Director
Annual Report 2019
241
FINANCIAL STATEMENTS: CONSOLIDATED
Consolidated statement of other
comprehensive income for the year ended
December 31, 2019
Net profit for the year
Other comprehensive income items that will not be reclassified to the
Profit or Loss:
Net change in fair value of debt instruments measured at fair value through
other comprehensive income
Other comprehensive income items that is or may be reclassified to the
profit or loss:
Net change in fair value of debt instruments measured at fair value through
other comprehensive income
Cumulative foreign currencies translation differences
Expected credit loss for fair value of debt instruments measured at fair value
through other comprehensive income
Total other comprehensive income for the year
EGP Thousands
Dec. 31, 2019
Dec. 31, 2018
11,800,995
9,581,994
212,967
57,026
5,944,586
(2,164,847)
2,501
(184,921)
-
-
17,776,128
7,474,173
242
Annual Report 2019
Consolidated cash flow for the year ended
December 31, 2019
Cash flow from operating activities
Profit before income tax from continued operations
Adjustments to reconcile net profit to net cash provid-
ed by operating activities
Fixed assets depreciation
Impairment charge for credit losses (Loans and advances to
customers)
Other provisions charges
Impairment charge for credit losses (due from banks)
Impairment charge for credit losses ( financial investments)
Impairment charge for other assets
Exchange revaluation differences for financial assets at fair
value through OCI
Intangible assets amortization
Impairment charge financial assets at fair value through OCI
Utilization of other provisions
Other provisions no longer used
Exchange differences of other provisions
Profits from selling property, plant and equipment
(Profits) losses from selling financial investments
Shares based payments
Bank's share in the profits of associates
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
Financial assets at fair value through P&L
Derivative financial instruments
Loans and advances to banks and customers
Other assets
Due to banks
Due to customers
Income tax obligations paid
Other liabilities
Net cash provided from operating activities
Cash flow from investing activities
Payment for purchases of associates
"Payment for purchases of property, plant, equipment and
branches
constructions"
Proceeds from selling property, plant and equipment
Proceeds from redemption of financial assets at amortized cost
Payment for purchases of financial assets at amortized cost
Payment for purchases of financial assets at fair value
through OCI
Proceeds from selling financial assets at fair value through OCI
Net cash used in investing activities
Notes
Dec. 31, 2019
Dec. 31, 2018
EGP Thousands
16,534,881
13,078,833
24
12
29
12
12
23
20
21
29
29
29
11
21
15
41
21
20
18 - 19
42
25
26
28
11
21
21
21
576,544
1,610,878
461,869
9,503
(184,921)
(93,313)
1,593,030
238,715
-
(28,135)
(6,910)
(110,062)
(1,439)
(497,894)
464,539
(1,135)
390,830
3,076,023
101,501
-
-
316,763
(102,991)
130,208
39,561
(2,114)
(17,670)
(2,269)
(1,045)
(441,628)
408,346
(27,419)
20,566,150
16,946,929
(8,870,547)
-
2,318,924
(2,910)
(14,533,328)
163,933
4,550,788
19,151,586
(3,625,579)
1,895,241
21,614,258
(13,661,577)
4,640,524
4,557,492
(66,141)
(21,255,952)
(2,263,465)
5,381,901
34,573,817
(2,778,973)
1,025,022
27,099,577
-
(10,575)
(1,303,181)
(874,708)
1,439
43,937,957
(76,516,842)
1,045
5,532,271
(33,995,313)
(50,954,311)
(12,670,761)
54,855,966
(29,978,972)
2,059,341
(39,958,700)
Annual Report 2019
243
FINANCIAL STATEMENTS: CONSOLIDATED
Consolidated cash flow for the year ended
December 31, 2019 (Cont.)
Notes
Dec. 31, 2019
Dec. 31, 2018
EGP Thousands
Cash flow from financing activities
Increase (decrease) in long term loans
Dividend paid
Capital increase
Net cash used in (provided from) 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
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 with maturities more than three months
Treasury bills with maturity more than three months
Total cash and cash equivalent
27
15
16
17
15
(448,783)
(2,700,544)
105,413
(3,043,914)
46,793
(2,143,177)
50,315
(2,046,069)
(11,408,628)
(14,905,192)
34,303,645
22,895,017
49,208,837
34,303,645
28,273,962
28,370,183
27,634,062
(22,397,310)
(10,593,903)
(28,391,977)
22,895,017
20,058,974
46,518,892
41,999,252
(13,526,763)
(10,733,386)
(50,013,324)
34,303,645
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Annual Report 2019
Annual Report 2019
245
FINANCIAL STATEMENTS: CONSOLIDATED
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Notes to the consolidated financial statements
for the year ended December 31, 2019
1. General information
Commercial International Bank (Egypt) S.A.E. provides retail, corporate and investment banking services in various
parts of Egypt through 180 branches, and 27 units employing 6900 employees on the statement of financial position 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 Egyptian stock exchange.
The bank owns investments in a subsidiary “C-Ventures”, in which the bank’s share is 99.99%.
Financial statements have been approved by board of directors on February 3, 2020.
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 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.
Also according to the instructions for applying the International Standard for Financial Reports (9) issued by the Central
Bank of Egypt on February 26, 2019, reference is made to what was not mentioned in the instructions of the Central Bank
of Egypt to the Egyptian Accounting Standards.
2.1.1. Basis of consolidation
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.
In January 2019 and in accordance with the instructions of the Central Bank, the Bank did not restate the comparative
figures and recognized the effect of the application of IFRS 9 on the profit as of the date of application. Clarification of the
impact of application of IFRS 9 clarifies further information on the impact of the application.
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.
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246
Annual Report 2019
Annual Report 2019
247
FINANCIAL STATEMENTS: CONSOLIDATED
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 Bank applies the Equity Method in its consolidated financial statements, initially recognizing the Bank’s investments in
associate companies at amortized cost. The book value of associate investments is subsequently increased or decreased by
recognition of the Bank’s share in the profits or losses of associate companies after the date of acquisition among the Bank’s
profit or loss. The book value for associate investments is also decreased by the dividends received from associate companies.
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 at 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.
• Items of other comprehensive income with equity in relation to investments in equity instruments at fair value through
comprehensive income.
• Other operating revenues (expenses) from the remaining assets and liabilities.
Changes in the fair value of financial instruments of a monetary nature in foreign currencies that are classified as finan-
cial investments at fair value through comprehensive income (debt instruments) are analyzed between valuation differ-
ences that resulted from changes in the cost consumed for the instrument and differences that resulted from changing the
exchange rates in effect and differences caused by changing the fair value For the instrument, the evaluation differences
related to changes in the cost consumed are recognized in the income of loans and similar revenues and in the differences
related to changing the exchange rates in other operating income (expenses) item, and are recognized in the items of
comprehensive income right The ownership of the difference in the change in the fair value (fair value reserve / financial
investments at fair value through comprehensive income).
Valuation differences arising from the measurement of items of a non-monetary nature at fair value through profit and
losses resulting from changes in the exchange rates used to translate those items include, and then are recognized in the
income statement by the total valuation differences resulting from the measurement of equity instruments classified
at fair value through Profits and losses, while the total valuation differences resulting from the measurement of equity
instruments at fair value through comprehensive income are recognized within other comprehensive income items in
equity, fair value reserve item for financial investments at fair value through comprehensive income.
Financial policies applied as of December 31, 2018
2.5. Financial assets
The Bank classifies its financial assets in the following categories:
• Financial assets designated at fair value through profit or loss (FVTPL).
• Loans and receivables.
• Held to maturity financial 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 loss (FVTPL)
This category is divided into two sub-categories:
• Financial assets held for trading.
• Financial assets designated at fair value through profit and loss (FVTPL) at inception.
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 a part of a portfolio of identified financial instruments that are managed together, and
for which there is evidence of an actual recent 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 (FVTPL) 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 measured at fair
value with changes in the fair value recognized in the income statement.
• 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 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.
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.
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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.
Changes in accounting policies
IFRS 9 Effective 1 January 2019 in accordance with the Central Bank of Egypt regulations issued on 26 February 2019
The requirements in IFRS 9 represent a material change from the requirements of EAS 26 Financial Instruments: Recogni-
tion and Measurement. The new standard leads to fundamental changes in the accounting of financial assets and some
aspects of accounting of financial liabilities.
The principal changes in the Group's accounting policies resulting from the adoption of IFRS 9 are summarized below
Classification of financial assets and liabilities
IFRS 9 includes three categories of major classifications of financial assets: measured at amortized cost and fair value
through other comprehensive income and fair value through profit or loss. The classification of IFRS 9 is generally based
on the business model through which the financial asset is managed and its contractual cash flows. The Standard excludes
the current categories of EAS 26 which include held-to-maturity investments and held for trading and available for sale.
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.
• IFRS 9 replaces the "recognized loss" model in EAS 26 with the "expected credit loss" model. The new impairment model
also applies to certain credit and financial collateral contracts but does not apply to equity investments under IFRS (IFRS
9), credit losses are recognized before they are achieved, other than EAS 26
Available-for-sale, held–for-trading and financial assets designated at fair value through profit and loss are subsequently mea-
sured at fair value. Loans and 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 as available for sale, the value is measured at cost less impairment.
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:
• 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 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.
• 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.
The following are the principal changes in the Group's accounting policy: Impairment of financial assets:
Default Definition as per IFRS 9
Default is not specifically defined within IFRS 9. However the following guidance is available within the Standard:
‘’When defining default for the purposes of determining the risk of a default occurring, an entity shall apply a default defi-
nition that is consistent with the definition used for internal credit risk management purposes for the relevant financial
instrument and consider qualitative indicators (for example, financial covenants) when appropriate. However, there is a
rebuttable presumption that default does not occur later than when a financial asset is 90 days past due (DPD) unless an
entity has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropri-
ate.
The definition of default used for these purposes shall be applied consistently to all financial instruments unless informa-
tion becomes available that demonstrates that another default definition is more appropriate for a particular financial
instrument.’
• The Bank applies a three-stage approach to measure expected credit losses for financial assets carried at amortized cost
and debt instruments classified as at fair value through other comprehensive income. Assets are transferred through the
following three stages on the basis of changes in the quality of credit ratings since the initial recognition of these assets:
• Stage 1: expected credit losses over 12 months
For exposures where there has been no significant increase in credit risk since initial recognition, the portion of expected
long-term credit losses associated with the probability of default over the next 12 months is recognized.
• Stage 2: Unrealized credit losses over life - non-credit risk For credit exposures where there has been a significant increase
in credit risk since initial recognition, but not credit default, expected credit losses are recognized over the life of the asset.
Significant Increase in Credit Risk (SICR):
CIB will use the following indicators to identify any significant increase in credit risks.
For Corporate and Business Banking Risk Rating, Transition in Risk Ratings, Delinquency Status, Industry and Restruc-
tured status.
For Retail Delinquency Status, Watch list, Individual Profile, Restructured status.
• Stage 3: Expected Long-Term Credit Losses Financial assets are credit risk when one or more events have occurred that
have a detrimental effect on the estimated future cash flows of those financial assets. Due to the use of the same standards
in IAS 39, the Bank's methodology for specific provisions remains unchanged.
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FINANCIAL STATEMENTS: CONSOLIDATED
Financial policies applied as of 1 January 2019
Financial assets and liabilities
1. Initial Recognition
All "regular" purchases and sales of financial assets are recognized on the trade date, the date on which the Group com-
mits to purchase or sell the asset. Regular purchases and sales are the purchases and sales of financial assets that require
delivery of assets within the time frame generally provided by law or by market norms.
Financial assets or liabilities are measured initially at fair value plus, in the case of an item not carried at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition or issue.
2. Measurement and Classification
Financial assets - Policy effective 1 January 2019.
On initial recognition, financial assets are classified as measured at cost, carried at fair value through other comprehen-
sive income or at fair value through profit or loss. Financial assets are measured at amortized cost when each of the fol-
lowing officers is satisfied and is not classified as at fair value through profit or loss:
• Assets are retained in a business model that is intended to hold assets in order to collect contractual cash flows;
• The contractual terms of the financial assets on specific dates result in cash flows which are only payments on the original
amount and interest on the original amount outstanding.
Debt instruments are measured at fair value through other comprehensive income only when both of the following condi-
tions are met and are not classified as at fair value through profit or loss:
Upon initial recognition of equity investments that are not held for trading, the Bank may elect irrevocably to present
changes in fair value in other comprehensive income. This choice is made on an investment-by-investment basis.
All other financial assets are classified at fair value through profit or loss.
Business model
The Bank assesses the objective of the business model in which the asset is maintained at the business portfolio level. This
method better reflects how business is managed and how information is presented to management. The following infor-
mation is taken into consideration:
Debt instruments and equity instruments are classified and measured as follows:
Financial Instrument
Equity Instruments
Debt Instruments / Loans & Facilities
Methods of Measurement according to Business Models
Amortized Cost
Not Applicable
Business Model
of Assets held
for Collecting
Contractual
Cash Flows
Fair Value
Through Comprehensive
Income
An irrevocable election at
Initial Recognition
Through Profit or Loss
Normal treatment of equity
instruments
Business Model of Assets
held for Collecting Contrac-
tual Cash Flows & Selling
Business Model of Assets
held for Trading
The Bank prepares, documents and approves Business Models in accordance with the requirements of IFRS 9 and reflects
the Bank's strategy for managing financial assets and cash flows as follows:
Financial asset
Business model
Basic characteristics
Financial assets at amortized
cost
Business model for financial assets
held to collect contractual cash flows
•
• The objective of the business model
is to retain the financial assets to
collect the contractual cash flows
of the principal amount of the
investment and the proceeds.
Sale is an exceptional event for the
purpose of this model and under
the terms of the criterion of a
deterioration in the creditworthi-
ness of the issuer of the financial
instrument.
Lowest sales in terms of turnover
and value.
•
• The Bank makes clear and reliable
documentation of the reasons for
each sale and its compliance with
the requirements of the Standard.
•
Both the collection of contractual
cash flows and sales are complemen-
tary to the objective of the model.
• High sales (in terms of turnover and
value) compared to the business
model retained for the collection of
cash flows.
• The objective of the business model
Financial assets at fair value
through profit or loss
Other business models include trading
- management of financial assets at
fair value - maximizing cash flows by
selling)
•
is not to retain the financial asset
for the collection of contractual or
retained cash flows for the collection
of contractual cash flows and sales.
Collecting contractual cash flows
is an incidental event for the model
objective.
• Management of financial assets at
fair value through profit or loss to
avoid inconsistency in accounting
measurement.
• The Bank assesses the objective of the business model at the portfolio level where the financial asset is retained as reflect-
ing the way the business is managed and the manner in which the management is provided. The information to be taken
into account when evaluating the objective of the business model is as follows:
• The documented policies and objectives of the portfolio and the implementation of these policies in practice. In par-
ticular, whether the management strategy focuses only on the collection of the contractual cash flows of the asset
and maintaining a specific rate of return to meet the maturities of the financial assets with the maturity dates of the
liabilities that finance these assets or generate cash flows through the sale of these assets.
• How to evaluate and report on portfolio performance to senior management.
• Risks affecting the performance of the business model, including the nature of the financial assets held within that
model and the manner in which these risks are managed.
• How to assess the performance of business managers (fair value, return on portfolio, or both).
Assets are retained in the business model, which is intended to achieve both the collection of contractual cash flows and
the sale of financial assets. The contractual terms of the financial assets on specific dates result in cash flows that are only
payments on the original amount and interest on the original amount outstanding.
Financial assets at fair value
through other comprehensive
income
Business model of financial assets held
to collect cash flows and sales
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FINANCIAL STATEMENTS: CONSOLIDATED
Translation copied
• The periodicity, value and timing of sales in prior periods, the reasons for such transactions, and expectations regard-
ing future selling activities. However, information on sales activities is not taken into account separately, but as part of
a comprehensive assessment of how the Bank's objective of managing financial assets and how to generate cash flows
is achieved.
• Financial assets held for trading or managed and their fair value performance are measured at fair value through profit
or loss as they are not held to collect contractual cash flows or to collect contractual cash flows and sell financial assets
together.
• Assess whether the contractual cash flows of an asset represent payments that are limited to the principal of the instru-
The financial asset (in whole or in part) is derecognised when:
• Expiration of rights to receive cash flows from the original;
(A) The Bank has transferred substantially all the risks and rewards of the asset or (b) has not transferred or retained All
the material risks and benefits of the assets but transferred control over the assets.
Financial Liabilities
A financial liability is derecognised when the obligation under the obligation is discharged, canceled or expires.
ment and the proceeds:
Investments held for trading - effective until 31 December 2018
For the purpose of this valuation, the Bank recognizes the original amount of the financial instrument at the fair value of
the financial asset at initial recognition. The return is defined as the time value of money and the credit risk associated
with the original amount over a specified period of time and other basic lending risk and costs (such as liquidity risk and
administrative costs) as well as profit margin.
To assess whether the contractual cash flows of an asset are payments that are limited only to the asset of the financial in-
strument and the yield, the Bank takes into consideration the contractual terms of the instrument. This includes assessing
whether the financial asset includes contractual terms that may change the timing or amount of contractual cash flows,
thereby not meeting that requirement. In order to conduct such an assessment, the Bank shall consider:
• Potential events that may change the amount and timing of cash flows.
• Leverage characteristics (rate of return, maturity, currency type ...).
• Terms of accelerated payment and term extension.
• Conditions that may limit the ability of the Bank to claim cash flows from certain assets.
• Features that may be adjusted against the time value of money (re-setting the rate of return periodically).
• Reclassification
Investments held for trading are subsequently measured at fair value with any gain or loss arising from the change in fair
value included in the consolidated statement of income or loss in the period in which they arise. Interest earned or divi-
dends received are included in net trading income.
Classification of financial assets carried at fair value through profit or loss – applied
Effective 1 January 2019
The Bank classifies certain financial assets as at fair value through profit or loss
Profits or losses because assets were valued, managed and internally recorded on a fair value basis. The Bank has classified
certain financial assets at fair value through profit or loss.
Financial assets classified at fair value through statement of profit or loss - applied
Until 31 December 2018
Financial assets classified in this category are classified by the management as evidence
Financial assets are not recognized after initial recognition, unless the Bank changes the business model to manage fi-
nancial assets
When the following criteria are met:
3. Disposal
Financial assets
The Bank derecognizes the financial assets at the end of the contractual rights of the cash flows from the financial asset or
transfers its rights to receive the contractual cash flows in accordance with the transactions in which all significant risks
and rewards of ownership relating to the transferred financial asset are transferred or when the Bank has not transferred
or retained all the risks The fundamental benefits of ownership and did not retain control of financial assets.
When the financial asset is derecognised, the difference between the carrying amount of the financial asset (or the car-
rying amount allocated to the financial asset excluded) and the total of the consideration received (including any new
acquired asset) In other comprehensive income is recognized in profit or loss.
Effective January 1, 2019, any gain / loss recognized in other comprehensive income in respect of investment securities in
equity securities is not recognized in profit or loss on disposal of such securities. Any interest on the transferred financial
assets that are eligible for disposal that are created or retained by the Group as a separate asset or liability is recognized.
If the terms of the financial assets are modified, the Bank assesses whether the cash flows of the financial assets are
substantially different. If there are significant differences in cash flows, the contractual rights to the cash flows from the
original financial assets are past due. In this case, the original financial assets are derecognized and the new financial
assets are recognized at fair value.
• The classification eliminates or substantially reduces the difference in the transaction that may arise from the measure-
ment of assets or liabilities or the recognition of gains or losses on different grounds; or
• Assets are part of a group of financial assets that are managed and their performance evaluated on a fair value basis, in
accordance with documented management risk or investment strategy; or
• Financial instruments include embedded derivatives, unless embedded derivatives do not substantially change cash flows
and should not be recorded as a separate item.
Financial assets carried at fair value through the consolidated statement of income or loss are recognized at fair value
in the consolidated statement of financial position. Changes in fair value are recognized in net gain or loss on financial
assets designated at fair value through profit or loss. Interest earned on interest income is accrued, whereas income from
equity is recognized in other income. The Group has not classified any financial assets at fair value through profit or loss.
Deposits and amounts due from banks and other financial institutions
These are stated at cost, adjusted for effective fair value hedges, net of any amounts written off and provision for impairment.
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.
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.
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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.
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.
Fair value hedge
2.7.1.
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.
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 effec-
tive interest rate of a financial asset, are treated as an adjustment to the effective interest rate of that financial asset. Com-
mitment fees and related direct costs for loans and advances where draw down is probable are deferred and recognized 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 or 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.
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 - Financial policies applied till 31 December 2018
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.
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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.
• 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.
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 finan-
cial 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, until 31-December-2018. During periods start from first of January 2009, the decrease consider sig-
nificant 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 or loss are not reversed through the income statement.
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.
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.
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 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.
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 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.
2.13. 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 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
Vehicles
Computers and core systems
Fixtures and fittings
20 years.
3 years, or over the period of the lease
if less
3/5 years.
5 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.
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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.
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.
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.
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 Bank, 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.
When a provision is wholly or partially no longer required, it is reversed through profit or loss under other operating in-
come (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 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 and
performance conditions and market performance conditions are taken into account when estimating the fair value of eq-
uity instruments at the date of grant. At 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.
CIB owns a private insurance fund for financing end of service benefits, pensions and medical insurance for employees
under the supervision of the Ministry of Social Solidarity.
Income tax
2.20.
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.
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 at the date of the balance sheet.
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FINANCIAL STATEMENTS: CONSOLIDATED
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.
The Bank’s risk management policies are designed to identify and analyze these risks, to set appropriate risk limits and
controls, 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.
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.
2.23. Comparatives
Comparative figures have been adjusted to conform to changes in presentation in the current period where necessary.
2.24. Noncurrent assets held for sale
a non-current asset (or disposal group) to be classified as held for sale if its carrying amount will be recovered principally
through a sale transaction rather than through continuing use.
Determining whether (and when) an asset stops being recovered principally through use and becomes recoverable prin-
cipally through sale.
For an asset (or disposal group) to be classified as held for sale:
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
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:
• 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
(a) It must be available for immediate sale in its present condition, subject only to terms that are usual and customary
default.
for sales of such assets (or disposal groups);
(b) Its sale must be highly probable;
The standard requires that non-current assets (and, in a 'disposal group', related liabilities and current assets,) meeting its
criteria to be classified as held for sale be:
(a) Measured at the lower of carrying amount and fair value less costs to sell, with depreciation on them ceasing; and
(b) Presented separately on the face of the statement of financial position with the results of discontinued operations
presented separately in the income statement.
2.25. Discontinued operation
Discontinued operation as 'a component of an entity that either has been disposed of, or is classified as held for sale, and
(a) Represents a separate major line of business or geographical area of operations,
(b) Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations
or
(c) Is a subsidiary acquired exclusively with a view to resale.
When presenting discontinued operations in the income statement, the comparative figures should be adjusted as if the
operations had been discontinued in the comparative period.
3. Financial risk management
The Bank’s activities expose it to a variety of financial risks and those activities involve the analysis, evaluation, accep-
tance 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 financial 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.
• 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, which
are based on losses that have been incurred at the balance sheet date (the ‘incurred loss model’) rather than expected
losses (note 3.1,5) until 31-December-2018.
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.
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FINANCIAL STATEMENTS: CONSOLIDATED
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 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.
Longer-term finance and lending to corporate entities are generally secured; revolving individual credit facilities are gen-
erally unsecured. In addition, in order to minimize the credit loss the Bank will seek additional collateral from the coun-
terparty 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.
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.
Impairment and provisioning policies
3.1.3.
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 at 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, 2019
December 31, 2018
Loans and
advances (%)
Impairment
provision (%)
Loans and
advances (%)
Impairment
provision (%)
85.63
6.88
3.50
3.99
19.27
8.76
28.15
43.82
78.61
11.65
5.68
4.06
12.61
17.85
33.18
36.36
The internal rating tools assists management to determine whether objective evidence of impairment exists, 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
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FINANCIAL STATEMENTS: CONSOLIDATED
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.
Model of measuring the general banking risk
3.1.4.
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 instructions for the implementation of the Interna-
tional Financial Reporting Standard (9) issued by the Central Bank of Egypt on February 26, 2019. 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 to CBE ratings and rates of provi-
sions needed for assets impairment related to credit risk:
CBE Rating
Categorization
Provision%
Internal rating
Categorization
1
2
3
4
5
6
7
8
9
10
Low risk
Average risk
Satisfactory risk
Reasonable risk
Acceptable risk
Marginally acceptable
risk
Watch list
Substandard
Doubtful
Bad debts
0%
1%
1%
2%
2%
3%
5%
20%
50%
100%
1
1
1
1
1
2
Performing loans
Performing loans
Performing loans
Performing loans
Performing loans
Regular watching
3
Watch list
4 Non performing loans
4 Non performing loans
4 Non performing loans
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T
Annual Report 2019
267
FINANCIAL STATEMENTS: CONSOLIDATED
3.1.5. Maximum exposure to credit risk before collateral held
In balance sheet items exposed to credit risk
Cash and balances with central bank
Due from banks
Gross loans and advances to banks
Less:Impairment provision
Gross loans and advances to customers
Individual:
- Overdraft
- Credit cards
- Personal loans
- Mortgages
Corporate:
- Overdraft
- Direct loans
- Syndicated loans
- Other loans
Unamortized bills discount
Impairment provision
Unearned interest
Derivative financial instruments
Financial investments:
-Debt instruments
Other assets (Accrued revenues)
Total
Off balance sheet items exposed to credit risk
Financial guarantees
Customers acceptances
Letters of credit (import and export)
Letter of guarantee
Total
Dec. 31, 2019
28,273,962
28,353,366
629,780
(4,516)
EGP Thousands
Dec. 31, 2018
20,058,974
46,518,892
70,949
(3,246)
1,462,439
4,264,204
20,219,305
1,330,323
19,100,709
51,163,302
33,642,235
61,578
(55,197)
1,635,910
3,540,849
17,180,864
876,372
13,992,595
49,179,820
32,899,950
125,429
(65,718)
(11,825,887)
(13,040,828)
(41,908)
216,383
(16,038)
52,289
196,046,335
112,213,297
4,011,196
4,509,314
376,847,609
289,729,674
6,085,760
3,188,757
5,866,630
61,143,216
76,284,363
7,962,043
1,050,573
4,178,288
66,166,953
79,357,857
The above table represents the Bank's Maximum exposure to credit risk on December 31, 2019, before taking into account
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, 31.83% of the total maximum exposure is derived from loans and advances to banks and customers while
investments in debt instruments represent 59.55%.
Management is confident in its ability to continue to control and sustain minimal exposure of credit risk resulting from
both the bank's loans and advances portfolio and debt instruments based on the following:
• 92.51% of the loans and advances are concentrated in the top two grades of the internal credit risk rating system.
• Loans and advances assessed individualy are valued EGP 5,261,976 thousand.
• The Bank has implemented more prudent processes when granting loans and advances during the financial year ended
on December 31, 2019.
• 97.54% of the investments in debt Instruments are Egyptian sovereign instruments.
3.1.6. Loans and advances
Loans and advances are summarized as follows:
Dec.31, 2019
Loans and
advances to
banks
Loans and
advances to
customers
EGP Thousands
Dec.31, 2018
Loans and
advances to
banks
629,780
110,351,697
70,949
-
-
4,224,632
4,855,460
-
-
Loans and
advances to
customers
120,937,024
5,045,095
5,261,976
131,244,095
629,780
119,431,789
70,949
Neither past due nor impaired
Past due but not impaired
Individually impaired
Gross
Less:
Impairment provision
Unamortized bills discount
Unearned interest
Net
119,321,103
625,264
11,825,887
55,197
41,908
4,516
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-
-
-
-
-
13,040,828
65,718
16,038
3,246
-
-
106,309,205
67,703
Impairment provision losses for loans and advances reached EGP 11,830,403 thousand.
During the year, the Bank’s total loans and advances increased by 10.35%.
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.
Total balances of loans and facilities divided by stages:
Stage 1:
Expected
credit losses
over 12 months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
26,734,506
339,408
202,357
63,749,864
35,158,341
5,059,619
90,484,370
35,497,749
5,261,976
Dec.31, 2019
Individuals
Institutions
and Business
Banking
Total
EGP Thousands
Individually
impaired
-
-
-
Total
27,276,271
103,967,824
131,244,095
268
Annual Report 2019
Annual Report 2019
269
FINANCIAL STATEMENTS: CONSOLIDATED
Expected credit losses
Individual Loans:
EGP Thousands
EGP Thousands
Stage 1:
Expected
credit losses
over 12 months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
96,469
10,394
210,068
1,208,722
5,325,121
4,975,113
1,305,191
5,335,515
5,185,181
Dec.31, 2019
Individuals
Institutions
and Business
Banking
Total
Loans and advances to banks divided by stages:
Individually
impaired
-
-
-
Total
316,931
11,508,956
11,825,887
Stage 1:
Expected
credit losses
over 12 months
-
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
629,780
(4,516)
625,264
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
-
Dec.31, 2019
Time and term loans
Expected credit losses
Net
Expected credit losses divided by internal classification:
Corporate and Business Banking loans:
Stage 1:
Expected
credit losses
over 12
months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
Scope of
probability
of default (PD)
Individually
impaired
1%-14%
1,041,456
1,137,990
15%-21%
21%-28%
100%
167,266
867,786
3,319,345
-
-
-
4,975,113
-
-
-
Dec.31, 2019
Performing
loans (1-5)
Regular watch-
ing (6)
Watch list (7)
Non-per-
forming loans
(8-10)
EGP Thousands
Total
629,780
(4,516)
625,264
EGP Thousands
Total
2,179,446
1,035,052
3,319,345
4,975,113
-
-
-
-
Stage 1:
Expected
credit losses
over 12
months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
Scope of
probability
of default (PD)
Individually
impaired
(0% - 5%)
95,234
(5% - 10%)
1,235
(10% above)
100%
-
-
-
-
10,394
-
-
-
-
210,068
-
-
-
-
Total
95,234
1,235
10,394
210,068
Dec.31, 2019
Performing
loans (1-5)
Regular watch-
ing (6)
Watch list (7)
Non-per-
forming loans
(8-10)
The total balances of loans and facilities divided according to the internal classification:
Corporate and Business Banking loans:
Stage 1:
Expected
credit losses
over 12
months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
Scope of
probability
of default (PD)
Individually
impaired
1%-12%
61,291,934
24,935,477
12%-21%
2,457,930
5,944,147
21%-27%
100%
-
-
4,278,717
-
5,059,619
-
-
-
Dec.31, 2019
Performing
loans (1-5)
Regular watch-
ing (6)
Watch list (7)
Non-per-
forming loans
(8-10)
Individual Loans:
EGP Thousands
Total
86,227,411
8,402,077
4,278,717
5,059,619
EGP Thousands
-
-
-
-
Stage 1:
Expected
credit losses
over 12
months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
Scope of
probability
of default (PD)
Individually
impaired
(0% - 5%)
26,059,247
(5% - 10%)
675,259
(10% above)
100%
-
-
-
-
339,408
-
-
-
-
202,357
-
-
-
-
Total
26,059,247
675,259
339,408
202,357
Dec.31, 2019
Performing
loans (1-5)
Regular watch-
ing (6)
Watch list (7)
Non-per-
forming loans
(8-10)
270
Annual Report 2019
Annual Report 2019
271
FINANCIAL STATEMENTS: CONSOLIDATED
Impact of IFRS 9 application:
Corporate and Business Banking loans:
Effect of applying IFRS 9 *
Balance at
31/12/2018
under IAS 39
Financial
investments
Due from
banks
Loans to
customers
and banks
Opening
balance at
1/1/2019
under IFRS 9
(13,044,074)
(599,314)
(7,314)
716,325
(12,934,377)
Begining balance
Charges/(Reversals) PL
Write off
Recovery
F.X Revaluation
Ending Balance
Balance at
31/12/2019
under IFRS 9
(12,934,377)
(1,435,460)
1,380,772
(459,633)
1,187,085
(12,261,613)
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
61,291,934
2,457,930
-
-
63,749,864
(1,208,722)
62,541,142
24,935,477
5,944,147
4,278,717
-
35,158,341
(5,325,121)
29,833,220
-
-
-
5,059,619
5,059,619
(4,975,113)
84,506
The following table provides information on the quality of financial assets during the financial period:
Financial Assets at Fair value through OCI
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
EGP Thousands
Total
19,284,999
9,085,184
-
-
28,370,183
(16,817)
28,353,366
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
59,915,108
28,905,614
-
-
88,820,722
(414,395)
88,406,327
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Total
86,227,411
8,402,077
4,278,717
5,059,619
103,967,824
(11,508,956)
92,458,868
EGP Thousands
Total
59,915,108
28,905,614
-
-
88,820,722
(414,395)
88,406,327
Dec.31, 2019
Due from banks
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
Individual Loans:
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
19,284,999
9,085,184
-
-
28,370,183
(16,817)
28,353,366
Stage 1
12 months
26,059,247
675,259
-
-
26,734,506
(96,469)
26,638,037
-
-
-
-
-
-
-
Stage 2
Life time
-
-
339,408
-
339,408
(10,394)
329,014
Stage 3
Life time
-
-
-
202,357
202,357
(210,068)
(7,711)
EGP Thousands
Total
26,059,247
675,259
339,408
202,357
27,276,271
(316,931)
26,959,340
The following table shows changes in expected ECL losses between the beginning and end of the year as a result
of these factors:
Dec.31, 2019
Due from banks
Provision for credit losses on 1
January 2019
New financial assets purchased or
issued
Matured or disposed financial assets
Transferred to stage 1
Transferred to stage 2
Transferred to stage 3
"Changes in the probability of default
and loss in case
of default and the exposure at de-
fault"
Changes to model assumptions and
methodology
Write off during the year
Cumulative foreign currencies trans-
lation differences
Ending balance
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
160
16,816
(158)
-
-
-
(1)
-
-
-
16,817
7,155
-
(7,155)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Total
7,315
16,816
(7,313)
-
-
-
(1)
-
-
-
16,817
272
Annual Report 2019
Annual Report 2019
273
FINANCIAL STATEMENTS: CONSOLIDATED
Individual Loans:
Financial Assets at Fair value through OCI
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
Provision for credit losses on 1
January 2019
New financial assets purchased or
issued
Matured or disposed financial assets
Transferred to stage 1
Transferred to stage 2
Transferred to stage 3
Changes in the probability of default
and loss in case of default and the
exposure at default
Changes to model assumptions and
methodology
Write off during the year
Cumulative foreign currencies trans-
lation differences
Ending balance
595,511
183,940
(282,223)
931
-
-
(83,764)
-
-
-
414,395
3,803
-
(773)
(3,030)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Total
599,314
183,940
(282,996)
(2,099)
-
-
(83,764)
-
-
-
414,395
Provision for credit losses on 1
January 2019
Impairment during the year
Write off during the year
Recoveries
Cumulative foreign currencies trans-
lation differences
Ending balance
Corporate and Business Banking loans:
Stage 1
12 months
72,092
24,377
-
-
-
96,469
Stage 2
Life time
24,843
(14,449)
-
-
-
Stage 3
Life time
127,376
140,974
(118,486)
60,204
-
EGP Thousands
Total
224,311
150,902
(118,486)
60,204
-
10,394
210,068
316,931
Provision for credit losses on 1
January 2019
New financial assets purchased or
issued
Matured or disposed financial assets
Transferred to stage 1
Transferred to stage 2
Transferred to stage 3
"Changes in the probability of default
and loss in case
of default and the exposure at de-
fault"
Changes to model assumptions and
methodology
Recoveries
Write off during the year
Cumulative foreign currencies trans-
lation differences
Ending balance
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
EGP Thousands
Total
691,013
6,700,083
4,709,096
12,100,192
751,746
(364,309)
158,357
(3,937)
1,472
1,074,222
(899,007)
(359,174)
9,427
(2,560,546)
-
1,825,968
(772,859)
-
-
2,409,875
(2,036,175)
(200,817)
5,490
(149,199)
93,395
1,509,405
3,051
1,605,851
5,845
401,743
-
407,588
-
-
-
-
399,429
(1,262,286)
399,429
(1,262,286)
(124,860)
(551,032)
(511,193)
(1,187,085)
1,208,722
5,325,121
4,975,113
11,508,956
274
Annual Report 2019
Annual Report 2019
275
FINANCIAL STATEMENTS: CONSOLIDATED
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Loans and advances restructured
Restructuring activities include rescheduling arrangements, applying obligatory management programs, modifying 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, which 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, 2019
Dec.31, 2018
4,682,243
4,682,243
7,673,956
7,673,956
3.1.8. Financial investments:
The following table represents an analysis of financial investment balances by rating agencies at the end of the period
based on Standard & Poor's valuation and its equivalent.
and its equivalent.
Stage 1:
Expected
credit losses
over 12 months
-
-
-
107,225,613
-
107,225,613
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
-
-
-
-
-
-
-
-
-
-
Dec. 31, 2019
Amortized
cost
AAA
AA+ to -AA
A to -A+
Less than -A
Not rated
Total
Dec. 31, 2019
Fair value
through OCI
AAA
AA+ to -AA
A+ to -A
Less than -A
Not rated
Total
Stage 1:
Expected
credit losses
over 12 months
-
-
-
88,820,722
-
88,820,722
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Total
-
-
-
107,225,613
-
107,225,613
EGP Thousands
Total
-
-
-
88,820,722
-
88,820,722
Individually
impaired
-
-
-
-
-
-
Individually
impaired
-
-
-
-
-
-
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276
Annual Report 2019
Annual Report 2019
277
FINANCIAL STATEMENTS: CONSOLIDATED
The following table shows the analysis of impairment on credit losses of financial investments by rating agencies at the
end of the period based on Standard & Poor's valuation and its equivalent.
Dec. 31, 2019
Fair value
through OCI
AAA
AA+ to -AA
A+ to -A
Less than -A
Not rated
Total
Stage 1:
Expected
credit losses
over 12 months
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
-
414,395
-
414,395
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
414,395
-
414,395
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 year. The Bank has allocated exposures to regions based on the country of domicile of its counterparties.
Dec.31, 2019
Cash and balances with central bank
Due from banks
Gross loans and advances to banks
Less:Impairment provision
Gross loans and advances to
customers
Individual:
- Overdrafts
- Credit cards
- Personal loans
- Mortgages
Corporate:
- Overdrafts
- Direct loans
- Syndicated loans
- Other loans
Unamortized bills discount
Impairment provision
Unearned interest
Derivative financial instruments
Financial investments:
-Debt instruments
Total
Cairo
28,273,962
28,353,366
629,780
(4,516)
894,272
3,355,501
13,109,677
1,243,652
17,361,940
34,218,971
31,194,568
50,578
(55,197)
(9,741,062)
(41,908)
216,383
Alex, Delta and
Sinai
Upper Egypt
-
-
-
-
442,103
782,472
6,039,542
78,135
1,092,048
11,970,680
2,285,914
11,000
-
(1,620,679)
-
-
-
-
-
-
126,064
126,231
1,070,086
8,536
646,721
4,973,651
161,753
-
-
(464,146)
-
-
EGP Thousands
Total
28,273,962
28,353,366
629,780
(4,516)
1,462,439
4,264,204
20,219,305
1,330,323
19,100,709
51,163,302
33,642,235
61,578
(55,197)
(11,825,887)
(41,908)
216,383
196,046,335
345,106,302
-
21,081,215
-
6,648,896
196,046,335
372,836,413
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278
Annual Report 2019
Annual Report 2019
279
FINANCIAL STATEMENTS: CONSOLIDATED
3.2. Market risk
Market risk represnts as fluctuations in fair value, future cash flow, foreign exchange rates and commodity prices,
interest rates, credit spreads and equity prices, and it may reduce the Bank’s income or the value of its portfolios. The
bank assigns the market risk management department to measure, monitor and control the market risk. In addition,
regular reports are submitted to the Asset and Liability"Management Committee (ALCO), Board Risk Committee
and the heads of each business unit.
The bank separates exposures to market risk into trading or non-trading portfolios.
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 and 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 certain ‘holding period’ until positions can be closed ( 1 Day). The Bank assesses 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 VaR Lim-
its, for the trading book, which have been approved by the board, and are monitored and reported on a daily basis to the
Senior Management.
In addition, monthly limits compliance is reported to the ALCO.
The Bank has developed the internal model to calculate VaR, however, it 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 Standardized 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, the bank computes on a daily basis trading Stressed VaR, combined with the trading 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
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Medium
410
604,814
609,137
4,346
4,858
76
605,585
High
Low
2,426
1,176,577
1,186,564
9,949
9,696
122
1,178,349
50
274,079
271,813
183
1,487
44
274,303
Medium
231
453,569
429,195
24,374
7,030
119
455,104
High
Low
1,482
645,193
586,852
58,341
11,507
267
647,983
20
238,077
232,882
5,195
1,969
55
238,493
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Medium
410
4,346
4,346
4,858
76
5,839
High
2,426
9,949
9,949
9,696
122
10,382
Low
50
183
183
1,487
44
3,475
Medium
231
24,374
24,374
7,030
119
26,165
High
1,482
58,341
58,341
11,507
267
60,912
Low
20
5,195
5,195
1,969
55
5,611
Foreign exchange risk
Interest rate risk
- For non trading purposes
- For trading purposes
Portfolio managed by others risk
Investment fund
Total VaR
Trading portfolio VaR by risk type
Foreign exchange risk
Interest rate risk
- For trading purposes
Funds managed by others risk
Investment fund
Total VaR
Non trading portfolio VaR by risk type
Dec.31, 2019
Dec.31, 2018
Medium
High
Low
Medium
High
Low
EGP Thousands
Interest rate risk
- For non trading purposes
Total VaR
609,137
609,137
1,186,564
1,186,564
271,813
271,813
429,195
429,195
586,852
586,852
232,882
232,882
The increase in the value at risk, especially the rate of return, is associated with the increase in interest rate sensitivity
in the global financial markets. The three previous outcomes of the VAR were calculated independently from the centers
involved and historical market movements. The aggregate value at risk for trading and non-trading is not the Bank's risk
value because of the correlation between types of risk and types of portfolios and the consequent variety of impact.
280
Annual Report 2019
Annual Report 2019
281
FINANCIAL STATEMENTS: CONSOLIDATED
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 exchange rate risk and financial instruments
at carrying amounts, categorized by currency.
Dec.31, 2019
EGP
USD
EUR
GBP
Other
Total
Equivalent EGP Thousands
Financial assets
Cash and balances with central bank
Gross due from banks
Gross loans and advances to banks
Gross loans and advances to customers
Derivative financial instruments
Financial investments
Gross financial investment securities* 172,199,545
- Investments in associates and
subsidiaries
Total financial assets
24,810,156
651,997
-
76,258,644
76,939
107,693
2,022,378
24,997,111
629,780
50,732,541
139,444
550,291
1,865,300
-
4,175,708
-
42,833
789,250
-
77,202
-
848,304
66,525
-
-
-
28,273,962
28,370,183
629,780
131,244,095
216,383
25,001,742
1,810,704
-
-
-
-
-
199,011,991
-
107,693
274,104,974 103,522,996
8,402,003
909,285
914,829 387,854,087
Financial liabilities
Due to banks
Due to customers
Derivative financial instruments
Other loans
Total financial liabilities
Net on-balance sheet financial
position
81,980
216,276,483
205,915
64,446
216,628,824
11,644,652
78,428,221
76,673
3,208,300
93,357,846
73,058
8,479,582
-
-
8,552,640
10,890
867,498
-
-
878,388
27
396,671
-
-
11,810,607
304,448,455
282,588
3,272,746
396,698 319,814,396
57,476,150
10,165,150
(150,637)
30,897
518,131
68,039,691
* After adding Reverse repos and deducting Repos.
Interest rate risk
3.2.4.
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 the 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.
Up to1
Month 1-3 Months
3-12
Months
1-5 years
Over 5
years
Non-
Interest
Bearing
Total
-
-
-
18,576,895
9,085,184
706,644
658
173,793
455,329
-
-
-
-
-
-
28,273,962
28,273,962
1,460
28,370,183
-
629,780
85,681,987
15,769,768
14,670,005
11,728,367
3,393,968
-
131,244,095
402,984
1,604,150
704,698
6,385,125
-
-
9,096,957
2,485,199
37,674,269
77,869,613
43,231,169
36,383,640
1,368,101
199,011,991
-
-
-
-
-
107,693
107,693
107,147,723
64,307,164
94,406,289
61,344,661
39,777,608
29,751,216 396,734,661
5,505,976
178,790,478
320,830
30,449,392
5,694,732
15,856,268
-
34,834,663
-
257,371
289,069
44,260,283
11,810,607
304,448,455
3,182,215
4,175,946
125,307
4
1,679,690
2,868
3,250,787
14,091
5,000
-
-
-
9,163,162
3,272,746
187,481,537
38,196,955
21,690,398
34,839,667
1,937,061
44,549,352 328,694,970
Dec.31, 2019
Financial assets
Cash and balances with
central bank
Gross due from banks
Gross loans and ad-
vances to banks
Gross loans and ad-
vances to customers
Derivatives financial
instruments (including
IRS notional amount)
Financial investments
Gross financial invest-
ment securities*
- Investments in associ-
ates and subsidiaries
Total financial assets
Financial liabilities
Due to banks
Due to customers
Derivatives financial
instruments (including
IRS notional amount)
Other loans
Total financial
liabilities
Total interest re-
pricing gap
(80,333,814)
26,110,209
72,715,891
26,504,994
37,840,547 (14,798,136)
68,039,691
* After adding Reverse repos and deducting Repos.
3.3. Liquidity risk
Liquidity risk is the risk that the Bank is unable to meet its payment obligations associated with its financial liabilities
when they fall due and to replace funds when they are withdrawn. The consequence may be the failure to meet obligations
to repay depositors and fulfill commitments to lend.
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, and includes projecting cash flows by major currency under
various stress scenarios and considering the level of liquid assets necessary in relation thereto:
• Maintaining 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 CBE regulations.
• Managing the concentration and profile of debt maturities.
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FINANCIAL STATEMENTS: CONSOLIDATED
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 projections is an analysis of the
contractual maturity of the financial liabilities and the expected collection date of the financial assets.
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 by currency, provider, product and term.
3.3.3. Non-derivative cash flows
The table below presents the cash flows payable by the Bank under non-derivative financial liabilities by remaining con-
tractual maturities and the maturities assumption for non contractual products on the basis of their behaviour studies,
at balance sheet date.
Dec.31, 2019
Financial liabilities
Due to banks
Due to customers
Other loans
Total liabilities (contractual
and non contractual maturity
dates)
Total financial assets
(contractual and non
contractual maturity dates)
Dec.31, 2018
Financial liabilities
Due to banks
Due to customers
Other loans
Total liabilities (contractual
and non contractual maturity
dates)
Total financial assets
(contractual 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 Thousands
5,795,044
34,976,355
2,868
320,830
25,769,297
42,488
5,694,733
71,077,755
14,090
-
161,953,222
1,257,765
-
10,671,826
1,955,535
11,810,607
304,448,455
3,272,746
40,774,267
26,132,615
76,786,578
163,210,987
12,627,361
319,531,808
39,156,322
30,113,707
85,349,273
167,623,442
67,757,445
390,000,189
Up to 1
month
One to three
months
Three
months to
one year
One year to
five years
Over five
years
Total
EGP Thousands
6,632,843
29,932,979
33,380
626,976
23,750,618
10,000
-
72,467,784
87,286
-
145,207,840
443,188
-
13,937,648
3,147,675
7,259,819
285,296,869
3,721,529
36,599,202
24,387,594
72,555,070
145,651,028
17,085,323
296,278,217
41,324,915
40,718,467
74,369,489
141,260,576
49,075,657
346,749,104
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.
3.3.4. Derivative cash flows
The Bank’s derivatives include:
Foreign exchange derivatives: exchange traded options and over-the-counter (OTC) ,exchange traded forwards currency
options that will be settled on a gross basis 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 into maturity groupings based on the re-
maining period of the balance sheet to the contractual maturity date will be settled on a net basis. The amounts disclosed
in the table are the contractual undiscounted cash flows:
Up to 1
month
One to three
months
Three
months to
one year
One year to
five years
Over five
years
Total
EGP Thousands
29,879
182
30,061
51,676
-
51,676
124,360
947
125,307
-
-
-
-
75,544
75,544
205,915
76,673
282,588
Dec.31, 2019
Liabilities
Derivatives financial
instruments
- Foreign exchange derivatives
- Interest rate derivatives
Total
Off balance sheet items
Dec.31, 2019
Up to 1 year
1-5 years
Over 5 years
Total
EGP Thousands
Letters of credit, guarantees and
other commitments
Total
Dec.31, 2019
Credit facilities commitments
Total
50,210,710
14,264,820
5,723,073
70,198,603
50,210,710
14,264,820
5,723,073
70,198,603
Up to 1 year
4,030,911
4,030,911
1-5 years
2,826,599
2,826,599
Total
6,857,510
6,857,510
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FINANCIAL STATEMENTS: CONSOLIDATED
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
Financial investments:
Amortized cost
Total financial assets
Financial liabilities
Due to banks
Due to customers
Other loans
Total financial liabilities
Book value
Fair value
Dec.31, 2019
Dec.31, 2018
Dec.31, 2019
Dec.31, 2018
28,353,366
629,780
131,244,095
46,518,892
70,949
119,431,789
28,370,754
629,780
128,740,476
46,859,224
70,949
115,452,376
107,225,613
267,452,854
73,630,764
239,652,394
106,016,744
263,757,754
72,539,003
234,921,552
11,810,607
304,448,455
3,272,746
319,531,808
7,259,819
285,296,869
3,721,529
296,278,217
11,702,778
302,256,825
3,272,746
317,232,349
7,069,442
280,729,572
3,721,529
291,520,543
The fair value is considered in the previous note from the second and third level in accordance with the fair value standard
Due from banks
The fair value of floating rate placements and overnight deposits is their carrying amount. The estimated fair value of
floating 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.
Fair values of financial instruments
The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities.
Quantitative disclosures fair value measurement hierarchy for assets as at 31 December 2019:
instruments:
Level 1 - Quoted prices in active markets for the same instrument (i.e. without modification or repacking);
Level 2 - Quoted prices in active markets for similar assets and liabilities or other valuation techniques for which all sig-
nificant inputs are based on observable market data; and
Level 3 - Valuation techniques for which any significant input is not based on observable market data.
Dec.31, 2019
Date of
Valuation
Measured at fair value:
Financial assets
Financial Assets at Fair value
through P&L
Financial Assets at Fair value
through OCI
Total
Derivative financial instruments
Financial assets
Financial liabilities
Total
Assets for which fair values are disclosed:
Amortized cost
Loans and advances to banks
Loans and advances to custom-
ers
Total
31-Dec-19
31-Dec-19
31-Dec-19
31-Dec-19
31-Dec-19
31-Dec-19
31-Dec-19
216,383
282,588
498,971
106,016,744
629,780
128,740,476
235,387,000
Liabilities for which fair values are disclosed:
Other loans
Due to customers
Total
31-Dec-19
31-Dec-19
3,272,746
302,256,825
305,529,571
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Total
Significant
observable
inputs (level 2)
418,781
418,781
-
89,897,257
61,689,580
28,207,677
90,316,038
62,108,361
28,207,677
Valuation
techniques
(level 3)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
216,383
282,588
498,971
106,016,744
-
-
629,780
-
128,740,476
106,016,744
129,370,256
3,272,746
-
3,272,746
-
302,256,825
302,256,825
Fair value of financial assets and liabilities
Loans and advances to banks
Loans and advances to banks are represented in loans that do not consider 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 dis-
counted 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, financial assets at amortized cost, and fair value through OCI.
Fair value for amortized cost assets is based on market prices or broker/dealer price quotations.
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FINANCIAL STATEMENTS: CONSOLIDATED
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:
• Complying with the legally imposed capital requirements in Egypt.
• Protecting the Bank’s ability to continue as a going concern and enabling the generation of yield for shareholders and other
parties dealing with the bank.
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 monthly 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 12.75%, calculated as the ratio between total value of the capital
elements, and the risk-weighted assets and contingent liabilities of the Bank (credit risk, market risk and opertional risk).
While taking into consideration the conservation buffer.
Tier one:
Tier one comprises 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, interim profits and deducting previously recog-
nized goodwill and any retained losses
Tier two:
Tier two represents the gone concern capital which is compposed of general risk provision according to stage one ECL
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 remaining five years to maturity) and 45% of the
increase in fair value than book value for financial assets fair value through OCI , amortized cost , subsidiaries and associ-
ates 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 400% is 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 adjustments
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 summarize the compositions of teir 1, teir 2 , the capital adequacy ratio and leverage ratio .
1-The capital adequacy ratio
Tier 1 capital
Share capital (net of the treasury shares)
Reserves
IFRS 9 Reserve
Retained Earnings (Losses)
Total deductions from tier 1 capital common equity
Net profit for the year
Total qualifying tier 1 capital
Tier 2 capital
45% of special reserve
Subordinated Loans
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 (%)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Restated**
11,668,326
14,829,948
1,411,549
55,089
(4,754,596)
6,879,563
30,089,879
49
3,582,720
1,879,734
5,462,503
35,552,382
156,952,618
5,959,133
23,292,505
186,204,256
19.09%
14,690,821
24,661,076
-
81,328
(807,709)
8,430,530
47,056,046
-
3,208,300
1,740,919
4,949,219
52,005,265
169,831,103
766,516
28,851,964
199,449,583
26.07%
*Based on consolidated financial statement figures and in accordance with Central Bank of Egypt regulation issued on 24 December 2012.
**After 2018 profit distribution.
2-Leverage ratio
Total qualifying tier 1 capital
On-balance sheet items & derivatives
Off-balance sheet items
Total exposures
*Percentage
EGP Thousands
Dec.31, 2019
Dec.31, 2018
47,056,046
409,689,485
46,195,165
455,884,650
10.32%
Restated**
30,089,879
346,163,131
45,407,765
391,570,896
7.68%
*Based on consolidated financial statement figures and in accordance with Central Bank of Egypt regulation issued on 14 July 2015.
**After 2018 profit distribution.
For December 2019 NSFR ratio record 217.35% (LCY 255.43% and FCY 156.14%), and LCR ratio record 611.44% (LCY
757.42% and FCY 230.87%).
For December 2018 NSFR ratio record 209.70% (LCY 243.36% and FCY 165.61%), and LCR ratio record 601.53% (LCY
667.84% and FCY 338.82%).
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FINANCIAL STATEMENTS: CONSOLIDATED
4. Critical accounting estimates and judgments
5.2. By geographical segment
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.
4.1. Fair value of derivatives
The fair value of financial instruments that are not quoted in active markets are determined by using valuation tech-
niques. these valuation techniques (as models) are validated and periodically reviewed by qualified personnel indepen-
dent 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. For practicality purposes, 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 assump-
tions about these factors could affect reported fair value of financial instruments.
5. Segment analysis
5.1. By business segment
The Bank is divided into four 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 –Including other banking business, such as Assets Management.
Transactions between the business segments are on normal commercial terms and conditions.
Corporate
banking
SME's
Investment
banking
Retail
banking
EGP Thousands
Asset
Liability
Mangement
Total
9,754,092
2,234,547
5,292,706
7,121,674
816,595
25,219,614
(4,737,534)
(898,119)
(152,895)
(2,882,762)
(13,423)
(8,684,733)
5,016,558
(1,436,735)
3,579,823
103,555,078
1,336,428
(382,556)
953,872
1,398,063
5,139,811
(1,471,285)
3,668,526
200,721,627
4,238,912
(1,213,400)
3,025,512
26,524,730
803,172
(229,910)
573,262
54,542,870
16,534,881
(4,733,886)
11,800,995
386,742,368
Corporate
banking
SME's
Investment
banking
Retail
banking
Asset
Liability
Mangement
Total
9,025,518
2,452,934
3,870,401
6,163,506
639,484
22,151,843
(5,516,282)
(739,340)
(427,332)
(2,373,798)
(16,258)
(9,073,010)
3,509,236
(933,068)
2,576,168
102,781,541
1,713,594
(459,085)
1,254,509
2,159,095
3,443,069
(922,426)
2,520,643
165,584,686
3,789,708
(1,015,293)
2,774,415
22,693,303
623,226
(166,967)
456,259
49,242,585
13,078,833
(3,496,839)
9,581,994
342,461,210
Dec.31, 2019
Revenue according to
business segment
Expenses according to
business segment
Profit before tax
Tax
Profit for the year
Total assets
Dec.31, 2018
Revenue according to
business segment
Expenses according to
business segment
Profit before tax
Tax
Profit for the year
Total assets
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Dec.31, 2019
Revenue according to geographical
segment
Expenses according to geographical
segment
Profit before tax
Tax
Profit for the year
Total assets
Dec.31, 2018
Revenue according to geographical
segment
Expenses according to geographical
segment
Profit before tax
Tax
Profit for the year
Total assets
Cairo
Alex, Delta &
Sinai
Upper Egypt
21,215,527
3,309,436
694,651
(7,293,433)
(1,143,218)
(248,082)
13,922,094
(3,985,969)
9,936,125
2,166,218
(620,086)
1,546,132
446,569
(127,831)
318,738
EGP Thousands
Total
25,219,614
(8,684,733)
16,534,881
(4,733,886)
11,800,995
358,906,093
21,081,215
6,755,060
386,742,368
Cairo
Alex, Delta &
Sinai
Upper Egypt
17,792,484
3,424,556
934,803
(7,545,066)
(1,304,228)
(223,716)
10,247,418
(2,738,280)
7,509,138
2,120,328
(568,053)
1,552,275
711,087
(190,506)
520,581
Total
22,151,843
(9,073,010)
13,078,833
(3,496,839)
9,581,994
316,673,321
19,340,837
6,447,052
342,461,210
6. Net interest income
Interest and similar income
- Banks
- Clients
Total
Treasury bills and bonds
Reverse repos
Financial investments at amortized cost and fair value through OCI
Total
Interest and similar expense
- Banks
- Clients
Total
Financial instruments purchased with a commitment to re-sale (Repos)
Other loans
Total
Net interest income
EGP Thousands
Dec.31, 2019
Dec.31, 2019
3,308,719
14,630,606
17,939,325
24,277,671
-
383,961
42,600,957
(597,877)
(19,893,262)
(20,491,139)
(232,055)
(299,144)
(21,022,338)
21,578,619
3,338,266
15,274,649
18,612,915
18,582,089
2,519
206,186
37,403,709
(840,233)
(18,001,197)
(18,841,430)
(112,366)
(306,394)
(19,260,190)
18,143,519
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291
FINANCIAL STATEMENTS: CONSOLIDATED
7. Net fee and commission income
11. Other operating (expenses) 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
8. Dividend income
Financial assets at fair value through P&L
Financial assets at fair value through OCI
Total
9. Net trading income
Profit (Loss) from foreign exchange
Profit (Loss) from forward foreign exchange deals revaluation
Profit (Loss) from interest rate swaps revaluation
Profit (Loss) from currency swap deals revaluation
Profit (Loss) from financial assets at fair value through P&L
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
1,258,672
141,907
2,051,109
3,451,688
(1,170,893)
(1,170,893)
2,280,795
1,456,930
140,247
1,805,439
3,402,616
(991,957)
(991,957)
2,410,659
EGP Thousands
Dec.31, 2019
Dec.31, 2018
7,307
46,116
53,423
9,951
16,007
25,958
EGP Thousands
Dec.31, 2019
Dec.31, 2018
749,591
(85,657)
(29,521)
3,238
50,408
688,059
668,071
(38,904)
(20,865)
8,179
472,595
1,089,076
Profits (losses) from non-trading assets and liabilities revaluation
Profits from selling property, plant and equipment
Release (charges) of other provisions
Other income/expenses
Total
12. Impairment release (charges) for credit losses
Loans and advances to customers
Due from banks impairment provision
"Provision for impairment of debt instruments investments"
Total
13. Adjustments to calculate the effective tax rate
Profit before tax
Tax rate
Income tax based on accounting profit
Add / (Deduct)
Non-deductible expenses
Tax exemptions
Withholding tax
Income tax / Deferred tax
Effective tax rate
10. Administrative expenses
14. Earning per share
Staff costs
Wages and salaries
Social insurance
Other benefits
Other administrative expenses *
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
(2,604,675)
(95,408)
(108,367)
(2,240,472)
(5,048,922)
(2,237,595)
(78,841)
(61,976)
(1,845,547)
(4,223,959)
* The expenses related to the activity for which the bank obtains a commodity or service, donations and depreciation.
292
Annual Report 2019
Net profit for the year, available for distribution
Board member's bonus
Staff profit sharing
Profits shareholders' Stake*
Weighted Average number of shares
Basic earning per share
By issuance of ESOP earning per share will be:
Average number of shares including ESOP shares
Diluted earning per share
* Based on separate financial statement profits.
EGP Thousands
Dec.31, 2019
Dec.31, 2018
91,769
1,439
(361,649)
(1,526,309)
(1,794,750)
59,863
1,045
(400,596)
(1,249,987)
(1,589,675)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
(1,610,878)
(9,503)
184,921
(1,435,460)
(3,076,023)
-
-
(3,076,023)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
16,534,881
22.50%
3,720,348
1,466,387
(1,493,292)
1,040,443
4,733,886
28.63%
13,078,833
22.50%
2,942,737
870,539
(314,359)
2,041
3,496,839
26.74%
EGP Thousands
Dec.31, 2019
Dec.31, 2018
11,800,858
(177,013)
(1,180,086)
10,443,759
1,424,525
7.33
1,435,391
7.28
9,553,868
(143,308)
(955,387)
8,455,173
1,424,525
5.94
1,435,391
5.89
Annual Report 2019
293
FINANCIAL STATEMENTS: CONSOLIDATED
15. Cash and balances with central bank
Cash
Obligatory reserve balance with CBE
- Current accounts
Total
Non-interest bearing balances
16. Due from banks
Current accounts
Deposits
"Effect of applying
IFRS 9 "
Expected credit losses
Total
Central banks
Local banks
Foreign banks
Total
Non-interest bearing balances
Floating interest bearing balances
Fixed interest bearing balances
Total
Current balances
Due from banks
Gross due from banks
Expected credit losses
Net due from banks
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
294
Annual Report 2019
EGP Thousands
Dec.31, 2019
Dec.31, 2018
5,876,652
6,532,211
22,397,310
28,273,962
28,273,962
13,526,763
20,058,974
20,058,974
EGP Thousands
Dec.31, 2019
Dec.31, 2018
3,704,142
24,666,041
(7,314)
(9,503)
28,353,366
9,945,682
1,348,559
17,059,125
28,353,366
1,460
9,085,184
19,266,722
28,353,366
28,353,366
4,168,973
42,349,919
-
-
46,518,892
25,397,558
4,109,576
17,011,758
46,518,892
1,724
10,203,376
36,313,792
46,518,892
46,518,892
Stage 1
28,370,183
(16,817)
28,353,366
EGP Thousands
Dec.31, 2019
Dec.31, 2018
6,025
749,625
29,112,513
(1,470,340)
28,397,823
(763,761)
(763,761)
27,634,062
-
3,669,700
49,441,511
(3,097,887)
50,013,324
(8,014,072)
(8,014,072)
41,999,252
Treasury bills and other government securities are classified to financial instruments through other comprehensive in-
come when applying IFRS 9 Note 21
Governmental bonds
Governmental bonds
Repo
Total
Net
18. Loans and advances to banks, net
Time and term loans
Impairment provision
Net
Current balances
Net
Analysis for impairment provision of loans and advances to banks
EGP Thousands
Dec.31, 2019
58,769,618
(2,406,225)
(2,406,225)
56,363,393
EGP Thousands
Dec.31, 2019
Dec.31, 2018
629,780
70,949
(4,516)
625,264
625,264
625,264
(3,246)
67,703
67,703
67,703
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Beginning balance
Release during the year
Exchange revaluation difference
Ending balance
(3,246)
(1,270)
-
(4,516)
Analysis for impairment provision of loans and advances to banks
Beginning Balance
Addition during the year
Deduction during the year
Ending balance
Below is an analysis of outstanding balance:
(70)
(3,140)
(36)
(3,246)
Stage 2
(3,246)
(1,270)
-
(4,516)
Balance
625,264
Rating
B -
Annual Report 2019
295
FINANCIAL STATEMENTS: CONSOLIDATED
19. Loans and advances to customers, net
Individual
- Overdraft
- Credit cards
- Personal loans
- Real estate 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
"Effect of applying
IFRS 9 "
Impairment provision
Unearned interest
Net loans and advances to customers
Distributed to
Current balances
Non-current balances
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
1,462,439
4,264,204
20,219,305
1,330,323
27,276,271
19,100,709
51,163,302
33,642,235
61,578
103,967,824
131,244,095
(55,197)
716,325
(12,542,212)
(41,908)
119,321,103
51,682,809
67,638,294
119,321,103
1,635,910
3,540,849
17,180,864
876,372
23,233,995
13,992,595
49,179,820
32,899,950
125,429
96,197,794
119,431,789
(65,718)
-
(13,040,828)
(16,038)
106,309,205
44,549,290
61,759,915
106,309,205
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Annual Report 2019
297
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20. Derivative financial instruments
20.1. Derivatives
The Bank uses the following financial derivatives for non hedging purposes.
Forward contracts represent commitments to buy foreign and local currencies including unexecuted spot transactions.
Future contracts for foreign currencies and/or interest rates represent contractual commitments to receive or pay net on
the basis of changes in foreign exchange rates or interest rates, and/or to buy/sell foreign currencies or financial instru-
ments in a future date with a fixed contractual price under active financial market.
Credit risk is considered low, and future interest rate contract represents future exchange rate contracts negotiated for case
by case, These contracts require 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 are exchange of currencies or interest (fixed rate versus variable rate for example) or both (meaning foreign ex-
change 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 fulfill
their liabilities. This risk is monitored continuously through comparisons of fair value and contractual amount, and in order
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 represent contractual agreements for the buyer (issuer) to
the seller (holders) as a right not an obligation whether to buy (buy option) or sell (sell option) at a certain day or within
certain year for a predeterminedamount 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 is exposed to credit risk for
purchased options contracts only and in the line of its book cost which represent its fair value.
The contractual value for some derivatives options is considered a base to analyze the realized financial instruments on
the balance sheet, but it doesn’t provide an indicator for the projected cash flows of the fair value for current instruments,
and those amounts don’t reflects credit risk or interest rate risk.
Derivatives in the Bank's benefit that are classified as (assets) are conversely considered (liabilities) as a result of the
changes in foreign exchange prices or interest rates related to these derivatives. Contractual / expected total amounts of
financial derivatives can fluctuate from time to time as well as the range through which the financial derivatives can be
in benefit for 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:
20.1.1. For trading derivatives
Foreign currencies derivatives
- Forward foreign exchange contracts
- Currency swap
- Options
Total (1)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Notional
amount
8,315,292
4,904,151
1,365
Assets
Liabilities
52,183
24,756
-
76,939
189,833
16,082
-
205,915
Notional
amount
5,360,272
3,628,415
-
Assets
Liabilities
21,112
18,243
-
39,355
73,105
12,807
-
85,912
298
Annual Report 2019
Annual Report 2019
299
FINANCIAL STATEMENTS: CONSOLIDATED
20.1.2. Fair value hedge
21. Financial investments securities
Interest rate derivatives
- Governmental debt instruments hedging
- Customers deposits hedging
Total (2)
Total financial derivatives (1+2)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
Notional
amount
-
8,880,574
Assets
Liabilities
-
139,444
139,444
216,383
-
76,673
76,673
282,588
Notional
amount
662,803
7,103,638
Assets
Liabilities
-
12,934
12,934
52,289
9,164
37,782
46,946
132,858
20.2. Hedging derivatives
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 9,146 thousand at December 31, 2018 , Resulting in gains from hedging instruments at December 31, 2018 EGP 16,832
thousand. Losses arose from hedged items at December 31, 2019 reached EGP 29,742 thousand against losses of EGP 34,193
thousand at December 31, 2018.
The Bank uses interest rate swap contracts to cover part of the risk of potential increase in fair value of its fixed rate cus-
tomer deposits in foreign currencies. Net derivative value resulting from the related hedging instruments is EGP 62,771
thousand at the end of December 31, 2019 against EGP 24,848 thousand at December 31, 2018, resulting in gains from
hedging instruments atDecember 31, 2019 of EGP 87,619 thousand against losses of EGP 90,306 thousand at December 31,
2018. Losses arose from the hedged items at December 31, 2019 reached EGP 171,993 thousand against losses EGP 94,856
thousand at December 31 , 2018.
Movement of financial investment securities:
Beginning balance
Addition
Deduction
Exchange revaluation differences for foreign financial assets
Profit (losses) from fair value difference
Available for sale impairment charges
Ending Balance as of Dec.31, 2018
Beginning balance
Effect of applying IFRS 9
Addition *
Deduction
Exchange revaluation differences for foreign financial assets
Profit (losses) from fair value difference **
Ending Balance as of Dec.31, 2019
Available for
sale financial
investments
30,474,781
12,670,761
(1,872,988)
102,991
(2,118,094)
(39,561)
39,217,890
Financial
Assets at Fair
value through
OCI
39,217,890
42,268,972
58,210,468
(54,358,072)
(1,588,099)
6,146,098
89,897,257
Held to
maturity
financial
investments
45,167,722
33,995,313
(5,532,271)
-
-
-
73,630,764
Amortized cost
73,630,764
1,020,895
76,516,842
(43,937,957)
(4,931)
-
107,225,613
Dec.31, 2019
Investments listed in the market
Governmental bonds
Other bonds
Equity instruments
Portfolio managed by others
Investments not listed in the market
"Treasury bills and other governmen-
tal notes"
Governmental bonds
Other bonds
Equity instruments
Mutual funds
Total
Dec.31, 2018
Investments listed in the market
Governmental bonds
Other bonds
Equity instruments
Portfolio managed by others
Investments not listed in the market
Treasury bills and other
governmental notes
Governmental bonds
Other bonds
Equity instruments
Mutual funds
Total
Financial
Assets at Fair
value through
P&L
Financial
Assets at Fair
value through
OCI
Amortized cost
Total
EGP Thousands
-
-
-
418,781
56,363,393
4,823,267
502,920
-
107,225,613
-
-
-
163,589,006
4,823,267
502,920
418,781
-
27,634,062
-
27,634,062
-
-
-
-
418,781
-
-
344,929
228,686
89,897,257
Trading
financial
investments
Available for
sale financial
investments
37,387,013
1,228,032
458,094
-
-
-
-
-
107,225,613
Held to
maturity
financial
investments
73,598,251
-
-
-
-
-
344,929
228,686
197,541,651
EGP Thousands
Total
113,255,344
1,228,032
458,094
429,249
-
41,999,252
41,999,252
-
-
46,073
98,678
39,217,890
-
-
-
32,513
115,630,016
-
-
46,073
169,567
157,585,611
Stage 1
39,217,890
50,679,367
89,897,257
2,270,080
-
-
429,249
-
-
-
-
38,376
2,737,705
Movement of financial Assets at Fair value through OCI
Beginning Balance
Addition during the year
Ending balance
disclosure and measurement of financial assets and financial liabilities:
* Including amount of EGP 7,256,157 treasury bills less than 3 months.
** Does not include the hedging amount of Euro bonds with an amount of EGP Thousand 11,455.
300
Annual Report 2019
Annual Report 2019
301
FINANCIAL STATEMENTS: CONSOLIDATED
The following table shows the financial assets and the net financial commitments according to the business model classification:
22. Investments in associates
Dec.31, 2019
Cash and balances with
central bank
Due from banks
Treasury bills
Loans and advances to
customers, net
Derivative financial
instruments
Financial Assets at Fair value
through OCI
Amortized cost
Financial Assets at Fair value
through P&L
Total 1
Due to banks
Due to customers
Derivative financial
instruments
Other loans
Other provisions
Total 2
Debt financial
Assets at Fair
value through
OCI
Equity financial
Assets at Fair
value through
OCI
Financial
Assets at Fair
value through
P&L
Amortized cost
-
-
-
-
-
28,273,962
28,353,366
-
-
-
27,634,062
119,321,103
-
-
-
107,225,613
-
283,174,044
11,810,607
304,448,455
-
3,272,746
2,011,369
321,543,177
216,383
61,186,660
1,076,535
-
-
-
-
89,037,105
-
-
1,076,535
-
-
282,588
-
-
282,588
-
-
-
-
-
-
-
-
-
-
-
418,781
418,781
-
-
-
-
-
-
Total book
value
28,273,962
28,353,366
27,634,062
119,321,103
216,383
62,263,195
107,225,613
418,781
373,706,465
11,810,607
304,448,455
282,588
3,272,746
2,011,369
321,825,765
Company's
country
Company's
assets
Company's
liabilities
(without
equity)
Company's
revenues
Company's
net profit
Investment
book value
Stake %
EGP Thousands
Egypt
Egypt
42,920
45,557
17,399
(19,917)
5,563
23.50
741,875
501,413
511,163
22,437
102,130
32.50
784,795
546,970
528,562
2,520
107,693
Company's
country
Company's
assets
Company's
liabilities
(without
equity)
Company's
revenues
Company's
net profit
Investment
book value
Stake %
EGP Thousands
Egypt
Egypt
-
-
-
-
14,100
23.50
860,057
640,554
926,624
72,954
92,458
32.50
860,057
640,554
926,624
72,954
106,558
Dec.31, 2019
Associates
- Fawry plus
- International Co. for
Security and Services
(Falcon)
Total
Dec.31, 2018
Associates
- Fawry Plus
- International Co. for
Security and Services
(Falcon)
Total
21.1. Profits (Losses) on financial investments
23. Other assets
Profit (Loss) from selling FVOCI financial instruments
Released (Impairment) charges of equity instruments
Released (Impairment) charges of FVOCI equity instruments
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
497,894
(1,533)
(45,664)
450,697
441,628
(39,561)
-
402,067
Accrued revenues
Prepaid expenses
Advances to purchase of fixed assets
Accounts receivable and other assets (after deducting the provision)*
Assets acquired as settlement of debts
Insurance
Gross
Impairment of other assets
Net
EGP Thousands
Dec.31, 2019
Dec.31, 2018
4,011,196
217,484
942,985
4,333,966
356,382
36,130
9,898,143
(150,000)
9,748,143
4,509,314
186,797
768,733
3,790,709
276,520
30,945
9,563,018
-
9,563,018
*A provision with amount EGP 119 million has been charged against pending installments, and with amount EGP 212 million has been
released.
This item includes other assets that are not classified under specific items of balance sheet assets, such as: accrued income
and prepaid expenses, amounts paid in advance relating to taxes on bills and bonds, custodies, debit accounts under
settlement and any balance that has no place in another asset category.
302
Annual Report 2019
Annual Report 2019
303
FINANCIAL STATEMENTS: CONSOLIDATED
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25 . Due to banks
Current accounts
Deposits
Total
Central banks
Local banks
Foreign banks
Total
Non-interest bearing balances
Floating bearing interest balances
Fixed interest bearing balances
Total
Current balances
26. Due to customers
Demand deposits
Time deposits
Certificates of deposit
Saving deposits
Other deposits
Total
Corporate deposits
Individual deposits
Total
Non-interest bearing balances
Floating interest bearing balances
Fixed interest bearing balances
Total
Current balances
Non-current balances
Total
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EGP Thousands
Dec.31, 2019
Dec.31, 2018
420,500
11,390,107
11,810,607
111,967
10,476,614
1,222,026
11,810,607
289,069
4,908,538
6,613,000
11,810,607
11,810,607
503,539
6,756,280
7,259,819
190,801
6,009,778
1,059,240
7,259,819
257,355
89,568
6,912,896
7,259,819
7,259,819
EGP Thousands
Dec.31, 2019
Dec.31, 2018
98,755,641
47,843,715
85,344,897
68,579,440
3,924,762
304,448,455
120,553,214
183,895,241
304,448,455
44,260,283
39,592,933
220,595,239
304,448,455
217,358,718
87,089,737
304,448,455
92,422,114
43,561,846
81,059,934
62,812,279
5,440,696
285,296,869
116,842,160
168,454,709
285,296,869
48,741,931
23,738,113
212,816,825
285,296,869
202,126,154
83,170,715
285,296,869
304
Annual Report 2019
Annual Report 2019
305
FINANCIAL STATEMENTS: CONSOLIDATED
27. Other loans
Interest rate
%
Maturity date
Maturing
through next
year
EGP Thousands
Balance on
Balance on
Dec.31, 2019 Dec.31, 2018
Agricultural Research and Develop-
ment Fund (ARDF)
Social Fund for Development (SFD)
European Bank for Reconstruction
and Development (EBRD) subordi-
nated Loan
International Finance Corporation
(IFC) subordinated Loan
Balance
3.5 - 5.5
depends on
maturity date
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or 9% which is
more
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+ 6.2%
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+ 6.2%
3-5 years*
56,578
61,578
125,429
4 January
2020*
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10 years
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1,604,150
1,791,360
1,604,150
1,791,360
59,446
3,272,746
3,721,529
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Interest rates on variable-interest subordinated loans are determined in advance every 3 months/every quarter. Subordi-
nated loans are not repaid before their repayment dates.
* Represents the date of loan repayment to the lending agent.
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28. Other liabilities
Accrued interest payable
Accrued expenses
Accounts payable
Other credit balances
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
1,090,649
1,027,526
6,097,077
181,542
8,396,794
1,347,397
733,218
4,101,884
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*
306
Annual Report 2019
Annual Report 2019
307
FINANCIAL STATEMENTS: CONSOLIDATED
30. Equity
30.1. Capital
The authorized capital reached EGP 50 billion according to the extraordinary general assembly decision on 12 June 2019.
31 . Deferred tax assets (Liabilities)
Deferred tax assets and liabilities are attributable to the following:
• Increase issued and Paid in Capital by amount EGP 105,413 thousand on November 18,2019 to reach EGP 14,690,821 thou-
sand according to Board of Directors decision on February 4, 2019 by issuance of tenth tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 2,917,082 thousand on February 14, 2019 to reach 14,585,408 according
to Ordinary General Assembly Meeting decision on March 4 ,2018 by distribution of a one share for every four outstanding
shares by capitalizing on the General Reserve.
• Increase issued and Paid in Capital by amount EGP 50,315 thousand on August 02,2018 to reach EGP 11,668,326 thousand
(against EGP 11,618,011 thousand in 2017) according to Board of Directors decision on January 31, 2018 by issuance of ninth
tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 79,351 thousand on May 24,2017 to reach EGP 11,618,011 thousand ac-
cording to Board of Directors decision on November 9, 2016 by issuance of eighth tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 68,057 thousand on April 19,2016 to reach EGP 11,538,660 thousand
according to Board of Directors decision on November 10, 2015 by issuance of seventh tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 2,294,121 thousand on December 10, 2015 to reach 11,470,603 accord-
ing to Ordinary General Assembly Meeting decision on March 12 ,2015 by distribution of a one share for every four out-
standing shares by capitalizing on the General Reserve.
• Increase issued and Paid in Capital by amount EGP 94,748 thousand on April 5,2015 to reach EGP 9,176,482 thousand ac-
cording to Board of Directors decision on November 11, 2014 by issuance of sixth tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 79,299 thousand on March 23,2014 to reach EGP 9,081,734 thousand
according to Board of Directors decision on December 10, 2013 by issuance of fifth tranche for E.S.O.P program.
• Increase issued and Paid in Capital by amount EGP 3,000,812 thousand on December 5, 2013 according to Extraordinary
General Assembly Meeting decision on July 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.
• The Extraordinary General Assembly approved in the meeting of March 21,2016 continue 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 10% of issued and paid- in capital at par value ,through 10 years starting year 2016 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 of this divi-
dend, which includes staff profit share and remuneration of the Board of Directors stated in the law.
30.2. Reserves
According to The Bank status 5% of net profit is used to increase the legal reseve to reaches 50% of The Bank's issued and
paid in capital.
Central Bank of Egypt concurrence for usage of special reserve is required.
Fixed assets (depreciation)
Other provisions (excluded loan loss, contingent liabilities and income tax
provisions)
Intangible Assets
Other investments impairment
Reserve for employee stock ownership plan (ESOP)
Interest rate swaps revaluation
Trading investment revaluation
Forward foreign exchange deals revaluation
Balance
Movement of Deferred Tax Assets and Liabilities:
Beginning Balance
Effect of applying IFRS 9
Additions / disposals
Ending Balance
Assets
(Liabilities)
Dec.31, 2019
EGP Thousands
Assets
(Liabilities)
Dec.31, 2018
(79,162)
146,675
-
76,407
216,709
6,642
(35,477)
18,545
350,339
(49,750)
53,552
53,657
65,788
166,122
4,695
7,394
6,912
308,370
Assets
(Liabilities)
Dec.31, 2019
Assets
(Liabilities)
Dec.31, 2018
308,370
136,491
(94,522)
350,339
179,630
-
128,740
308,370
32. Share-based payments
According to the extraordinary general assembly meeting on June 26, 2006, the Bank launched new Employees Share
Ownership 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 instru-
ments is measured using the Black-Scholes pricing model.
Details of the rights to share outstanding during the year 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
Dec.31, 2019
No. of shares in
thousand
Dec.31, 2018
No. of shares in
thousand
29,697
9,152
(880)
(10,541)
27,428
26,600
10,422
(1,035)
(6,290)
29,697
308
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Annual Report 2019
309
FINANCIAL STATEMENTS: CONSOLIDATED
Details of the outstanding tranches are as follows:
33.2. Legal reserve
Maturity date
Exercise price
Fair value
EGP
EGP
2020
2021
2022
Total
10.00
10.00
10.00
52.44
54.51
50.53
No. of shares in
thousand
8,685
9,850
8,893
27,428
The fair value of granted shares is calculated using Black-Scholes pricing model with the following:
Exercise price
Current share price
Expected life (years)
Risk free rate %
Dividend yield%
Volatility%
13th tranche
12th tranche
10
59.26
3
18.14%
1.70%
25%
10
77.35
3
15.54%
1.29%
26%
Volatility is calculated based on the daily standard deviation of returns for the last five years.
33. Reserves and retained earnings
Legal reserve
General reserve
Capital reserve
Retained earnings
Special reserve
Reserve for financial assets at fair value through OCI
Reserve for employee stock ownership plan
Banking risks reserve
IFRS 9 risk reserve
Cumulative foreign currencies translation differences
General risk reserve
Ending balance
33.1. Banking risks reserve
Beginning balance
Transferred to bank risk reserve
Ending balance
310
Annual Report 2019
EGP Thousands
Dec.31, 2019
Dec.31, 2018
2,188,029
16,474,429
13,466
11,881,657
-
4,111,781
963,152
5,164
-
2,501
1,549,445
37,189,624
1,710,293
12,776,215
12,421
9,637,083
20,645
(3,750,779)
738,320
4,323
1,411,549
-
-
22,560,070
EGP Thousands
Dec.31, 2019
Dec.31, 2018
4,323
841
5,164
3,634
689
4,323
Beginning balance
Transferred to legal reserve
Ending balance
33.3. Reserve for financial assets at fair value through OCI
Beginning balance
Net unrealised gain/(loss) on financial assets at fair value through OCI
Effect of applying IFRS 9
Release provision for impairment of debt instruments investments
Ending balance
33.4. Retained earnings
Beginning balance
Transferred to reserves
Dividend paid
Net profit of the year
Transferred ( from) to bank risk reserve
Ending balance
33.5. Reserve for employee stock ownership plan
Beginning balance
Transferred to reserves
Cost of employees stock ownership plan (ESOP)
Ending balance
33.6. General risk reserve
Beginning balance
Effect of applying IFRS 9
Transferred to general risk reserve
Ending balance
EGP Thousands
Dec.31, 2019
Dec.31, 2018
1,710,293
477,736
2,188,029
1,332,807
377,486
1,710,293
EGP Thousands
Dec.31, 2019
Dec.31, 2018
(3,750,779)
6,157,553
1,889,928
(184,921)
4,111,781
(1,642,958)
(2,107,821)
-
-
(3,750,779)
EGP Thousands
Dec.31, 2019
Dec.31, 2018
9,637,083
(6,854,370)
(2,700,544)
11,800,995
(841)
11,881,657
6,193,879
(3,994,924)
(2,143,177)
9,581,994
(689)
9,637,083
EGP Thousands
Dec.31, 2019
Dec.31, 2018
738,320
(239,707)
464,539
963,152
489,334
(159,360)
408,346
738,320
EGP Thousands
Dec.31, 2019
General risk
reserve
-
117,251
1,432,194
1,549,445
Annual Report 2019
311
FINANCIAL STATEMENTS: CONSOLIDATED
In accordance with the instructions issued by the Central Bank of Egypt on February 26, 2019, IFRS 9 has been effective
from 1 January 2019.
35.4. Credit facilities commitments
The Bank has measured the effect of applying the Standard as follows in accordance with the above instructions:
34. 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 with maturities more than three months
Treasury bills with maturities more than three months
Total
35. Contingent liabilities and commitments
35.1. Legal claims
EGP Thousands
Dec.31, 2019
Dec.31, 2018
28,273,962
28,370,183
27,634,062
(22,397,310)
(10,593,903)
(28,391,977)
22,895,017
20,058,974
46,518,892
41,999,252
(13,526,763)
(10,733,386)
(50,013,324)
34,303,645
• There is a number of existing cases against the bank on December 31, 2019 without provision as the bank doesn't expect to
incur losses from it.
• A provision for legal cases that are expected to generate losses has been created. (Disclosure No. 29)
35.2. Capital commitments
35.2.1. Financial investments
The capital commitments for the financial investments reached on the date of financial position EGP 148,361 thousand
as follows:
Financial Assets at Fair value through OCI
Financial investments in subsidiaries
Investments
value
160,415
160,412
Paid
132,362
40,103
Remaining
28,053
120,309
35.2.2. Fixed assets and branches constructions
The 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 911,159 thousand.
Credit facilities commitments
36. Mutual funds
Osoul fund
EGP Thousands
Dec.31, 2019
Dec.31, 2018
6,857,510
9,173,782
• CIB established an accumulated return mutual fund under license no.331 issued from capital market authority onFebru-
ary 22, 2005. CI Assets Management Co.- Egyptian joint stock co - manages the fund.
• The number of certificates issued reached 3,205,040 with redeemed value of EGP 1,324,387 thousands.
• The market value per certificate reached EGP 413.22 on December 31, 2019.
• The Bank portion got 137,112 certificates with redeemed value of EGP 56,657 thousands.
Istethmar fund
• CIB bank established the second accumulated return mutual fund under license no.344 issued from capital market au-
thority on February 26, 2006. CI Assets Management Co.- Egyptian joint stock co - manages the fund.
• The number of certificates issued reached 421,394 with redeemed value of EGP 80,718 thousands.
• The market value per certificate reached EGP 191.55 on December 31, 2019.
• The Bank portion got 50,000 certificates with redeemed value of EGP 9,578 thousands.
Aman fund ( CIB and Faisal Islamic Bank Mutual Fund)
• CIB and Faisal Islamic Bank established an accumulated return mutual fund under license no.365 issued from capital
market authority on July 30, 2006. CI Assets Management Co.- Egyptian joint stock co - manages the fund.
• The number of certificates issued reached 291,583 with redeemed value of EGP 29,336 thousands.
• The market value per certificate reached EGP 100.61 on December 31, 2019.
• The Bank portion got 27,690 certificates with redeemed value of EGP 2,786 thousands.
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 91,376 with redeemed value of EGP 21,947 thousands.
• The market value per certificate reached EGP 240.18 on December 31, 2019.
• The Bank portion got 50,000 certificates with redeemed value of EGP 12,009 thousands.
35.3. Letters of credit, guarantees and other commitments
Thabat fund
Letters of guarantee
Letters of credit (import and export)
Customers acceptances
Total
EGP Thousands
Dec.31, 2019
Dec.31, 2018
61,143,216
5,866,630
3,188,757
70,198,603
66,166,953
4,178,288
1,050,573
71,395,814
• 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 86,779 with redeemed value of EGP 24,495 thousands.
• The market value per certificate reached EGP 282.27 on December 31, 2019.
• The Bank portion got 50,000 certificates with redeemed value of EGP 14,114 thousands.
Takamol fund
• CIB bank established an accumulated return mutual fund under license no.431 issued from financial supervisory author-
ity on February 18, 2015. CI Assets Management Co.- Egyptian joint stock co - manages the fund.
• The number of certificates issued reached 140,659 with redeemed value of EGP 25,921 thousands.
• The market value per certificate reached EGP 184.28 on December 31, 2019.
• The Bank portion got 50,000 certificates with redeemed value of EGP 9,214 thousands.
312
Annual Report 2019
Annual Report 2019
313
EGP Thousands
Dec.31, 2019
Dec.31, 2018
651,041
(651,041)
-
651,041
(412,326)
238,715
FINANCIAL STATEMENTS: CONSOLIDATED
37. Transactions with related parties
40. Intangible assets:
All banking transactions with related parties are conducted in accordance with the normal banking practices and regula-
tions applied to all other customers without any discrimination.
37.1. Loans, advances, deposits and contingent liabilities
Loans and advances
Deposits
Contingent liabilities
EGP Thousands
9,581
83,921
1,261
Book value
Amortization
Net book value
According to CBE's regulation issued on Dec 16, 2008, an annual amortization of 20% has been applied on intangible as-
sets starting from acquisition date.
37.2. Other transactions with related parties
Cashflow disclosures
International Co. for Security & Services
Fawry plus
38. Main currencies positions
Egyptian pound
US dollar
Sterling pound
Japanese yen
Swiss franc
Euro
EGP Thousands
Income
Expenses
38
553
296,717
-
EGP Thousands
Dec.31, 2019
Dec.31, 2018
(387,742)
(79,511)
248
6
484
32,890
(636,384)
578,745
2,189
(20)
658
37,144
Main currencies positions above represents what is recognized in the balance sheet position of the Central Bank of Egypt.
39. Tax status
Corporate income tax
• Settlement of corporate income tax since the start of activity till 2017
• 2018 examined & paid
• The yearly income tax return is submitted in legal dates
Salary tax
• Settlement ofa salary tax since the start of activity till 2018
Stamp duty tax
• The period since the start of activity till 31/07/2006 was examined & paid, disputed points have been transferred to the
court for adjudication
• The period from 01/08/2006 till 31/12/2018 was examined & paid in accordance with the protocol signed between the Fed-
eration of Egyptian Banks & the Egyptian Tax Authority
41. Treasury bills and other governmental notes - net increase (decrease)
Dec.31, 2018
91 Days
maturity
Unearned
interest
Net
182 Days
maturity
Unearned
interest
Net
364 Days
maturity
Unearned
interest
Net
Total unearned
interest
Net
Change
Dec.31, 2018
Dec.31, 2017
Total
Net
Total
Net
Change
-
-
3,669,700
(86,343)
49,441,511
(3,011,544)
-
-
-
-
-
1,289,425
(87,067)
3,583,357
1,202,358
(2,380,999)
57,602,997
(4,151,507)
46,429,967
53,451,490
7,021,523
(3,097,887)
(4,238,574)
50,013,324
54,653,848
4,640,524
314
Annual Report 2019
Annual Report 2019
315
FINANCIAL STATEMENTS: CONSOLIDATED
42. Other assets - net increase (decrease)
Total other assets by end of 2018
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Total 1
Total other assets by end of period
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Impairment charge for other assets
Total 2
Change (1-2)
Total other assets by end of 2017
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Total 1
Total other assets by end of 2018
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Unrealized amount from avilable for sale investments
Impairment charge for other assets
Total 2
Change (1-2)
EGP Thousands
Dec.31, 2019
9,563,218
(276,520)
(768,733)
8,517,965
9,746,431
(356,382)
(942,781)
(93,236)
8,354,032
163,933
EGP Thousands
Dec.31, 2018
6,886,807
(45,083)
(522,211)
6,319,513
9,563,218
(276,520)
(768,733)
(251,750)
316,763
8,582,978
(2,263,465)
43. Important Events
The Board of Directors and CBE have approved, on 4 November 2019 & 16 January 2020 respectively, to gain a control stake
in a Kenyan bank, and CIB is currently in the process of fulfilling the necessary approvals from all supervisory and oth-
erwise relevant authorities in Kenya.
316
Annual Report 2019
Annual Report 2019
317
FINANCIAL STATEMENTS: CONSOLIDATED
318
Annual Report 2019