THE BANK TO TRUST
NAVIGATING
UNCHARTED WATERS
2020 was an unprecedented year not only for CIB, but the world over.
From lockdowns to dwindling investor sentiment, regulatory shifts
to economic disruptions, CIB has had to call on decades of stalwart
leadership and the resilience of its strategy to navigate headwinds and
emerge as a stronger institution.
CONTENTS
01
02
CIB Introduction
Strategic Direction
06 At a Glance
08 Key Financial Highlights
10 Leadership
22 What We Do
26 CIB’s Stock
28 Our History and Timeline
34 Awards
40 Strategy
44 Value Creation Model
48 A Note From Our
Non-Executive Chairman
50 A Note From Our CEO
54 BOD’s Report
03
Our Businesses
70 Institutional Banking
78 Retail Banking
84 Digital Banking
04
Support Functions
98 Operations and IT
102 Human Resources
106 Marketing and Corporate
Communications
05
Our Controls
114 Risk Group
118 Compliance Group
122 Internal Audit
06
Responsible Banking
126 Environmental Sustainability
130 Social Development
142 Corporate Governance
07
08
Subsidiaries and Associates
156 Financial Statements
152 CVentures
152 Mayfair CIB Bank Limited
152 Falcon Group
154 Fawry Plus
155 Al Ahly Computer Equipment
155 Damietta Shipping and Marine
Services
2020 Annual Report
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01
CIB
Introduction
#1
Bank by market cap on the EGX
CIB is dedicated to
CREATING
OUTSTANDING
STAKEHOLDER
VALUE
and providing superior customer
service solutions.
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01010101 CIB Introduction
At a Glance
workforce comprising 7,071 employees, CIB provides
tailored, client-centric services to clients in the
corporate, commercial, retail, wealth, and small and
medium enterprise (SME) spheres, while working
to deliver 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 busi-
ness 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
four strategic subsidiaries and affiliates, CVentures,
Mayfair CIB Limited, Falcon Group and Fawry Plus,
in which CIB’s shares are 99.99%, 51%, 30%, and
23.5%. In addition to CIB’s strategic subsidiaries and
affiliates, the Bank has direct ownership in Damietta
Shipping Marine Services (DSMS) and Al Ahly
Computer Equipment Company (ACE) in which it
owns 49.95%, and 39.34% respectively.
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
corporations. It has been awarded numerous acco-
lades from prestigious bodies throughout the year,
including the World’s Best Emerging Markets Bank
by Global Finance in 2020.
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.
CIB is Egypt’s leading private-sector bank. It is an
award-winning institution dedicated to creating
outstanding stakeholder value and providing supe-
rior customer service solutions to a broad range
of clients. The Bank furnishes clients with innova-
tive solutions that satisfy their banking needs and
facilitate their financial lives. Its dynamic business
model and commitment to fully integrating supe-
rior technology into its products and services allow
it to maintain its market leadership and 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 Egyptian economy. With a well-established
network of 208 branches and banking units and a
KEY FACTS
208
Branches
+1.5
Million Clients
7,071
Employees
EGP/MN
87,464
Market Cap*
EGP/BN
25.8
Revenues
1,121
ATMs
*31st of Dec 2020.
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CIB Introduction
Key Financial Highlights
Common Share Information Per Share
Earning Per Share (EPS)1
Dividends (DPS) 2
Book Value
(BV/No of Share)
Share Price (EGP) 3
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)
FY20
FY19
FY18
FY17
FY16
Consolidated
Consolidated
Consolidated
Consolidated
Consolidated
FY20
FY19
FY18
FY17
FY16
FY15
FY14
FY13
FY12
FY11
FY20
FY19
FY18
FY17
FY16
Consolidated
Consolidated
Consolidated
Consolidated
Consolidated
FY20
FY19
FY18
FY17
FY16
FY15
FY14
FY13
FY12
FY11
6.21
7.33
7.26
5.76
4.56
3.58
3.55
2.67
2.42
2.43
0.00
1.25
1.00
1.00
0.50
0.75
1.20
1.00
1.25
1.00
40.20
35.26
29.26
24.43
18.44
14.39
16.31
13.46
18.94 15.03
59.5
83.5
96.5
88.8
73.6
47.4
51.3
45.4
39.8
47.4
59.0
82.7
67.0
71.1
30.8
28.9
32.6
27.4
21.1
18.5
Financial Measures
Cost : Income
Return on Average
Common Equity (ROAE)*****
Net Interest Margin (NII/
average interest earning
assets)
Return on Average Assets
(ROAA)
Regular Workforce
Headcount
20.71% 21.59% 20.33% 20.79% 21.36% 20.47% 21.58% 20.35% 20.38% 21.26% 19.69% 22.91% 22.89% 28.01% 35.26%
19.20% 29.49% 33.14% 32.45% 34.24% 19.35% 29.55% 33.13% 32.71% 34.03% 32.80% 30.25% 24.77% 24.18% 22.23%
6.75% 6.48% 6.43% 4.97% 5.47% 5.74% 5.41% 5.36% 4.74% 3.71%
2.53% 3.26% 3.03% 2.69% 2.71% 2.55% 3.26% 3.02% 2.72% 2.70% 2.90% 2.87% 2.54% 2.47% 2.20%
7,071
6,900
6,759
6,551
6,422
5,983
5,403
5,193
4,867 4,517
59.2
83.0
74.1
77.4
76.4
38.1
49.2
32.6
34.6
18.7
Balance Sheet and Off Balance Sheet Information (EGP millions)
1478
1469
1167
1162
1154
1147
908
900
597
594
87,464 121,963 86,439 89,865 88,155 43,692 44,673 29,330 20,646 11,098
Sheet Information
(EGP millions)
Cash Resources and
Securities
(Non. Governmental)
131,858 63,270 69,068 63,684 77,523 131,708 63,226 69,030 63,673 73,035 34,097 19,430 16,646 16,764 19,821
9.5
11.3
10.2
13.4
16.8
10.6
13.9
12.2
14.3
7.7
0.0% 1.51% 1.35% 1.29% 0.65% 1.97% 2.44% 3.07% 3.62% 5.35%
0.0% 15.6% 15.3% 15.4%
9.7% 18.5% 29.9% 34.4% 33.9% 33.9%
1.47
2.35
2.53
3.17
4.14
2.65
3.02
2.42
1.83
1.24
Net Operating Income 4
25,881 23,019 20,379 14,890 11,315 25,839 23,018 20,351 15,192 11,370 10,165
7,717
6,206
5,108 3,837
Provision for Credit Losses
- Specific
Provision for Credit Losses
- General
5,019
1,435
3,076
1,742
893
4,989
1,435
3,076
1,742
893
1,682
589
916
610
321
Total Provisions
5,019
1,435
3,076
1,742
893
4,989
1,435
3,076
1,742
893
1,682
589
916
610
321
Non Interest Expense
5,626
5,049
4,224
3,119
2,433
5,553
5,045
4,223
3,119
2,433
2,028
1,705
1,450
1,445 1,337
Net Profits
10,238 11,801
9,582
7,516
6,009 10,300 11,804
9,556
7,550
5,951
4,641
3,648
2,615
2,203 1,749
Net Loans and Acceptances
120,347 119,946 106,377 88,428 85,384 119,632 119,946 106,377 88,428 86,152 57,211 49,398 41,970 41,877 41,065
Assets
Deposits
Common Shareholders
Equity
Average Assets
Average Interest
Earning Assets
Average Common
Shareholders Equity
Balance Sheet Quality Measures
Equity to Risk-Weighted
Assets 5
Risk-Weighted Assets
(EGP billions)
Tier 1 Capital Ratio 6
Adjusted Capital Adequacy
Ratio 7
427,842 386,742 342,461 294,782 267,544 426,145 386,697 342,423 294,771 263,852 179,193 143,647 113,752 94,405 85,628
341,169 304,448 285,297 250,723 231,741 340,087 304,484 285,340 250,767 231,965 155,370 122,245 96,940 78,835 71,574
59,476 51,880 34,228 28,439 21,374 59,405 51,800 34,147 28,384 21,276 16,512 14,816 12,115 11,311 8,921
407,292 364,602 318,622 281,163 223,522 406,421 364,560 318,597 279,312 221,523 161,420 128,700 104,079 90,017 80,361
363,922 328,296 290,869 257,931 203,053 362,981 328,296 290,869 258,315 203,625 145,835 117,133 94,605 79,834 70,549
55,678 43,054 31,334 24,907 18,955 55,602 42,973 31,265 24,830 18,894 15,664 13,465 11,713 10,116 8,765
28.97% 24.32% 16.93% 15.59% 13.34% 28.94% 24.28% 16.89% 15.56% 13.28% 15.74% 15.84% 15.50% 15.69% 14.49%
201
199
186
169
150
201
199
186
169
150
96
84
70
65
55
28.09% 23.59% 16.16% 14.93% 12.90% 28.09% 23.59% 16.16% 14.93% 12.90% 15.01% 15.70% 15.23% 14.33% 14.15%
31.41% 26.07% 19.09% 18.03% 13.97% 31.41% 26.07% 19.09% 18.03% 13.97% 16.06% 16.77% 16.32% 15.71% 15.40%
1 Based on net profit available for distribution (after deducting staff profit share and board bonus) and unadjusted to stock dividends
2 2018 DPS after taking into account the share distributions of one share for every four shares
3 Unadjusted to stock dividends
4 2016, 2015 and 2014 excluding CI Capital profit (Discontinued Operations)
5 Total Equity after Profit Appropriation
6 Including CBE Deposit Auctions
7 After Profit Appropriation.
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CIB Introduction
Leadership
Board of Directors
Mr. Sherif Samy
Non-Executive Chairman
Chair of the Audit Committee and Governance
and Nomination Committee
Member of the Compensation Committee
Mr. Hussein Abaza
Chief Executive Officer and Board Member
Chair of the Management Committee and High
Lending and Investment Committee
Mr. Sherif Samy is an experienced senior executive
and advisor in the fields of financial markets and
services, in addition to investment and corpo-
rate governance. He is currently Non-Executive
Chairman of a real estate asset management
company and serves on the boards of directors of
the state’s project finance arm, National Investment
Bank, the Universal Health Insurance Authority, and
several listed and privately held companies in the
education, venture capital, fund management, and
private equity sectors. Additionally, he is a member
of the Investment Board of the National Pension
Fund and of the International Advisory Board of
the UAE Securities and Commodities Authority,
and a member of Board of Trustees of the French
University in Egypt.
Mr. Samy served a four-year term, ending 2017, as
Chairman of Egypt’s
independent non-banking
Financial Regulatory Authority (FRA), where he
achieved a major legislative and regulatory leap in
capital markets, insurance, mortgage, leasing, private
pensions, factoring, and microfinance.
He served on the board of the Central Bank of
Egypt from 2013 to 2017 and its Monetary Policy
Committee, and chaired its Audit Committee. He was
also Chairman of the Financial Services Institute, the
Egyptian Institute of Directors, and a member of the
board of the country’s National Payment Council and
its Anti-Money Laundering Unit.
In 2014, Mr. Samy became the first Egyptian to be
elected to the board of the International Organization
of Securities Commissions (IOSCO), and was reelected
for a second term in 2016. He was also elected presi-
dent of the Union of Arab Securities Authorities in
2016/2017. Prior to that, he was the Managing Director
of Banque Misr’s investment arm, Misr Capital, and a
board member of Banque du Caire. Starting 2007, he
was appointed for several consecutive terms to the
board of the General Authority for Investment and Free
Zones (GAFI).
Mr. Samy started his professional career with global
consulting firm Accenture, where he worked in its
Chicago, Riyadh, and Beirut offices. He graduated
from Alexandria University’s Faculty of Commerce
with high distinction, and attended numerous
executive programs at leading business schools in
the US and Europe in the areas of strategy, manage-
ment, and investment.
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-winning
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.
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CIB Introduction // Leadership
Dr. Amani Abou-Zeid
Lead Director, Non-Executive
Independent Director of the Board
Member of the 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
remarkable mix of experience from across conti-
nents and stakeholders. She has managed the
African Development Bank’s largest operational
portfolio and implemented national and conti-
nental multi-sectoral development programs,
including implementing the world’s largest solar
power plant. As AU Commissioner, she launched
the Single African Air Transport Market, benefit-
ting 800 million Africans, delivering on the first
flagship project for African Integration under AU
Agenda 2063. She also launched Africa’s digital
transformation strategy to enhance Africa’s leap-
frogging 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 Efficiency, 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 gender equality and women’s empow-
erment. An Egyptian national, Dr. Abou-Zeid
has a multidisciplinary educational background,
receiving a BSc in Electrical Engineering from
Cairo University, an MBA from Université Senghor,
an MPA from Harvard University, and a PhD in
Social and Economic Development from the
University of Manchester.
Mrs. Magda Habib is the co-founder and Chief
Executive Officer of Dawi Clinics, a chain of
primary 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 managerial
arenas, including strategic brand management,
retail marketing, corporate
consumer and
communications, and
investor relations. She
was also a co-founder, board member, and Chief
Commercial, Marketing and Strategy Officer at
Fawry Banking and Payment Technology Services.
As a co-founder and a key member of the execu-
tive team, Mrs. Habib helped establish Fawry as
the leading electronics payment platform in Egypt
with more than 50,000 payment points nation-
wide. 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
Mrs. Magda Habib
Non-Executive Independent
Director of the Board
Member of Audit Committee, Governance
and Nomination Committee, Operation and
Technology Committee,
and Compensation Committee
merger and development of Raya Group, as well
as being responsible for the creation and develop-
ment 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.
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CIB Introduction // Leadership
Mr. Paresh Sukthankar
Non-Executive Independent
Director of the Board
Chair of the Risk Committee
Member of the Audit Committee Compensation
Committee, and Governance
and Nomination Committee
Sukthankar is currently Lead Partner in Sanaksh
Advisors LLP, a firm that provides 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 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 institutions. At HDFC Bank, he contrib-
uted to various key areas, including credit, risk
management, finance, human resources, investor
relations, corporate communications, corporate
social responsibility, and information 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.
Sukthankar resigned from HDFC Bank in 2018. Mr.
Sukthankar has been a member of various commit-
tees 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 departments,
including corporate banking, risk management,
financial control, and credit administration. Mr.
Mr. Rajeev Kakar
Non-Executive Independent
Director of the Board
Chair of the Operations and Technology
Committee and Compensation Committee
Member of the Governance
and Nomination Committee
Mr. Rajeev Kakar is a seasoned banker, busi-
ness founder, entrepreneur, and corporate board
member with over three decades of global banking
experience and expertise in financial services,
especially in emerging local corporate, commercial,
MSME and retail banking, across multiple coun-
tries 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 successfully operating large banks, financial
institutions, and leading business turnarounds,
with a demonstrated ability to conceptualize and
execute multi-country business strategies, lead
acquisitions 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.
Middle East, and Africa region until 2006. He moved
as the Global Co-Founder of Fullerton Financial
Holdings, 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 Financial
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),
(GIB Bahrain), Gulf
Gulf
International Bank (GIB Saudi Arabia), Commercial
International Bank (Egypt), UTI Asset Management
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.
International Bank
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,
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CIB Introduction // Leadership
Mr. Jay-Michael Baslow
Non-Executive Independent
Director of the Board
Member of the Governance and Nomination
Committee, Risk Committee, and
Compensation Committee
In addition to his banking experience, Mr. Baslow
was a strategy consultant in the media and telecoms
industry at Booz Allen & Hamilton. He co-founded
Frictionless Commerce Incorporated, a strategic
sourcing software startup in Cambridge, MA, where
he was Chief Financial Officer and a member of the
board; and was the Associate Dean for Resource
Development at Harvard Medical School, overseeing
the major gifts and planned giving operations.
Mr. Baslow received a BA in Mathematics from the
University of Pennsylvania and an MBA in Finance
from The Wharton School.
Mr. Jay-Michael Baslow brings to the Board a variety
of banking experience acquired during the past four
decades. Mr. Baslow spent the last 16 years of his
career in Risk Management at J.P. Morgan, covering
a range of sectors. Prior to his 2019 retirement, he
was the Head of EMEA Risk Management for the
bank’s Wealth Management organization and the
Chief Risk Officer of J.P. Morgan International Bank
Ltd, its London-based private bank. Prior to that,
Mr. Baslow worked in Credit Risk Management,
covering a variety of corporate and financial sectors
and EMEA regions, including over three years based
in Dubai as the Head of MENA Credit Risk and then
returning to London as the Head of EMEA Emerging
Markets Credit Risk.
During the late 1990s, Mr. Baslow was an invest-
ment banking client executive at Chase Securities,
covering global telecommunications operators and
equipment manufacturers from the bank’s New York
headquarters. He started his career with Chemical
Bank in the 1980s, first as a technologist and then as
a real estate investment banking analyst.
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CIB Introduction // Leadership
Management Committee
Mr. Hussein Abaza
Chief Executive Officer and Board Member
Chair of the Management Committee and 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-winning
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
appointed 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 Operations
Group was significantly developed, resulting in major
expansions within the operations function. New divi-
sions were established, serving the expansion of the
business or merging several operations divisions,
including 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,
including Treasury Middle Office, Operations
Control Management, Retail Operations, Customer
Care and Experience, as well as the Sustainable
Development Department.
His vision brought about the establishment of the
Security and Resilience Management Group, with
a clear strategic mandate to develop and firmly
establish the Bank’s business continuity and cyber
security management capabilities. Under his leader-
ship, CIB has obtained ISO22301:2012 Certification
in Business Continuity Management, positioning
CIB as the pioneer and leader among peer financial
institutions in the market.
In 2015 and 2016, Mr. Sultan led a major trans-
formation strategy in the IT Department, adding
significant value
technology and
to existing
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. Sultan 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
Management 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 Manager of
the Financial Institutions Group. In January 2010, he
assumed his role as President of the Global Customer
Relations Department, before taking on his current role.
is Chairman of International
Mr. El Ganainy
Securities & Services Co. (Falcon Group), and a
member of the boards of CI Capital Holding Co,
Misr for Central Clearing, Depositary and Registry
Company, and Egyptian Sport Fund. He is also a
member of Egyptair Holding Co’s General Assembly,
Honorary Chairman of both Interarab Cambist
Association
the Egyptian Dealers
Association (ACI Egypt), and a member of the
American Chamber of Commerce in Egypt.
(ICA) and
Mr. El Ganainy served as Chairman of CI Asset
International
Management Co, Commercial
Brokerage Co, the Normalization Committee, and
Egyptian Football Association. He was on the boards
of TE Data, Telecom Egypt, and the Egyptian Holding
Co. for Airports and Air Navigation, and executive
board member of ACI International (The Financial
Market Association). He served as Chairman of Port
Marsa Alam for Tourism Investment, and Capital
Securities Brokerage Co, in addition to serving on the
board of Royal & Sun Alliance Insurance Co.
Prior to joining CIB, Mr. El Ganainy worked at the
United Bank of Egypt as General Manager, Treasurer,
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.
responsible for managing CIB’s 205 branches and
is a member of ALCO, and other group manage-
ment committees. He has a proven track record
in delivering results as a corporate and invest-
ment banker, as a retail banker, as a CFO, and as a
chairman of portfolio companies. He has success-
fully led big change mandates across CIB business
lines and support functions. Mr. Issa started his
banking career in 1993 at CIB branches, attended
CIB’s industry-leading credit course in 1994, and
was later promoted through the ranks within
CIB’s Corporate Banking and Investment Banking
Divisions between 1995 and 2001. In 2001, he took
a two-year study break to earn an MBA degree at
UNC-Chapel Hill.
During his career, he took on notable positions such
as Chairman of the Board of Directors at CORPLEASE,
Chairman of the Board of Directors at Falcon Group,
board member at CI Capital Holding, Managing
Director at CI Capital Investment Banking, Group
CFO at CIB, Head of FIG at CIB Institutional Banking,
Co-Founder and Head of Research at CIBC, Head
of Strategic Planning at CIB and Senior Manager
at CIB Corporate Banking. He is the Chairman of
the Banking Committee at the American Chamber
of Commerce in Egypt. He was appointed by His
Excellency, the Prime Minister of Egypt in 2017 to
sit on the board of Egypt’s Trade Development
Authority. In April 2018, he became a member of the
Board of Directors at EGYPTAIR Holding Company.
Mr. Ahmed Issa
Acting Chief Risk Officer
Ms. Hanan El Borollossy
Chief Executive Officer, Retail Banking
Mr. Ahmed Issa is the Chief Executive Officer of
Retail Banking and a Member of the Management
Committee at CIB. He is responsible for strategy
formulation and execution across CIB’s consumer
banking and business banking. Mr. Issa is also
With more than 30 years of banking experience,
Ms. Hanan El Borollossy joined CIB’s Corporate
Banking Department in 1991 and attended CIB’s
Credit Course in 1992 to begin her career as a credit
analyst. Her responsibilities gradually expanded to
include strategic and managerial functions required
for her assigned portfolios.
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CIB Introduction // Leadership
graduate training courses in the US, UK, and Europe,
covering different areas as corporate, risk, invest-
ment, and strategic leadership. She assumed several
roles at CIB over her career, before becoming Chief
Corporate Banking Officer in 2010.
In March 2017, Ms. Wefky was appointed Deputy
CEO – Institutional Banking, handling both the
Corporate Banking Group and the Global Customer
Relations Group, before assuming her current role
as President of Corporate Credit and Investment
in December 2017, handling the Corporate Credit
Banking Group, Direct Investment Group, and Debt
Capital Market Group.
Under her leadership, the Bank’s corporate loan
book has more than quadrupled in the last 10 years.
Ms. Wefky is currently overseeing a transformation
project for the corporate functions across the value
chain aiming to migrate the entire corporate lending
cycle to an electronic solution, thus streamlining all
business, risk, and operation processes paving the
way for future CIBians to continue leading the corpo-
rate finance market.
Throughout her career, Ms. Wefky was chosen to
represent CIB as a board member, Managing Director,
and Chairman at several affiliates. She is an active
member in several committees within the Bank, such
as the High Lending and Investment Committee,
Asset and Liability Management Committee,
Non-Financial Risks and Compliance Committee,
and Pricing Concession Committee.
Ms. Wefky graduated from the American University in
Cairo (AUC) in 1985 with a BA in Business Administration.
In 2017, she was appointed as Deputy Chief Risk
Officer overlooking CIB’s integrated Enterprise Risk
Management (ERM) framework through managing
and developing all key financial risk areas, such as
credit risk, and assets and liabilities management risk,
including market, liquidity, and interest rate risks. This
is in addition to non-financial risks including opera-
tions, strategic, conduct, vendor management, IT,
reputation, and social and environmental risks.
In January 2020, she was appointed as Acting
Chief Risk Officer to lead a highly collaborative
and proactive risk function that is able to navigate
an increasingly complex business and regulatory
environment through the integration of overall risk
concepts and frameworks into the Bank’s strategy,
while applying best practice methodologies and
applications to mitigate those risks.
Ms. El Borollossy is a key member in the Bank’s senior
committees, and is Chairperson of the Non-Financial
Risks and Compliance Committee, Business Banking
Risk Committee, and Consumer Risk Committee.
Throughout her career, Ms. El Borollossy was chosen
to represent the Bank by serving on the boards of
several companies and affiliates, and was Chairperson
of Commercial Life Insurance Company (CIL).
Ms. El Borollossy received her BA in Economics
and Political Science from the American University
in Cairo in 1983, and has since undergone various
postgraduate studies and trainings in corporate,
investment, marketing,
risk, and
strategic management areas at reputable interna-
tional financial institutions including INSEAD, DC
Gardner, and Euromoney.
leadership,
Ms. Nevin Wefky
President of Corporate Credit and Investment
Ms. Nevin Wefky joined CIB in 1986 and finished the
Credit Course in February 1987, before joining the
Corporate Banking Group. Throughout her 33 years
of experience, Ms. Wefky completed various post
CIB’s stalwart leadership
has enabled the Bank to
weather the storm during
this unprecedented year.
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CIB Introduction
What We Do
Institutional Banking
Corporate Banking and Global Customer
Relations Group
Widely recognized as Egypt’s preeminent corporate
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, securiti-
zation, bonds, and structured finance. CIB’s project
finance and syndicated loan teams facilitate 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 opportunities
in Egypt and across the region, maximizing return
on investment.
Financial Institution Group
CIB provides a diverse set of banking and financial
services designed to suit the needs of different finan-
cial institutions through facilities tailored to address
the financing needs of banking and nonbanking
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
relationship managers, who supply our customers
with exclusive, 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 to
manage the Bank’s relationship with strategic
governmental and large enterprises by focusing
on providing first class service and lifetime value
for top-tier local and regional companies under
state-owned enterprises, 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 management
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 enterprises
as it works to cement CIB’s position as a bank of
choice for business owners.
Representative Offices, Strategic
Subsidiaries, and Associates
Dubai Representative Office
CIB launched its UAE operations in 2005, allowing
for a direct presence in the GCC region to offer a full
range of products to retail and corporate clients.
The Dubai Representative Office 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
attracting and channeling inbound investments
and cementing relationships with reputable GCC
corporations with investment or planned invest-
ments in Egypt and Africa, in addition to targeting
high-net-worth individuals and business banking
clients with an appetite for the Egyptian market.
The office creates a bridge between the GCC and
Egyptian markets to provide growth opportunities
for the Bank, while extending its business portfolio
and plays a key role in building and maintaining rela-
tionships with large corporate clients and financial
Widely recognized as Egypt’s
preeminent corporate
bank, CIB serves enterprises
ranging from industry leading
corporates to medium-sized
businesses.
institutions in the GCC to boost the corporate and
trade finance business in Egypt. These strategic
alliances are key to the Bank’s expansion strategy,
allowing it to leverage unique opportunities to offer
clients extensive financial tools while providing valu-
able market information to GCC clients.
Addis Ababa Representative Office
CIB established its Ethiopia Representative Office in
April 2019 in Kirkos Sub City, Addis Ababa. The office
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 Ethiopia, as well as international and
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CIB Introduction // What We Do
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 developing
strong ties with Ethiopian banks to pave the way
for establishing on-the-ground market intelligence
within the country.
CVentures
is Egypt’s first corporate venture
CVentures
capital firm owned by a bank focused primarily on
investing in category-defining companies in finan-
cial technology spaces with the potential to create
meaningful change in financial services. CVentures
primarily participates in Series A and Series B invest-
ment rounds, and seed investment rounds in core
financial applications including, but not limited
to, capital markets and payments, money transfers
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.
Mayfair CIB Bank Limited (MCIB)
CIB acquired 51% of Mayfair Bank Kenya, now known
as Mayfair CIB Bank Limited (MCIB) in April 2020
with a share subscription of USD 35.5 million. It
marked the first cross-border acquisition by CIB into
Sub-Saharan Africa, allowing the Bank to penetrate
what it feels is a hub for the East Africa region,
giving it access to ample opportunities in light of the
country’s economic fundamentals, its geographic
location, and its COMESA membership.
The acquisition falls in line with CIB’s strategy to
restore Egypt’s relations with its African neighbors
and the continental efforts to increase intra-African
trade, which led to the ratification of the African
Continental Free Trade Area (AfCFTA). The AfCFTA
will build a bloc that creates a GDP of USD 2.6 trillion
and a market of 1.3 billion consumers, 75% of whom
are aged 35 and under. CIB’s strategy for this subsid-
iary will focus on trade finance activities, with special
attention on growing the Egypt-Kenya trade corridor,
building a bridge for Egyptian large corporates and
SMEs to do business and even set up shop in the hub
of Eastern Africa, and serve multinational and local
SMEs in Kenya.
Through MCIB, CIB is keen on the transfer of know-
how to both countries. Already, CIB is investing in
building a pool of young talents from all over the
continent for the MCIB’s head office in Cairo and
subsidiary in Nairobi. CIB is paying special attention
on training, learning, and development while at the
same time gaining knowledge of Kenya’s pioneering
efforts in the fintech space.
Falcon Group
Falcon Group provides a plethora of services
including, but not limited to, security services,
money transfer, technical systems, and security
products, public services and project management,
and tourism 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 provides consistent services at the
highest quality, lowest 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 limited
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 correspondence and
mail, cash withdrawal and deposits, repaying loan and
credit card dues, as well as various bill payments such
as utility, telecom, subscription fees, taxes, and fines.
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CIB Introduction
CIB’s Stock
CIB continues to hold
the highest weight on the
EGX30, accounting for
43.71% of the index.
Breakdown of Shareholders by Region
(As of December 2020)
Breakdown of Shareholders by Type
(As of December 2020)
Since the Bank began offering its shares to the
public in 1995, it has become the biggest constit-
uent on the Egyptian Exchange (EGX). Investors
and analysts view CIB’s stock as a proxy for the
Egyptian market, with the Bank acting as a mirror
for the local banking sector. The economy’s growth
prospects are generally depicted in the credit
outlook, while retail banking is seen as portraying
the longer-term story of financial inclusion.
In 1996, CIB became the first Egyptian bank to offer
its shares on international markets with a GDR
program on the London Stock Exchange (LSE). In
2001, CIB marked another first by being the first
Egyptian 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.
North America
Africa
GCC
Continental Europe
UK and Ireland
Rest of the World
47.53%
24.14%
9.49%
8.30%
5.88%
4.66%
By the end of 2020, CIB’s total issued shares were
1,477,681,340, the Bank’s GDR outstanding posi-
tion reached 330,664,256 shares, representing
22.38% of issued shares, and its ADR outstanding
position recorded 15,095,347 shares, representing
1% of issued shares.
CIB continues to hold the highest weight on the
EGX30, accounting for 43.71% of the index, and the
highest free float at 93.45%. CIB’s stock is one of Egypt’s
most liquid stocks as it is considered the most valu-
able financial institution, with a market capitalization
of EGP 87,464 million as of December 2020.
Institutions
Individuals
92.48%
7.52%
Investor Relations
The Bank’s Investor Relations (IR) division main-
tains a proactive investor relations program to keep
shareholders and investors abreast of developments
impacting the Bank’s performance. The team and
senior management alike dedicate significant time
to one-on-one meetings, road shows, investor confer-
ences, and conference calls, sparing no effort in
providing the investment community with transparent
disclosures while simultaneously ensuring analysts
have the information they need to maintain a balanced
coverage of the Bank’s shares.
During 2020, the team and senior management
conducted more than 200 one-on-one and group
virtual meetings through online communications
platforms and met with over 500 local and inter-
national investment funds and research analysts,
alongside several in-house meetings that took place
before the pandemic hit Egypt. In addition to two
in-person conferences attended during the first
two months of 2020, the IR team participated in 10
online conferences. Moreover, the team conducted a
group call attended by more than 700 participants in
October and conducted a webinar in June.
During the year, disclosures, including regular
updates and releases, continued to be periodically
made available on CIB’s IR website as well as the
EGX, LSE, and OTCQX portals in a timely manner
that ensures fair access to information for inves-
tors from around the world, allowing them to make
informed investment decisions.
Thanks to the team’s continuous efforts to further
enhance the program, CIB was awarded the Leading
Corporate for Investor Relations in Egypt in MENA’s
largest investor relations event organized by the Middle
East Investor Relations Association (MEIRA) in part-
nership with Extel. This is the seventh year in a row in
which CIB receives at least one award from MEIRA.
Equity Analysts’ Coverage
CIB is widely covered by leading research houses both
locally and internationally. In 2020, 14 institutions regu-
larly issued research reports on CIB.
COMI started the year with an open price of EGP
83.02 and ended it at EGP 59.19 with 29% y-o-y nega-
tive change as a result of the challenges materializing
this year. During 2020, CIB’s price reached a peak of
EGP 86.01 and a valley of EGP 56.06, and the average
VWAP during the year was EGP 68.06, with an average
volume of more than EGP 2.1 million and an average
market capitalization of EGP 100 billion.
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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 ownership
stake as part of a shift in its international strategy.
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 remaining
stake. In July 2009, Actis, a Pan-African private equity
firm specializing in emerging markets, acquired 50%
of the Ripplewood Consortium’s stake. In December
2009, Actis became the single largest shareholder
in CIB with a 9.09% stake after Ripplewood sold its
remaining share of 4.7% on the open market. The
emergence of Actis as the predominant shareholder
marked a successful transition in the Bank’s strategic
partnership. In March 2014, Actis undertook a partial
realization 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 equity firm sold
its remaining 6.5% stake to several wholly-owned
subsidiaries of Fairfax Financial Holdings, making
the latter the sole strategic shareholder in CIB.
Fairfax is represented on CIB’s Board of Directors by
a non-executive member.
1991
• First Egyptian commercial bank to arrange debt swap transactions
• First bank to launch a smart card center in Egypt
1993
• 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
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
1994
• First bank in Egypt to connect with the international SWIFT network
1977
• Becomes first private sector bank to create a dedicated divi-
sion providing 24/7 banking services to shipping clients, with
a primary focus on business in the Suez Canal
1996
• First Egyptian bank to have a Global Depository Receipt (GDR)
program on the London Stock Exchange
1987
• Chase Manhattan divests its stake in the Bank, and Bank changes its
name to Commercial International Bank (CIB)
1997
• 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
incident), rated BBB by Fitch IBCA
1989
• Selected by BSP to become its agent in Egypt
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CIB Introduction // Our History and Timeline
1998
• 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
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
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
2005
• First bank in Egypt to launch a page on Bloomberg for local
debt securities
2006
• First to adopt a pricing policy according to client risk rating to
abide by Basel II requirements
• First Egyptian bank to execute a EGP 200 million repo transac-
tion in the local market
• First and largest Egyptian bank to provide securitization
trustee services
2007
• Only Bank in Egypt chosen by UNIFEM and World Bank to
participate in the Gender Equity Model (GEM)
2010
• 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 primary 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 institutionalized as part of its founding institution’s
bylaws, as CIB shareholders unanimously agree to dedicate
1% of annual net profit to the Foundation
2011
• CIB-TCM becomes pioneer in trading in almost 114 new and
unconventional currencies
2012
• First Egyptian bank to officially establish a Sustainable
Development Department
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
2013
• 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 offers customers the option of interacting with
call center agents over video calls
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CIB Introduction // Our History and Timeline
2014
• First Egyptian bank to sign an agreement with Misr for Central
Clearing, Depository and Registry (MCDR) company to issue debit
cards for investors to collect cash dividends
• Launches first co-branded credit card, Mileseverywhere, with national
carrier 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
2015
• First Egyptian bank to successfully pass external quality assurance on
its Internal 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
2016
• 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
• 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 companies. 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, becoming the first bank in Egypt to introduce a
chatbot that supports both English and colloquial Arabic
• Became a
founding signatory to the United Nations
(UNEP-FI)
Initiative
Environment Program Financial
Principles for Responsible Banking
2019
• Recognized by Forbes among the top 500 employers glob-
ally coming in 90th place; within the top 100 companies in
the world
2020
• Acquired 51% of a Kenyan bank, now known as Mayfair CIB
Bank Limited in Kenya through a capital increase for a total
transaction value of USD 35.35 million
• Included in the 2020 Bloomberg Gender Equality Index (GEI),
becoming the only company in Egypt and one of just a handful
from Africa to be included in the index, which features 325
companies representing 42 countries across 50 industries with
a demonstrable commitment to the global advancement of
women in the workplace
• Ranked 28th on Forbes Middle East’s Top 100 Listed
Companies in the Arab World, ranking highest of the four
Egyptian compnies on the list
2017
• Becomes the only Egyptian bank ranked on the FTSE4Good
Sustainability Index
• 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
The only company in Egypt
to be included in the 2020
Bloomberg Gender Equality
Index (GEI).
2018
• 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
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CIB Introduction
Awards
1993 – 1998
2005
2018
2019
Six-time Recipient of Best Bank in Egypt award by
Euromoney
First Egyptian bank to win the JP Morgan Quality
Recognition Award
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
The Middle East’s Best Bank for Corporate
Responsibility - By Euromoney
2006 – 2012
2013
Seven-time Recipient of JP Morgan Quality
Recognition Award
First Egyptian bank to win the JP Morgan Quality
Recognition Award
2020
2016
2017
• Socially Responsible Bank of the Year by
• 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
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
• Best Bank in Egypt award by Euromoney
• World’s Best Emerging Market Bank award by
Global Finance
• Best Foreign Exchange Provider in Egypt
award by Global Finance
• Best Treasury and Cash Management Provid-
ers in Egypt award by Global Finance
• Best Emerging Markets Bank award by
Global Finance
• Best Private Bank in Egypt award by
Global Finance
• Best Bank in Egypt award by Global Finance
• Best Regional Bank in North Africa award by
African Banker
• Best Domestic Bank in Egypt award
by Asiamoney
• Best Digital Bank in Egypt award by Asiamoney
• Pan-Africa Sustainability Award by
EMEA Finance
CIB has been
named World’s
Best Bank in
Emerging Markets
by Global Finance
for the third time
in only four years,
having received
the same title from
Euromoney in 2017
and Global Finance
in 2018.
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CIB Introduction // Awards
THE WORLD’S BEST CONSUMER DIGITAL BANKS IN THE MIDDLE EAST 2020
BY GLOBAL FINANCE
• Best Consumer Digital Bank
• Best Integrated Consumer Banking Site
• Best Online Product Offerings
• Best Website Design
• Best Mobile Banking App
• Best Information Security and Fraud Management
• Most Innovative Digital Bank
• Best Open Banking APIs
THE WORLD’S BEST CORPORATE/INSTITUTIONAL DIGITAL BANKS IN THE
MIDDLE EAST 2020 BY GLOBAL FINANCE
• Best Online Investment Management Services
• Best Online Treasury Services
• Best Online Portal
• Best Integrated Corporate Banking Site
• Best Information Security and Fraud Management
• Best Mobile Banking Adaptive Site
• Most Innovative Digital Bank
• Best Open Banking APIs
NOTABLE RANKINGS
• Ranked 28th on Forbes Middle East’s Top 100 Listed Companies in the
Arab World
• Ranked highest of the four Egyptian companies on the Top 200 Banks list by
Jeune Afrique
• Ranked highest in Top Banks by African Business and Top 10 Safest Banks in
Africa by Global Finance
• Only Egyptian institution to be included among the 325 companies in
Bloomberg’s Gender Equality Index (GEI)
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02
Strategic
Direction
3strategy pillars
- Core business growth
- Digitalization
- Geographic expansion
CIB’s forward-looking
STRATEGY
is propped up by its people, effective
data analytics tools, and a stalwart
management team.
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0102020202 Strategic Direction
Strategic Direction
Strategy
Over the past few years, CIB’s strategy has focused
on uniquely positioning the Bank to become a more
client-centric organization. Our motive is to move
towards creating more digital experiences for our
customers. As we acknowledge the pivotal role that
artificial intelligence, blockchain, cloud, and data
(ABCD) play, we have been heavily investing in data
analytics, upscaling our infrastructure, digitizing and
automating the way we do business, while simultane-
ously developing our employees’ skillset to match the
latest emerging trends.
Mission
Vision
To transform traditional financial services into
simple and accessible solutions by investing
in people, data, and digitization to serve
tomorrow’s needs today
To be at the forefront of change, building for
the future, and turning aspirations into reality
Based on our mission and vision statements, CIB’s strategy will focus on three main growth avenues as we
move forward:
Core Business
Growing our Commercial Business Activities
When it comes to our core operations, CIB’s strategy
will be focused on customizing solutions to build
a bespoke bank and a financial-value-creating
companion for our targeted customer base.
modules, advanced campaign management capabili-
ties and process re-engineering, accompanied by a
new distribution strategy to expand outreach.
CIB will integrate ABCD to drive the business to new
levels by exploiting data, digital, new core banking
Using advanced campaign management techniques,
CIB will focus on data-driven sales. The Bank will
also continue to advance data mining capabilities
to enhance its behavioral segmentation in order to
target customers’ effectively with relevant products.
The institutional banking unit will transform to focus
on workflow optimization, digitalization, and auto-
mation. Moreover, the corporate lending function
will further expand to cover new governorates.
Organizational Development
Adoption of best practices for corporate governance
is key for CIB. The full roll-out of the Enterprise Risk
Management (ERM) system, which provides the
organization with the necessary controls and risk-
informed decision-making process, further solidifies
our standing in the eyes of its stakeholders.
The business banking unit will be revamped as more
investment will be directed towards advanced IT
solutions, digitalization of customer experiences in
cash and trade management products, automation of
sales management, and acquiring and payment solu-
tions. The unit will position itself as the clients’ SMEs
banking partner by working on building a distinctive
value proposition with the aid of data analytics for
both the borrowing and non-borrowing customers.
These business aspirations will be supported by the
transformation of the Global Transactional Banking
via the development of products through digital
channels for cash management, trade, supply chain,
and global custody services. The transformation will
benefit the Bank in strengthening the clients’ relation-
ship and loyalty, grow the Bank’s low-cost deposit base,
and significantly improve the customer experience.
Responsible Banking
The Bank continues to advocate for responsible
banking through the support of financial inclusion
and literacy, women and youth empowerment and
equality, in addition to the adoption of best practices
in sustainability, CSR, and governance.
We will also continue to work toward becoming
Egypt’s number one green bank and venture into
initiatives such as improving employee wellbeing,
community
investments, promoting accessible
banking, and banking the unbanked.
The continuous development of our human capital
is critical to the strides we have taken to maintain
and improve the quality of services offered to our
customers, and, consequently, in the value created for
stakeholders. Human Resources will continue to play
a strategically enabling role to evolve staff capabili-
ties, establish a culture of innovation, engagement,
and enablement, while building the right skills such
as adaptive thinking, cross–cultural competency,
computational thinking, and virtual collaboration.
Digital Disruption
We will continue to develop our digital capabilities
to encourage financial inclusion and lower the cost
of service and turnaround time (TAT) to ensure
operational efficiency and resource allocation. We
will harness the power of technology, partnerships,
and data to better identify and serve the untapped
market in a sustainable manner. Our goal is to offer
value-added tailored products and services through
the appropriate distribution channels, while at
the same time ensuring access to marginalized
segments of society.
Digitalizing the banking experience and working
towards direct processing not only benefits the
Bank through productivity gains and cost optimiza-
tion, but improves the customer experience. The
Bank will continue building a resilient cyber secu-
rity environment while moving towards an agile
infrastructure and organization.
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Strategic Direction
Geographical Expansion
To diversify our operations, balance sheet struc-
ture, and sources of income, CIB embarked on a
journey to look for expansion opportunities across
the border. In light of its geographical location,
historic and cultural ties, its macroeconomic and
demographic potential, Sub-Saharan was tapped
as a key opportunity. Importantly, regional inte-
gration efforts such as the African Continental
Free Trade Agreement (ACFTA) and the Egyptian
government’s direction to restore bilateral ties
provide imperative political support.
In particular, East Africa has been identified as the
most attractive region for CIB to do business. The
region is home to some of the fastest growing econo-
mies in the world, while it will also provide a platform
for CIB to learn and adopt the strides taken toward
digital transformation and financial inclusion.
CIB will continue to work on growing and solidi-
fying its continental footprint, especially after
the establishment of its representative office in
Ethiopia and the acquisition of a majority stake in
a local Kenyan bank.
In short, we aim to position CIB as a trade finance hub
for Egypt and East Africa, focusing on both corporate
and SMEs. Capturing pent-up capital expenditure
and investment flow is the route CIB has set its eyes
on to continue its solid and consistent financial
performance and creating value for our stakeholders.
When it comes to our core
operations, CIB’s strategy will
be focused on customizing
solutions to build a bespoke bank
and a financial-value-creating
companion for our targeted
customer base.
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Strategic Direction
Value Creation Model
Value creation is and has always been one of the main
pillars of the Bank’s strategy and focus. CIB works dili-
gently to create value for its shareholders, 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.
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 on behav-
ioral analytics and technology to improve the
customer experience.
• Operational Efficiency – ensuring a stream-
lined approach to provide exceptional customer
experience through process re-engineering
and straight-through processing.
• Digitalization of
Journey
– developing our digital capabilities and trans-
actional banking.
the Customer
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
and Sustainability
STRATEGIC
PRIORITIES
Financial
Performance
• Asset quality
• Profitability
• Loan growth
• Centralization of
operational processes
with focus on automa-
tion through STP
• Business continuity,
cybersecurity, and
resilience manage-
ment
Operational
Efficiency
KEY STAKEHOLDERS
Clients
Employees
Shareholders and Investors
Society
Resources (Input)
Value Created (Outcome)
Financial Capital
Strong financial
capital is always
reinvested in the
Bank’s activities
• EGP 10.2 billion in consolidated net income
• EGP 25.8 billion standalone revenues
• EGP 60 billion net worth
• EGP 428 billion total assets
• EGP 341 billion total deposits
• EGP 87,464 million market capitalization
• 19.2% ROAE
• 4.26% NPLs
• 20.7% 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
• 7,071 total workforce as of year-end
• 6,525 trained employees
• 30% of staff are women, well above Egypt’s
23% average
Human Capital
• Highly skilled staff capable of sustaining
CIB’s path of success and maintaining the
Bank’s leading position within the market
Human Capital
CIB’s in-depth
expertise in different
industries is mainly
rooted in our skilled,
specialized, and
dedicated staff
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Strategic Direction // Value Creation Model
Resources (Input)
Value Created (Outcome)
Resources (Input)
Value Created (Outcome)
Responsible
Banking
Integrating environ-
mental, social, and
governance aspects
into the Bank’s poli-
cies, operations, and
culture to achieve
sustainable develop-
ment and act as an
advocate of respon-
sible banking
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
• First Bank in Egypt to support the Task Force for
Climate Related Financial Disclosures (TCFD)
Responsible Banking
• Constituent of the FTSE4Good Index
• First Egyptian bank to conduct a Debit and Credit
for the 5th consecutive year
• For the 3rd consecutive year, CIB is listed
on the 2021 Bloomberg Gender Equality
Index (GEI), after being the first Arab
listed on the
and African company
2019 Bloomberg GEI — the world’s only
comprehensive investment quality data
source on gender equality
• Co-Chair of the Closing Gender Gap
Accelerator supported by the World
Economic Forum (WEF)
• Included in the new Low Carbon Select
Index in the Middle East and North
Africa (MENA), recently launched by
the Arab Federation of Exchanges (AFE)
and data provider Refinitiv
• Founding Signatory to the UNEP-FI
Principles for Responsible Banking
Innovation and Technology
• Expanding in digital banking platforms
through availing more services to
enhance customer experience, sales
efficiency, and manage costs. Digital
banking achieved a historical record
of cost synergy reached EGP 3.2 billion
with a 44% y-o-y increase
• Continuously upgrading our infrastruc-
ture and cyber security capabilities to
provide a seamless customer experi-
ence in a safe environment
Life Cycle Assessment
• First Egyptian bank to conduct an
Environmental and Social Impact Assessment
on borrowing SME clients
• Largest ATM network among private banks at 1,121
ATMs, high cash deposit and withdrawal transac-
tions migration rates from branches (96.4% and
98.5%, respectively)
• 118% y-o-y increase in mobile banking transactions
volume to EGP 53 billion; 35% y-o-y increase in
number of online banking customers
• CIB is the first bank in the market to avail digital
registrations for Smart Wallet, maintaining a
market competitive activity rate of 20%, with a 107%
y-o-y increase in transaction value to EGP 2.8 billion
over 7.5 million transactions: 34% y-o-y increase in
number of customers
• CIB is ranked 1st in the Egyptian banking sector in
domestic payments over ACH
• 93% y-o-y increase in corporate internet banking
transaction volumes; 45% y-o-y increase in number
of cash management products; transactions values
amounted to EGP 327.5 billion
• CIB is ranked 1st in Egyptian market in the e-govern-
mental payment space; corporate payment services
(CPS) saw a 70% y-o-y increase in transaction
volumes to EGP 15.2 billion; 102% y-o-y increase in
number of customers
• CIB is ranked 1st in Egyptian market for number of
securitization SPVs launched in 2020 at eight SPVs
amounting to EGP 33 billion
NPS in 2020 (vs. 20.3 NPS ME Benchmark)
• Overall - 28
• Wealth - 28
• Plus - 29
• Prime - 27
• Corporate - 38 (vs. 37.9 NPS ME Benchmark)
• Business Banking - 23 (vs. 37.9 NPS ME
Benchmark)
CSAT in 2020 (vs. 8 ME Benchmark)
• Smart Wallet - 8.7
• Mobile Banking - 8.6
• Internet Banking - 8.6
• ATMs - 8.3
Service Excellence and Brand
Recognition
• Since 2014, CIB has been monitoring
its service performance through a
service index, ensuring sustained, high
customer satisfaction levels as part of
its overarching strategy
• CIB has been named the World’s Best
Bank in Emerging Markets by Global
Finance for the third time in four
years, having received the same title
from Euromoney in 2017 and Global
Finance in 2018
• Ranked 28th on Forbes Middle East’s Top
100 Listed Companies in the Arab World
Service Excellence
and Brand
Recognition
CIB has long-standing
relationships with
clients that are built
on trust, customer
centricity, and rights
concepts. The Bank’s
core values enable
it to preserve and
strengthen its brand
positioning in the
financial services
market in Egypt as the
largest private bank,
the best bank when
it comes to corporate
and retail services
and a leader in digital
transformation
CIB works diligently
to create value for its
shareholders, customers,
employees, and society.
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Strategic Direction
A Note From Our
Non-Executive Chairman
As a Board of Directors, we are
committed to ensuring world-
class governance remains a
hallmark of this institution.
in technology
infrastructure and
investment
innovative digital channels were also leveraged to
expand its offerings to clients and migrate a larger
share of transactions from branches, addressing
both social distancing measures and contributing
to our vision for a digital, modern banking future.
Thanks to the dedication of thousands of CIB men
and women, the Bank is now emerging from the
storm in a position of strength with more ambitious
objectives for the year to come.
As a Board of Directors, we are committed to
ensuring world-class governance remains a hallmark
of this institution. We start 2021 with a non-executive
chairperson and are pressing on with initiatives from
last year that will further strengthen our governance,
controls, and risk management systems.
Dear shareholders,
Staying the course is what CIB strived to do in
2020. The year saw thousands of CIBians, lead by
the management team and with oversight from
the Board of Directors, extend all efforts to keep
our clients (and each other) safe and to mitigate
as much as feasible the impact of COVID-19 on
our business. The challenge was not just to mini-
mize disruption to the business and services to
our clients, but to also keep momentum going on
various development initiatives.
We will continue fostering a strategy that prioritizes
consistent growth through prudent management,
which will allow us to build on the lessons learned
in previous years and drive value for shareholders.
Sustainability is also an integral part of CIB’s stra-
tegic directives, believing that both businesses and
the financial institutions that allow them access
to capital must place sustainability at the heart of
everything they do. Similarly, we must ensure that
growth is equitable and that we work to champion
the nation’s push toward financial inclusion.
In the early days of the pandemic, our focus was
squarely on providing a safe banking experience for
our clients — and a healthy work environment for
our team. As COVID-19 became the ‘new normal’,
we were keen to support clients in managing their
own responses to the impact on their businesses.
CIB has also fully complied with the Central Bank
of Egypt’s timely initiatives to support retail,
SMEs, and corporate borrowers alike. The Bank’s
On behalf of the Board of Directors, I hope 2021 will
be a recovery year and that we will be able to report
to our shareholders, as well as the rest of our stake-
holders, positive developments on performance,
innovation, and responsible banking.
Sherif Samy
Non-Executive Chairman
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Strategic Direction
A Note
From Our CEO
— and comparatively little scientific knowledge
— of the virus. And they have demonstrated great
stamina and strength of character every day since.
There are really only two things you can do to prepare
for a crisis: you must plan and then be flexible
when the crisis arrives. The Central Bank of Egypt’s
response to COVID-19 is the stuff of which business
school case studies are made. Far beyond measures
to ensure physical safety of clients and bankers in
the system, the central bank acted quickly to bolster
consumer, business, and investor confidence in our
financial system. It moved ahead with payment
holidays for corporate and individual borrowers.
It showed vision with measures designed to both
minimize face-to-face contact and drive adoption of
electronic payments for the long term. And it showed
boldness with a multifaceted stimulus program.
As we approach our second year of this pandemic, we
can see light at the end of the tunnel. In particular,
the prospect of a vaccine. Egyptian medical profes-
sionals are already being vaccinated, a development
that will prove to be a huge psychological leap for
consumers, manufacturers, and retailers alike. And
we look forward to the rollout of the vaccine to the
wider public over the course of the months to come.
In the meantime, I have been regularly reminded by
our clients in the business community that we have
all managed businesses through more challenging
times. Today, consumption is picking up. Businesses
of all forms are open. Our monetary policy is appro-
priate to the times and our base of foreign reserves
is strong, helping ensure stability of the Egyptian
pound. The central bank has ensured we remain one
of the best carry trades in the world, compensating
for the downturn in tourism. There’s every sign that
smart policy will ensure that our tourism industry
will be able to quickly respond when the world
opens again to holidaymakers.
We are approaching 2021
from a position of strength: we
achieved solid revenue growth
in 2020, took appropriate
provisions and still delivered
good profitability despite an
unprecedented year.
We have much for which to be grateful as we look
forward to the promise of a new year, and the health
and wellbeing of the thousands of people who work
here — and of the hundreds of thousands of clients
we serve — is at the very top of that list.
I will not dwell at length in this note on our response
to COVID-19 — we have (and will continue) to report
on this in successive communications materials
to all stakeholders. But I do want to single those to
whom we all owe thanks.
COVID-19 is insidious. Dangerous to many, fatal
to some, and an omnipresent threat to us all. The
courage, kindness, and hard work of each and every
one of the men and women who work for us every
day — particularly front-liners — saw us through
the worst of it. During the first wave, we spoke of our
team being everyday heroes for continuing to come
to work at a time when we had no real experience
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Strategic Direction // A Note From Our CEO
The question, then, is not “will there be spending
on capital expenditure this year?” It is “when will
we see the first signs of a pickup?” Any downward
movement in interest rates will only work to
support that pickup.
In short, we believe 2021 is a year in which we are
planting the seeds of a solid, gradual recovery — one
reinforced by our young, fast-growing population; by
a rising interest in entrepreneurism; by a state-led
financial inclusion drive that will bring more and
more businesses into the formal financial system;
and by the continued, rapid digitalization of bank
and other financial services.
CIB has made substantial investments in digital
infrastructure and services for going on a decade,
and we started 2021 pushing faster than ever, from
our e-wallet and adoption of QR code technology,
to the forthcoming rollout of a new web presence
with powerful new tools that help us better serve our
clients of all sizes.
Among those clients will be small and medium-sized
businesses. SMEs are growing in number thanks
both to the rising popularity of business ownership
and to incentives from policymakers and the private
sector alike, whether it is new products or incentives
to join the formal economy. SMEs are the mainstay
of any economy, and CIB looks forward to providing
a new crop of businesses with tailor-made products
and services as they grow into the next generation of
large corporations.
As we do so, the Bank will continue to emphasize
sustainability at every turn, guided by our goal of
creating shared value for every single one of our
stakeholders. Our ability help drive change will be
underscored later in 2021 when we become the first
bank in Egypt to issue a green bond, raising capital
to on-lend to pro-environment projects across the
economy. And alongside others in our industry,
we look forward to participating in the natural gas
conversion project, which will help take vehicles
more than 20 years old off the road and replace
them with new cars, microbuses, and buses that are
powered by dual-fuel engines that can run on petrol
and cleaner-burning natural gas.
Further afield, we are now beginning our first full
year in which we have owned Mayfair CIB in Kenya,
marking our cautious entry to this exciting new
market. Our hope is that a growing global recovery
will put the winds in our sails as Egypt’s trade with
the rest of Africa blossoms.
In sum, we are approaching 2021 from a position of
strength: we achieved solid revenue growth in 2020,
took appropriate provisions and still delivered good
profitability despite an unprecedented year. We have
18% unsecured portfolio coverage, which will ensure
that as we see a broad-based market recovery, we
will be able to capture the benefits of this upswing
without having to take substantial new provisions.
Our expectation is that our core corporate franchise
will mark the start of its rebound — and following
this, increased appetite from SMEs and continued
strength in our consumer credit business.
As I wrote last year: 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 indi-
viduals live better lives and corporate clients build
businesses that create meaningful jobs. I have every
confidence we are up to this task in the year ahead —
and far beyond.
Hussein Abaza
Chief Executive Officer
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Strategic Direction
Board of Directors’ Report
A Challenging Macroeconomic
Environment
2020 was a year of tremendous change, not only on
the local front, but on the global arena as well. With
a worldwide pandemic that hit most countries,
infected tens of millions of people, and claimed the
lives of millions by the end of the year, COVID-19
sparked a global economic slowdown that negatively
impacted sectors and businesses around the world.
Unlike many, Egypt did go into complete lockdown
during the height of the pandemic, but imposed in
the second half of March curfews that were gradu-
ally eased then eventually lifted toward the end of
June. With a lower number of infections and fatali-
ties than numerous other countries, the first wave
of the pandemic did not hit Egypt as hard as many
would have expected, given the country’s population
and population density. This enabled the Cabinet to
open up economic activity faster, which — coupled
with the economic reforms the country had final-
ized before the pandemic — allowed Egypt to be the
only country in the MENA region to register positive
GDP growth of 2.5% in the fiscal year ending June
2020. Egypt’s unemployment rate returned to pre-
pandemic levels in 3Q2020, falling to 7.3% compared
to 7.8% in the same quarter of last year, after hitting
a near two-year high of 9.6% in 2Q2020. The country’s
plan to ‘coexist’ with the virus was successful from an
economic standpoint.
The government announced a EGP 100 billion
stimulus package to mitigate the economic impact of
COVID-19, of which half was allocated to the tourism
sector. The package also included EGP 20 billion
allocated by the Central Bank of Egypt (CBE) to
invest in listed securities on the Egyptian Exchange
(EGX) to support asset prices and stem market
volatility caused by the pandemic-induced sell-off.
State pensions increased by 14% and cash-transfer
social programs through Takaful and Karama were
extended to reach more families, while a support
initiative targeting irregular workers in sectors that
were most severely hit was launched. A EGP 10
billion consumer spending initiative was launched to
offer citizens two-year, low-interest loans to pay for
consumer goods discounted by 10-25% and provide
ration-card subsidies. Energy costs were lowered for
the entire industrial sector, and real estate tax relief
was provided for the industrial and tourism sectors.
Under its support programs, the CBE reduced the
preferential interest rate from 10% to 8% on loans to
the tourism, industry, agriculture. and construction
sectors and provided participating banks with the
interest differential.
The CBE also launched a six-month debt moratorium
for individuals and businesses in March, allowing the
delay of principal and interest payments until 16
September 2020. It also lifted all fees and commis-
sions on local currency digital payments, transfers,
and out-of-network ATMs to reduce physical interac-
tions, with an eye toward further supporting financial
inclusion and the shift to a cashless economy. This
was extended from September to December, and
again to June 2021.Moreover, the CBE raised the ATM
withdrawal ceiling, and adjusted the limit on mobile
wallets and prepaid cards.
The CBE’s Monetary Policy Committee (MPC) slashed
interest rates by an unprecedented 300 basis points
(bps) in an emergency meeting in March and kept
interest rates unchanged until September, when it
cut them 50 bps, followed by another 50 bps cut in its
meeting in November. This brought the CBE’s over-
night deposit rate to 8.25%, the lending rate to 9.25%,
and the main operation and discount rates to 8.75%.
These decisions were supported by declining inflation,
with annual headline urban inflation slowing to 5.7%
in November. Even with the 400 bps rate cut in 2020,
Egypt’s carry trade remained attractive to foreign inves-
tors, being the second highest in the world, surpassed
only by Malaysia, according to a list of more than 50
major economies tracked by Bloomberg.
However, the pandemic did not leave the economy
unscathed, with Egypt seeing a total of USD 17 billion
in foreign portfolio investment outflows from March
to May. The government was able to balance the gap
created from various sources, including drawing
down on USD 5.4 billion from international reserves
in March (which hit a two-year low of USD 40.1
billion before dropping to USD 36 billion in May and
rebounding upwards for the following four consecu-
tive months to end December at USD 40 billion,
reaching its highest level since April, with a monthly
increase of almost USD 800 million, reflecting the
largest monthly increase throughout 2020. It also
used c. USD 6 billion in deposits kept outside of
the reserves and received a USD 2.8 billion Rapid
Financing Instrument (RFI) from the International
Monetary Fund (IMF) in May. In the same month,
Egypt sold its largest-ever international issuance, a
USD 5 billion, three-tranche Eurobond that was 4.4x
oversubscribed. In June, the government secured a
12-month Stand-by Arrangement (SBA) worth USD
5.2 billion from the IMF, of which USD 3.6 billion were
received, to date. This also cushioned against severe
currency fluctuation.
The country’s main sources of foreign currency came
under pressure amid the global lockdown, with only
remittances posting strong and consistent recovery,
picking up in 3Q2020 to USD 8 billion (a 28% y-o-y
increase) while tourism revenues, Suez Canal receipts,
and Foreign Direct Investments (FDI) continued to
be weak. Moreover, Egypt recorded a budget deficit
of EGP 463 billion — or 7.9% of GDP — in FY2019-
2020, showing an improvement from 8.2% recorded in
FY2018-2019. The country’s revenues for the fiscal year
came in lower than the forecast of EGP 1.2 trillion by c.
EGP 200 billion, recording EGP 975 billion.
How Did CIB Operate?
Through this, CIB’s management demonstrated flex-
ibility and agility to weather the storm. Throughout
the pandemic, CIB called on its continuity, resilience,
and crisis management plans to effectively manage
the situation with minimal impact on services and
operations, while simultaneously safeguarding the
health and safety of employees, customers, and all
relevant stakeholders.
Before the pandemic hit Egypt, a continuity and
resilience gap assessment was conducted to
ensure that the strategies and plans addressed all
the dynamics of the situation against a set of best
practices and to identify any areas of improve-
ment. With the first COVID-19 case in Egypt, CIB
began enforcing health and safety practices such as
admitting fewer customers to branches, reducing
workforce across departments, enforcing the use
of facemasks, installing sanitizers in all prem-
ises, performing enhanced sterilization and deep
cleaning, and publishing instructions for safe ATM
usage on ATM screens. During the height of the
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crisis, the Bank managed to secure all pandemic
supplies despite high demand and scarcity. The
Bank also conducted protocol and PCR tests and
provided proper medical care and monitoring for all
infected employees. For the majority of the year, CIB
provided facilities at a local hotel for infected staff
that did not have the means to isolate. Moreover,
a dedicated page on the Bank’s website under the
name Bank Safely was launched, consolidating
necessary actions taken by CIB to keep all stake-
holders abreast of developments daily.
The Path to Sustaining CIB’s Leadership
is Paved With Good Governance
Corporate governance is and has always been an
area of great focus for CIB. The Bank, guided by its
Board, has continuously strived to adopt sound
corporate governance principles out of its belief that
good governance is the best path to achieving and
sustaining success.
CIB’s governance framework seeks to drive long-term
value for shareholders, employees, and other stake-
holders through a set of robust and clear internal
policies and processes that help the Board and
senior management make well-informed decisions.
Tailor-made to the Bank’s scope, size, and business
complexity, among these policies are the Code of
Corporate Governance, Code of Conduct, Conflict of
Interest policy, and Disclosure policy. These policies
are precisely drafted, clearly communicated, and
periodically reviewed to ensure that CIB is constantly
up-to-date with market developments, and to reflect
on areas for improvement in order to continue
providing best-in-class financial solutions to clients,
enterprises, and individuals alike. The framework is
also anchored in the Bank’s Board of Directors, with
a distinguished group of independent non-executive
directors (NEDs) that make up the majority of CIB’s
Board of Directors, along with competent board
committees and an experienced management team.
The Board is collectively responsible for CIB’s long-
term financial and non-financial success, setting the
Bank’s strategic objectives and overseeing their imple-
mentation, ensuring the effectiveness of the internal
control systems, managing risk, and securing CIB’s
institutional reputation and long-term sustainability.
The Board structure is in line with international best
practices and allows for the position of a lead director.
In July 2019, CIB appointed a lead director who is an
independent member of the Board.
In compliance with CBE regulations and corporate
governance directives, two of CIB’s independent
NEDs concluded six years of service on the Board in
February and March 2020; Mr. Jawaid Mirza and Mr.
Mark Richards, respectively. Additionally, Mr. Bijan
Khosrowshahi concluded six years of service on the
Board as NED in October.
2020 marked a new Board term for CIB, with the
Bank’s Ordinary General Assembly convening on
15 March 2020 and electing a new Board term for
three years commencing 2020. This was followed by a
number of changes to the elected Board of Directors.
On 13 October, the Board of Directors appointed
Mr. Jay-Michael Baslow as a non-executive, inde-
pendent member. Mr. Baslow brings to the Board a
wide banking experience acquired throughout the
past four decades. He spent the last 16 years of his
career in Risk Management at J.P. Morgan, covering a
range of sectors. Prior to his 2019 retirement, he was
the Head of EMEA Risk Management for the bank’s
Wealth Management organization and the Chief
Risk Officer of J.P. Morgan International Bank Ltd, its
London-based private bank.
On 23 October, Mr. Hisham Ezz Al-Arab decided to
step down from his responsibilities as Chairman and
Managing Director, after receiving a letter from the CBE
notifying CIB’s Board that, in light of the findings of a
limited review inspection, the CBE’s Board of Directors
issued a resolution dated 20 October to discharge the
Bank’s Chairman and Managing Director. The letter
stipulated that CIB’s board is to elect a Non-Executive
Chairman from among its NEDs. The Board unani-
mously decided to appoint Mr. Sherif Samy, the
Chairman of both the Audit and Governance and
Nomination committees, to assume the responsibili-
ties of Non-Executive Chairman of the Board, and has
received the CBE’s approval in this regard.
Several meetings were subsequently held at the CBE
and attended by CIB’s Non-Executive Chairman and
management, during which the key findings of the CBE
inspection were relayed. The Board dedicated signifi-
cant attention to the situation, and CIB’s Executive
Management reviewed and carefully assessed all the
inspection findings to quantify their impact on CIB.
Under the Board’s supervision, CIB’s Management
thoroughly conducted a corrective action plan that was
presented to the CBE. This required additional time for
the Bank to complete its review process before it could
satisfactorily release the 30 September 2020 financial
statements and associated disclosures. Additionally, as
directed by the Board, the Audit Committee appointed
an independent international professional services firm
to conduct an in-depth review of the Bank’s controls
and lending functions, in order to further enhance regu-
latory compliance and strengthen controls at CIB, as
part of the Bank’s governance culture and commitment
to enhancing risk management.
With these changes, and as of 23 October, CIB’s
Board is comprised of seven directors, six of whom
are independent NEDs (85%). CIB’s Board boasts
an optimal mix of skills, experience, and diversity
in terms of gender and nationality, with two female
directors (28%) and three non-Egyptian directors
(43%). CIB prides itself on having a diverse board
with significant leadership and experience across a
broad set of industries.
During 2020, CIB’s Board of Directors met 17 times,
three of which were attended physically, 13 conducted
via video conferencing, and one attended physically
by the directors who were present in Cairo, with
directors residing abroad joining via video confer-
ence in view of the prevailing preventive measures
due to the COVID-19 pandemic.
As such, the Board of Directors is pleased to report
CIB’s FY2020 strategy and robust results, despite the
year’s challenges and headwinds.
CIB’s Strategy
CIB’s flexibility to adapt to unforeseen changes in
the market is underlined by our strong commitment
to continuously create value for all our stake-
holders. 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 equity.
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.
The strategy was put to the test in 2020, proving once
again that CIB could and will continue to be “The
Bank to Trust” through a strategy anchored in the
following pillars:
Growing Commercial Business Activities
CIB’s strategy is focused on customizing solutions to
build a bespoke bank and a financial-value-creating
partner for our targeted customer base. Through arti-
ficial intelligence, blockchain, cloud, and data — or
the ‘alphabet of the future’ better known as ABCD —
CIB aims to drive all lines of business to new levels by
exploiting data, digital, new core banking modules,
advanced campaign management capabilities, and
process re-engineering that will work hand in hand
with a new distribution strategy to expand outreach.
The Bank’s transformation is supported by strong
and dynamic balance sheet management, which
was formulated in response to a subdued borrowing
appetite directly associated with COVID-19. Through
a deposit-gathering strategy aimed at reshaping its
funding mix, CIB was able to create a flexible balance
sheet structure to secure earnings and profitability
during the year.
Digital Disruption and Financial Inclusion
CIB will continue to develop its digital capabilities to
encourage financial inclusion, improve the customer
experience, ensure operational efficiency and
resource allocation, and secure the Bank against risk.
Part of the Bank’s digital strategy has always been
rooted in alleviating pressure on branches and
diverting customers to digital channels. In 2020, with
the help of its Bank of the Future (BOTF) program,
CIB more heavily relied on robotics and operational
centralization to increase efficiency and reduce the
cost to serve, through positioning its digital plat-
forms as the primary channel.
CIB’s ATM network continues to be the largest in
Egypt among private sector banks and third in the
sector. In 2020, the Bank’s ATM network grew 11%
y-o-y to reach 1,121 ATMs, and handled more than
61 million transactions. The Bank also supported
nationwide financial inclusion efforts by offering
mobile payment interoperability over the ATM
network for all mobile payment schemes. Similarly,
CIB participated in the regulator’s ATM initiative by
installing 180 ATMs across the country.
increased reliance on digital platforms
With
throughout the pandemic, CIB’s online banking
subscribers increased 35% y-o-y as of December
2020 to 802,000 users, with an activity rate of 67%. In
2020, the Bank improved its internet banking user
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Strategic Direction // Board of Directors’ Report
interface, created a digital self-onboarding process
for existing CIB customers to register for online
or mobile banking, made local payments instant
through straight-through-processing (STP), and
transformed transaction processing. Online banking
channels’ share in total cost savings recorded EGP
946.5 million as of December 2020.
Launched in December 2019, Zaki the Chatbot now
conducts over 35,000 interactions per month on both
CIB’s website and Facebook Messenger in English,
Arabic, and colloquial Arabic. Zaki has offloaded the
social media team by over 55%.
On the mobile payments front, CIB was able to utilize
its Smart Wallet as one of the prime digital channels
despite the circumstances imposed by the COVID-19
pandemic. CIB became the first bank in Egypt to offer
digital wallet registration through SMS for banked
and unbanked customers, which had a positive
impact on new enrollments and created solutions
utilizing major e-commerce platforms to facilitate
customer needs. In 2020, smart wallet users grew
34% y-o-y to 840,000 customers, while the number
of transactions recorded a 23% y-o-y increase to 7.5
million transactions with a total value of EGP 2.8
billion, an impressive 107% y-o-y increase.
The Bank continued to support the government’s
efforts to automate governmental payment by part-
nering with E-Finance Company, which develops
and operates e-payment platforms and channels to
enable government authorities to receive and collect
payments through the E-Pay portal and Corporate
Payment Services (CPS) platform. In 2020, CIB
ranked first in the Egyptian market in terms of CPS
online transactions, with a 102% y-o-y increase in its
customer base to 1,700 corporate customers and a
70% y-o-y increase in the number of CPS transactions
for 59,000 transactions worth EGP 15.2 billion.
CIB relied on analytics and data management in
several initiatives and projects throughout 2020,
with one aimed at reducing branch waiting times
through applying Operations Research (OR) queuing
theory-based models to categorize and classify
transaction types and clients whose activities could
be transferred to online channels. The Intelligent
Product Recommendation Engine was a machine
learning-based predictive model developed
to
help relationship managers find the most suitable
products for their clients based on the client’s history
with CIB. The Cash Management Project worked to
better utilize idle cash within CIB’s different cash
hubs, decreasing overall Bank-wide cash levels by
establishing a cash formula that predicts the amount
of cash needed at each hub. The project enabled CIB
to decrease associated costs related to handling,
transporting, and storing unnecessary cash.
Geographical Expansion
To diversify our operations, balance sheet struc-
ture, and sources of income, CIB began looking for
expansion opportunities beyond Egypt. Considering
its geographical location, historic and cultural ties,
and its macroeconomic and demographic potential,
Sub-Saharan Africa was tapped as a key opportunity.
Importantly, regional integration efforts such as the
African Continental Free Trade Agreement (ACFTA)
and the Egyptian government’s direction to restore
bilateral ties provide imperative political support.
East Africa was identified as the most attractive region
for CIB to do business. Home to some of the fastest
growing economies in the world, it will provide a
platform for CIB to learn and adopt the strides taken
toward digital transformation and financial inclu-
sion. We aim to position CIB as a trade finance hub
for Egypt and East Africa, focusing on both corporate
and SMEs, especially after the establishment of our
representative office in Ethiopia and the acquisition
of a 51% stake in a local Kenyan bank, which was
renamed Mayfair CIB Bank Limited. Completed in
May 2020, the transaction was concluded through a
capital increase valued at USD 35.35 million.
People…The Main Enabler
The continuous development of CIB’s human capital
is critical to the strides the Bank has taken to main-
tain and improve the quality of services offered to
customers, and, consequently, the value created for
stakeholders. Human Resources will continue to play
a strategically enabling role to evolve staff capabili-
ties, establish a culture of innovation, engagement,
and enablement, while building the right skills such
as adaptive thinking, cross–cultural competency,
computational thinking, and virtual collaboration.
Moreover, the adoption of best practices for corpo-
rate governance is key for CIB. The full rollout of
the Enterprise Risk Management (ERM) system,
which provides the organization with the necessary
controls and risk-informed decision-making process,
further solidifies the Bank’s standing in the eyes of
our stakeholders.
By the end of 2020, CIB’s total workforce stood at
7,071, with 75% of the workforce being Generation Y
(1982-2000), with women accounting for 30% of staff
— well above Egypt’s average ratio of 23%. In 2020,
CIB hired 1,013 people, made 1,278 internal transfers,
and promoted 609 promising young talents.
In response to the COVID-19 pandemic, the Bank put
in place a work-from-home (WFH) strategy to ensure
all critical activities would be carried out smoothly.
This included technology upgrades, ensuring laptops
were made available, and increasing network band-
width, among others. All departments were able
to shift quickly to a more responsive approach,
allowing CIB to navigate these unprecedented times.
Additionally, HR conducted all entrance assessments,
interviews, internal promotions, and internal hiring
selection panels online, becoming the first bank in
Egypt to have a full online selection process, which
will continue into 2021. The Bank participated in five
employment fairs, including two virtual sessions at
universities to promote CIB’s employer value propo-
sition. The Bank was able to continue implementing
its talent acquisition and career mobility initiatives
despite the pandemic. “Tawarny”, which allows
university students to practice mock HR interviews,
completed one virtual session, while “Ma7atetna
3andak”, which initiates mobile recruitment teams
outside Cairo to facilitate the recruitment process
for candidates at local hubs, visited two governorates
in Egypt. This year, “Ma7atetna 3andak” also worked
to integrate people with disabilities, conducting
one session in Alexandria where eight candidates
attended and four successfully hired, and another in
Tanta where 24 candidates with disabilities attended,
six of whom were hired.
In 2020, CIB offered its specialized training and
developmental programs online. International certi-
fication also took place for programs for the Wealth,
Plus, Private, Business Banking, Branch Managers,
Payroll, Retail Banking, and SMEs segments. Further
learning tracks were developed for audit, trade
finance, corporate services, communications, stra-
tegic planning, information security, IT, and risk.
CIB also conducted several strategic programs in
2020 such as the Analyst Program, which provided
43 analysts with over 150 virtual training hours, five
mock cases, 15 virtual assessments, and various
coaching sessions to prepare for the job market.
The SME Academy was conducted over two rounds,
with 51 employees receiving more than 400 virtual
training hours, 40 assessments, and over 12 role
play sessions and engaging activities. Moreover, HR
introduced many leadership development tracks,
with one entitled ‘Leading with agility in turbulent
times’ in response to the pandemic. The program was
moderated by a leading professor from IMD Business
School and attended by 44 leaders across various
areas and departments. HR also revamped and digi-
talized the content of its induction programs for CIB
staff and Contact Center agents to benefit 404 new
hires and 110 Contact Center employees.
In line with CIB’s Africa expansion plan, the Bank
designed an analyst program for a group of 21 select
African delegates, with the induction taking place in
Uganda and the program delivered virtually. HR also
provided multiple learning and development solu-
tions to employees at Mayfair CIB Bank Limited.
By continuously engaging our people, we encourage
innovation, accountability, retention, and business
outperformance. During 2020, CIB continued to build
a robust engagement strategy to enhance employee
enablement, including the first Recognition Program
Event, attended by more than 1,000 top performers.
CIB rolled out several initiatives during 2020 to
ensure that employees are treated with dignity and
respect, creating an inclusive culture to support
equal opportunities. CIB introduced the Employee
Wellness Program to support employees’ mental
health, allowing them to lower stress levels and
improve productivity. The Bank also introduced
the Flexible Work Arrangement (FWA) Program
to empower women in the workplace by affording
new mothers the flexibility to work from home full
time before applying for unpaid leave. Two rounds
of the She is Back initiative, which eases the transi-
tion for women returning from maternity and/
or childcare leave, were conducted for a total of 95
women. Externally, the “Helmik Yehmena” program
trained and empowered women in areas where they
are underrepresented, beginning with South Valley
University in Qena where it reached over 200 students
in Upper Egypt, and 35 in Port Said.
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CIB always recognizes and rewards performance,
which underpins its ability to attract, retain, and moti-
vate employees. In 2020, CIB further enhanced the
variable pay program to build a correlation between
each department’s performance and how it contrib-
utes to the Bank’s overall performance in achieving
both financial and non-financial objectives. The remu-
neration is assessed yearly taking into consideration
market fluctuations and external developments.
2020 Financial Position
The past several years allowed CIB to enter 2020 in
good form, as despite the headwinds associated with
the pandemic, CIB reported FY2020, with consoli-
dated net income down 13% y-o-y to EGP 10.2 billion.
Standalone net income reached EGP 10.4 billion,
down 13% from 2019. Standalone revenues grew
12% over the previous year to EGP 25.8 billion. Net
interest income hit EGP 25.1 billion in FY2020, an
increase of 16% y-o-y.
The Bank was able to maintain its operational effi-
ciency in 2020 despite the extra spending related to
the pandemic and the WFH arrangements, with the
cost-to-income ratio standing at 20.7% compared
to 21.6% in 2019. Return on average equity (ROAE)
recorded 19.2% on a consolidated basis (post
profit appropriation) compared to 29.5% in 2019.
Consolidated return on average assets (ROAA)
recorded 2.53% (post profit appropriation) for 2020,
down from 3.26% in 2019. As of year-end 2020, CIB
booked a net interest margin (NIM) of 6.75%, up from
6.48% a year earlier.
CIB’s gross loan portfolio stood at EGP 137 billion
at year-end, growing 4% y-o-y from EGP 132 billion
by 2019 year-end. This increase met the Bank’s stra-
tegic objectives in maintaining asset quality and
enhancing profitability. CIB’s market share of total
loans amounted to 5.63% in September 2020.
The Bank pursued deposit growth in 2020, adding
EGP 37 billion to its base, which grew to a total of
EGP 341 billion over the year, an increase of 12%
from 2019. CIB’s share of the deposits market reached
6.56% in September 2020.
Loan-loss provision expense for 2020 exceptionally
amounted to EGP 5.0 billion, bringing the loan-loss
provision balance to an unprecedented EGP 16.4
billion. This was not associated with any asset quality
significant deterioration, as evident by a solid NPLs
of the gross loan portfolio of 4.26%, up from 3.99% by
2019 year-end, cushioned by a solid 281% coverage
ratio, but rather a result of the Bank’s conservative
risk management strategy and management’s deci-
sion to cautiously frontload adequate provisions to
mitigate any and all potential risks that might arise
from such a fluid year.
The Bank remains comfortably covered in terms
of capital adequacy, with year-end CAR recording
31.4% (post profit appropriation) — well above the
minimum regulatory requirement.
This year’s financial results highlight CIB’s solid
strategic direction, the Board’s invaluable oversight,
management’s strong leadership capabilities, and
concrete execution across the Bank’s channels,
including brick and mortar operations, digital plat-
forms, and the product and support functions.
Appropriation of Income for FY2020
On 11 January 2021, the CBE instructed banks under
its supervision not to pay out cash distributions from
2020 profits and/or retained profits that are distrib-
utable to shareholders. Banks are only allowed to
disburse employee profit share and Board of Directors
remuneration. The decision comes to support banks’
capital and aims at protecting liquidity from any nega-
tive effect COVID-19 might instill on the economy.
2020 Operational Highlights
Institutional Banking
The headwinds that resulted from the global COVID-19
pandemic were felt bank-wide. However, with the
technological infrastructure in place and the dedica-
tion of its teams, the Institutional Banking (IB) Group
contributed 72% to CIB’s loan growth during the year.
On the positive side, businesses were pushed
toward decentralization, sparking the acceleration
of the digital transformation and leading clients
to further utilize online transactions. Despite
the obstacles stemming from the pandemic, the
Bank’s online platform, which offers a full array
of products and services, was able to support and
accommodate all clients’ banking business needs
with no disruption.
Despite the circumstances, the Corporate and GCR
Group’s year-end loan and investment portfolio
reached EGP 97.5 billion through executing several
new key transactions in the real estate, power,
education sectors, as well as closing numerous
key deals in the petroleum, pharmaceutical, and
automotive industries, among others. LCY loans
remained the main facilities required by clients
throughout the year, up 10% y-o-y, mostly financing
Working Capital needs.
With global markets severely hit by COVID-19 in the
first six months of the year, which resulted in significant
portfolio outflows from Egypt and a fallout in Egypt’s
main sources of foreign currency, the Treasury Group
was able to take favorable positions that resulted in
noteworthy profits. Moreover, the Group ensured suffi-
cient liquidity was available, FX volatility was properly
managed, and customer needs were fulfilled.
Despite the challenges for direct
loans under
Non-Banking Financial Institutions (NBFI), the divi-
sion maintained strong asset quality of financed loan
portfolios related to all financed clients, with zero
defaults and minimal NPLs under various financed
portfolios directed to the leasing, car finance, and
microfinance sectors. As of 3Q2020, a sound improve-
ment was reflected in the utilization rates of existing
customers due to relative market stability. In light
of the Bank’s strategy to promote financial inclu-
sion, NBFI supported the Digital Channels team in
introducing CIB Smart Wallet to microfinance insti-
tutions for the automation of micro lending. NFBI
also helped the team introduce CIB Business Online
and ACH products to NBFI-affiliated companies.
Retail Banking
CIB maintained its leadership in the consumer
market, adding more consumer loans and liabilities
despite the circumstances imposed by the pandemic.
New to Bank (NTB) figures continued to grow, ending
the year with 269,000 NTB customers. Consumer
Banking grew its loan portfolio 33% y-o-y and deposit
portfolio 9% y-o-y. To enhance profitability and
the funding mix, CIB continued to gather current
accounts and savings accounts (CASA), which
accounted for 53.4% of the total funding base.
CIB branches continued to outperform in 2020
under tremendous pressure from pandemic-related
challenges and the highly priced liability offering
from public-sector banks.
Cards’ revenue was impacted by a 42% y-o-y drop,
on the back of the CBE’s six-month debt moratorium
initiative due to the pandemic. However, CIB was
able to maintain its cards’ acquisition rate, with
138,000 credit cards acquired throughout the year,
bringing the total card portfolio to 615,400 primary
cards and 120,600 supplementary cards.
Business Banking has built a well-established cash
and trade management business with average liability
book growth rates of 32% and 99%, respectively, for
the last three years. In 2020, operating profits for the
division came in at EGP 1.6 billion, deposits hit EGP
29.5 billion, growing 26% y-o-y, while trade recorded
EGP 26.7 billion. In the payment solution space, the
division executed EGP 35 billion in transactions.
The Business Banking client base grew to more than
64,000 companies during the year, up 12 % y-o-y.
In line with the CIB’s direction and commitment to
Egypt’s strategy to grow and expand SME lending,
Business Banking launched new lending programs
targeting existing and new customers with facilitated
documentation, fast approval turnaround time, and
fixed monthly installments. This is in addition to
a new initiative that supports SMEs in COVID-19
circumstances by offering unsecured unsupported
overdraft lines to existing borrowers to pay salaries.
CIB maintained its dominant position in Egypt’s
payment acceptance sector in 2020, attaining a
market-leading share of 28% for POS transactions
and a 19% market share for e-commerce transactions.
Following the country’s push for financial inclusion,
the Bank 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.
This year Business Banking witnessed an expansion
in women’s activities by sponsoring local and global
events such as She Can and She’s Next, in addition to
the new Women in Business (WIB) lending program.
Operations and Information Technology
With a special focus on the customer journey within CIB,
the operations and IT functions strive to incorporate
technological advancements and artificial intelligence
across the Bank’s functions to ensure CIB meets its
growth targets. To improve the customer experience
and offload banking operations, the Bank implemented
several enhancements to Straight Through Processing
(STP) for domestic transfers, which increased four-
fold daily. Additional services were added to internet
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banking to offload branches and expand digitalization,
such as credit card requests, loan requests, and mobile
wallet subscription, among others.
CIB launched an extensive process re-engineering
program covering various departments and units.
Moreover, CIB was able to conclude stage two of
the T24 program in April 2020, with the final stage
currently in progress. Moreover, the Bank conducted
different activities during the year to maintain
CIB’s competitiveness in the market, offload front
liners, and ensure a safe banking environment for
customers. In line with this, the Contact Center inte-
grated a chatbot with WhatsApp Business to cater to
customers’ general inquiries and inform them of any
CBE policy changes.
The IT department was able to deliver on most of its
projects according to schedule, and with almost 90%
of the IT team working from home to maintain social
distancing and reduce staff footprint within the head
offices. CIB became the first organization in North and
West Africa to receive the Management and Operation
Stamp and Certification from Uptime Institute, a
leading global data center certification group.
Security and Resilience Management
CIB has always taken its business continuity and
the protection of its customers’ information as a top
priority. In a step that confirms that the Bank has
put in place best practices for information security
ensuring data integrity, confidentiality, availability and
customer assets safety, CIB obtained ISO 27001 certi-
fication for Information Security Management System
covering alternative Channels and Digital Services,
Contact Center, and Data Center. The Bank has also
been able to successfully maintain its Payment Card
Industry – Data Security Standard (PCI-DSS) certifica-
tion and renew its Business Continuity Management
ISO 22301 certification for the third year, upgrading its
certification to the 2019 version of the standards and
making it one of the first financial institutions in Egypt
to comply with the new version of the standards.
CIB kicked off a comprehensive Data Classification
and Protection Program to implement a proper Data
Protection and Information Governance framework
as part of the Bank’s extensive efforts to prevent
confidentiality breaches and data leakage. Moreover,
CIB successfully finalized one of its key strategic
security programs, the Identity Access Management
and Privileged Access Management.
Reaching out to Shareholders and
Investors
CIB works diligently to increase value for its stake-
holders. The Bank’s active Investor Relations division
keeps shareholders and investors abreast of devel-
opments impacting the Bank’s performance. The
team and senior management dedicate significant
time to one-on-one meetings, road shows, investor
conferences and conference calls, sparing no effort
in providing the investment community with trans-
parent disclosures while simultaneously ensuring
analysts have the information needed to maintain
balanced coverage of the Bank’s shares.
including
regular updates and
Disclosures,
releases, were periodically made available on CIB’s
investor relations website, as well as the EGX,
LSE, and OTCQX portals in a timely manner that
ensures fair access to information for investors
from around the world, allowing them to make
informed investment decisions.
Thanks to the team’s continuous efforts to further
enhance the program, it was named Leading IR
Program in Egypt in 2020 in the largest investor
relations event in the MENA region organized by the
Middle East Investor Relations Association (MEIRA),
in partnership with Extel. This is the seventh year
running in which CIB has received at least one award
from MEIRA.
After the pandemic hit Egypt, the IR team was able
to swiftly communicate with investors and analysts
online, substituting in-person meetings with confer-
ence calls, which has proven efficient and expanded
the reach of the team by overcoming the logistical
issues associated with physical meetings. During
2020, the team, took part in 10 virtual investor
conferences and one webinar, alongside two physical
conferences and a total of 34 in-person meetings
before the onset of the pandemic. In total, the team
conducted more than 240 one-on-one and group
meetings — both virtual and in-person — throughout
the year and spoke with over 620 local and interna-
tional investment funds and research analysts.
The IR team’s agenda was particularly busy in March
and April 2020, explaining to the investment commu-
nity the COVID-19 situation in Egypt, the measures
CIB was taking in response to the pandemic, and
how this will impact the Bank. In October, November,
and December, the team addressed the investment
community with the Board changes, responded
to their questions, and kept the market abreast of
developments related to the findings of the CBE
inspection as it continued to unfold, as well as the
delay in releasing 3Q2020 financial results.
The Bank is widely covered by leading research
houses both locally and internationally. In 2020, 14
institutions regularly issued research reports on CIB.
Stock Performance
COMI started the year with an open price of EGP
83.02 and ended it at EGP 59.19 with 29% y-o-y
negative change. During 2020, CIB’s price reached
a peak of EGP 86.01 and a valley of EGP 56.06, and
the average VWAP during the year was EGP 68.06,
with an average volume of more than 2.1 million
shares and an average market capitalization of
EGP 100 billion.
Awards and Recognition in 2020
During 2020, CIB was named World’s Best Bank in
Emerging Markets award by Global Finance for the
third time in only four years, having received the same
title from Euromoney in 2017 and Global Finance
in 2018. The recognition comes as the Bank pushed
through digital banking solutions and financial
inclusion efforts despite the challenges of COVID-19.
Moreover, CIB ranked 28th on Forbes Middle East’s Top
100 Listed Companies in the Arab World, ranking the
highest of the four Egyptian companies on the list.
It was also listed among the Top 200 Banks by Jeune
Afrique, Top Banks by African Business, and Top 10
Safest Banks in Africa by Global Finance. CIB was
the only Egyptian institution included among the 325
companies on Bloomberg’s Gender Equality Index
(GEI).
CIB received several international awards demon-
strating its excellence across different business lines,
including:
Global Finance
• Best Foreign Exchange Provider in Egypt
• Best Treasury and Cash Management Providers
in Egypt
• Best Emerging Markets Bank
• Best Private Bank in Egypt
• Best Bank in Egypt
• World’s Best Consumer Digital Banks in the
Middle East 2020
- Best Consumer Digital Bank
- Best Integrated Consumer Banking Site
- Best Online Product Offerings
- Best Website Design
- Best Mobile Banking App
- Best Information Security and Fraud Management
- Most Innovative Digital Bank
- Best Open Banking APIs
• World’s Best Corporate/Institutional Digital
Banks in the Middle East 2020
- Best Online Investment Management Services
- Best Online Treasury Services
- Best Online Portal
- Best Integrated Corporate Banking Site
- Best Information Security and Fraud Management
- Best Mobile Banking Adaptive Site
- Most Innovative Digital Bank
- Best Open Banking APIs
Euromoney
• Best Bank
Asiamoney
• Best Domestic Bank in Egypt
• Best Digital Bank in Egypt
African Banker
• Best Regional Bank in North Africa
EMEA Finance
• Pan-Africa Sustainability Award
CIB…A Model for Responsible Banking
The Bank continues to advocate for responsible
banking by supporting financial inclusion and literacy,
women and youth empowerment and equality, in
addition to the adoption of best practices in sustain-
ability, CSR, and governance. CIB will continue to work
toward becoming Egypt’s number one green bank and
venture into initiatives such as improving employee
wellbeing, community investments, promoting acces-
sible banking, and banking the unbanked.
This year, CIB celebrated a year of achievements on
the sustainability front since becoming a founding
signatory of the United Nations Environment
Program – Finance Initiative (UNEP-FI) Principles
for Responsible Banking. Since becoming one of the
first institutions in Egypt to introduce sustainability
reporting in 2015, CIB has gradually enhanced its
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Strategic Direction // Board of Directors’ Report
commitment to sustainability across its business;
integrating environmental, social, and governance
(ESG) dimensions into its policies, procedure, opera-
tions, and culture. In 2020, the Bank also issued its
fifth sustainability report.
Sustainable Finance
CIB has established a new sustainability governance
framework in 2020 and launched a Sustainable
Finance division to center sustainability as a core
business strategy and provide a solid platform to
integrate sustainability as well as environmental,
social, and governance (ESG) principles across its
functions. CIB thus became the first Egyptian bank to
launch this kind of a division and the first institution
in Egypt to establish the role of a Chief Sustainability
Officer. In recognition of its efforts, CIB was elected to
represent the MENA region on the UNEP-FI Banking
Board, positioning it as a champion in promoting
and driving the implementation of the Principles for
Responsible Banking (PRB) across the region.
High on the Bank’s agenda:
• Climate Risk:
- Green Bond: CIB took solid steps in its Green
Bond issuance process during 2020, which
was slated to be issued prior to year-end. The
process has taken longer than anticipated due
to pandemic-related disruptions. The Bond’s
proceeds will help the Bank align with the UN
Sustainable Development Goals (SDGs) that fall
within the materiality of CIB including SDG 6
(Clean Water and Sanitation), SDG 7 (Affordable
and Clean Energy), SDG 9 (Industry, Innovation,
and Infrastructure), SDG 11 (Sustainable Cities
and Communities), and SDG 13 (Climate Action).
- CIB is the first bank in Egypt to join the
Taskforce for Climate Related Disclosures
(TCFD), an organization established
in
December 2015 by the Financial Stability Board
(FSB) to develop recommendations for volun-
tary climate-related financial disclosures that
are consistent, comparable, reliable, clear, and
efficient. The purpose is to provide decision-
useful information to investors, lenders, and
other stakeholders to encourage sustainable
investments and build an economy that is resil-
ient in the face of climate related uncertainties.
• Measuring Business Impact: In 2020, CIB was
the first bank in the MENA region to measure
business and environmental impact through
assessing the life cycle of credit and debit cards.
life cycle analysis (LCA)
The
is performed
according to ISO 14040 using a powerful modeling
and simulation software that allows for detailed
and reliable insights for calculation and analysis.
CIB initiated the Greening SMEs project in
February 2020 to conduct an Environmental
and Social Impact Assessment as a partner with
borrowing SMEs.
• Resource Efficiency: CIB works to measure,
reduce, and improve its ecological footprint.
Despite the increase in headcount and number
of branches, the Bank successfully decreased its
paper consumption in 2020 by 8% in comparison
to 2019, beating the internal target of 1%.
• Gender Empowerment: CIB is one of the first
two companies to acquire the Egyptian Gender
Equity Seal in the private sector, obtained
through a partnership with the National Council
for Women and the World Bank. CIB is also
Co-Chairing the World Economic Forum (WEF)
Closing Gender Gap Accelerator, a national
public-private collaboration model that enables
governments and businesses to take decisive
action toward closing economic gender gaps.
• Community Development: CIB partnered
with the United Nations Development Program
(UNDP), the Egyptian Italian Environmental
Project (EIEP), and the Ministry of Environment
to inaugurate the first open Natural and Cultural
House in Egypt at Zewara Camp, at Wadi El
Rayan Protectorate in Fayoum governorate.
• Sustainability Indices: CIB was included
in the new Low Carbon Select Index in the
Middle East and North Africa (MENA), recently
launched by the Arab Federation of Exchanges
(AFE) and the data provider Refinitiv. CIB
Ranks first on the EGX’s Sustainability Index
for six consecutive years. The Bank was
included in the 2019 and 2020 Bloomberg
Gender Equality Index and is a constituent of
the Financial Times Stock Exchange (FTSE)
FTSE4Good Sustainability Index.
Social Development
CIB strives to create a positive impact on the local
community and has undertaken several initiatives to
support underserved segments. The Bank’s commit-
ment 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
During these unprecedented times, CIB was leading a
key CSR role across Egypt and expanding its commit-
ment to the community in general and health in specific.
CIB donated USD 2.5 million to support the national
project of buying 100 RT-PCR detection kits to enhance
testing capacity across Egypt. In a project led by the
Federation of Egyptian Banks in coordination with the
CBE, CIB donated EGP 80 million to support house-
holds and businesses affected by quarantine measures.
CIB also participated in the national #GoodChallenge
campaign managed by the NGO the Egyptian Food
Bank, donating EGP 1.6 million in support of 10,000
families whose incomes were affected by these excep-
tional circumstances. CIB also supported many other
smaller local projects/initiatives in the healthcare
sector, such as supporting the El Nidaa Foundation to
build a local face mask production factory in Upper
Egypt. CIB also donated USD 250,000 to the African
Union COVID-19 Response Fund and USD 100,000 to
the Kenya COVID-19 Response Fund.
Social Activities
2020 witnessed a lighter schedule of external events and
sponsorships due to the outbreak, but the Bank strived to
maintain some of the activities it has long been part of.
• KidZania – CIB and KidZania’s partnership
began in 2013, and since then, the Bank has
organized several trips each year to KidZania for
underprivileged and special needs children, as
well as children with health conditions.
• Autism International Day/ADVANCE – The
Bank continued its sponsorship of the Egyptian
Advance Society for Persons with Autism and
Other Disabilities (ADVANCE). A number of
activities took place in April, dubbed Autism
Awareness Month, including the virtual Annual
Autism Conference and the virtual Art Exhibition
for Children and Youth with Autism Spectrum
Disorder.
• Beena – For five consecutive years, the Bank
was 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 orphans, senior citizens, and
individuals with special needs.
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 health-
care and nutrition services extended to children of
underprivileged 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
Foundation 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 commu-
nity 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 geographical
areas throughout Egypt. During 2020, CIB Foundation
allocated a total budget of EGP 177 million to support
the Egyptian healthcare providers to enhance the level
of service provided to children. Total expenditure in
2020 reached EGP 182.72 million for a total of 23 projects
serving hundreds of thousands of Egyptian children in
different governorates across Egypt.
Supporting Squash
Supporting sports and athletes has long been central
to CIB’s social development goal. The Bank led the fray
when it came to recognizing the potential of Egypt’s
squash players, with six Egyptians in the world’s top
10 men players and five in the top 10 women as of
December 2020. Supporting these talents is part and
parcel of the Bank’s desire to generate value for the
Egyptian athletic community, with 2020 seeing the
bank broaden its support for the sport and capitalize
on the traction its players are seeing around the world.
Squash Tournament Sponsorships
In 2020, the Bank held the CIB Egyptian Squash
Open 2020 Women’s and Men’s Platinum for the
second year running, a competition that brought
together the world’s best 96 men and women squash
players from 19 different countries with a total prize
money of USD 270,000 each for men and women,
representing the largest sum of prizes for squash
tournaments this season since the emergence of
the COVID-19 outbreak. Moreover, the Bank held
the CIB PSA World Tour Finals for the second year
in a row. The tournament saw 16 of the world’s top
squash players competing for a combined USD
370,000 prize at The Park, Mall of Arabia.
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of service, while supporting their investment and
financial growth plans. We come into 2021 a stronger
institution not only due to our track record in the
market but the ability to learn from challenges, be
they economic, political, or otherwise — and 2020
was no different. We have come to understand that
no matter the operating environment, CIB’s strategic
pillars allow us to consistently learn from the hurdles
we face, and we remain committed to maximizing
returns for shareholders through a business strategy
centered around asset quality and profitability.
Underlining the Bank’s commitment to enhancing
risk management and its governance culture, CIB
has appointed an independent international profes-
sional services firm to conduct an in-depth review
of the Bank’s controls and lending functions in the
year to come. The scope of work includes addressing
specific and related areas from the CBE inspection
with an eye to further enhance regulatory compli-
ance and strengthen controls, corporate governance,
and risk management at CIB. Any additional recom-
mendations of the said review will be considered
in the Bank’s future actions. In addition, significant
improvements in internal policies, procedures, and
frameworks we have implemented over the years,
as well as our previously communicated digital
transformation strategy, will continue to help CIB’s
management lead with fortitude in 2021.
Strategic Direction // Board of Directors’ Report
Sponsoring the Egyptian Squash Federation
CIB maintained its sponsorship of the Egyptian
Squash Federation for the ninth consecutive year and
sponsored the National Men’s, Women’s, and Junior
Squash Teams. Currently, Egyptian players hold the
Men’s World Team Championship, the Women’s World
Team Championships, and the Juniors’ World Team
Championship titles for boys and girls. Additionally,
Egyptian players hold all of these individual 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, as of
December 2020:
• Ali Farag – #1 on the Men’s PSA World Squash List
• Tarek Momen – #3 on the Men’s PSA World
Squash List (current world champion)
• Nour El Tayeb – #4 on the Women’s PSA World
Squash List (Retired in October 2020)
• Karim Abdel Gawad – #5 on the Men’s PSA World
Squash List
• Hania El-Hammamy – #5 on the Women’s PSA
World Squash List
• Marwan Elshorbagy – #6 on the Men’s PSA World
Squash List
• Salma Hany – #10 on the Women’s PSA World
Squash List
• Mohamed Abouelghar – #11 on the Men’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 devel-
oping their skills and enhancing their international
rankings. The partnership is part 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
athletes representing Wadi Degla and sponsored by
CIB are Nouran Gohar (#2 on the Women’s PSA World
Squash List), Ali Farag, and Karim Abdel Gawad.
Business and Operations in 2021
With the rollout of a COVID-19 vaccine, we hold opti-
mism for 2021 as the global economy improves on
the back of stoked economic activity and improved
sentiment. As we embarked on setting CIB’s priori-
ties for 2021, our direction and goals remain clear:
continue to provide valuable opportunities for share-
holders by providing clients with the highest quality
2020 Performance Measures
Results
Financial
• Maximize shareholder equity and deliver
above-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
Business Operations
• Grow revenues faster than expenses
• Identify market gaps and attain first-mover
advantage by laying the groundwork ahead of
peers to allow the Bank to benefit from rising
opportunities
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
performance-based compensation
- Investing in training and development
• Consolidated ROAE of 19.5% (after profit appropriation)
• Consolidated EPS decreased by 12%
• Total tier capital hit 31.40% of risk-weighted assets
• Standalone cost-to-income ratio of 20.5%
• Institutional banking profit before tax declined 16% y-o-y to EGP
1.8 billion, and loan portfolio declined to EGP 98.8 billion, down
just below 5 % y-o-y
• Retail banking profit before tax decreased 26% y-o-y to EGP 1.3
billion and deposits grew to EGP 227.8 billion, an 11% y-o-y increase
• Much effort was exerted to improve cybersecurity, with a clear
strategy and comprehensive plan to improve security capabilities
and continuously provide a safe banking environment for customers
• CIB obtained ISO 27001 certification for Information Security
Management System covering alternative Channels and Digital
Services, the Contact Center, and its Data Center. The Bank has
also been able to successfully maintain its Payment Card Industry
– Data Security Standard (PCI-DSS) certification
• CIB renewed its Business Continuity Management ISO 22301 certi-
fication for the third year, upgrading its certification to the 2019
version of the standards and making it one of the first financial
institutions in Egypt to comply with the new version
• CIB had an average of 6,988 employees in 2020 with an average
annual income of EGP 264,000 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 2020, CIB allocated a
total of 8,599,210 stocks to 4,687 employees. Since the inception of the
plan in 2006 and its renewal in 2015 and until 2020, the Bank has allo-
cated 99,632,173 shares to its employees (taking into consideration
capital increases throughout the stated period)
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| 67
03
Our
Businesses
EGP/BN
97.5
loan and investment portfolio
68 |
Annual Report 2020
CIB’s digital
BUSINESS PLAN
is driven by a vision to make CIB part of our
customers’ daily lives.
03030303 Our Businesses
Institutional Banking
Corporate Banking and Global Customer
Relations (GCR) Groups
In light of the profound negative impact of the
COVID-19 pandemic on the global economy, the
Corporate Banking and Global Customer Relations
(GCR) Groups have operated under exceptionally
challenging circumstances in 2020. Owing to its
talented and agile teams, the strong balance sheet,
and hard-earned, widely acknowledged market
expertise, CIB was able to steer through the crisis.
Supporting clients in times of distress has always been
a trademark of CIB. The Bank undertook extraordinary
measures caring for its employees and supporting
customers, especially in the most impacted sectors
by the pandemic, such as tourism, transportation,
textiles, and manufacturing, among others. This is
in addition to SMEs that do not have the sufficient
capital to endure the abrupt disruption of cash flows.
Despite these challenging conditions, CIB continued
to prioritize the health and safety of its employees,
out of the belief that they are the Bank’s main asset.
As such, the Bank promptly mobilized flexible work
arrangement policies while ensuring that productivity
and performance are not undermined.
The pandemic also served as a catalyst for change
and a reminder of the inevitable necessity of keeping
the global financial system fully functioning, through
plans for IT resilience and business continuity
measures. In this respect, the Bank’s accumulated
investments in infrastructure over the years helped it
move swiftly in the face of the crisis.
The events of 2020 also pushed businesses towards
decentralization, leading clients to utilize online
transactions. Despite the obstacles stemming from
the pandemic, the Bank’s online platform, which
offers a full array of products and services, was able
to accommodate all clients’ banking business needs
with no disruption.
This digital onboarding process was supported by
the dynamic collaboration between the highly skilled
Business and Global Transaction Banking teams,
which allowed the Bank to create bespoke digital
solutions capitalizing on the teams’ extensive busi-
ness-specific and technical expertise. Furthermore,
the Bank is fully committed to its digital transforma-
tion plan to automate the entire credit approval cycle
and provide off-the-shelf financing solutions to elimi-
nate redundancies and provide seamless customer
experience. The Bank is also working on the use of
robotics and machine learning to automate corporate
customers’ daily operations and improve straight
through processing to avail more time and resources
for employees to better serve our corporate clients.
Despite the adverse conditions during the year, the
Corporate and GCR Groups did not lose sight of the
importance of continuously innovating their product
offerings and re-engineering their processes, in line
with market best practices to facilitate business,
all while maintaining credit discipline. As such, the
Groups are continuing to promote financial inclu-
sion to support medium-sized companies through
offering customized financial solutions. Accordingly,
the Groups revisited the supply chain finance
scheme, navigating towards and incentivizing the
use of the designated digital platform to allow for
more flexibility under the program. Moreover, the
Groups are embedding sustainability into many of
the daily business practices, from assessing risks to
designing products and advising clients.
The Groups have expanded the existing client
network to tap into further market opportunities,
by financing mega-projects in active sectors such as
petroleum, power generation, real estate, food and
beverages, pharmaceuticals, oil and commodities,
fertilizers, and ports.
EGP/BN
34.7
in syndicated short-, medium-,
and long-term loans.
The Groups’ expertise helped support the Bank’s
clientele while providing guidance on the ever-
changing business environment and regulatory
frameworks. In line with recent market develop-
ments, the Groups are well-equipped to support CIB’s
clients in expanding their respective businesses,
as well as effectively contributing to the national
economic growth strategy.
2020 Highlights
Egypt’s growth trajectory, unleashed by macroeco-
nomic and political stability, undoubtedly decelerated
due to the economic shock caused by the COVID-19
crisis, which created an unstable environment for
banks. Factors contributing to the economic slow-
down included a sharp contraction in vital sectors
such as tourism, as well as a reduction in FDIs,
drop in flow of remittances, slowdown in consumer
spending, decline in net exports, and a growing debt
burden. These factors combined weighed down
on the local currency. Moreover, a generally slower
global economic growth and threats of a second wave
lockdown, accompanied by worsening conditions
in key trade partners, could further impact growth.
On the other hand, the Egyptian government imple-
mented a steady reform plan to revive the economy,
such as a lower interest rate environment, in a bid to
support local economic activity. This is in addition
to efforts to promote financial inclusion, implying
a stronger monetary base, consolidation, and
improved regulatory oversight in the banking sector,
leading to stronger asset bases and declining levels of
non-performing loans. Start-ups in the fintech sector
are also helping broaden the reach of formal banking
services in what is still a largely cash-driven society.
Furthermore, the CBE undertook highly effective
and swift measures to deal with the pandemic, such
as extending deal maturities for six months to alle-
viate companies’ cash flows, increasing ATM limits
and waiving withdrawal fees, launching discounted
pricing initiatives in earmarked sectors, and pushing
banks to expedite digital and contactless solutions.
The Groups’ loan and investment portfolio recorded
EGP 97.5 billion as of December 2020.
The Groups closed numerous key deals throughout
the period, including, but not limited to:
• Funding the development of residential, medical,
commercial, and educational real estate projects
and the securitization deal settling the New Urban
Communities Authority (NUCA)’s bridge facility.
• Financing raw material imports for pharmaceu-
tical products related to the COVID-19 pandemic.
• Extending short-term working capital finance to
major automotive assemblers and other major
players in various key industries.
• Participating in a syndicated deal to finance the
upgrade of four quays in Alexandria Port.
• Funding a major acquisition in the food and
beverage sector.
• Financing imports for oil and commodity
market leaders.
• Supporting the IT sector in a securitization deal
and financing imports for smart tablets under the
Ministry of Education’s National Reform Project.
• Extending contingent finance related to the
new Monorail project which connects the New
Capital with the 6th of October City.
2021 Forward-Looking Strategy
Amid the unprecedented market conditions in the
global financial sector, and increasing competi-
tion from commercial banks and fintechs alike,
the Groups’ strategies will be based on diversified
pillars. We will build on heavy investment in digital
transformation, data analytics, machine learning,
and the use of robotics, while focusing on our basic
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Our Businesses // Institutional Banking
We commit to operational
excellence by adopting
industry best practices, which
is supported by our unique
value proposition.
commercial activities through grasping strategic
opportunities that will drive continuous value for
clients and CIB alike. This is in addition to other
opportunities, such as financing mega projects in the
petrochemicals, power generation, pharmaceuticals,
food and beverage, real estate, construction, health-
care, education, and ports sectors, among others.
Simultaneously, the needed groundwork, through
digitization and streamlining of all credit approval
cycles, as well as automation of customers’ daily
operations and revisiting the processes, will pave the
way to ensure customers’ financial needs are met in
the smoothest and simplest manner.
The year will see an increased focus on financial inclu-
sion, and the growth potential of the medium size
segment and women’s financing and will continue
to tap on potential business opportunities in various
governorates. The Groups will also continue to build
strategic relationships with key governmental enti-
ties. Moreover, a special focus will be given to supply
chain financing, sustainability financing, and auto-
mated cash-management solutions.
Debt Capital Markets (DCM)
CIB’s Debt Capital Markets Group (DCM) has an
unmatched track record and experience in financial
advisory, structuring, and arranging large-ticket syndi-
cated loans, project finance, securitization, and bonds.
DCM also has a dedicated agency and security agency
desk with more than 36 accounts being managed.
2020 Highlights
Project Finance and Syndicated Loans: DCM success-
fully closed syndicated short-, medium-, and long-term
loans equivalent to EGP 34.7 billion as of 31 December
2020, out of which CIB’s share amounted to EGP 3.1
billion for public and private sector companies across
several sectors including oil and gas, ports, real estate, as
well as mining and packaging. Moreover, DCM focused
on refinancing, restructuring, and re-engineering
balance sheets for private sector borrowers with deals
closed as of 31 December 2020 worth EGP 11.1 billion,
out of which CIB’s share amounted to EGP 2.5 billion.
Securitizations: DCM continued to play a pivotal
role in advising and arranging securitization issu-
ances in cooperation with several partner banks
and closed securitization deals as of 31 December
2020 worth EGP 11.7 billion out of which CIB’s share
amounted to EGP 2.97 billion, cementing CIB’s posi-
tion as one of the top Egyptian banks in structuring
securitizations in the local market.
2021 Forward-Looking Strategy
DCM will continue screening the market and
aligning with banks to capture new business
opportunities with a special focus on the govern-
ment mega
infrastructure projects such as
railways, dry ports, new economic zones, etc. DCM
will also capture opportunities in refinancing,
restructuring, and engineering balance sheets
for private and public sector borrowers facing
struggles because of the COVID-19 pandemic. We
will also leverage on our track record in struc-
turing debt to capture new roles such as financial
advisor, global coordinator, or structuring bank to
enhance fee income.
DCM has solid deals in the pipeline for FY2021
for new syndicated loans and project finance with
deal sizes amounting to EGP 40 billion, as well as
restructuring and refinancing deal sizes amounting
to EGP 17.2 billion.
In term of securitizations and bonds, DCM’s strategy
is to attract new potential clients and work with
the regulator to adopt more innovative structures
that will pave the way for new industries to enter
the securitization market. With the current market
dynamics and fierce competition, DCM seeks to
strengthen its alliances in the market either with
established clients in sectors such as real estate,
auto finance, leasing, and microfinance or with the
large banks who would jointly with CIB underwrite
large-ticket transactions. DCM has deals valued at
EGP 7.9 billion in the pipeline for FY2021.
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
management 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 support
client growth.
We commit to operational excellence by adopting
industry best practices, which is supported by our
unique value proposition of a full-fledged finan-
cial partner in addition to our team of specialized
investment experts.
2020 Highlights
The disruption caused by the COVID-19 pandemic
has resulted in a significant downward trend for
global equity markets. The crisis took its toll on
the projected performance of the investments as
well as underlying strategies. During 2020, DIG’s
ultimate objective was to preserve the Bank’s
rights in its portfolio and provide continuous
support to our partners. Capitalizing on Egypt’s
economic direction and focus on key sectors, DIG
has cautiously and opportunistically targeted
new acquisitions with a focus on sectors that are
expected to benefit from the current situation
such as the education, healthcare, pharmaceu-
tical, and food and beverages industries.
DIG has embarked on a set of initiatives, entailing new
equity products and tailored structures, to expand its
investment portfolio and broaden its funding alter-
natives offered to support clients’ growth.
2021 Forward-Looking Strategy
In 2021, DIG’s strategy is to achieve targeted growth
considering the Bank’s direction, with the aim to revive
its pre-COVID-19 expansionary strategy. DIG will
continue basing all its investment decisions (whether
buy, hold, or exit) on pure fundamental analysis and
following a systematic and rational approach in gath-
ering, sensitizing, and analyzing information.
From a marketing perspective, DIG will continue
to expand and diversify its portfolio by executing
select quality investments that provide CIB with the
opportunity to create possible synergies and stra-
tegic alliances, hence generating attractive financial
returns for the bank. From a portfolio management
perspective, DIG will ensure the Bank is represented
as a full-fledged financial service provider through
the active participation in companies’ boards of
directors as well as maximizing direct and indirect
investment returns.
With responsible banking becoming the mainstream
banking model around the world, CIB has taken steps
to shift to sustainable practices that assess, measure,
and mitigate economic, social, and environmental
impact. Interest in investment products with features
related to Environmental, Social, and Governance
(ESG) matters has grown exponentially during the
past several years and adopting this growth has been
fundamental in the investment community.
In this respect, and considering the sustainability
efforts undertaken by CIB in the last period, DIG is
working on introducing the Green Investment initia-
tive which will target investments in companies that
currently adopt ESG standards or are planning to
expand into green projects.
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Our Businesses // Institutional Banking
Financial Institutions Group (FIG)
The Financial Institutions Group (FIG) covers
three business segments: 1) Correspondent Banking,
International Payments,
Trade Finance, and
2) Non-Bank Financial
Institutions, and 3)
Development Finance. The teams are CIB’s first
point of contact for bank and non-bank finan-
cial institutions, and serve to manage the Bank’s
relationships with different global institutions,
including loans, trade finance, and investments, as
well as agency management and promotion activi-
ties for development programs in partnership with
development institutions, government agencies,
and local banks.
2020 Highlights
2020 saw global correspondent banks working remotely
and increasing their reliance on communication tech-
nology. CIB’s investment in digitalization enabled our
Correspondent Banking division to ensure that trade,
treasury, and cash management services for CIB and
its clients remained uninterrupted, with volumes
decreasing at a lower rate than expected given lock-
downs and delays in project implementation.
Africa continued to be a priority for correspondent
banking; our coverage has grown to 21 countries
through a network of 38 local and Pan-African banks,
in addition to several African multilateral financial
institutions. This includes CIB’s recently acquired
subsidiary in Kenya, Mayfair Bank, in addition to
establishing our Representative Office in Ethiopia,
a reflection of CIB’s commitment to growing its
business in Africa and our support to our clients
when venturing into new markets, especially in sub-
Saharan Africa.
By the end of September 2020, the Development
Finance (DF) segment had, through managing
developmental programs, served 46,778 agri-busi-
ness beneficiaries with approved developmental
agri-loans, at a total of EGP 742.3 million. Among
those credit lines and development programs
is the Sustainable Agriculture Investment and
Livelihood Project (SAIL), which targets small
farmers to help enhance their
living stan-
dards by providing tailored
loans in certain
geographic areas, including Aswan, Beni Suef,
and Minya. Development Finance, together with the
Non-Banking Financial Institutions (NBFI) team,
have disbursed EGP 1,424 million to the microfi-
nance market. Some 44% of this amount financed
women micro entrepreneurs. DF also supports
CIB’s financial inclusion activities by offering its
customers a wide range of innovative tailored
financial services to meet their needs, such as
digital collections and disbursement to MFIs
through the smart wallet. Building on existing CIB
services such as ACH, DF introduced cash manage-
ment solutions to its customers.
2020 was also challenging for direct loans under
the NBFI segment. The uncertainties regarding
the impact of COVID-19 and the accompanying
economic slowdown led to decreased market
demand and utilization growth of our NBFI
clients, with a witnessed pickup during Q3.
Nevertheless, the NBFI division maintained
strong asset quality of financed loan portfolios
related to all financed clients, with zero defaults
and minimal NPLs under various financed port-
folios directed to the leasing, car finance, and
microfinance sectors. NBFI focused on wider
market coverage and succeeded in onboarding
new bank clients in the newly regulated consumer
finance market, among others. On the investment
side, while new issuances were minimal during
1H of the year, the aggressive decreases in pricing
encouraged issuers to tap the market in 2H, when
NBFI played a prominent role in securitization
transactions related to the automotive finance
and leasing sectors, in addition to being one of
three lead arrangers in the first Sukuk transaction
for a NBFI worth EGP 2.5 billion.
In light of the Bank’s strategy to promote financial
inclusion, we have supported the Digital Channels
team in introducing CIB Smart Wallet to micro-
finance institutions for the automation of micro
lending. NFBI also helped the team introduce CIB
Business Online and ACH products to our clients
in the non-bank segment.
Separately, new FX facilities were extended, and an
automated cash flow mechanism was applied to
serve third-party clients. We also extended a facility
to a credit-worthy insurance company that enhanced
the utilization under the CBE initiatives introduced.
2021 Forward-Looking Strategy
Egypt has been relatively resilient in the face of
the pandemic, and its economic growth was not
as affected as other emerging markets which
paves the way for a pickup in 2021, translated
into a growth on contingent trade finance busi-
ness related to mega and infrastructure projects.
In terms of FIG’s activities, we will continue to
work on expanding our correspondent network in
sub-Saharan Africa. We will particularly focus on
supporting the growth and development of our
subsidiary in Kenya, while identifying potential
African trade finance opportunities as well as
select infrastructure projects involving Egyptian
contractors in key markets in the East African
region. We will also continue to approach credit
insurance companies that will boost trade finance
activities with African countries.
We aim to continue being the leading private bank
in managing developmental funds. We also intend
to enhance our operational effectiveness and effi-
ciency through upgrading the current system, and
to effectively market our financial services and
digital solutions.
As stipulated by the CBE, we are focusing on growing
our loans to the microfinance sector to fulfill 20% of
loans that should be directed to the SME and micro-
finance sectors, and supporting financial inclusion
and women’s empowerment.
We are also looking to expand the sectors we
finance by approaching players in the mortgage
sector to add them to our client base and accord-
ingly aid in increasing the penetration in other
NBFI sectors such as leasing, car finance, micro-
finance, factoring, and consumer. Additionally,
we are participating in the marketing of a new
product, authorized by the FRA, which enhances
the investments portfolio division. We are also
targeting insurance, investment, and brokerage
companies to increase their LCY deposits.
Treasury Group
2020 Highlights
CIB’s Treasury Group was able to establish pruden-
tial safeguards that prevented adverse effects
resulting from COVID-19. We were able to take
necessary actions to ensure that the business is
operating efficiently despite internal and external
communication challenges.
Global markets were severely hit by COVID-19 in
1H2020, resulting in significant portfolio outflows
from Egypt and a fallout in Egypt’s main sources of
foreign currency, leading to fluctuations in FX and
fixed-income markets. However, we found portfolio
outflows to be an opportunity to take favorable
positions, which resulted in noteworthy profits.
Moreover, the Group ensured sufficient liquidity
was available, FX volatility was properly managed,
and customer needs were fulfilled.
The Treasury Group maintained a good line of
communication with other departments within
the Bank to provide customers with the support
they needed to alleviate the negative impact
on their respective businesses through offering
competitive pricing and customized
foreign
exchange products. TAT was enhanced through
increasing FX limits for customers on the Bank’s
digital platforms, such as e-remittance and VCN.
In 2020, the Treasury Group won Global Finance
Magazine’s Best Treasury and Cash Management
Provider in Egypt and Best Foreign Exchange
Provider in Egypt.
2021 Forward-Looking Strategy
The Treasury Group will continue its shift from
offering clients standard products to more
client-centric products. In line with the Bank’s
expansionary plans, the Group will seek to
better the performance of its trading and sales
activities by expanding into other African nations,
supported by the recent acquisition of Kenya’s
Mayfair Bank. This expansion will authorize the
Group to act as a hub for international investors
and support our representative office with a range
of treasury solutions.
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Our Businesses // Institutional Banking
Strategic Relations Group (SRG)
The Strategic Relations Group (SRG) is an insti-
tutional banking group dedicated to initiating,
nurturing, and growing banking relationships with
strategic institutional depositors who are essential
contributors to CIB’s stable funding base. The Group’s
primary objective is to offer a first-class banking
experience while maintaining the balance between
mainstream commercial banking activities and its
clients’ non-commercial needs.
CIB takes pride in being the sole bank operating
in Egypt with a focus group, exclusively dedicated
to servicing its prime institutional entities. SRG
carries out this function through highly qualified
Relationship Managers, whose role is to ensure
that customers receive superior, personalized
services catering to their respective business
needs. SRG provides tailored banking services with
a highlighted focus on digital banking solutions.
Products or services that CIB exclusively offers to
clients include advanced, tailored GTS products,
and short-term bridge finance facilities for the
educational sector to eliminate cash-flow gaps that
develop throughout the year.
SRG’s strategic clientele consist of more than 180
diplomatic missions, NGOs, educational enti-
ties, and international and local donor agencies.
The team works tirelessly to facilitate its clients’
business operations and meet their banking
requirements by creating innovative and tailored
products and services. Its
include
offering customized digital solutions, the collec-
tion of tuition and visa fees, the monitoring and
reporting of deposit activities, fund management,
and savings plans, providing a settlement system
between tourism companies and airlines, and
special offerings for staff loans.
functions
Although COVID-19 led SRG’s foreign clients to
pause certain activities, SRG successfully continued
to conduct its business with foreign entities. SRG
leveraged our electronic channels to ensure a
normal workflow without any disruptions, and
expanded utilization of GTS products in accordance
with the Bank’s strategy.
SRG relies heavily on data analytics and digital
banking in all aspects of its business decisions,
including performance analysis, pricing strategies,
and customer behavior analysis. Technology, in
particular digital banking, is a key marketing tool that
the SRG team leverages when marketing CIB products.
2020 Highlights
The Group successfully oversaw the marketing of
a lending program, which extends debt against a
guaranteed flow of proceeds to an identified group
of clients operating within the airline industry. In
addition, efforts were directed towards expanding
marketing efforts to attract the educational sector’s
deposits. The Group also successfully executed
bridge finance facilities for the educational sector.
lead generators,
2021 Forward-Looking Strategy
The Group has become one of CIB’s primary chan-
nels for corporate
leveraging
on existing relationships while simultaneously
capturing NTB opportunities by creating a wider
networking base. A tailored, short-term bridge
finance facility was designed and implemented for
the education sector, including universities and
schools, to eliminate cash flow gaps that develop
during the year. This product is poised to become
a major attraction for these institutions, helping
expand our institutional depositor rate and enhance
the utilization of CIB’s digital banking solutions.
Enterprises and Governmental Relations
(EGR)
Since its establishment in 2016, the Enterprises and
Governmental Relations (EGR) Group has positioned
itself as a market leader, focusing on large enterprises
and governmental institutions.
Over the last couple of years, EGR’s role evolved
to manage relationships with large private sector
companies, conduct
fundraising, and attract
customers previously segmented under state-owned
enterprises, government entities, and sovereign
authorities. In 2020, EGR’s role expanded to include a
diversity of banking business solutions and products
to top-tier clients, and to increase the bank’s market
share in this industry. Aside from the usual finan-
cial and advisory assistance provided, EGR clients
require higher flexibility and constant support in
their transactions. The Group caters to the needs of
these strategic customers through tailored products
and services, all while growing CIB’s business.
EGR is one of the market’s pioneers that focus on
governmental entities. The Group also overcame the
challenges presented by COVID-19 and sustained its
client relationships and remarkable financial figures.
2020 Highlights
During 2020, EGR continued its vital role of leveraging
the power of digital banking to offer an exceptional
banking experience to its customers and achieved
remarkable growth in all its GTS services ratios. EGR
also expanded its institutional banking liabilities
portfolio, reflected in the increase in its lending
capabilities and achievements in the trade finance
business in comparison to the previous before.
2021 Forward-Looking Strategy
In the coming year, the division seeks to achieve a
solid presence in the market and manage its rela-
tionships with clients in a sustainable manner that
drives value for its customers. EGR aims to do this
by growing its market database and utilize digital
banking and other technologies to better the busi-
ness and ease clients’ relations with the Bank. At
the same time, where possible, the Bank will look at
decreasing transaction costs to maximize revenue
through using alternative digital channels and
e-banking business solutions.
EGR will continue to play a crucial role, while
increasing the Bank’s total portfolio and market
share. The team will also continue to match its
clients’ requirements with the best available banking
business solutions in the market, and increase its
customers’ penetration by sustaining its position as
a client-centric organization and preferred service
provider. This should lead to an increase in the
banking product penetration and revenues.
SRG’s strategic
clientele consist
of more than
180 diplomatic
missions, NGOs,
educational
entities, and
international
and local donor
agencies.
21 Countries
covered by CIB’s correspondent
banking activities.
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Our Businesses
Retail Banking
We strengthened our
customer proposition with
regards to product offerings
and service levels and
increased our customer base
in our target segments.
Consumer Banking
CIB maintained its leadership in the Household
market, adding more to Household loans and liabili-
ties despite the difficult circumstances imposed by
the global pandemic. This reinforced the Bank’s supe-
rior position in the market. NTB figures continued to
grow, ending the year with 269,000 NTB customers.
In light of the COVID-19 pandemic, the digital
platform became crucial for customers to conduct
seamless, easy transactions, and increase customers’
migration from branches. The priority in 2020 was
to drive rapid adoption of digital banking transac-
tions across all segments, specifically in the Prime
segment. Digital capabilities are planned to be one of
the main sourcing channels of customers’ requests.
We have enhanced our customers’ experience with
our chatbot Zaki, and introduced predictive text to
help our customers find the most frequently asked
questions based on keywords. Not only did Zaki
display tutorials to increase customers’ awareness to
the features of digital channels and the registration
process, it also helped customers stay up to date with
all CBE mandates and circulars related to COVID-19.
In 2020, CIB realized the efficiency gains driven
from the full rollout of the CRM modules, namely
account opening (A/O) and loan origination (LO).
A/O improved staff efficiency and customer experi-
ence by decreasing the time and resources spent
during the account opening process. The full rollout
of the loan origination module across the distribu-
tion network was completed early 2020. The module
reduced the loan approval process for the selected
segments to two days, as the process automated
the end-to-end credit assessment process while
providing instant decisions based on automated
workflows and decision rules.
The year also saw CIB leverage on our CRM Marketing
Module, using the Campaign Command Center in
launching personalized campaigns to different groups
of customers. The module also sends automated
personalized welcome SMSs or emails to customers
in their preferred language upon the opening of their
accounts, including the account data.
2020 Highlights
CIB was the first bank to launch the loan module with
a decision engine. Loan origination was successfully
rolled out throughout the Bank’s entire branch network,
covering personal loans, credit cards, and overdrafts for
both secured and unsecured sorts. This led to a 22% and
64% increase in the monthly acquisitions of credit cards
and unsecured lending, respectively.
We strengthened our customer proposition with
regards to product offerings and service levels and
increased our customer base in our target segments.
We believe there is still ample room for further
growth, given our upcoming strategic initiatives and
business opportunities.
CIB branches continued to outperform in 2020,
despite the highly priced liability offering from state
banks. The Bank was able to maintain its leading
position as the most efficient and productive branch
operator in the peer universe, with higher household
deposits, personal loans, revenues, and profits per
branch than any other bank in Egypt.
Improving the customer experience and operating
efficiency through the migration of activities from
assisted to self-serve channels (digital), by leveraging
our investment in digital capabilities, was a priority.
CIB invested in different solutions to constantly
move certain branch service transactions to digital
channels over several phases. As transactions accel-
erate via other channels, branches will focus more on
sales opportunities and complex services.
Segments
Private
Positioning the CIB Private brand in the high net
worth (HNW) community was the key target in
2020. The Private segment launched a range of offer-
ings; including portfolio management services in
collaboration with CI Capital based on the profiling
strategies intended to align customers’ risk appetite
with the matching portfolio.
The segment introduced the Private Facility Pack, a
flexible consumer facility offered with the opportu-
nity to switch between overdrafts and personal loan
products. A Secured Overdraft against Treasury Bills
was launched targeting all customers with custody
portfolios, as well as increasing the maximum unse-
cured loan ticket size to reach EGP 5 million.
On the partnership building level, several agree-
ments were forged throughout the year covering a
variety of services aligned with private customers’
demands and lifestyle.
Deposits for the segment amounted to EGP 34.1
billion, while the total asset portfolio came in at
EGP 5.2 billion.
Premium Segments
Premium segments (Wealth and Plus) offer distin-
guished propositions to their customers through the
focus on customer migration to digital channels for a
smoother and more convenient service.
Product penetration reached an average of 3% for
Wealth and 2.4% for Plus. In 2020, deposits for the
Wealth segment rose to EGP 115.5 billion, while the
asset portfolio came in at EGP 16.4 billion. As for
the Plus segment, total deposits reached EGP 29.9
billion and assets EGP 3.5 billion.
The segments introduced the KYC Customer
Interactive Form for automating customers’ data
fulfillment, and enhanced customers’ communica-
tion through sending email shots and personalized
SMSs for impacted Wealth and Plus customers.
Prime
The Prime segment successfully launched the Prime
Me bundle during 2020, geared towards the millen-
nial sub-segment. Several activities were conducted
to cluster Payroll customers into categories to
provide them with the most suitable products.
“Solfa w Aman Loan” products were also launched,
targeting blue collar workers earning more than EGP
3,000 a month, with a simple communication mecha-
nism and a relatively smaller loan amount and tenor.
CIB introduced a bundled proposition for prepaid
cards and smart wallet, targeting financial inclusion
customers whose salaries are less than EGP 3,000.
Building on successful launches in 2020, the Prime
segment’s assets ENR reached EGP 9.8 billion, while
deposits came in at EGP 18.8 billion, with a favorable
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Our Businesses // Retail Banking
mix of 80% CASA and 20% deposits. The segment also
added 253,300 NTB customers, payroll and non-payroll.
Household Assets
Household assets grew by EGP 8.7 billion, with a
total ENR of EGP 34.8 billion despite challenges
during the year. Cards continued to contribute to
CIB’s income by maintaining a high net interest
margin profitability and fee revenue. Consumer
loans continued to lead asset income generation,
due to portfolio optimization and effective acqui-
sition programs and tactics, newly introduced
products and the full rollout of loan origination.
Cards
Due to the CBE initiative following the pandemic, card
revenue was impacted, where a 42% drop was driven
by the lowered arrears fees.
The acquisition figure showed significant growth,
despite the circumstances, with 138,000 credit
cards acquired throughout the year, bringing the
total card portfolio to 615,400 primary cards and
120,600 supplementary cards.
Additionally, the pandemic impact and subsequent
CBE initiative negatively contributed to the P&L,
specifically on the international spending, cash
advance fees, arrears, and interchange revenue
lines. Despite this, gross contribution grew in 2020
compared to the previous year.
CIB launched World Credit Card during the year,
with a distinguished rich travel and lifestyle proposi-
tion, targeting the Exclusive Wealth customer base to
add higher value to CIB’s cards product suite.
Prepaid payroll cards were also revamped (with the
proper KYC requirements), complementing our payroll
proposition by targeting customers with incomes of
less than EGP 3,000 per month at a lower cost solution
for blue collar workers in the Prime segment.
Household Loans
It has been an extremely challenging year for the
loans business due to unprecedented
personal
COVID-19 implications such as the CBE’s six-month
loan installments postponement initiative, which
had a negative impact on the loan top-up program
and customer DBR ratios. Furthermore, we froze
some lending programs due to market conditions.
This was compensated by an improvement in sales
efficiency, with a significant increase in the average
run rate of unsecured loans. The unsecured acqui-
sition crossed EGP 4.26 billion, marking a record
achievement in light of market challenges.
A number of new personal loans programs were
launched in 2020, including “Solfa we Aman”, a
short-term fixed loan targeting the low-income band
payroll sub-segment. CIB also launched the Car
Finance program, a semi-secured bundle targeting
premium segments, an unsecured loan limit increase
to EGP 5 million, and overdraft lending against T-bills
for Private customers.
In terms of financial achievements for loans, ENR
reached EGP 26.52 billion, interest income EGP 3.2
billion, and fees EGP 186 million.
Mortgages
Despite the significant drop in the number of referrals
provided by social housing, as well as the closure of the
Notary Public for three months, the business managed
to successfully exceed its ENR by EGP 708 million y-o-y.
Low-income mortgages continued to show a healthy
portfolio in terms of delinquency, with rates main-
tained within the accepted level.
ENR reached EGP 1.9 billion in December, up by 61%
compared to the previous year, while interest income
came in at EGP 146.5 million.
Liabilities
The high-yielding CDs offered by public banks in
March had a negative impact on our business growth,
evidenced in the increase of outflows to state-owned
institutions. In response, we launched a three-year
fixed CD at 12%.
The Bank launched the CASA campaign, a loyalty
program, and the customer journey to ensure
a guaranteed satisfactory customer experience
within the first year.
The liabilities business remains the main contributor
to Retail Banking revenues through its existing
product suites. One of the main products that was
a key to growth, improving the overall profitability
and addressing the segment’s needs, was the ‘Easy
Account’, a tailored account offering a competitive
interest rate to Prime customers with low balances
as an alternative to CIB Savers. Easy Account acquisi-
tions closed at 89,700 accounts opened this year.
Liability ENR reached EGP 198.3 billion, interest
income EGP 14.3 billion, and fees EGP 274 million.
Insurance
The insurance business worked with AXA to launch
two new products this year: Cancer Care, a simple,
pre-underwritten product that gives out a tiered
lump sum upon the diagnosis, and SME, an insurance
cover for companies with less than 200 employees
including life and medical covers.
The business also developed insurance benefits with
the Diamond Plus Payroll package, including acci-
dental death or disability coverage and in-hospital
cash covers. Introducing an enhancement to increase
the medical and referral limit for unsecured personal
loans to EGP 1.5 million had a positive impact on
the booking process of more than 70% of the cases
referred to AXA to obtain the insurability decision.
In 2020, total insurance fees reached EGP 241.3
million, while volumes for the life and health
insurance business hit 594.5 million.
2021 Forward-Looking Strategy
Significant transition will take place in the service
model for retail customers, and an extensive
strategy to incorporate a well thought out coverage
and operation model to satisfy customers’ require-
ments, is being implemented. We will continue
to improve the operating efficiency through cost
control and migration of activity from assisted
to self-serve channels (digital) by leveraging our
investment in digital capabilities. We will also intro-
duce a best-in-class digital onboarding solution to
facilitate the onboarding of personal loans, credit
cards, debit cards, and prepaid card holders with
specific online propositions for customers.
Segments
In 2021, the Private proposition will be complemented
by the launch of new financing programs tailored for
this segment, as well as finalizing the lending policy
and IT requirements for Margin Lending.
In 2021, our aim is to boost the customer base by
22% for Wealth and 20% for Plus by providing the
Relationship Managers (RMs) with the best tools and
retention schemes. We will continue focusing on our
proposition awareness for all fronts and customers
through social media. Leads generation will remain
a top priority to support our RMs, and so we will
continue to enhance the process. We will also leverage
the Family Proposition to target potential Plus family
customers to match their family banking needs. As
for Overseas Banking, we aspire to grow the customer
base of Non-Resident Egyptian (NRE) and Foreigner
Non-Residents (FNR) customers through a proposi-
tion built on a remote/virtual set-up, unique products,
and strong digital offering.
The Prime segment will identify new sub-segments
through continuous marketing research, in line with
our sub-segmentation strategy. We will launch the
Family bundle, which will cater to affluent Prime
customers to increase CIB’s share of wallet. The
segment will hammer on the CRM instant account
opening and loan origination integration to cross-sell
assets under day one programs. This is in addition
to introducing agent banks like Fawry Plus as a
new acquisition arm for the lower income segment,
offering them prepaid cards and smart wallet bundles
to reduce the payroll customers’ acquisitions cost.
Household Products
For the year to come, the Bank plans to develop
an online solution that leverages on CIB’s digital
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Our Businesses // Retail Banking
platform to reinforce acquisitions and generate extra
sourcing for cards and household loans through an
efficient and customer-friendly digital onboarding
experience. CRM will also roll out for the payroll
channel to efficiently enable maximizing asset pene-
tration for eligible payroll NTB customers.
In 2021, we plan to boost credit card acquisitions
as well as ENR through capturing further market
share and leading the business growth by lever-
aging on innovation, agility, and data analytics
capabilities. We plan to increase our run rates and
leverage the credit risk score capability to optimize
acquisition efficiency.
New effective acquisition programs and tactics
will be introduced. We aim to boost acquisitions in
household loans by focusing on online acquisitions,
leveraging our new technological capabilities and
infrastructure. A new risk-based approach will also
be introduced.
The liabilities business will depend on three main
pillars to achieve the desired growth:
1. Pricing flexibility that is consistent with CIB’s
premium strategy and providing frontlines and
segment management with the needed agility in
acquisitions and P/L management;
2. Digital enhancements to offload frontlines and
improve customer experience on lower TATs; and
3. Streamlining our product mix to simplify the
range and removing redundancies and compli-
cated pricing frameworks, at the same time
delivering tailored bundles aligned with each
customer segment’s designed value proposition.
Business Banking
Business Banking has built a well-established cash
and trade management business with average
liability book growth rates of 32% and 99%, respec-
tively, for the last three years. In 2020, operating
profits for the division came in at EGP 1.6 billion,
deposits hit EGP 29.5 billion, growing 26% y-o-y,
while trade rose to EGP 26.7 billion. In the payment
solution space, the division processed EGP 35
billion in transactions. The Business Banking
client base grew to more than 64,000 companies
during the year, up 12% y-o-y.
2020 Highlights
In line with the Bank’s direction and commitment
to Egypt’s strategy to grow and expand the loan
portfolio for SMEs, Business Banking launched
new lending programs targeting existing and new
customers with facilitated documentation, fast
approval turnaround time, and fixed monthly
installments. This is in addition to a new initiative
that supports SMEs in COVID-19 circumstances by
offering unsecured unsupported overdraft lines to
existing borrowers to pay salaries.
Following the nation’s strategy to support SMEs,
Business Banking supported its customers through
the internet banking platform for companies, the
digital channels and contact center, in addition to an
initiative that encourages SMEs to transact online by
offering a three-month free online subscription for
newly enrolled customers to online banking. Another
initiative took place during the pandemic to increase
SME awareness by conducting online educational
webinars presented by our partners in the non-
financial solutions programs covering several topics
and market gaps.
Business Banking also developed unique and
differentiated deposit bundles suitable for various
customer needs and banking preferences, including
the Super Business Account, which gives customers
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.
CIB maintained its dominant position in Egypt’s
payment acceptance sector in 2020, attaining
a market-leading share of 28% for POS trans-
for
the
actions. Following
financial inclusion, the Bank managed to activate
all POS and e-commerce platforms to accept the
country’s push
technology) 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 merchant segments
capitalizing on the current products available and
suitable to merchant needs.
CIB maintained
its dominant
position in
Egypt’s payment
acceptance sector
in 2020, attaining
a market-leading
share of 28% for
POS transactions.
government-backed Meeza card and launched QR
acceptance to reach untapped segments — a key
enabler of payment business growth, especially
with very small merchants.
This year Business Banking witnessed an expan-
sion in women’s activities by sponsoring local and
global events in addition to the new (WIB) Women
in Business lending program. CIB sponsored the
She Can event, a one-day local event that took
place in Q1 2020, which included inspiring talks,
workshops, panel discussions, master classes,
mentorship, and networking activities along with
funding opportunities to support the female entre-
preneurship eco-system in Egypt and the MENA
region. CIB also sponsored She’s Next, a global
event held by VISA for 3 days that took place in Q3
2020, which reflects the Bank’s women’s empower-
ment and diversity and inclusion strategy, raising
brand awareness globally, promoting the strategic
direction towards women’s empowerment by
highlighting Business Banking tailored lending
products and services.
Early this year, the Sustainability team, along with
the Business Banking team, decided to conduct an
environmental and social impact assessment to our
investments on SMEs, through a research on the
CIB-funded SMEs database in order to assess the
level of sustainability and promote a continuous
improvement culture among our stakeholders.
2021 Forward-Looking Strategy
In the year to come, CIB Business Banking’s SME
client companies will enjoy a bouquet of products
and services designed for each segment according to
their business requirements. Business Banking will
enhance its value proposition by tailoring services to
the ever-changing needs of its clients.
Using state-of-the-art technology, Business Banking
will build the infrastructure to automate processes to
improve the customer experience. Business Banking
will invest in its online banking capabilities and
remote services such as (ChatBot, WhatsApp, IVR
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Our Businesses
Digital Banking
The four pillars of CIB’s digital
business plan are improving
the customer experience,
increasing migration and
automation ratios, optimizing
costs, and generating
revenue.
At CIB, digital thinking is widely and deeply inte-
grated into the organization. This focus goes beyond
service channels and transaction processing, as the
Bank works to implement digital transformation
throughout its entire business, from product devel-
opment 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 strategies. It is these building blocks that CIB
believes has formed the foundation of an entirely
distinct business line: Digital Banking.
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 support no matter
when, where, and how they interact with the Bank,
our digital solutions provide tremendous value. They
enhance the customer experience, optimize working
improve control
capital, reduce operating cost,
and visibility of payments and receivables, and add
security to financial operations. These elements are
also expected to see continuous 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 assessing internal and external facets
like risks and performance, the Bank expects to easily
expand its digital infrastructure as needed to comple-
ment the ever-changing demands of digitalization.
Accordingly, the four pillars of CIB’s digital busi-
ness plan are improving the customer experience,
increasing migration and automation ratios, opti-
mizing costs, and generating revenue. These are
handled through two core groups: the Analytics and
Data Management division (ADM) 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 adhere to CIB’s digital business plan and
transform the Bank into the digital bank of the future.
Analytics and Data Management Division
The Analytics and Data Management division (ADM)
is the embodiment of the Bank’s innovative drive and a
much-needed change catalyst for the organization as
a whole. During 2020, and as a result of CIB’s position
as a market leader in originality, several global organi-
zations such as Forbes recognized CIB’s achievements
by featuring ADM in discussion panels and forums
alongside other
international organizations. The
Bank’s stellar performance and experience were
evident during discussions with global market leaders
about the banks’ role in promoting modernization and
keeping up with technological advances, and their
responsibility towards offering clients the simplest
and most convenient methods of modern banking.
CIB’s Data Team has successfully obtained the CMMI
Certificate’s latest version in Data for Development
V2.0 (CMMI-DEV) Maturity Level 3. This accomplish-
ment rendered CIB the first bank in the world and first
organization in Egypt to obtain the latest version of
the certification.
CMMI Maturity Models were originally created for the
U.S. Department of Defense to subsequently become a
prestigious attestation of extraordinary performance
in all fields and sectors. Given the data-driven organic
ecosystem built over the years, the necessity of such a
model was indispensable to achieve the cutting-edge
goals set for the future and to maintain our continuous
improvement vision.
CIB’s Data Lab, driven by its previous success, renewed
its real-life business case practicum partnership with
Carnegie Melon University Africa for the second year.
The partnership aims to provide CMU Africa Masters’
students with real practical experience in informa-
tion technology. Through this partnership, we aim
to help the master’s students build a forecasting
model to reliably predict demand patterns at the CIB
Call Center, under the supervision of the CIB Data
Science Team. The Data Lab was also featured in the
IIF global survey for machine learning, focusing on
our practices and use cases for machine learning. The
team also applied for Gartner’s prestigious 2020 Eye
on Innovation Award for Financial Services with two
different projects to compete with global banking
and payment giants worldwide.
A clear agenda was put in place to support the busi-
ness in providing best-in-class services and products
to customers, optimize operational processes, and
maintain CIB’s position as a market leader in the
field by providing continuous support in the deci-
sion-making process. Our focus has recently shifted
towards the improvement of business processes,
especially in light of the challenging economic and
social conditions faced as a result of the COVID-19
pandemic. As such, the ADM team invented busi-
ness-specific projects to enhance the Bank’s bottom
line and improve the customer experience. The
impact of data is constantly felt across the organiza-
tion, transforming it into a reliable partner that many
stakeholders depend on.
ADM has always aimed to commercialize and
commoditize CIB’s data assets, to create value out
of the intangible data that was not captured by the
organization. The team was successful in doing so
this year through three main tracks.
Optimization of the Customer Experience
Robust Operations Research
(ROR) queuing
theory-based models were applied to reduce
branch waiting times, while offering fast, safe,
socially distanced, and desirable services, either
through our state-of-the-art online processes or
our branches. This customer service enhancement
came as a direct result of the ADM team’s efforts
to categorize and classify transaction types and
clients whose activities could be transferred to
online/remote channels. This process of customer
and transaction segmentation has been shared with
the different lines of business for alignment and
implementation. Furthermore, the team is working
on revamping the entire branch experience towards
a more customer centric operation. Our ultimate
goal was to reach the best setup for every branch
regarding its operational structure, branding, staff
functions, and customers’ nature.
The ADM team developed a machine learning-
Intelligent Product
based predictive model,
Recommendation Engine, to help relationship
managers find the most suitable products for their
clients based on the client’s history with the Bank.
Additionally, the team is building a fully analytics-
driven customer lifetime economic model on
top of advanced statistical modeling techniques,
allowing us to determine the full value generated
during the lifetime of any client and enabling
officers to preemptively decide on discounts and
pricing offered to the client.
Amid the fast-paced changes of current times,
the ADM team ensures the Bank can meet new
customers’ demands and behaviors. As a result, the
team is working on using the vast stores of customer
data available on social media to try and gain a more
comprehensive and timely understanding of our
clients and their needs.
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Operational Support Initiatives
We successfully rolled out the Cash Management
Project, which aimed to decrease overall bank-wide
cash levels. We identified that the amount of idle cash
sitting within CIB’s cash hubs can be better utilized by
establishing a cash formula that predicts the amount
of cash needed at each hub (branches, ATMs, central
vaults, and cash-in-transit). In place for nearly a year,
the project has proven highly successful, resulting in
a substantial decrease in Bank-wide cash levels, along
with the decrease of the associated costs related to
handling, transport, and storage. The team is also
working on the efficient distribution of employees
and responsibilities to increase their performance
and satisfaction. Mathematical optimization-based
capacity planning models are built for each depart-
ment, after which the team applies stochastic
simulation techniques to account for uncertainties
and ensure robustness. By factoring in the respective
KPIs, the team will be able to provide an equitable
working situation for all employees. In turn, this will
result in a more pleasant banking experience for
CIB’s clients and a more attentive employee base.
Decision Making and Business Reporting
Building on its proven reliable information and anal-
ysis, the team has chosen to enhance already existing
business intelligence (BI) capabilities (branded as
CIB Navigator our own internal marketplace) and
reporting tools by adding new data streams and
developing new platforms that are targeted for
specific products to monitor their performance more
effectively. In addition to providing management
with timely actionable analyses, the team presented
the Treasury, management, and board with a trade
portal dashboard reflecting the monthly trade activi-
ties within the Bank and all relevant data. It also
benefited from the existing Institutional Banking
portal to develop industry-specific analytics and KPIs
reflecting customers’ profitability, cost, and return
on capital, as well as macroeconomic figures such as
market share and trends. The ADM team is working
on enhancing its specialized visualization software,
which supports users by facilitating tracking changes
in the business and spotting trends, in addition
to facilitating the analysis of the different trends,
resulting in faster and more actionable reporting.
Additionally, the team is currently working on the
launch of Livestreaming Systems that will enable
real-time integration of core data existing analytics
platforms. It is also upgrading CIB’s reporting
and analytics dashboards by enhancing the Data
Warehouse system based on the cutting-edge
Teradata Vantage technology. The new system will
give CIB a boost in its data processing and storage
capacity, accommodating future business expan-
sions. The team is also working to upgrade our Power
Center Server (data integration) specifications to
cater to the rising demand in data integrations and
data provisioning streams to and from the enterprise
data warehouse, which is required for future AI and
machine learning applications.
Digital Banking
The Digital Banking Group:
• Re-engineers various operational processes to
reduce turnaround time (TAT) and increase
efficiency
• Provides a channel for acquiring new customers
• Creates new touch points for existing CIB
customers
• Generates efficiencies and reducing costs across
the Bank
• Increases migration and automation ratios
• Creates new revenue streams
• Enhances the customer experience and inte-
grating channels seamlessly
• Enables new market segments, specifically
financial inclusion
• Drives 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, reporting
on traffic, segments, products, and services with
the goal of maximizing product penetration and
increasing 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
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
• Online banking channels (Internet and mobile
banking)
• IVR, Chabot, and contact center channels
• ATMs and 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 customer
segments, and supporting financial inclusion. The
Financial Inclusion and Mobile Products division over-
sees the implementation of the Bank’s mobile payments
strategy and systematically measures the Bank’s digital
services and their lifecycles to ensure that customer
interactions continually migrate 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 entrepre-
neurs 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
enables CIB’s positioning as a key supporter of the
nation’s entrepreneurial ecosystem.
Digital Banking Governance and Support: The
Digital Banking Governance and Support division is
dedicated to managing collaboration and ensuring
compliance among all group divisions, the Bank’s
internal stakeholders, the regulator, and other
external stakeholders.
Internal and External Success
Our successes when it comes to digital transformation
come from putting the voice of the customer at the
heart of product, 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 customer
during all process redesigns, digital upgrades, and
enhancements, helping to translate an understanding
of customer needs into clear system requirements, ulti-
mately improving the customer experience.
Several services have been extended to the Bank’s
support functions, resulting in notable gains. Awareness
visits conducted for relationship managers and branch
staff improved customer service by enhancing their
knowledge of our digital products. Business reengi-
neering 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 auto-
mate daily payment processing.
Global Transactional and Digital Banking has worked
hard to embed flexible and secured digital capabili-
ties across our operations to take our consumer and
corporate customers to the next level. The goal is to
bring even more customers to digital solutions and
provide them with a richer range of services. We
also aim to optimize operations on the back end,
increasing automation and streamlining workflow
to cut the transaction processing times and costs, as
well as strengthening security and compliance.
Digital Transformation
Digital transformation is no longer just an option, but
rather a crucial move given CIB’s highly ambitious
endeavor to continuously provide superior services
to customers, and optimize the cost to serve. The
COVID-19 pandemic has put digital transformation
at the forefront of our priorities. Recent years have
seen significant strides towards digital transforma-
tion in different areas within CIB.
2020 was a real test for CIB’s digital platform in
light of the unprecedented circumstances imposed
by the pandemic, pushing the Bank to attempt to
deviate customer behavior away from branches and
towards digital.
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Our Businesses // Digital Banking
CIB has long sought to
reduce its environmental
footprint, and we take into
account in our credit process
the footprints of our clients.
CIB has started a new program entitled Bank of
the Future (BOTF), which paves the way for the
digital transformation of the existing customer base
towards the new digital era.
The Bank of the Future (BOTF) program, aims to posi-
tion CIB as “the digital bank to trust”. It will divert
customer behavior away from branches, positioning
them as an alternative channel, while establishing
digital as the primary channel to serve customers.
The program will work to digitalize the branch
experience and rely on robotics and operations
centralization to increase efficiency and reduce the
cost to serve. It will also introduce new ways to serve
customers indirectly, by availing open platforms third
parties can plug into to integrate their services with
CIB. Since launching the program in October 2020,
the following rates have been positively impacted:
• Online banking cost synergy increased by 42%
from EGP 83.8 million m-t-d in September to
EGP 119.3 million m-t-d in December 2020,
being the highest m-t-d cost synergy achieved
throughout the year.
• Online banking penetration rate increased
from 48% y-t-d in September to 53% y-t-d in
December 2020.
• Internal
transfer migration rate
increased
from 81% m-t-d in September to 86% m-t-d in
December 2020.
• External transfer migration rate
increased
from 60% m-t-d in September to 74% m-t-d in
December 2020.
BOTF has five key pillars:
1. Service Digitalization: Digitalize the customer
journey for several services from initiation
(online or offline) to execution and delivery. This
requires extending digital channels’ capabilities
to accommodate more diverse services. The
mechanism of the service digitalization work-
stream is to revamp the process inside branches,
educating customers on the use of digital chan-
nels for executing the transactions.
2. Operations Centralization: Migrate services
from the branches to central operations. To
start, the Bank announced the suspension of
25 in-branch services in two consecutive drops
during the year.
3. Robotics: For banks and the financial services
industry, Robotic Process Automation (RPA) is
vital for success. RPA and Artificial Intelligence
(AI) have already helped banks improve effi-
ciency by up to 70% with little to no human
supervision in the execution of repetitive tasks,
decision making, and other complex financial
activities. In 2020, CIB identified 250+ potential
processes to be automated, explored from more
than 40 departments and areas. The processes
were initially assessed using set selection
criteria: rule-based, high transaction volumes,
stable and well-defined
low exceptions,
processes, low system change, structured data,
and readable electronic inputs.
4. Branch Digital Experience: Enhance the branch
experience with digital touch points. This includes
elements of online appointment booking, self-
service kiosks, WiFi, digital signage, biometrics,
and experiences such as Walk-Out Banking (where
the customer opens an account and walks away
with a card and online banking services).
5. Branch classification: Review service model
for the branch network and allocate branches to
serve individuals only, corporate customers only,
or hybrid branches and extend the coverage
model to ensure all business banking customers
have an assigned account officer.
The Innovation Lab
CIB’s Innovation Lab is positioned as the fintech
and entrepreneurial hub of Egypt’s banking sector.
It contributes to incubators and accelerators with
workshops, mentorship, judges, and support for key
events in the sector. These initiatives allow for global
and local scouting of startups to enroll them into our
Entrepreneurs Engagement Program (EEP), through
which CIB’s banking model can be complemented
and/or disrupted.
EEP supports startups that have fast and agile solu-
tions by helping them transform their offerings into a
product line to serve CIB’s departments. The program
merges CIB’s resources and brand with the startups’
agility and unique offerings that would eventually allow
for continuous enrichment of CIB’s value proposition.
Recognizing that the best fintech providers will come
from the internal talent of a financial institution as
powerful as CIB, the Innovation Lab also promotes
intrapreneurship. The lab conducts innovation chal-
lenges and competitions that bring together creative
multidisciplinary teams from different areas and
levels within the Bank.
2020 Highlights
• Despite the global impact of COVID-19 on
ecosystem activities and events, the Innovation
Lab team’s agile model allowed for continuous
support of partners, stakeholders, and the Bank’s
digital transformation strategy.
• Out of a pool of 200 global and local startups
and fintechs, the CIB Innovation Lab was
consistently managing the commercial and/or
technical collaborations with multiple stake-
holders across CIB in line with their current
challenges and requirements.
• Participating and co-organizing youth-related
competitions, design sprints, and hackathons
to enable financial inclusion, increasing youth
awareness, and scouting for solutions that
match CIB’s needs.
2021 Forward-Looking Strategy
CIB’s Innovation Lab is in the process of formal-
izing its internal channels within CIB to enable and
promote innovation and its applications through its
engagement program and other projects, whether
in the local market or as part of CIB’s expansion
plans in Africa. We aim to continuously evaluate and
adopt disruptive technologies that will enable CIB’s
digital transformation strategy and allow for an agile
banking model.
ATM Network
2020 Highlights
CIB’s ATM network grew 11% to reach 1,121 ATMs,
being the largest ATM network among private
banks and handled more than 61 million transac-
tions. Average monthly dispensed cash exceeded EGP
6.4 billion, while average monthly deposits reached
EGP 1.7 billion. Despite the added scale and COVID-
induced operational complexity, the network’s
availability increased in 2020, and synergies jumped
27% y-o-y to EGP 1.5 billion.
The Bank has also supported government and
regulatory goals for nationwide financial inclusion
by participating in the regulator’s ATM initiative by
committing to install an additional 180 ATMs across
different geographic zones by the end of 2Q21.
A new, modern ATM user interface and contactless
ATM experience were introduced in Cairo ICT 2020,
both of which were received positively by attendees.
The new interface has begun rollout and the contact-
less experience is planned to begin rolling out in
2021, upon regulatory approval.
COVID-19 measures were implemented, including: 1)
waiving ATM withdrawal fees, 2) adjusting withdrawal
limits to comply with the regulator, 3) customer safety
measures, such as social distancing signs, and 4)
educational screen displays with appropriate safety
measures, encouraging the download of our mobile
banking app via a QR code.
The year also saw the TAT of replenishment process for
both on-site and off-site ATMs reduced. 96.4% of cash
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Our Businesses // Digital Banking
deposits below EGP 10,000 were migrated to ATMs
from in-branch deposits, and 98.5% of cash withdrawals
below EGP 20,000 were migrated to ATMs.
2021 Forward-Looking Strategy
We will continue to deliver on our ATM strategy,
including:
• Expanding the ATM network.
• Continuing the rollout.
• Introducing contactless ATMs.
• Introducing robotics for ticketing.
• Introducing AI in Cash in Transit (CIT) route
optimization.
Online Banking (Internet and Mobile
Banking)
Internet and mobile banking enable customers to
remotely access their accounts with ease and conve-
nience, and to conduct a broad range of financial
transactions anytime wherever they are. During
the COVID-19 pandemic, online banking channels
became among the main channels for our customers,
with a significant increase in usage. This was particu-
larly apparent in mobile banking usage, which
surpassed that of internet banking, with almost 80%
of our online banking customers relying on mobiles.
2020 Highlights
In 2020, we focused on enhancing online channels by
improving the customer experience and adding more
features. These included:
• Creating a digital self-onboarding process for
existing CIB customers to register for internet
banking or mobile banking, without the need to
go to branches.
• Transforming
into
straight-through-processing, which drastically
reduced TAT to instant local payments and
offloaded the operations teams while increasing
the migration rate for external transfers to 74%
in December 2020.
transaction processing
• Launching self-service via IVR to unlock accounts
and recover usernames.
• Increasing transfers limits through online
channels and allowing transfers to elec-
tronic wallets.
Online banking channels share in the total cost
savings recorded EGP 946.5 million as of December
2020, marking an 89% y-o-y increase. The online
customer base reached 802,000 users, with an
activity rate of 67% as of December 2020. Online
banking subscribers increased 35% y-o-y as of
December 2020. The number of Internet Banking
transactions grew by 11% y-o-y in the same period,
with the value of transactions reaching EGP 40
billion, while mobile banking transactions grew
118% y-o-y in the same period, with the value of
transactions reaching EGP 53 billion.
Online banking migration rates y-t-d in December
2020 were 96% for credit card settlements, 81% for
internal transfers, and 59% for external transfers
from total branch transactions.
2021 Forward-looking Strategy
The new digital platform is expected to launch in
2021, upon final regulatory approval. It is anticipated
to enhance the market position of our digital pres-
ence, boosted by new features and services, and is set
to give customers more control over their position in
the Bank. The new digital platform will be launched
with a mega marketing campaign that will boost
activity and acquisition rates for online banking and
improve CIB’s digital presence.
Phone Banking (IVR and Contact Center)
CIB’s phone banking provides value to customers by
giving them personalized advice for their banking
needs and offering digital solutions that let them
bank more quickly and efficiently wherever they are.
• Proposing the addition of 11 new requests to
Internet Banking and Mobile Banking, pending
regulatory approval. This would increase acqui-
sition rates for new products such as loans,
accounts, credit cards and deposits, and offload
our call center and branch network.
2020 Highlights
CIB’s 19666 channels (IVR and Contact Center)
witnessed 19% growth in calls in 2020 (vs. 11%
growth in 2019), reaching nearly one million monthly
calls. Customer inquiries related to regulatory
initiatives associated with COVID-19 overloaded
our networks, while the challenges arising from the
curfew and precautionary measures led to a large
percentage of absenteeism. As such, we increased
voice channel capacity and launched a dedicated
menu for regulator’s initiatives and played back
educational messages while on queue advising
the caller to use alternative channels. We halted
certain requests during curfew hours and advised
customers to use our digital channels instead.
We changed the IVR top level menu, leading the
IVR resolve rate to surpass 49% and making IVR our
primary voice channel. We also added self-service
features, allowing customers to unlock online
banking accounts or recover their usernames, which
offloaded agents’ calls. These efforts and more saw
a 22% y-o-y increase in the IVR customer base to
835,000 customers and a 37% y-o-y increase in syner-
gies to EGP 35.2 million.
2021 Forward-looking Strategy
We plan to revamp the IVR UX to shorten the time
to serve while reducing channel utilization/cost
and introduce new self-service features. Plans
are underway to transform the call center into a
contact center to support new channels (live chat
and video) and identify customer personas and
behaviors, aiding in customer migration to the
best-fit channel.
Our four growth pillars are:
1. Quick Wins - These are quick fixes that can help
offload the call center to IVR or other channels,
improving our channel utilization.
2. Strong Foundation - Such
initiatives will
strengthen our IVR and Contact Center and
serve as a base for future development, including
identifying customer personas and behavior in
cooperation with the data analytics team.
3. Transformation - Projects and initiatives to
continue our journey from call center to contact
center, including: remote and video agents and a
live text chat.
4. Rich Portfolio - Enhance our proposition with
a portfolio of features such as branch appoint-
ment booking.
CIB Chatbot
2020 Highlights
Zaki the Chatbot, which was launched in December
2019, now conducts over 35,000 interactions per
month on both the public website and Facebook
Messenger in English, Arabic, and colloquial Arabic,
growing fivefold in from February (pre-COVID) to
April. The feature has offloaded the social media
team by over 55%.
During the pandemic, a dedicated tab for regulatory
mandates and FAQs for all products was updated to
reflect any regulatory changes.
2021 Forward-looking Strategy
2021 will see the introduction of Zaki on WhatsApp
upon regulatory approval, integrated with seamless
live chat. The move will serve new segments of corpo-
rate and business banking customers and add new
services and features (e.g. balance inquiry, financial
transactions, banking requests).
CIB Mobile Payment (Smart Wallet)
Smart Wallet is an innovative payment experience
that serves both banked and unbanked customers by
providing a convenient, secure, and cost-effective way
to make financial transactions through mobile devices.
Customers can easily pay bills, recharge their mobile
prepaid lines, send money to other wallet holders in
Egypt, and deposit and withdraw funds from all ATM
machines or via any of our authorized banking agents.
2020 Highlights
Despite the challenges arising from the COVID-19
pandemic, we worked on multiple fronts to leverage
Smart Wallet’s value proposition and increase its
customer base, activity rate, transaction volumes, and
value. We successfully accelerated the momentum
and utilized the circumstances imposed by the
COVID-19 pandemic to best utilize Smart Wallet as
one of the prime digital channels.
• CIB is the first bank in the market to avail digital
wallet registration through SMS for banked and
unbanked customers. This had a positive impact
on new enrollments.
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Our Businesses // Digital Banking
• Applied new tactics for Smart Wallet positioning,
visibility, and branding through partnering with
major e-commerce platforms in the market.
• Collaborated with the acquiring team to success-
fully launch the CIB Merchant Mobile Wallet,
through which merchants can collect money
from customers via QR codes.
• CIB Smart Wallet’s customer base increased by 34%
y-o-y to reach 840,000 customers as of December
2020, and maintained its leading activity rate of
20% across all banks in the Egyptian market.
• CIB Smart Wallet transaction volume increased
23% y-o-y to 7.5 million transactions, while trans-
action value rose 107% y-o-y to reach EGP 2.8
billion as of December 2020.
• Considering CIB’s financial inclusion objectives,
the Bank launched its new E-Wallet program,
a digital platform that provides cost effective
solutions and access to affordable financial
products. The program accommodates the needs
of untapped individuals and merchants. The
penetration test report has been submitted to the
regulator and is pending approval for the launch
of the pilot phase, before going to market in 2021.
2021 Forward-looking Strategy
A number of initiatives in 2021 will continue to
propel the success of the Smart Wallet:
• Expand the internal and external sales force.
• Position Smart Wallet as a complimentary
channel for CIB consumer banking.
• Introduce Digital Registration Channel
for
Smart Wallet.
• Digital Campaigns, partnerships, and on-going
offers and discounts.
• Promote Mobile Acceptance as the key driver of
wallet utilization.
• Introduce digital community solutions.
• Introduce new financial use cases.
• Launch the e-Wallet platform, after regulatory
approval.
• Introduce new financial use cases over the e-Wallet
platform such as savings, group savings, lending,
and micro insurance after regulatory approval.
GTB Business Development
The GTB Business Development team provides the
most comprehensive GTB solutions that best cater to
corporate customers’ daily banking needs, providing
best-in-class financial solutions and consulting, and
acting as the main stakeholder in developing corpo-
rate business needs throughout multiple tasks such as:
• Increasing CIB’s market share for corporate
digital solutions.
• Conducting comprehensive plans for creating
bundled products and offers to all corporate
customers, offering best-in-class products
and pricing to encourage those customers to
increase their total deposits and collections in
terms of cash inflows.
• Providing comprehensive ERP integration solu-
tions to attract multinationals and meet their
sophisticated needs.
2020 Highlights
• Positioning CIB as 1st ranked in the electronic
governmental and domestic payments over
ACH platforms across all operating banks in the
Egyptian market.
• Enabling different LOBs to exceed most of their
GTB KPIs for all corporate digital products.
• Working on comprehensive GTB bundled pricing
solutions and attracting new business opportu-
nities such as deposits, trade contingents, assets,
digital migration rates, and increased NII.
2021 Forward-looking Strategy
In terms of product and pricing bundling, we plan to
apply multiple product pricing bundles to attract new
corporate segments as well as industry segmentation to
provide competitive pricing that best suit the industry.
We plan to improve collaboration with relationship
managers and enhance our digital campaigns. We
will launch internal and external communication
campaigns through multiple channels in coopera-
tion with the digital marketing team, including:
• Branch and RMs communications
• Flyers, banners, and radio campaigns
• Social media, CIB Chatbot, website, and multi-
media campaigns
• Preparing comprehensive user guides for all
GTB products
• Staff Sales Performance Rewarding programs
Cash Management Digital Products
CIB provides an agile and digitized suite of prod-
ucts, channels, and technology infrastructure that
continuously adapts and responds to changing
customer needs, while improving their access to
working capital and cash flow, enhancing sales
collection, digitizing the payables management
process, and improving operational efficiency.
digital channels, as well as the payment infrastruc-
ture, by improving speed and agility through the
initiation and phase deployment of the payment
hub and API Gateway, improving after sales solution
delivery, and accelerating process automation.
2020 Highlights
2020 saw a notable increase in transactions, gener-
ating significant synergies for cash management,
which increased by 39% y-o-y as of December 2020 to
reach EGP 667 million.
Other key highlights include:
• First bank in the market to acquire the IPN
(Instant Payment Network)
certification,
which is a new payment network with instant
capability to send and receive money between
banks using an enhanced experience, with the
ability to transact between different account
types such as bank accounts, Meeza cards, and
Meeza digital wallets using mobile applications,
allowing customers to access their accounts
in different banks through the desired mobile
application provided by banks or Payment
Service Providers (PSPs).
• A 45% y-o-y increase in the customer base to
reach 17,300 corporate customers.
• Migration rate of 87% for all outgoing transfers.
• Migration rate of 60% for all internal transfers.
• A 28% y-o-y increase in the number of cash
management product transactions to reach 3.7
million, worth EGP 327.5 billion.
• A 93% y-o-y increase in the corporate Internet
banking number of transactions.
• International remittances witnessed significant
improvements on a y-o-y basis, as the number
of transactions increased by 136% to reach
173,000, value of transactions increased by 116%
to reach EGP 2 billion, and total foreign currency
increased by 183% to reach USD 170 million.
• Microfinance institutions digitalization process:
digitalizing the core MFIs functions. Loan
disbursements and installments collections are
operated digitally using our digital solutions and
customers’ accounts, cards, and wallets.
2021 Forward-looking Strategy
In 2021, CIB intends to focus on building and
enhancing the capabilities of current products and
Below are some of key areas of focus in 2021:
• Continuous focus on customer and transac-
tion migration rate to further strengthen our
digital transformation.
• Implement key GTB and digital banking strategic
initiatives: New CIB Business Online, Payment
Hub, API Gateway, Robotics/RPA.
• Intelligent process review and automation for
key manual processes.
• Accelerate customer ERP Integration.
• Scale Supply Chain Finance Sales and Cross Sell
Operating Model
Trade Finance Management Digital
Products
Trade Finance Online is CIB’s market-leading online
trade channel, offering corporate customers the
ability to conduct and manage their trade finance
transactions online. The channel provides customers
transparent and clear information about their trans-
actions, while eliminating paperwork and saving
them time and money.
2020 Highlights
• Re-engineering and enhancing online trans-
actions processes to accelerate the delivery
process and increase customer satisfaction,
through participating in the revamp of the
trade finance core system. The revamp aims to
improve the speed of transaction processing
and reduce processing TAT.
• Re-engineering trade finance process workflow
for Mayfair Bank, recently acquired by CIB.
• Creating a Trade Finance MT101 end-to-
end cycle to be presented to our prime
corporate customers. The new service enables
our customers to send matured incoming docu-
mentary for collection payment instructions
through the SWIFT system, which reduces the
consumed time and provides a fast and secure
channel for sending the payment instructions.
• Total trade finance online fees for deals gener-
ated online reached EGP 112 million.
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Our Businesses // Digital Banking
• A 65% y-o-y increase in the customer base to
• Number of suppliers digitally enrolled in the SCF
3,700 corporate customers.
program reached 13.
• A 23 % y-o-y increase in the number of transac-
tions to 26,000.
• A 75% y-o-y increase in synergies to reach EGP
18 million.
2021 Forward-Looking Strategy
• The Trade Finance Management team will work
on implementation of the trade finance transfor-
mation program in cooperation with Operations
and IT. This program is designed to:
- Significantly improve the customer experience.
- Position CIB as the preferred trade service
bank in Egypt.
- Improve transaction processing TAT lever-
aging automation and new technologies.
- Significantly reduce manual intervention and
increases cost synergy.
2021 Forward-Looking Strategy
• Introduce more SCF programs, techniques, and
workflows to be compatible with different types
of credit approvals.
• Expand the NTB customer base.
Governmental Payment Digital Products
Considering CIB’s continued support of the govern-
ment’s efforts to automate governmental payment, we
maintain an outstanding partnership with E-Finance
Company. The company develops and operates govern-
mental e-payment platforms and channels to enable
customs, tax, and other government authorities to
receive and collect payments through the E-Pay portal
and Corporate Payment Services (CPS) platform, which
greatly improves the customer experience.
- Trade Revenue Assurance: Automation for
commissions and charges collection.
2020 Highlights
Supply Chain Finance
Supply Chain Finance is an effective way for compa-
nies to improve their working capital position, drive
EBITDA improvement and strengthen supplier rela-
tionships. The key concept behind SCF is to provide
suppliers with access to advantageous financing
facilities by leveraging the buyer’s stronger credit
rating. It provides short-term credit, which can opti-
mize cash flow by allowing buyers to lengthen their
payment terms whilst providing suppliers with the
option to receive payments earlier.
2020 Highlights
• Launched the electronic supply chain finance
(e-SCF) module of CIB Business Online.
• Enhanced SCF’s TAT on both the Bank and
customer sides by revisiting the end-to-end
process, enabling STP
through
processing) for invoice eligibility, and enabling
new extensions in order to facilitate the process
for accepting uploading bulk documents.
(straight
• Total discounted invoices reached 950, amounting
to EGP 69 million.
• CIB is ranked 1st in the Egyptian market in
governmental e-payment transactions over the
corporate payment services (CPS) portal for the
last seven months, with transactions worth EGP
15.2 billion in 2020, at a market share of 26%.
• A 102% y-o-y increase in the CPS customer base
to reach 1,700 corporate customers.
• A 70% y-o-y increase in the number of CPS trans-
actions to reach 59,000 transactions amounting
to EGP 15.2 billion.
• A 39% y-o-y increase in synergies to EGP 5.2 million.
2021 Forward-Looking Strategy
• A key objective for 2021 is to ease the burden of
government payment on the CIB branches by
enrolling corporate customers to the digital plat-
form (CPS) in order to decrease the high traffic on
branches related to processing such payments,
and to meet the Bank’s overall strategy.
Global Securities Services
The Global Securities Services division is respon-
sible for marketing and developing the custody
services and enhancing CIB market share. Targeted
customers include institutions and high-net-worth
individuals. Services are diversified among different
investment instruments, such as equities, treasury
bonds, treasury bills, securitization, global deposit
receipts, and eurobonds.
2020 Highlights
• GSS successfully attracted new portfolios
amounting to EGP 11 billion.
• Fixed income instruments hiked 18% y-o-y to
EGP 222 billion.
• CIB maintained its leading position as No. 1
custodian in the local market, garnering 26%
market share among all the 54 local custodians.
• CIB Custody is ranked 1st in the Egyptian market
in number of securitization SPVs launched in
2020, with a total of eight SPVs amounting to
EGP 33 billion.
• Enabled the consumer segment to launch lending
against securities service treasury bills. Investors
can now lend up to 80% of their portfolio against
the outstanding treasury bill balance.
2021 Forward-Looking Strategy
• Investing in technology through enhancing
and upgrading the current custody core system
to support performing new use cases such as
applying STP for the new depository powered
by the regulator to handle the fixed income
investments (treasury bills and bonds), as well
as enhance billing features.
• Automating securitization operation processes
by supporting the operations team in imple-
menting a new securitization system,
in
correlation with the business growth in such
industry, and to absorb the large volume of
transactions related to different SPVs.
• Setting the roadmap to launch a margin
some
lending product, which
enhancements with the central depository to
mitigate the business risk.
required
Digital Banking Governance and Support
The digital banking governance and support team
is dedicated to manage collaboration among digital
channels teams, the Bank’s internal stakeholders, the
regulator, and other external stakeholders.
2020 Highlights
In 2020, and in light of the COVID-19 pandemic, the
digital governance team played an orchestrated vital
role in governing and coordinating the processes and
tasks for all digital channels teams. The regulator at that
time issued numerous instructions and regulations for
almost all our digital products, which the team handled
with the digital channel owners, along with the Bank’s
internal stakeholders, to guarantee the full alignment
among all engaged parties.
The team also closely monitored all digital channels
KPIs and deliverables, in order to evaluate the overall
performance, highlighting the slow momentum in
some KPIs, to take corrective action.
2021 Forward-Looking Strategy
• The digital banking governance and support
team will continue to diligently ensure compli-
ance across the Bank’s digital channels, challenge
stakeholders to adopt new technologies while
ensuring that digital products, strategies, and
financial inclusion efforts comply with regulatory
guidelines as they are updated. In all interactions,
the team will encourage stakeholders to increase
their digital appetite.
• In light of the government and CBE’s financial
inclusion efforts, we will continue to monitor the
recently passed Egyptian Banking Law, along with
the frequent regulations issued by the CBE related
to digital products and financial inclusion.
• Establish a data hub to consolidate all digital
channel data in order to generate periodic,
comprehensive dashboards and analytical
reports, and closely monitor digital channels’
KPIs and deliverables.
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04
Support
Functions
3
Divisions form the
Bank’s support base:
Operations and IT, HR,
and Marketing
96 |
Annual Report 2020
CIB’s
SUPPORT
FUNCTIONS
form the backbone of the organization,
ensuring that the Bank runs with
efficiency and ease.
0104040404 Support Functions
Operations and IT
What separates CIB from other banks is its
unmatched customer experience. The success of
its customer-centric approach is due to the effi-
ciency of its internal processes, across operations
and information technology (IT) areas. Managed
through the COO Area, the operations and IT func-
tions within the Bank work together to incorporate
technological advancements and artificial intelli-
gence across the Bank’s functions, with special focus
on the customer journey, which is an integral part of
all our processes. This is in addition to ensuring that
the Bank meet its growth targets.
The Operations Group, along with the Information
Technology division, remain the main enablers
of the Bank’s strategic vision. The Group’s objec-
tive is to offer our customers the highest level of
service quality, which relies on the continuous
enhancement of the Bank’s operational efficiency,
automation, and process redesign, with an overall
aim to optimize service costs and ameliorate our
customer satisfaction.
2020 Highlights
2020 challenged the COO area on several different
fronts, owing to the COVID-19 pandemic, which
has changed the way we view the world. Equipped
with the task to ensure our employees’ safety, CIB
managed to secure all pandemic supplies despite
scarcity and made sure to conduct protocol and PCR
tests for any and all infected staff members as well
as ensure they had access to proper medical care.
We also closely monitored all infected employees,
reaching a recovery rate of more than 80%.
Digital adoption was key during this time, with
the division employing digital channels and expe-
diting digital migration, initiation of projects, and
onboarding new digital initiatives. A strong busi-
ness continuity plan was set in place to streamline
work across the Bank’s different areas and facilitate
a remote working environment for most back-office
staff. During the pandemic, we continued to main-
tain high responsiveness to customer complaints,
especially with relation to regulatory changes that
were implemented at the time, to ensure a smooth
customer experience and optimum service.
To cope with the changes imposed by the pandemic,
an initial work from home program was launched to
maintain business continuity during the pandemic
and ensure staff safety. Thereafter, CIB introduced
the Flex Program, CIB’s flexible work from home
structure. This presented us with an opportunity to
alter our current business model and streamline our
workplace infrastructure.
The pandemic also accelerated the expansion of RPA
tools to automate some processes and eliminate
manual procedures, a strategic task that will help us
serve 3.5 million customers by 2025. The pilot stage
was first initiated in the IT Operations department
and will be rolled out across other operating units.
Despite the imposition of restrictions, we continued
to expand our ATM network to 1,121 ATMs. We also
increased our branch network to 208 branches
during the year. The reduction in staff on prem-
ises allowed us to renovate our headquarters and
complete other projects, including the New Capital
project and Core and Shell.
COVID-19
led to challenges in some projects.
However, this afforded us the opportunity to review
our project pipeline, reprioritize projects to serve the
digital front, and deliver projects at an accelerated
pace. This also enabled us to make optimum use of
our resources across different projects and improved
the timeline for product rollout to the market.
Stage 2 of the T24 program was concluded in April
2020, and the final stage is currently in progress.
208
branches
Stage 3 has two main technical tracks: 1) the migra-
tion of our applications to Java Technology as well as
another release upgrade from R18 to T24 R20 and 2)
addressing a number of module implementation and
back-to-core scope items that replace old customiza-
tion. Different activities were conducted to maintain
CIB’s competitiveness in the market in areas such as
the Contact Center, where a chatbot was integrated
with WhatsApp Business to cater to customers’
general inquiries and inform them of any CBE policy
changes. Current online platforms (CR2 and FCC)
were strengthened to provide features that maintain
CIB’s competitiveness in the market, while working
on building new platforms and solutions to enhance
the Bank’s digital environment and offering. All these
activities aim to offload front liners and ensure a safe
banking environment for our customers.
Information Technology
As a consequence of COVID-19, the industry had
to adapt to changes in customer behavior, which
demanded an increase in digital channels, and regu-
latory changes imposed by the government and CBE.
The Bank dealt with these changes with ease and
flexibility, while keeping security and safety tight,
particularly when it came to our human capital.
Almost 90% of the IT team worked from home,
which had no impact on workflow. Most of the
IT department’s projects were not impacted by
COVID-19 and are running according to schedule.
The main delay resulted from the immobilization
of resources due to travel constraints imposed
around the world. Major projects were rolled out,
including LO across branches, IBAN Phase I, and
the VDI Phase I rollout for the call center and select
corporate banking users, which was completed
in July 2020. The project was closed and rollout
for any additional departments will be managed
either as a BAU or through the CIB Flex program
to ensure the project aligns with business needs.
As a result of the pandemic, CBE mandated several
changes that required immediate implementation to
support Egyptian citizens. All these required changes
and mandates were successfully managed and imple-
mented through the Bank’s IT systems, from the Core
Banking and Credit System for loans and due post-
ponement to debit card, ATM, and POS daily limits,
charges, and fees.
From the regulatory side, CIB’s IT team responded
to the CBE’s required regulatory changes with the
needed flexibility and accuracy, ensuring minimal
impact on customer service and leading to maximum
use of the department’s automation capabilities.
In 2020, CIB became the first organization in
North and West Africa to receive the Management
and Operation Stamp and Certification from
Uptime Institute, a leading global data center
certification group, thanks to the efforts of the CIB
Infrastructure team.
The Data Center team modernized the Monitoring
and Control Software to Data Center Infrastructure
Management (DCIM) and Building Management
System (BMS). The new solution simplifies the
operational processes, optimizes the monitoring and
alerting capabilities, and gives insightful dashboards
that reflect data center capacity and overall health.
Digitalization and Straight Through Processing
(STP) were essential not only for the customer
experience, but also to offload banking opera-
tions. Consequently, several improvements were
implemented to equip STP for domestic transfers,
which increased fourfold daily. Additional services
were added to internet banking to offload branches:
account opening, CD/TD booking, credit card
requests, loan requests, and mobile wallet subscrip-
tion. The KYC service was also introduced but is
pending CBE approval before rollout to customers.
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Support Functions // Operations and IT
The IT department also managed to deliver other
key projects for CIB’s Compliance and Cards units.
For the Compliance unit, the department managed
to deliver the Risk Score Card and Smart Wallet
Transaction Screening projects. For the Cards unit,
IT successfully enhanced the system and front-end
tool used by payroll corporates to include and
process the additional information needed and
mandated by the CBE. This enabled the business to
resume prepaid payroll cards issuance. The prepaid
card portfolio was migrated from the current
application that has limited flexibility to in terms
of a dedicated card management system with rich
configuration items that support the card business
strategy when it comes to expanding prepaid and
Meeza card portfolio.
Operations
To accommodate the growth of the business over the
coming years and in light of the ongoing global push
toward automation and digital technologies, CIB has
set out a digital transformation strategy to improve
operational efficiency and meet customer needs.
We launched an extensive process re-engineering
program covering various departments and units.
The main objective was to simplify and streamline
processes as well as enhance digitalization for a
better customer experience through reducing TAT
and increase the efficiency and productivity of the
front office and backend operations. Accordingly,
one of the most important approaches will be
to modernize our processes by expanding tech-
nology capabilities and increasing opportunities
for customer self-service. Through the self-service
option, the customer will be able to send in a
request through the various alternative channels, in
turn initiating a STP while being able to track the
request throughout its entire life cycle.
Customer Experience continues to be a cornerstone
with most of the KPIs achieved despite the reduction
of manpower. Our focus continues to be on main-
taining the optimum availability of digital channels
to support off-loading front liners and shift customer
transactions to digital channels.
Different teams within the operations department
worked diligently throughout the year to opti-
mize efficiency and productivity and absorb the
increase in customer transactions while ensuring
a high service level.
Security and Resilience Management
With the rapid spread of COVID-19 across the globe,
CIB’s efforts in terms of security and resilience
management were directed toward continuity, resil-
ience, and crisis management to effectively manage
the situation with minimal impact on our services
and operations, while safeguarding the health and
safety of our employees and customers.
Before the pandemic hit Egypt, CIB was closely
monitoring the situation to ensure containment of a
potential outbreak in the country. A gap assessment
was conducted from a continuity and resilience
perspective to ensure our strategies and plans are
comprehensively addressing all the dynamics of the
situation as it evolves.
When all triggers and signs pointed towards a
partial or full lockdown, a work from home (WFH)
strategy was put in place to ensure activities
would be carried out smoothly in either scenario.
In addition, upgrades to existing technology
and an increase in resources were initiated to
facilitate WFH plans, such as availing laptops,
increasing network bandwidth, and upgrading to
collaboration tools.
After the successful covering of ACH, inward and
outward remittances, remittances can now be
executed through IBAN and online channels.
Another win for the department was the successful
completion of the first surveillance audit of the ISO
9001/2015 Quality Management of the Real Estate
and Premises Projects.
At the onset of the first cases in Egypt, CIB proactively
began enforcing health and safety practices by admit-
ting fewer customers into branches and preemptively
enforcing the use of facemasks in all premises.
Moreover, sanitizers were made available in all branches
and headquarters, social distancing was enforced by
reducing the workforce, and sterilization and deep
cleaning routines were regularly implemented.
governance framework as part of the CIB’s exten-
sive efforts to prevent confidentiality breaches and
data leakages. It allows the Bank to avoid financial
losses and legal implications resulting from security
breaches and helps us comply with data protection
regulations and best practices.
With the rapid
spread of COVID-19
across the globe,
CIB’s efforts in terms
of security and
resilience
management were
directed toward
continuity,
resilience, and
crisis management.
The pandemic did not prevent the Bank from
executing its security and resilience management
strategy. It highlights: 1) organizational resilience
as an important strategic pillar, focusing on aspects
of visibility reporting and coping with unforeseen of
risks, 2) promoting security as an asset that supports
the Bank’s plans to expand its digital footprint and
reach untapped segments to support financial inclu-
sion, and 3) building trust by maintaining compliance
with regulations, standards and best practices as the
Bank proceeds with its expansion plans in Africa.
Within this framework and in alignment with its
digital transformation strategy, the Bank successfully
finalized one of the key strategic security programs,
the identity access management and privileged
access management program, which manages the
identity of users and the privileged identities of IT
administrators along with their access to systems
and applications across the Bank. The program
also provides a unified customer experience and
an advanced authentication process that protects
customers’ identities against theft. The program
benefited CIB in many ways, including but not
limited to improved compliance, increased security,
productivity gains, and operational cost reduction.
CIB obtained the ISO 27001 certification
for
Information Security Management System covering
alternative channels and digital services, contact
centers, and data centers. The certification highlights
the Bank’s commitment to adopting international
best practices for information security and ensuring
integrity, confidentiality, availability, and
data
customer assets safety. The Bank also maintained
its Payment Card Industry – Data Security Standard
(PCI-DSS) certification and renewed its Business
Continuity Management ISO 22301 certification for
the third year running, upgrading its certification to
the 2019 version and making it one of the very first
financial institutions in Egypt to comply with the
new version of the standards.
In alignment with the Bank’s efforts to secure our
customers’ data and ensure privacy and protec-
tion controls are in place, a comprehensive Data
Classification and Protection program was initiated
as one of the key strategic initiatives. The program
information
established a data protection and
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Support Functions
Human Resources
The cornerstone of our success lies in our people. To
maintain this success, we continue to develop and
invest in our workforce as well as actively seek to find
the right caliber to take our business forward. At the
same time, we help match our talent with the right
opportunities and help pave their career path. In line
with the technological advancements happening
within the global Human Resources (HR) field, CIB
is shifting its HR focus toward the adoption of digital
tools and solutions. Meanwhile, CIB will continue
to build on the existing analytics arm in the HR
department to propose continuous enhancements
related to reshaping the hiring strategy for the future
workforce, reviewing the retention tools used, and
building strategic workforce planning to deal with
the digital future.
2020 Highlights
Talent Acquisition and Career Mobility
Due to the COVID-19 pandemic, CIB became the first
bank to digitize its hiring experience. All entrance
assessments and interviews were conducted digi-
tally and internal promotions and internal hiring
processes were digitalized. This virtual approach will
continue to take place in 2021 to maintain CIB’s title
as an “Employer of Choice”.
employment
Despite the global pandemic, CIB hired 1,013 new
employees, encouraged the internal mobility of 1,278
employees and promoted 609 employees for better
exposure and enhanced career progression. While a
major part of our headhunting process is conducted
social-distancing
through
measures forced some organizers to turn to digital;
in 2020, CIB participated in five employment fairs
across different universities, two of which were
conducted online. It was a great experience engaging
with interested students virtually in lieu of sending
recruiters to campuses, an approach which has
transformed from optional to being a necessity.
fairs,
We continued to conduct HR initiatives despite the
pandemic. In 2020, we held three virtual sessions for
the Tawarny initiative, which began in 2018 to help
university students practice mock HR interviews
and provide them with tips to enter the workforce.
Fortunately, we were able to maintain our connection
with Egyptian youth and continue to qualify candi-
dates to drive the country’s development and growth.
The “Ma7atetna 3andak” initiative, which helps facili-
tate the recruitment process across different areas in
Egypt, expanded its outreach in 2020 to include
differently abled candidates. The session targeting the
differently abled took place in Alexandria, with eight
candidates attending, four of which were hired. Another
session took place in Tanta, attended by 24 candidates,
six of whom were hired.
Business Enablement and Skills Development
In 2020, CIB continued to administer specialized
training programs to cater to employees’ needs and
enable them to achieve their objectives. A series of
specialized development tracks were catered for
each segment of the business, most of which came
with
international certifications such as those
for our Wealth, Plus, Private, Business Banking,
Branch Managers, Payroll, Retail Banking, and SMEs
segments. Other learning tracks included programs
in Audit, Trade Finance, Corporate Services,
Communications, Strategic Planning, Information
Security, IT, and Risk. Over 500 employees were
registered in the programs collectively, and received
international certifications. The programs were
conducted through digital platforms.
Nevertheless, several strategic programs were
conducted in 2020 to meet business aspirations,
including, but not limited to the following:
• Analyst Program: The program provided 43
analysts with more than 150 virtual training
hours, more than five mock cases, over 15 virtual
assessments, and various coaching sessions with
the aim of advancing their technical skills.
• SME Academy: A tailored program to qualify
competent calibers that would support the bank
in attaining its SME strategy. HR conducted two
rounds composed of 51 employees and provided
them with more than 400 virtual training hours,
40 assessments, and over 12 role plays and
engaging activities.
• Induction Program: This is designed for new
hires. The Induction Program was split into two
tracks: one for CIB employees and the other for
new Contact Center agents. In total, 404 new
hires and 110 new agents were provided with a
series of e-learning sessions, virtual trainings,
and multiple assessments.
• Leadership Program: To tackle the pandemic
circumstances, a new training program was
introduced called Leading with Agility
in
Turbulent Times to train middle managers on
how to lead employees during challenging times.
The program was moderated by one of the top
professors from IMD business school.
Finally, HR developed
specialized Customer
Experience training bites targeting outsourced
employees to equip them with the right skills to ulti-
mately improve the customer journey.
Learning External Empowerment Initiatives
HR has always keenly supported
the bank’s
strategy of achieving its core pillars in regards to
the social commitment and society development.
Consequently, the department resumed undergrad-
uate summer training programs. Those programs
were successfully delivered virtually to undergradu-
ates from public and private universities.
Following the Bank’s strategy to expand into Africa,
the HR department expanded its outreach of the
Analyst Program to include a group of 21 select
African delegates. The induction took place in
Uganda, while the Analyst program took place online.
At the same time, the HR department provided
support and learning solutions to employees at the
newly acquired Mayfair CIB Bank Limited, exposing
them to various development opportunities.
Digital Learning
To comply with social distancing measures, all
programs were offered digitally through various
platforms such as e-learning modules and virtual
training programs for various departments across
the organization. A set of unconventional online
training programs, offered by international vendors,
were also availed to all employees to provide them
with constant development and enhance their tech-
nical skills and abilities.
Since educational videos have become an important
and effective content delivery tool to better dissemi-
nate and unify information, HR developed a series of
educational videos for several departments to raise
awareness related to business topics such as finan-
cial inclusion, trade finance, and commercial papers.
Employee Engagement and Enablement
During 2020, CIB continued to build a robust
engagement strategy to enhance employees’ level of
enablement and encourage employees’ sustainable
engagement through the following initiatives:
• Recognition Program Event: CIB witnessed
the successful launch of the first recognition
program event that was attended by over 1,000
top-performing employees, where winners
were chosen based on how they exemplified the
Bank’s core values, provided excellent service
levels, and played a role to achieve its 2019 goals.
• HR Help Desk (Ask HR): CIB founded the HR
Help Desk team to become the sole point of
contact with employees and to make sure all
HR related inquiries are answered in a timely
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Support Functions // Human Resources
1,013
new hires during 2020
and efficient manner. During the pandemic, the
HR Help Desk team played a crucial role in the
crisis management plan. The team acted as a
focal point for all employees who suffered from
symptoms or tested positive. The HR Help Desk
received a total of 18,700 calls until the fourth
quarter of 2020. The team will continue to play
an engaging role in communication between the
HR department and employees while supporting
the COVID-19 crisis management action plan.
• CIB Flex: CIB introduced the Flexible Work
Arrangement (FWA) Program based on the
Bank’s strategic direction to adopt a more
flexible workplace and adapt to the digital trans-
formation era. The pilot phase was launched
in August 2020 and two batches with a total of
378 employees were rolled out. The aim of the
program is to ensure a safe work environment
for employees, enhance the level of satisfaction,
engagement,
loyalty and commitment, and
promote gender equality.
• Employee Wellness Program: The Employee
Wellness Program seeks to support CIB’s
employees in terms of helping them manage
their stress levels, improve their productivity,
and boost their mental health.
• Employee Onboarding: CIB is working on
enhancing the onboarding experience for new
hires to maintain its position as an employer
of choice.
Gender Equality Initiatives
At CIB, we are strongly committed to equality, inclu-
sion, and diversity. To warrant our legacy as an
“Employer of Choice”, we create an inclusive culture
to promote equal opportunities and ensure that our
employees are treated with dignity and respect. We
are currently particularly focused on our gender
equality initiatives: “Helmik Yehmena”, She is Back,
and Women Empowerment.
“Helmik Yehmena”
In 2020, CIB launched the “Helmik Yehmena” initia-
tive aiming to support women to join the workforce
in certain areas where they are underrepresented.
The initiative helps women using short training
programs that began in South Valley University in
Qena. To date, we have reached out to 200 women in
Upper Egypt, 35 women attended in Port Said, and
we hope to expand the program across Egypt.
She is Back
She is Back helps mothers in their transition back
to work from maternity leave. Women are informed
of any external or internal changes that affect both
the Bank and their own respective roles during their
absence. In 2020, two rounds were organized for 95
women, one of which was an online session.
Women’s Empowerment
Women’s empowerment was one of the main objec-
tives of the newly introduced FWA program which
gives mothers with infant children the opportunity to
work from home before applying for an unpaid leave.
This promotes gender equality through a higher
percentage of women’s representation throughout
different levels in the organization.
Reward Management
The Bank’s remuneration philosophy revolves around
the recognition and the reward of exceptional perfor-
mance. It reflects our commitment to attract, retain,
and motivate employees to support the achievement
of the organization’s business objectives. In 2020, CIB
developed its variable pay program, which links each
department’s performance to how it contributes to
the organization’s overall performance in achieving
the Bank’s financial and non-financial objectives. This
mechanism ensures transparency, reward appropria-
tion, and fair compensation within the organization.
Our remuneration is assessed on a yearly basis taking
into consideration market fluctuations and external
market developments.
We further strengthened our value proposition
to enhance employees’ enablement and satisfac-
tion through introducing non-cash benefits that
include travel and housing benefits, as well as
other benefits in collaboration with the social
services community.
200
Women in Upper Egypt benefited from
CIB’s “Helmik Yehemena” initiative
Employee Age Breakdown
Gen Y
Gen X
Boomers
75%
22%
2%
Employee Gender Breakdown
Male
Female
70%
30%
At CIB, we
are strongly
committed to
equality,
inclusion,
and diversity.
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Support Functions
Marketing and Corporate
Communications
30%
increase in traffic to CIB’s website
in 2020
Marketing is constantly evolving, moving from mass
to direct to digital marketing, and now to data-driven
marketing. CIB’s marketing strategies and resources
have kept pace with these changes while adapting to
external factors, the Bank’s objectives, and consumer
behavior. Consumers use more devices, are more
privacy-aware, and have increasingly sophisticated
customer-experience expectations. CIB’s forward-
looking approach to marketing and communications
has kept us aligned with these trends, setting CIB
apart from other banks. CIB owns the complete
marketing funnel. The Marketing and Corporate
Communications division includes 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. CIB’s marketing
campaigns focus on value propositions rather than
on competitive pricing or other simple appeals.
2020 Highlights
In the last nine months of 2020, we have likely expe-
rienced 10 years’ worth of change. In that same brief
span, we’ve seen businesses embrace digital transfor-
mation and thrive. In CIB, we are no different and our
customers and prospects embraced Digital Banking
more than ever.
The biggest shift in today’s marketing is in how
consumers research and buy products. The Internet
is a major contributor to this shift, as is the recent
and persistent COVID-19 pandemic and economic
uncertainty. In categories as diverse as electronics,
financial services, and health care, consumers
increasingly
ignore push marketing, preferring
instead to use the Internet to research products and
decide which ones to buy.
That said, the core challenge in business and marketing
remains the same: deciding on the investments and
steps needed to get your business ready to take action
on your product, channel, or consumer strategy.
Challenges and Responses
The first quarter kicked off with various seasonal
offers, partnerships, promotions and campaigns,
while playing catch-up with the rest of world’s expo-
sure to COVID-19. Once the pandemic hit close to
home, communication became key. We had to put
aside our preplanned marketing calendar, pivot,
and stand by CIB values like never before. It was an
opportunity to project trust by being transparent
about how the pandemic was impacting us, while
providing guidance to customers on how to bank
safely during these trying times.
The division prioritized communication of CBE regu-
latory changes, digital migration, general awareness
for banking safely, while deprioritizing campaigns
that would drive traffic to our branches or drive
behavior inverse to social distancing. The marketing
calendar was revisited on a weekly basis to accom-
modate for the changes in consumer behavior due
to the impact of the pandemic. We launched a Bank
Safely page, dedicated to the latest news regarding
the pandemic, with a mixture of regulatory updates,
branch network working hours and temporary
closures due to sanitation processes and an abun-
dance of caution, and infection and recovery rates
among our staff. Even Zaki, our chatbot, still wears
a facemask to promote precautionary measures. Our
branch network admitted fewer customers, all of
whom must be wearing masks, and our advertising
real estate were riddled with messages promoting
banking safely, our digital channels, and social
distancing. Like the rest of the world, we were also
working from home, so we needed to ensure that the
teams were able to launch all campaigns remotely.
During 4Q2020, we began migrating some services
from branches to exclusively digital channels; by the
end of the year, a total of 37 services will be discon-
tinued from branches.
Successful 2020 initiatives
HNW Experiences Platform
CIB takes pride in the fact that we are a ‘premium’ bank;
we do not instigate price wars and consciously play no
part in them. In an increasingly competitive industry,
it is becoming imperative to design experiences that
would allow us to retain and grow our high-net-worth
(HNW) customer portfolio, create loyalty and drive
brand advocacy. We work to craft experiences that
customers will cherish and appreciate, going beyond
banking and tailoring to customers’ lifestyles.
CIB’s HNW Experiences Platform is a marketing
platform built around strategic partnerships with
niche brands and venues catered around the lifestyle
of each segment’s demographics. Experiences range
from gifts, exclusive offers and discounts, outings,
sports, health, shopping, entertainment, and spon-
sorships. We had planned to launch the platform for
our Plus, Wealth, and Private consumer segments
in 2020, but strategies had to be realigned once the
pandemic hit due to the nature of the experiences.
As it stands, all HNW perks and experiences were
resumed with caution and close monitoring of
the ongoing regulatory changes due to COVID-19.
Nonetheless, CIB held true to its pre-COVID commit-
ments while renegotiating discounts or contract
extensions on a case by case basis to ensure conti-
nuity of the platform during these trying times when
our partners’ cashflow was at risk.
Personalization and Marketing Automation
(Monthly Offers)
Due to the exceptional circumstances, CIB’s
monthly offers focused more on retailers that
offered e-commerce options. CIB partnered with
some of the biggest names in the Egyptian market
such as Tradeline, Souq, Carrefour, and Noon, to
name a few, offering our cardholders exclusive
discounts, installment plans, and other promotions
— positioning CIB cards in the market as the go-to
cards for safe banking. Our Bonus loyalty program’s
redemption process has become fully digital and
instant. QR Code Payment acceptance was also
launched, providing a convenient and seam-
less experience for both merchants and eWallet
customers, reducing the use of cash.
We also made large strides in automating and person-
alizing some Customer Relationship Management
messages such as Segment Welcome emails tailored
to the needs of each of our consumer segments,
follow-up emails for non-customers, and personal-
ized Bonus emails, to name a few. We will continue
to look for more opportunities to automate, simplify,
and personalize communications to build loyalty,
pushing customers towards the conversion end of
the funnel and simplifying operational marketing.
Content Marketing, Always On and Online Lead
Generation
CIB is considered the best and most consistent bank
in terms of social media interactions and second
highest ranked for video views due in part to the
Always On program launched in 2019. The program
helped us generate EGP 9 million in loan bookings
and 40 card bookings digitally for the first time,
drove an additional 30% of traffic to our website,
and pushed our monthly run rate for online banking
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Support Functions // Marketing and Corporate Communications
During the pandemic, the
Corporate Communications
team steadily expanded its
local media relationships,
focusing on online platforms
and adding new journals
and websites.
registrations by 35%. We continued this momentum
throughout 2020, especially throughout the worst
times of the pandemic, while heavily investing in the
search for online lead generation and display adver-
tising to raise awareness of our digital channels.
On the CIB website, traffic on the ‘Ways to Bank’
section has increased almost 3x since the beginning of
year compared to last year. Apply Online lead genera-
tion for loans grew 22% y-o-y and cards 140% y-o-y as
of October 2020. Even our blog is doing consistently
well, with traffic up 247% y-o-y as of October 2020.
stakeholders in optimizing UX and UI for our digital
channels, leading the design process for our new
public website, online banking, and ATM channels.
These are planned to launch in 2020 and early 2021
under our Reliable Banking Everywhere initiative,
where we worked to design digital channels with
personalization and conversion in mind, similar to
walking into a branch.
Branding and Corporate Communications
During 2020, CIB received a number international
awards that demonstrate its excellence across
different business lines, cementing its position as
a leading financial services provider in Egypt and
Africa. Global Finance named CIB the 2020 World’s
Best Bank in Emerging Markets for our excel-
lence in innovation, our digitization and financial
inclusion efforts, and serving retail and corporate
clients despite all the challenges. The Corporate
Communications team worked extensively on a
360-degree brand campaign promoting the award.
This is CIB’s third title in four years after winning
it from Global Finance in 2018 and Euromoney in
2017. CIB ranked 28th on Forbes Middle East’s Top
100 Listed Companies in the Arab World, ranked
highest of the four Egyptian companies on the
Top 200 Banks list by Jeune Afrique, Top Banks by
African Business, and Top 10 Safest Banks in Africa
by Global Finance. It is the only Egyptian institu-
tion to be included among the 325 companies in
Bloomberg’s Gender Equality Index. For a full list of
accolades garnered during the year, please refer to
the Awards section of this report.
Our social media following has also grown
significantly; Facebook followers climbed 14%,
Instagram 63%, LinkedIn 86%, and YouTube
65% compared to last year due to consumers’
increased appetite for digital, as well we our
focused communications on Digital Migration
and Applying Online digital channels. For the first
time, on LinkedIn we extended our value proposi-
tion for small businesses to include professional
services beyond traditional financial products
and services. We launched the #GrowTogether
miniseries, on which we hosted the CEOs of our
professional services providers in live webinars to
serve small businesses with advice and best prac-
tices from each provider’s area of expertise.
UX Design – Launching CIB’s Digital Channels
On the UX design front, the team has supported all
increasing
During the COVID-19 pandemic the Corporate
Communications team steadily expanded its local
media relationships,
its exposure by
focusing on online platforms and adding new journals
and websites. The team successfully increased the
Bank’s media presence, releasing more than 44 news
releases to spread awareness and knowledge and
promoting its products through marketing campaigns,
with 654 digital and print advertisements.
The Corporate Communications team secured inter-
views for senior management with the world’s most
prominent publications, such as Global Finance,
Euromoney, and Financial Times. CIB’s former
Chairman Hisham Ezz Al-Arab gave insight on CIB’s
Challenging Today
for Empowering Tomorrow
campaign, despite numerous obstacles amid the
challenges posed by COVID-19 and the economy.
Africa
Following the acquisition of Mayfair Bank in Kenya,
now Mayfair CIB Bank Limited, a branding, marketing,
and communications strategy has been developed to
support CIB’s business strategy in Kenya: to facilitate
trade finance and credit facilities for Egyptian corpo-
rates looking to engage in Africa. As such, the division
will support CIB to organize ‘teach-ins’ for mid-sized
corporates in Cairo to present CIB’s trade finance
and credit facilitating capabilities, as well as market
knowledge and economic insights; and lead/host indi-
vidual marketing trips to Kenya for the most desirable
Egyptian corporate targets to make introductions to
relevant manufacturers or trading partners.
The team has developed a new corporate identity,
with the rebranding of Mayfair – CIB Bank Limited
being implemented across the Bank’s branches,
online presence, and touch points.
CIB hired a local agency to handle the pre and post-
acquisition
launch and provide ongoing media
support and event management. Over 30 articles were
generated in Kenya announcing the acquisition, and a
media and communications plan has been developed
to reflect our business strategy that will include tradi-
tional and social media outreach to local audience.
Internal Communications
CIB appointed an
international consultant to
evaluate current means of internal communica-
tion, assess the communication needs of different
stakeholders/employees, and develop an internal
communication channel strategy.
To ensure the right foundation was set, a compre-
hensive audit was conducted to develop a full
understanding of the current IC strategies and
endeavors and help identify gaps and focus areas.
Working towards building a unified culture among
employees, the second half of 2020 saw the final-
ization and initial implementation of the Internal
Communication
including
ongoing townhalls and casual staff events, which
maintain direct communication between senior
management and employees. However, due to the
exceptional circumstances of COVID-19, online
townhalls were introduced to all CIB employees,
noting that the average feedback for webinars was
more than 90% positive. When caseloads lessened,
we were able to resume internal and external
activities in 3Q2020, such as a bi-weekly casual
Strategy project,
breakfast for a small number of junior employees
along with our senior management.
Our weekly digital newsletter, CIB Round-up, which
sheds light on CIB-related news, the banking sector,
and the Egyptian economy, received very positive
feedback from staff. The round-up was shared in
both English and Arabic this year due to popular
demand. A new dedicated section for CIB sustain-
able finance news was introduced to shed light on
CIB’s sustainability updates, news, performance
and achievements, as well as national and global
sustainability-related topics.
We completed the intranet assessment report, and
3Q2020 saw the finalization of the scope of work for
intranet enhancement, concluding with the kick-off
of the planning and analysis phase.
A “5 Years of Sustainability Reporting” competition
also took off during 3Q2020, engaging employees
while shedding light on and bringing awareness to
sustainable banking. The best 12 sustainable stories
were chosen to be featured in our 2021 calendar.
Similarly, the Bank held an appreciation event for CIB
employees in early 2020, aiming to promote engage-
ment between staff members and management.
A dedicated page was created on the intranet for
formal daily updates on the Bank’s operations and
procedures during the pandemic. We also launched an
internal awareness campaign titled Your Safety First
to encourage staff to wear masks, regularly wash/sani-
tize their hands, and maintain social distancing. The
campaign kicked off in full force within all our prem-
ises through different channels, including posters,
floor stickers, emails, and desktop screensavers.
CIB also
launched an Anti-Money Laundering
campaign in early 2020, aiming to increase staff
awareness about the different types of anti-money
tactics. The campaign was launched through all of
our internal channels, including emails from our
senior management.
Branches and ATMs
All updates on branch and ATM activities were commu-
nicated to customers through several channels, from
updated working hours, promoting social distancing
by admitting fewer customers in our waiting areas,
to voiceover awareness across the branch network
via the integrated sound system. Messages were also
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Support Functions // Marketing and Corporate Communications
displayed on branch LCDs and ATM screens, and
commercial ads were replaced with general hygiene
awareness messages, including on alternative digital
channels. Floor stickers were also added to our ATMs
and branches promoting social distancing, in addition
to “Wear Your Mask” door stickers.
Keeping our staff safe, Everyday Hero packs were
distributed among all CIB front liners to express
management’s appreciation and gratitude for their
efforts and dedication during the pandemic. Desk
separators were also successfully dispersed throughout
branch network to maintain social distancing.
2021 Forward-looking Strategy
Implementing Data Analytics, Digital Banking,
and Technology
To deliver data-driven marketing and high-quality
customer experiences, CIB needs to
in
building data-rich customer profiles by aggregating
and correlating customer and prospects’ transac-
tional, behavioral, and interest-related information
without breaking customer trust, while maintaining
authenticity and transparency.
invest
One of the primary requirements for actively shaping
individual customer journeys across channels is to
have a comprehensive data set for each customer.
Knowing what customers did in the past, how we
approached them, how they responded, and what
their current behavior is will enable us to account for
their individual needs. To make 360-degree customer
profiles a reality, data from all touchpoints needs
to be collected and unified in a centralized system.
This means consolidating data from various sources
like data warehouses, CRM systems, web-tracking
systems, or channel-specific marketing tools.
facilitator and enabler. We will also focus on human-
izing banking by creating content that makes the
banking experience less intimidating and simpler for
the average customer.
Our content strategy on social media will also be
targeted. A specific plan for each channel will be devel-
oped based on the target audience. This will ensure we
keep our content relevant to the audience, creating
engagement and extending our organic reach.
A key online imperative will be remarketing to existing
website visitors, expanding our reach by building
lookalike tribes and performance marketing. Large
data platforms such as Google and Facebook have
extensive data about customers which we can utilize,
but not acquire. Performance Marketing is about
immersive marketing, whereby a customer is identified
and presented with other relevant advertising based
on their internet browsing. Remarketing involves any
customer that showed interest, whether organically or
through a paid ad, by clicking on the ad and landing on
our website, to retarget them until they complete a goal.
Content Marketing and Always On
We aim to build a content resource center by creating
CIB tailored content revolving around topics and
events of interest that can be made relevant to
banking by introducing ways to navigate daily finan-
cial challenges faced by our target customers. Over
the past few years, we have been carefully creating
our website content to guide customers towards the
right product and service for them. This will be most
visible in our new public website, once launched.
Additionally, we have been slowly building our CIB
Blog, which will include content for different audi-
ences, from beginners to experts, and will include
infographics and videos.
With a dedicated team of UX designers who are
responsible for the front-end experience across all
digital touch points, CIB’s marketing campaigns
focus on value propositions rather than competi-
tive pricing or other simple appeals. The result is
customer advocacy, or word-of-mouth, that gener-
ates referrals and grows CIB’s customer base.
Digital and Social Media Marketing
Social media will remain a strong platform for pres-
ence and generating sales leads. It will also be used
to make the Bank younger by speaking to Gen-Y and
millennials through portraying banking as a lifestyle
Our main objective from Always On is to use it as a
vehicle that keeps communicating during campaign
calendar down times through capitalizing on all
our digital advertising knowhow and prowess while
communicating in an untraditional tone of voice to:
• Promote products and services.
• Increase brand awareness.
• Generate overall awareness, acquisition, and
growth of the customer base.
• Remain relevant and in the moment with our
online customers.
• Increase customer engagement over CIB’s digital
and social media channels.
UX Design, Search, and Personalization
The UX team will be highly involved in the UX design
of the following projects throughout 2021: new
intranet, new corporate online channels, subsequent
phases of retail online channels, and continuous
improvements to existing channels.
The implementation of CIB’s public website should
be launched during 4Q2020. New Internet, Mobile
Banking, and ATM platform launches are expected
within 1Q21, with a carefully bespoke customer expe-
rience unique to CIB’s customer needs.
Our website will serve as a repository of tailored
financial related content to educate customers by
serving them a series of articles and videos that will
be published according to a monthly calendar to
improve website retention and increase returning
customers organically. Content should be relevant to
challenges and everyday use cases faced by our target
and existing customers. The website will include
interactive tools that will help customers identify
products, services, bundles, and loan and mortgage
calculators, to name a few.
Search: Search Engine Optimization (SEO) and
Search Engine Marketing (SEM)
Search engine optimization, or SEO, is about under-
standing what people are searching for online, the
answers they are seeking, the words they’re using,
and the type of content they wish to consume.
Knowing the answers to these questions allows us to
connect to the people searching online for the prod-
ucts and services that we offer within their natural
purchase journey. If knowing our customer’s intent
is one side of the SEO coin, configuring it in such
a way that search engine crawlers can find, under-
stand, and highly rank our content in search results
is the other. At CIB, we treat SEO as an ongoing
activity. The continuous optimization ensures
that search engines rank us as high as possible for
customers looking for information online. SEO will
not be limited to products and services, but rather
be configured to extend to content related to our
sponsorships, investor relations, and sustainability
to capture customer traffic from prospects with
aligned values and interests.
Search Engine Marketing (SEM) is a campaign-
by-campaign play as it simply involves paying for
advertised search results. It is an effective tool but
requires extended periods of time online. We will
begin to more heavily invest in SEM than social
media advertising given the better KPIs displayed
from the traffic it generates. It is a main marketing
channel when it comes to Always On campaigning
and we will use it to complement SEO.
Personalization
The benefits of personalization become apparent
when paired with well-targeted social media, and
accurate behavior analytics. The same product can
be marketed to multiple groups according to what
will attract them, and when a customer lands on our
site the narrative that captured their interest on social
media will continue seamlessly, taking them from
consideration, to evaluation and finally to action.
Our customers will be targeted based on their online
behavior and interactions with our new public
website. Personalization will be implemented incre-
mentally, with a period of data-gathering after the
launch of the site to be able to generate insights into
what areas of the site should be personalized and
how. Personalization rules will then be strategized
and implemented, one at a time, with enough time in
between to analyze the impact of the change.
CIB’s marketing
strategies and
resources have
kept pace with
these changes while
adapting to external
factors, the Bank’s
objectives, and
consumer behavior.
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05
Our
Controls
3
Divisions make up CIB’s control
structure: Risk, Compliance,
and Internal Audit
112 |
Annual Report 2020
CIB’s
CONTROL
FRAMEWORK
is central to ensuring the independent and
objective oversight and assurance needed
to secure clients’ financial wellbeing as
well as the Bank’s.
0105050505 Our Controls
Risk Group
The Risk Group (RG) provides independent risk
oversight and supports the Enterprise Risk
Management (ERM) framework across the orga-
nization by managing different types of financial
and non-financial risks. The Group proactively
assists in recognizing potential adverse events
and establishes appropriate risk responses to
proactively manage expected and unexpected
losses. The framework works to identify, measure,
monitor, and control risk exposure against limits,
levels, and promptly
appetite, and tolerance
reports to senior management and the Board. The
Group is managed by the Chief Risk Officer (CRO),
and reports to the Board Risk Committee (BRC) to
ensure independence.
CIB’s Risk Group oversees five main departments:
• Credit and Investment Exposure Management
• Consumer and Business Banking Risk
• Enterprise Risk Management
• Restructuring and Recoveries of Distressed Assets
• Credit Information and Reporting
Lines of Defense
Three Lines of Defense
Business Line
Management
Independent
Risk, Legal and
Compliance
Independent Audit
The Bank applies the Three Lines of Defense model:
The first line includes all business and operations
functions responsible for identifying and managing
risks inherent in activities. The second line includes
the Risk, Compliance, and Legal departments respon-
sible for setting frameworks and regulations, as well
as monitoring and reporting on their execution,
management, and control. The third line includes
Independent Audit department that provides an
independent assessment of the entire process.
The Bank embeds risk management
its
strategy-setting, budgeting, and performance
management, providing management with the
information needed to adopt appropriate strategies
and enhance decision making.
into
A comprehensive set of risk management policies
(including limits), processes, and guides is in place
to cover all material risks, and is regularly updated
to be in line with the Bank’s strategy, CBE regula-
tions, and international best practices. All policies,
procedures, and/or guides are annually reviewed
and duly approved.
2020-2021 Highlights and Forward-looking
Strategy
During the height of the COVID-19 pandemic, Risk
Group focused on maintaining a resilient profile
and keeping exposure within acceptable levels,
while sustaining a healthy profitability ratio. The
Bank proactively conducted stress testing to assess
unexpected losses, and the Risk Group undertook
a number of initiatives that included provisioning
to the most affected sectors, as well as the recogni-
tion of other risks that may continue in the ‘new
normal’ environment.
Balance Sheet Risks
Liquidity ratios remained within acceptable levels.
Local currency (LCY) liquidity ratio reached 56.18%
against the CBE’s 20% limit while the foreign currency
(FCY) liquidity ratio reached 67.92% against the
CBE’s 25% limit. Furthermore, the Bank’s Liquidity
Coverage Ratio (LCR) remained steady at 1,359%, and
the Net Stable Funding Ratio (NSFR) recorded 251%.
The Interest Rate Risk in the Banking Book (IRRBB)
remained at acceptable levels and allowed the balance
sheet to benefit from a volatile interest rate environ-
ment. In 2021, the Bank is expected to maintain a
healthy balance sheet, supported by dynamic growth
and the ongoing realignment of the funding strategy.
Credit Risks
During 2020, and in light of the COVID-19 outbreak,
the Risk Group diligently monitored the Bank’s
portfolio quality to ensure prudent impairment
1,359%
LCR Dec. 2020
251%
NSFR Dec. 2020
288.62%
Total Coverage Dec. 2020
coverage, taking into consideration any adverse
change in asset quality.
• Institutional Banking: An extensive bottom-up
assessment was conducted, which entailed the
reassessment of industry risk profiles in industry
grading models, and the measurement of early
warning and qualitative factors. It also included
stress testing of all corporate borrowers using
early warning factors as proxies for declining
business activity, with a primary focus on
assessing financial solvency and debt servicing
• Business Banking: As part of Egypt’s 2030
Growth Strategy, the Bank focused on growing
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Our Controls // Risk Group
the financing of small and medium-sized
enterprises (SMEs), a core pillar of the Egyptian
economy. Despite COVID-19 and its related chal-
lenges, the Bank maintained the quality of its
Business Banking portfolio, evidenced through
Non-performing Loans (NPL) of 1% of the total
portfolio and 2.9% of the unsecured portfolio
and portfolio growth from EGP 2 billion in 2019
to EGP 3.3 billion in 2020, with companies served
now up to 3,350 versus 2,942 in 2019.
• Consumer Banking: Households were rendered
vulnerable to the potential short and long-term
economic impact of the pandemic, consequently
affecting the debt repayment capabilities of
customers. Therefore, comprehensive portfolio
analysis and stress testing have been conducted
to better estimate the impact of the situation and
ensure adequate provisioning. The Consumer
Risk department was also able to support the
business in pursuing targeted portfolio growth
levels through rolling out multiple credit param-
eter rationalizations and programs.
The Group’s primary view in 2021 is to support
quality businesses in the coming cycle, as they
benefit from potential market recovery while
becoming resilient to market disturbances. The
specific guidelines recommended are to continue
to adopt financing schemes that allow close moni-
toring of asset conversion cycles, enhance asset
protection through earmarked controls/supports
with proper margins, and emphasize portfolio
monitoring through top-down assessments and
early warning models.
• Operational Risk: The comprehensive frame-
work is a set of interrelated tools and processes
that are used to
identify, assess, measure,
monitor, and remediate the Bank’s operational
risks. The main measurements include opera-
tional/conduct risk events management, Risk
and Control Self-Assessments (RCSA), Key Risk
Indicators (KRIs), control testing analysis, and
Operational Risk Assessment procedures (ORAP).
• Technology Risk: The framework was enhanced
to cover the assessment of six main domains that
include cyber security, information security, IT
resilience, third-party, IT project execution, and
IT control assurance.
• Model Risk: The Bank carried out several initia-
tives including applying an organization-wide
procedure, conducting an annual inventory and
documentation process for all models, enhancing
risk appetite statement and thresholds, and inde-
pendent validation.
• Fraud Risk: Improved controls were introduced
in response to the expected increase in attacks
involving cards and internet banking through
‘Phishing’. The fraud management team moni-
tored transactions 24/7 through a set of specific
rules; and their triggers were regularly reviewed
and modified to track any real-time attacks. The
Bank also continuously conducts fraud aware-
ness campaigns with customers and employees
through various channels.
• Third-Party Risk: An organization assessment
was conducted to improve coverage of the impact
of third-party risks on the Bank’s activities and
business continuity during the pandemic, as well
as assess readiness to meet unexpected risks.
Non-Financial Risks
During the pandemic waves and lockdown, the Bank
continued to enhance its governance, processes,
systems and controls to mitigate potential losses
arising from non-financial risks as follows:
As global losses continue to accelerate for non-
financial risks and trends continue to shift due to
COVID-19, the Bank will continue to enhance a
comprehensive framework with a focus on tech-
nology, vendor, and model risks in 2021.
Enhanced Technology and Automation
During the COVID-19 lockdown in 2020, technology
played an important role in enabling business conti-
nuity, and accordingly the Bank revised and prioritized
its risk projects. In 2021, critical transformation projects
will commence with Corporate Lending by migrating
the entire lending cycle to an electronic solution. The
Risk Group will also build up scalability and efficiency
by leveraging on consumer transformation projects
and customer behavior as main drivers to support busi-
ness growth and maintain a healthy portfolio quality.
Business Banking will also initiate automation of end-to-
end workflows to provide superior customer experience.
Digital Financial Inclusion
A robust risk strategy as well as lending criteria
will be developed to address untapped segments,
in line with the Bank’s business strategy and the
CBE’s directives in order to increase the penetra-
tion rates of underserved and unbanked segments
and provide access to instant decision-making and
customer experience.
Risk Culture
The Bank continues to promote a strong risk
culture, where employees of all levels are engaged
and empowered. The Risk Group conducted aware-
ness sessions for employees using platforms that
include e-learning and virtual trainings.
In 2020, the Risk
Group diligently
monitored CIB’s
portfolio quality
to ensure prudent
impairment
coverage, taking
into consideration
any adverse change in
asset quality.
4.27%
Default Dec. 2020
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Our Controls
Compliance Group
CIB’s independent Compliance Group is respon-
sible for endorsing a culture of ethical conduct. The
Group proactively drives bank-wide compliance by
establishing policies, programs, and procedures that
guide our employees to make sound business deci-
sions while adhering to applicable laws, regulations,
and requirements. The Group operates through an
integrated compliance risk management framework,
with the strategic objective of protecting CIB through
the provision of guidance, training, and advice to our
stakeholders as well as promoting accountability for
managing compliance risk in accordance with global
standards and best practices.
As CIB continues to create one success story after
another, our commitment to ethical and professional
practices becomes exponentially more important.
Our culture is not only shaped by the Bank’s vision,
mission statement and strategic objectives; it is
defined by how we streamline those core values in
who we are and what we believe in as CIBians. Our
shared vision is that compliance risk management
is the responsibility of all CIBians. Our principal role
is to exhibit responsible business behavior that is
aligned with the highest ethical standards and is in
the interest of our clients, employees, shareholders,
and community.
2020 Highlights
Tone from the Top
With the world making its way through the COVID-19
pandemic, our core values and integrity are being
tested now more than ever. As a way to further
embed our ethical beliefs into our business culture,
the Compliance Group founded the Tone from the
Top campaign. The campaign is sponsored by CIB’s
executive and senior leadership, and is a reflection
of the Bank’s continued emphasis on its compli-
ance culture, raising awareness, and reinforcing our
shared responsibility in managing compliance risk.
The Tone from the Top campaign includes internal
communication and bulletins, with a focus on
compliance as an integral part of how we do business.
Financial Crime Combating Program
The Financial Crime Combatting (FCC) Program is
an integral part of the CIB Compliance Program. The
FCC team is tasked with the overall management
and effective implementation of standards, policies,
and procedures that safeguard CIB’s local and global
community against financial crime.
Consequently, the Compliance Group has imple-
mented structural and infrastructure enhancements
to ensure the FCC team is equipped with the neces-
sary independence, manpower, and technology.
Our FCC program deploys all possible best prac-
tices and international standards to guarantee
we can combat the risk of money laundering and
terrorist financing. The program is founded on
three main pillars:
1. Prevention: This primary step comes during
the onboarding stage of potential customers
and during important transactional engage-
ments. Through our Know Your Customer (KYC)
program and the utilization of state-of-the-art
risk scoring, customer compliance risk level is
preemptively defined. This provides CIB with the
insights required to act proactively against the
risk of money laundering and terrorist financing.
2. Detection: We monitor our portfolio on an
ongoing basis for financial crime risk. Using data
analytics, the portfolio is regularly scanned. We
also ensure that specific transactions are auto-
matically detected and monitored. Detected
suspicions are investigated independently by the
FCC team to ensure proper diligence is enacted.
3. Reporting: It is our responsibility to track,
investigate, and report any suspicious activities
and/or transactions.
Sanctions Program
CIB conducts business in full compliance with
all applicable local and international sanctions.
To that end, we maintain a robust Sanctions
Compliance program that applies to customers’
diverse engagements. Our program is structured
to fully adhere to local sanctions requirements
included
in the Egyptian Money Laundering
Combating Unit Sanction Lists as well as global
sanctions requirements proposed by organiza-
tions such as the United Nations, European Union,
Office of Foreign Assets Control, and the Financial
Conduct Authority.
Required procedures are in place to ascertain that
we are continuously kept abreast and in compliance
with the increasingly dynamic and ever-growing
sanctions requirements. Our Sanctions Compliance
team drives our organization when it comes to the
design of policies and procedures that incorporate
robust control measures to ensure full compliance.
They also lead the efforts in employee awareness
raising when it comes to sanctions compliance.
Customers’ Rights Protection Program
CIB has always held customers’ interest as one of
our top priorities. To that end and in light of the
CBE’s Customers’ Rights Protection guidelines,
CIB established the Compliance Customers’ Rights
team. Its strategic objective is to lay the foundation
necessary to safeguard customers’ rights. The team
is responsible for transparency and disclosure; safe
keeping confidentiality and information secrecy;
handling customers’ complaints and spreading
awareness and financial literacy to customers.
The department works in tandem with other busi-
ness, support, and control functions to guarantee
customers receive financial services and solutions
that serve their needs, provided with transparency
and full disclosure at every interaction.
Compliance Monitoring and Control Program
We believe in having a hands-on approach to
complement our advisory and oversight role. As
such, as part of the CIB Compliance Group, the
Internal Control Management and Compliance
Monitoring and Testing teams have the strategic
objective of taking the pulse of the compliance
program, assuring the program’s ongoing health
and providing independent assessments of the
compliance and control environment.
The teams act as an independent testing arm while
managing the role of process control oversight as
part of the second line of defense. The teams also lead
the Bank-wide Compliance Risk Assessment and
design and implement risk-based reviews to provide
assurance related to compliance and controls at an
organizational level.
Analytics for Compliance
The Compliance Group has several ongoing projects
that capitalize on the innovative technical solutions,
digitalization initiatives and the wealth of data and
analytics available at the Bank.
The Group is currently at different stages of driving
the automation of high-risk compliance processes,
machine-learning and the enhancement and unifi-
cation of our processes. One of our main focus areas
is enhancing the process of transaction monitoring
through automation and machine learning with
the ultimate aim of improving the efficiency of the
process and ensuring that trends are accurately
identified and managed.
As the face of regulatory and compliance land-
scape continues to progressively change, analytics
continues to be our strongest asset and the only
way we can maintain the flexibility required for
compliance. Based on this, the Group established
an Analytics team who will work closely with
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Our Controls // Compliance Group
respective data and technology teams to provide
data-driven insights and assist in taking strategic
decisions related to compliance risk scoring, risk
evaluation, automation, and process enhancement.
They will also be heavily involved in our regulatory
reporting requirements.
Knowledge and People
We believe a true compliance and conduct culture can
only be achieved through our employees. Despite the
exceptionally challenging circumstances imposed by
the COVID-19 pandemic and the conversion to hybrid
and flexible working arrangements, the team has
worked closely with the Learning and Development
team to ensure that our people continue to be
reminded of our responsibility toward all stakeholders.
Through e-learning and virtual classrooms, CIB
staff and outsourced employees have been trained
on different compliance-related topics including
Through e-learning and
virtual classrooms, CIB
staff and outsourced
employees have been
trained on different
compliance-related topics
including Financial Crime
Combatting, Sanctions,
FATCA requirements
and Customers’ Rights
Protection.
Financial Crime Combatting, Sanctions, Foreign
Account Tax Compliance Act (FATCA) requirements,
and Customers’ Rights Protection.
During 2020, we also chose to disseminate key messages
through campaigns focusing on raising awareness.
With focus on different areas, ‘Suspicious Activities and
Red Flags’ and ‘Financial Crime’ have been selected as
our topics of choice for this calendar year.
Commitment to our Regulators
As we embrace our compliance and controls
culture, focusing on our relationship and engage-
ment with our regulators is key. To that end, we
have expanded the role of the CBE Relations team
to now include two new teams: the Regulatory
Affairs team and the Advisory Compliance team,
together creating the Regulatory Compliance
division. The division will work collaboratively
with our regulator and CIB business partners to
ensure a seamless and structured communication
process, common understanding and proper and
swift implementation of requirements.
The team also works closely on coordinating efforts
with our colleagues to ensure we provide proper
focus to our regulatory reporting commitments and
that the process is designed with agility and capital-
izes on data and analytics. The team consistently
makes sure that the regulatory reporting processes
are accurate and up to date.
Egypt’s MENA FATF Visit
Recently, Egypt has undergone an assessment by
the Middle East and North Africa Financial Action
Taskforce (MENA FATF). The assessment covered
several key compliance risk indicators including
to Ultimate
policies and procedures related
Beneficial Owner
identification and
(UBO)
on-boarding, KYC updates, Risk Classification,
Transactions Monitoring and Reporting.
The MENA FATF team acknowledged that the CIB
Compliance team have demonstrated the required
level of understanding for FATF recommendations
and associated risks and praised CIB’s process and
its control design.
Our Footprint in Africa - Mayfair CIB Bank
Limited
In April 2020, CIB acquired 51% of Mayfair Bank in
Kenya (now Mayfair CIB Bank Limited) in line with
CIB’s direction towards expanding its footprint
in Africa. The Compliance Group has since been
working diligently on fulfilling and securing all the
necessary regulatory approvals, conducting required
due diligence and compliance risk assessments,
aligning the regulatory requirements, and fulfilling
any mandates for these types of transactions.
A significant step was the completion of our FATCA
requirements and fulfilling the ensuing registrations
as a lead financial institution.
We are also working closely with our colleagues in
Mayfair CIB Bank Limited to review and align the
compliance policies and procedures in addition to
exploring and assessing the regulatory and compli-
ance landscape in Kenya. This is to ensure full
alignment and synergy between the respective teams
when it comes to the compliance and control culture.
2021 Forward-Looking Strategy
As we look forward to another successful year in
2021, we embrace our responsibility to continuously
work on reinforcing our compliance and controls
culture. Our commitment to our stakeholders is to
continue being rigorous when it comes to ethical
behavior and decision-making. We will continue to
advocate this culture with a conviction that this is
the responsibility of each and every CIBian.
We will also continue to invest in our compliance
infrastructure to ensure we have the required tech-
nological solutions that provide us with agility
and capability to comply at all times and adjust
promptly to the ever-changing regulatory and
compliance landscape.
The Compliance
Group’s principal
role is to exhibit
responsible
business practices
aligned with the
highest ethical
standards in the
interest of our
clients, employees,
shareholders,
and community.
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Our Controls
Internal Audit
2020 Highlights
Due to the onset of the COVID-19 pandemic, 2020
was an exceptional year. As a consequence of the
pandemic, IAG adjusted its methods to ensure the
continuity of its services by stressing the use of the
remote audit practices. Furthermore, cybersecurity
was given noticeable attention due to the conse-
quent dramatic changes, which then necessitated a
continuous evaluation for the reliability and security
of the Bank’s work environment.
2021 Forward-Looking Strategy
IAG’s 2021 strategy takes into consideration the
Bank’s digital transformation and further relies on
big data in IAG’s analytical processes. This should
allow the division to maintain its swift and focused
support to CIB’s management.
The role of the Internal Audit Group (IAG) is to
provide
independent and objective assurance
and consulting activities to its stakeholders. IAG
adds value and improves the bank’s operations
by helping it accomplish its objectives, through a
systematic, disciplined approach, to evaluate the
effectiveness of the Governance Process, Enterprise
Risk Management and Controls.
CIB’s Audit Committee is responsible for overseeing
IAG’s activities, including the approval of its charter
and safeguarding its independence as the third line
of defense. IAG’s main pillar is its employees, who
are chosen based on their professional expertise.
The team is pushed to leverage their own profes-
sional skills and know-how and are frequently
invited to attend technical training programs and
international conferences.
In accordance with international practices, IAG along
with the Bank’s Analytics and Data Management
team, use a systemic analytical approach to imple-
ment a monitoring mechanism to detect early
warning signals.
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06
Responsible
Banking
5
SDGs in our focus
124 |
Annual Report 2020
CIB’s commitment to creating
SHARED VALUE
is the guiding post of its sustainability and
responsible finance strategy.
0106060606 Responsible Banking
Sustainable Finance:
A Strategy for Responsible
Growth
CIB’s journey has been distinguished by its power to
link business growth to its quest to advance the wider
ecosystem surrounding it. This has found expression
in embracing sustainability to achieve stakeholder
value creation, from employees to clients, regulators,
shareholders, the wider community, and the environ-
ment. The Bank believes that to grow, it must promote
the growth of all elements of life around it. CIB under-
stands that growth is achieved through a connection
with its ecosystem and the planet at large.
2020 was a year of achievements for CIB on the
sustainability front, since becoming a founding
signatory of the United Nations Environment
Program – Finance Initiative (UNEP-FI) Principles
for Responsible Banking. The Bank continues to act
as a domestic and regional influencer in promoting
the UNEP-FI Principals for Responsible Banking, and
has worked on all of the principles in the last year.
2020 also marked the Bank’s five-year anniversary for
sustainability reporting. Since becoming one of the
first institutions in Egypt to introduce sustainability
reporting in 2015, CIB has gradually enhanced its
commitment to sustainability across its business,
integrating environmental, social, and governance
(ESG) dimensions into its policies, procedures,
operations, and culture.
its fifth year of sustainability
CIB celebrated
reporting by launching a Sustainability Reporting
Award, given to twenty participants from the 10th
Egypt CSR Forum. Award recipients received free
Global Reporting Initiative (GRI) Certified Training
over a two-day virtual workshop. This is in line with
the Bank’s strategy to increase sustainability educa-
tion and spread awareness of transparent reporting.
New Structure
New Sustainability Governance
In 2020, CIB embarked on a new chapter in its
sustainability journey as a pioneer in Egypt’s
banking sector. With the support of the Bank’s
committed leadership and a clear vision to place
sustainability at the forefront, CIB formally estab-
lished a new sustainability governance framework.
Sustainable Finance Steering Committee
A cross-functional committee that includes Board
and Executive Management representation, the
Sustainable Finance Steering Committee’s mission
is to establish, guide, empower, and monitor the
Sustainable Finance Function, in line with CIB’s
business needs and international best practices. The
committee’s scope covers risk management, revenue
generation, ecological footprint and sustainable
finance initiatives and programs. It is mandated
to endorse and formulate strategic sustainability
frameworks, enable the implementation of sustain-
ability systems, ensure stakeholder engagement, and
oversee monitoring and reporting.
Chief Sustainability Officer
As part of the Bank’s move towards sustainable
governance, CIB was the first institution in Egypt
to appoint a Chief Sustainability Officer, who now
heads the new Sustainable Finance division.
Sustainable Finance Division
CIB became the first Egyptian bank to launch a
Sustainable Finance division. The new division will
ensure the centrality of sustainability as a core business
strategy, and provide a solid platform for the integration
of sustainability, and environmental, social, and gover-
nance (ESG) principles across the Bank’s functions.
Sustainability Strategic Network
The Sustainability Strategic Network is a cross-func-
tional, multi-stakeholder organizational structure
that includes key representatives from across the
Bank, linking functions and departments together.
This structure will embody a knowledge-based and
action-oriented network, focused on advancing
broadly articulated sustainability issues. The struc-
ture will be an integral component of the Bank’s
sustainability governance structure, as it ensures
an inclusive and participatory approach to embed
sustainability within CIB.
Policy and Framework Architecture
CIB has a clear and comprehensive sustainability
infrastructure in place that aligns with national
and global frameworks and standards, and rein-
forces the Bank’s environmental, social, and
governance commitments.
Climate Change
Green Finance: The First Green Bond in Egypt
CIB acknowledges the key role that financial insti-
tutions play in economic development, given their
ability to allocate monetary resources to compa-
nies engaged in diverse economic fields, as well as
to private individuals. As such, the Bank aims to
contribute to the development of the green bond
market, as it represents another milestone in its
sustainable finance journey.
As the leading private sector bank in Egypt, and in the
context of its commitment to advancing sustainable
finance, CIB took solid steps during 2020 to issue Egypt’s
first corporate Green Bond, aiming to finalize the issu-
ance during the second quarter of 2021. The Green
Bond serves as the latest addition to a suite of environ-
mentally beneficial products to leverage capital market
fixed income instruments and fund adaptation and
migration measures. The Bond’s proceeds will observe
UN Sustainable Development Goals (SDGs) number 6,
7, 9, 11, and 13, which fall within the materiality of CIB.
Measuring Climate Risk: First Bank in Egypt
to join the Taskforce for Climate Related
Disclosures (TCFD)
CIB is the first bank in Egypt to join the Task Force
on Climate-Related Financial Disclosures (TCFD).
The TCFD was established in December 2015 by the
Financial Stability Board (FSB) with the goal of devel-
oping recommendations for voluntary climate-related
financial disclosures that are consistent, comparable,
reliable, clear, and efficient, in order to provide deci-
sion-useful information to investors, lenders and other
stakeholders. The TCFD aims to encourage sustain-
able investments so as to build a resilient economy in
the face of climate-related uncertainties.
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Responsible Banking // Sustainable Finance
Measuring Business Impact
Credit and Debit Card Product – Life Cycle
Assessment
In 2020, CIB was the first bank in Egypt and the
MENA region to undertake a card product life cycle
assessment initiative. The project aims to analyze the
environmental impact of the credit and debit cards
from initiation as raw materials until their decom-
position. The life cycle analysis (LCA) is performed
according to ISO 14040 using a powerful modeling
and simulation software that allows for detailed and
reliable insights for calculation and analysis.
Environmental and Social Impact Assessment
of SMEs
CIB, as partner to its borrowing SMEs, acknowl-
edges the opportunities resulting from greening and
diversifying such operations. Therefore, in February
2020, CIB initiated the Greening SMEs project, by
conducting an Environmental and Social Impact
Assessment with the following main objectives:
• Baseline Assessment: Assess the environ-
mental and social impacts of borrowing SMEs.
• Mitigation Strategies: Develop strategies to
reduce the environmental and social impacts
of SMEs.
• Environmental and Social Toolkit: Design
and implement generic instruments to promote
environmental compliance and sustainable
business practices among different SME sectors.
• Awareness-Raising: Promote green behavior
among SMEs.
Managing Ecological Footprint
In 2021, CIB will further its measurement and
produce an Ecological Footprint report, which
widens its scope of assessment and tackles a wide
range of environmental indicators that are key to the
Bank’s stakeholders.
Building on the Bank’s extensive carbon footprint
assessment of all CIB branches, we have established
seven carbon emission reduction targets for elec-
tricity, refrigerant leakage, water, paper usage, aerial
transportation, ground transportation, and waste
generation. This has culminated in a total target of
10% GHG reduction by 2025, as compared with our
baseline emissions in 2018.
Resource Efficiency
CIB works to measure, reduce, and improve its
ecological footprint. Despite the increase in head-
count and number of branches, the Bank successfully
decreased its paper consumption in 2020 by 8% in
comparison to 2019. The set target for total paper
reduction in 2020 was 1%.
System and Certifications
CIB began implementing an Energy Management
System (EnMS) at one of its head offices (SV2). The
system integrates energy management into existing
mechanisms, enabling the Bank to better manage its
energy, sustain achieved savings, and continuously
improve energy performance. It also combines best
practices in project management, energy monitoring,
and energy awareness, along with an energy policy
that will govern CIB’s approach towards energy use
and performance.
CIB was also the first organization in Egypt and the
first Bank in the Middle East to receive the ISO 41001
certification in 2020. This recognition shows CIB’s
full adoption of the Facilities Management System
developed by the International Organization for
Standardization (ISO). The certification scope covers
all the Bank’s premises and its related operations.
Gender Empowerment
Women are positioned at the heart of CIB’s employ-
ment, services, and external initiatives. CIB has
been at the forefront of women’s empowerment
movements through pioneering innovative efforts
that promote the financial inclusion and economic
independence of women, to help them achieve socio-
economic equality in Egypt.
At CIB, we encourage public-private collabora-
tions to foster inclusive economies and societies,
and achieve sustainability goals. We believe that
such partnerships create a platform for knowledge
sharing, and further enables governments and
institutions. CIB is one of the first two companies
to acquire the Egyptian Gender Equity Seal in the
private sector, obtained through a partnership with
the National Council for Women and the World
Bank. In tandem with efforts directed towards
narrowing the gender gap in the workforce, the
Bank aims to extend this experience to its corporate
clients by creating facilities that promote women’s
empowerment in the Egyptian market. It also
encourages corporate clients to enhance female
participation rates amongst their employees, senior
management, and Boards of Directors.
Moreover, CIB is Co-Chairing the World Economic
Forum (WEF) Closing Gender Gap Accelerator, a
national public-private collaboration model which
enables governments and businesses to take deci-
sive action towards closing economic gender gaps.
Along with leading businesses and ministers, the
Bank will lead the accelerator’s activities, shape
its objectives and monitor its impact. The accel-
erator focuses on four key objectives: preparing
women for post COVID-19 work environments,
closing gender gaps in remuneration between and
within sectors, facilitating women’s participation
in the labor force, and advancing more women into
management and leadership roles.
Community Development
First Natural and Cultural House in Egypt
CIB partnered with the United Nations Development
Program (UNDP), the Egyptian Italian Environmental
Project (EIEP), and the Ministry of Environment
for the inauguration of the first open Natural and
Cultural House in Egypt at Zewara Camp, at Wadi
El Rayan Protectorate in the Fayoum governorate.
Aside from its social, environmental, and economic
positive impact, this project provides CIB with the
opportunity to align its internal environmental
initiatives with external community investment.
2020 Highlights
Governance
• Organizational structure that ensures compliance,
growth, and innovation
Sustainability Frameworks
• First bank in Egypt to join the Task Force for Climate
Related Financial Disclosures (TCFD)
Sustainability Indices
• CIB was included in the new Low Carbon Select Index
in the Middle East and North Africa (MENA), recently
launched by the Arab Federation of Exchanges (AFE)
and the data provider Refinitiv
• CIB Ranks 1st in the Egyptian Stock Exchange
Sustainability Index for six consecutive years
• CIB is included in the 2019 and 2020 Bloomberg
Gender Equality Index
• CIB is a constituent of the Financial Times Stock
Exchange (FTSE) FTSE4Good Sustainability Index
Gender Empowerment
• First private bank to acquire Egyptian Gender Equity Seal
• Co-Chair of the Closing Gender Gap Accelerator
supported by the World Economic Forum (WEF)
Environmental and Social Impact Assessment
• First bank in Egypt to conduct a Debit and Credit Life
Cycle Assessment
• First bank in Egypt to conduct an Environmental and
Social Impact Assessment on Borrowing SMEs
Community Development
• Funded the Establishment of the First Natural and
Cultural House in Egypt
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Social Development
1.5%
profits go toward the CIB
Foundation
CIB took a leading role
in numerous community
development efforts due to
the pandemic.
As Egypt’s leading private sector bank, CIB strives
to create a positive impact on the local commu-
nity. Accordingly, it has undertaken a number
of initiatives to promote inclusive and sustain-
able 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 squash
champions. Although 2020 witnessed a lighter
schedule of external events and sponsorships due
to the outbreak, the Bank was an active sponsor in
some of the events prior to COVID-19, such as the
BT 100, Climate Neutrality Dialogue, and African
Footballer of the Year 2019.
potential employees in an informal setting while
also giving jobseekers the opportunity to learn more
about CIB and the opportunities available.
Corporate Social Responsibility
Corporate social responsibility (CSR) is at the
heart of CIB’s core values. This year, we imple-
mented various CSR projects and supported
initiatives carried out by other organizations. We
diversified our community development activi-
ties by expanding our scope to include sports, fine
art, culture, and social welfare. CIB took a leading
role in numerous community development efforts
due to the pandemic. Believing that healthcare is
integral to community growth, it was necessary
to support different initiatives not only in Egypt
but also in Africa; at the onset of the COVID-19
outbreak, CIB donated USD 2.5 million to support
the national project of buying 100 RT-PCR detec-
tion kits to enhance the existing COVID-19 testing
capacity across Egypt. CIB also participated in a
Federation of Egyptian Banks initiative, in coordi-
nation with the CBE, donating EGP 80 million to
support households and businesses impacted by
the preventative measures. The Bank donated an
additional EGP 1.6 million to support 10,000 fami-
lies whose incomes were affected by the pandemic
under a project launched by the Food Bank NGO
called the #GoodChallenge. CIB also supported
several other smaller domestic healthcare projects/
initiatives, supporting the El Nidaa Foundation to
build a local face mask production factory in Upper
Egypt, in addition to its donation to the Waqfeyat
al Maadi Community Foundation to support daily
workers to work from home.
CIB also took part in AUC’s virtual employment
fair, AUC’s Engagement Fair, and the UCCD Virtual
Career Fair, allowing the organization to meet
As we start our expansion plans beyond our borders
and venture into Africa, we must become a more
effective global citizen by showing solidarity with
the continent that we all call home. In an effort to do
so, USD 250,000 was donated to the African Union
COVID-19 Response Fund, as well as another USD
100,000 to the Kenya COVID-19 Response Fund.
Social Activities
KidZania
Since the founding of their partnership in 2013,
CIB has organized several annual trips to KidZania
for underprivileged and special needs children,
and children with health conditions. The trips
provided children with a fun setting in which they
learned about different banking operations, such
as debit cards, issuing cheques, and depositing
and withdrawing money using KidZania’s official
currency, Kidzos.
Autism International Day/ADVANCE
The Bank continued its sponsorship of the Egyptian
Advance Society for Persons with Autism and Other
Disabilities (ADVANCE). A number of activities took
place in April, dubbed Autism Awareness Month,
including the virtual Annual Autism Conference and
the virtual Art Exhibition for Children and Youth
with Autism Spectrum Disorder.
Beena
Beena, a protocol signed between CIB and the
Ministry of Social Solidarity, encourages active
youth participation in the community and monitors
the development of social care services. The Bank
has been the main partner and financial sponsor
of Beena for five consecutive years. This initiative
successfully attracted thousands of youths around
Egypt who volunteered with orphans, senior citi-
zens, and individuals with special needs.
CIB Foundation
The CIB Foundation is a non-profit organization dedi-
cated to enhancing pediatric healthcare services in
Egypt and having a positive, life-changing impact
on the country’s youth. Following a decade of
responsibility
concentrated corporate
activities, CIB established the Foundation in 2010
to move away from the mainstream charity model
and towards an approach that focuses on insti-
tuting sustainable long-term projects for Egypt’s
most vulnerable communities.
social
Through an annual commitment of 1.5% of CIB’s
net annual profit, the Foundation concentrates
on providing health and nutrition services to
underprivileged children, specifically focusing on
those who lack access to quality healthcare. The
Foundation works with well-established healthcare
partners who have an extensive outreach to ensure
that the allocated funds yield positive and sustain-
able results, and that the children receive the care
they need to lead healthy and productive lives.
The CIB Foundation does not regard itself as merely
a donor organization, but an active partner in all of
its projects. Monitoring the progress and ensuring
the timely completion of projects is a pivotal
cornerstone of the Foundation’s work. Its diligence
has allowed the Foundation to gain prominent
recognition over the years.
Approved Projects in 2020
57357 Fighters
On the grounds of its longstanding partnership with
the Children’s Cancer Hospital 57357, the Foundation
allocated EGP 30 million to establish the Digital
Pathology Lab at the hospital. The Lab will use a
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computer-based technology to generate information
from digitized specimen slides.
The specimen glass slides
(conventional) are
converted into digital slides that can be electronically
shared and analyzed using a computer software. This
piece of technology will increase diagnosis efficiency
by rendering faster results and reducing human error.
The automated lab is expected to benefit approxi-
mately 7,000 children annually.
A Journey of Hope
In collaboration with the Nile of Hope Foundation,
the CIB Foundation established a pediatric radi-
ology department in the hospital. For its part, the
Foundation purchased a closed MRI machine (1.5T)
for a total of USD 1.29 million. The MRI will assist
in detecting and inspecting children’s congenital
anomalies syndrome, a structural or functional
defect present at birth that may lead to physical or
mental disabilities. This project is expected to scan
approximately 4,000 children annually.
A Journey of Healing
The Foundation Board allocated EGP 11.77
million in April 2020 to outfit the pediatric
department in the Shifaa Al-Orman Hospital in
Luxor. The new department allows children to
receive the required treatment without the need
to travel long distances. This department fills a
gap in Upper Egypt’s healthcare services, where
there are limited specialized centers for treating
pediatric cancer patients. The commute is not
only considered hazardous for the patient, but
also a great financial burden on the families. The
pediatric department expects to serve around 900
children annually.
Our Differences...Our Strength
In
line with the Foundation’s commitment to
supporting children with special needs, the CIB
Foundation allocated a budget of EGP 5.55 million to
the outfitting of five clinics and rehabilitation centers
for cerebral palsy, and audio and mental measurement
in Cairo, Giza, and Helwan. This project is expected to
serve approximately 1,000 children annually.
The Right to Live Upright
In collaboration with the Assiut University Hospital,
CIB Foundation will fund the establishment of a
specialized center in treating children with spine
problems and deformities. CIB Foundation allocated
EGP 4.48 million for the purchase of high-quality
surgical equipment to replace the existing devices
that do not adequately monitor the neurological
functions. With the new equipment, the hospital will
be capable of serving 104 children annually.
Touch of Hope
Building on the previous successful collaboration
between the CIB Foundation and Sporting Students
Hospital, the Foundation allocated EGP 3.88 million
to establish an advanced pediatric cardiac operating
room with a capsule system. The room is expected
to enable the hospital to operate on 288 children
annually while guaranteeing the highest standards
of sterilization and hygiene. It will also enable the
hospital to perform minimally invasive and highly
advanced surgeries with the utmost accuracy, in
accordance with
international standards, while
decreasing the number of children on the waiting
lists for open-heart surgeries.
Children Without Risk
The Board approved EGP 3.94 million to outfit a
Pediatric Intensive Care Unit in Mabara El Maadi
Hospital in collaboration with the Garden City
Cosmopolitan Lions Club. The Lions Club financed
the construction and finishing works of the unit. The
Foundation’s role centers on outfitting the unit with
the latest medical equipment. The hospital services
large numbers of patients in the Maadi area and the
surrounding district.
Egypt suffers from an acute shortage of around
32% in ICU beds, particularly in pediatric units.
The overall purpose of the project is to provide
healthcare to children who suffer from medical
complications. The unit is expected to serve
approximately 800 children each year, and aims to
contribute to the reduction in child mortality and
treat diseases that may cause permanent damage
and/or disability.
Strong Hearts...Stronger Future
Building on the longstanding partnership between
Magdi Yacoub Foundation and the CIB Foundation,
the Foundation allocated EGP 20 million to fund 100
pediatric open-heart surgeries and purchase cath lab
consumables for 350 children.
According to the data from the Aswan Heart Centre,
the center performs around 4,000 surgical and
cardiac procedures annually.
Gift of Life
In light of the successful collaboration between CIB
Foundation, Rotary Club of Giza Metropolitan, and
El Kasr El Eini Hospital, the CIB Foundation allo-
cated EGP 4.5 million to fund the third round of 100
open-heart surgeries to be performed in El Kasr El
Eini Hospital to reduce the number of children on
the waiting lists and alleviate some of the financial
burden on the hospital.
Super Smile
The CIB Foundation allocated EGP 1.25 million
to fund 50 cleft lip and cleft palate surgeries in Ain
Shams University Hospital. The choice of surgeries
came after Rotary District 2451 found that these
congenital defects are particularly evident in Upper
Egypt. Rotary District 2451 will be in charge of
selecting the candidates, as well as supervising and
following up on the procedures.
Diabetic Heroes
The CIB Foundation allocated EGP 370,000 for the
Medicine for All Foundation to fund the purchase of
medications for 250 underprivileged diabetic children
for one year, to be distributed on a monthly basis.
The Medicine for All Foundation is a specialized
NGO in the field of medicine and therapy devices
that provides services for underprivileged children
suffering from chronic diseases such as brain atrophy,
diabetes, and dwarfism.
Children’s Right to Sight Program
The CIB Foundation allocated EGP 929,000 to cover
176 surgeries as part of the Children’s Right to Sight
7,000
children benefit from 57357’s
Digital Pathology Lab
1,000
children benefit from the
Our Differences...Our Strength
program
(CRTS) program, in collaboration with the Kasr
El Nile Rotary Club, to help eradicate the causes of
blindness in children and infants.
Their Care…Our Responsibility
As part of the Foundation’s longstanding partnership
with the Yahia Arafa Children’s Charity Foundation,
the Board allocated EGP 6 million to fund the annual
operating costs of five pediatric units in the Ain Shams
University Hospital, supervised and managed by the
Yahia Arafa Children’s Charity Foundation. The units
are a congenital heart defect unit, pediatric heart
surgery unit, women’s obstetrics hospital’s neonatal
unit, children’s hospital’s pediatric surgery unit, and
the children’s hospital’s neonatal unit. The Board also
allocated EGP 3 million for equipping the units, which
will serve around 14,500 children annually.
Going Miles for Their Smiles
As part of the CIB Foundation’s mandate to support
children in need, the Board allocated EGP 1.85
million to support FACE for Children in Need’s
annual operating costs, to cover a part of the medical
services and care provided to orphans at the Maadi
Home Center.
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FACE for Children in Need is an NGO aiming to assist
and protect orphans, abandoned children, and street
children. FACE’s mission is to create a world in which
deprived and vulnerable children in Egypt receive
protection, love, and education, and help them tran-
sition into adulthood.
For a Better Childhood
The Board approved a budget of EGP 1.91 million to
fund 50% of the annual operating costs of the pedi-
atric and neonatal ICU sections of Benha University
Hospital, which serve about 3,500 children in the
Qalyubia region annually. The funding will ensure the
sustainability of the project and maintain the highest
level of care provided to the children.
A Warmer Winter
In 2020, the Foundation allocated EGP 8 million to
fund its seventh collaboration with the Egyptian
Clothing Bank to provide winter clothing to under-
privileged children, especially in rural areas, across
all 27 governorates. The need for winter clothing has
been rising for the past few years due to weather fluc-
tuations and low temperatures.
One Heart
CIB Foundation allocated EGP 10 million to cover
100 pediatric open-heart surgeries to reduce the
number of children on the waiting lists and alle-
viate some of the financial burdens of the hospital.
The hospital, which is managed and operated by Al
Joud Foundation, is located in Shubra El Kheima
and operates in line with international standards.
The hospital offers its services free of charge to the
underprivileged.
For a Better Eyesight
The Board allocated EGP 3.07 million to support the
establishment of a pediatric ophthalmology center.
The fund will be directed to outfit the outpatient clinics.
The project helps eradicate the causes of blindness in
children and infants. Moreover, the outpatient clinic
enables the Institute to provide specialized services
tailored for children, as currently they are diagnosed
and treated with adults. The center will extend its
services to 12,000 children a year from suburban areas
in Giza, Upper Egypt, and the Delta region.
Ongoing Projects
The money will be utilized to produce 50,000 winter
training suits and 50,000 pairs of shoes, to be distrib-
uted to children in underprivileged areas across Egypt.
Private Sector Alliance Against COVID-19
The CIB Foundation allocated EGP 5 million to
support the AmCham Private Sector Alliance Against
COVID-19, in collaboration with UNICEF Egypt. The
fund will be directed to purchasing PPE for medical
staff in health units nationwide.
For a Better Life
Building on its longstanding partnership with the
MOVE Foundation, the Board approved EGP 1.39
million to cover 50% of the annual operating costs
of the Foundation. The operating costs will enable
the MOVE Foundation to provide free services to 100
children in need. The annual operating costs cover
staff salaries, maintenance work, children’s transpor-
tation, stationery expenses, as well as utility bills.
57357 Fighters
390 Infusion Pumps and 216 Syringe Pumps
Building on its longstanding partnership with the
Children’s Cancer Hospital 57357, the Foundation
allocated EGP 20 million in 2019, which helped the
hospital acquire an integrated system that connects,
manages, and monitors infusion and syringe pumps
during chemotherapy sessions. This is crucial, as
each patient requires a minimum of two syringe
and infusion pumps per session. The Foundation
will purchase 390 infusion pumps and 216 syringe
pumps, as well as auxiliary equipment. This project is
expected to benefit more than 18,500 children annu-
ally. The entire project amount was disbursed over
two installments in 2020.
Operating Costs
The Foundation also allocated EGP 4 million to support
the hospital’s operations in funding key segments in
the Cairo and Tanta branches. The segments include
pathology, blood banks, radiology laboratories, medica-
tion, radiotherapy, nuclear medicine, and supplies. The
amount was fully disbursed in 2020.
Children Without Virus C Program
In collaboration with the Egyptian Liver Care Society,
the Foundation dedicated over EGP 5.1 million to
fund the Children Without Virus C Program. The
fund covers medications, blood tests, X-rays, medical
staff training (doctors and nurses), and awareness
sessions for infected children and their families.
Since the program’s inception, a total of EGP 2.72
million was disbursed, EGP 1.01 million of which was
disbursed in 2020.
For a Better Life
Building on its longstanding partnership with the
MOVE Foundation, the Board allocated EGP 1.2
million to cover the operating costs of the organi-
zation for one year to help accommodate 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 impacted the lives of approximately
250,000 children with cerebral palsy living in Egypt
since its establishment in 2004. The fund was fully
disbursed in 2020.
6/6 Eye Exam Convoys
In April 2019, the Board allocated EGP 21.57 million
to fund the deployment of 100 medical convoys 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, a
personal hygiene and ophthalmic health awareness
campaign was launched. The children also received
a backpack with a hygiene kit, coloring books, and
colored pencils.
This initiative was launched in collaboration with
the Gozour Foundation for Development, a CIB
Foundation partner since 2012. To date, the CIB
Foundation has sponsored a total of 441 convoys,
benefiting around 301,000 students in more than 20
governorates. The fund was disbursed in full in 2020.
The CIB Foundation
allocated EGP 5 million to
support the AmCham Private
Sector Alliance Against
COVID-19, in collaboration
with UNICEF Egypt.
Strong Teeth…Better Health
Pediatric Dentistry Clinic
The Foundation allocated EGP 7.5 million in 2018
to fund the purchase of equipment and supplies for
the Pediatric Dentistry Clinic in El Kasr El Aini. The
amount also covers expenses for the establishment of
another clinic in Sheikh Zayed to further 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
fund was fully disbursed during 2020.
Maxillofacial Unit
The CIB Foundation increased the allocated funds
from EGP 45,000 to EGP 90,000 to support the oper-
ating expenses of the maxillofacial unit, due to the
hikes in the prices of materials and consumables.
In April 2019, the Foundation allocated another EGP
90,000 to replace the malfunctioning sterilization
device in the unit. The CIB Foundation paid the full
amount to the supplier after delivery in 2020.
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The Maxillofacial Unit provides treatment
for
children across the country, and is one of the few
providers of specialized procedures. Before the
center’s establishment, children were treated in the
general prosthodontics area with adults.
Our Kids Our Future
The Board approved the allocation of EGP 4.1 million
in April 2019 to fund a project in partnership with
the Ibrahim A. Badran Foundation, which deployed
48 medical convoys in Fayoum’s underserved regions.
The convoys offer medical services through a team
of qualified doctors in various disciplines who will
extend medical services to 30,000 children each year.
The final installment was fully disbursed in 2020.
Kids on Wheels
In line with the Foundation’s commitment to
supporting children with special needs, the
Board allocated EGP 4 million to provide 100
children with wheelchairs in cooperation with
the Al-Hassan Foundation for Differently Abled
Inclusion in April 2019. Three installments worth
a total of EGP 3 million were disbursed to fund
the costs of 75 German wheelchairs, designed for
permanent child users.
For a Better Childhood
In April 2019, the CIB Foundation allocated EGP 12.4
million to Benha University Hospital to equip it with
40 incubators and 10 pediatric ICU beds with their
auxiliaries. This planned expansion enabled the
hospital to serve approximately 3,500 children each
year in Benha and the surrounding areas. A total of
EGP 3.32 million was disbursed in 2020.
One Heart
The Board allocated EGP 33.18 million in April 2019
to exclusively sponsor, outfit, and operate 15 cardiac
pediatric intensive care units through purchasing
medical equipment, while covering operating costs
for six months. The Foundation also sponsored 40
pediatric open-heart surgeries through its dona-
tion. The hospital offers its services free of charge to
underprivileged communities. The final installment
of the project was fully disbursed in 2020.
Children Without Risk
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 enables the hospital to
serve around 1,200 newborns annually. The CIB
Foundation disbursed the final payment after the
delivery of all the required equipment and training
the medical staff in 2020.
Touch of Hope
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 lymphoma. The device is
expected to help diagnose 1,200 children each year.
The full amount was disbursed in 2020.
We Can Live Together
The Foundation allocated EGP 1.23 million to the
True Light Society Association, which seeks to inte-
grate children with visual disabilities into the public
school system. The equipment provided by the
Foundation includes Braille typewriters and books,
visual assistants, and school supplies. Training
programs will also be offered to children and their
parents. Overall, the project will benefit 470 visu-
ally impaired children. A total of EGP 960,000 was
disbursed in 2020.
Healthy Children
In April 2019, the Board allocated EGP 3.38 million to
launch two mobile clinics providing comprehensive
medical services including pediatrics, ophthalmology,
and internal medicine to children in remote areas of
Upper Egypt. The clinics will provide children with
checkups, medical referrals for specialized cases, and
medication. The clinics are expected to examine more
than 95,000 children each year. In 2020, the first and
second installments amounting to a total of EGP 2.25
million were disbursed.
Gift of Life
Building on the success of previous collaborations,
the Board approved the allocation of EGP 3.7 million
in October 2018 to support a second round of open
heart surgeries for 100 underprivileged children with
congenital heart diseases at the El Kasr El Aini Hospital,
under the management of the Rotary Club of Giza
Metropolitan. The fund was fully disbursed in 2020.
Our Children’s Health is Priceless
In 2019, the Board allocated EGP 14.45 million to
establish a pediatric surgery unit at the South Valley
University Hospital, which serves a number of gover-
norates 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 increase
the capacity of the Emergency and Accidents
Department to operate on 600 children instead of
150 each year.
Kidney Care and Cure
In April 2019, the Board allocated EGP 16 million to
expand and outfit Sohag University Hospital’s pedi-
atric 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 features an ICU, a plasma separation
room, 16 new dialysis machines, and a central delivery
system that will lower infection rates. It is expected to
serve approximately 5,000 children each year.
A Vision to the Future
In April 2019, the Board approved a budget of EGP
4.63 million to outfit the pediatric ophthalmic clinic
at Alexandria University Hospital, considered to be a
center of excellence serving underprivileged families
in the Alexandria and Delta regions. The initiative
is expected to benefit 8,750 children each year. Of
the total value of the project, EGP 4.47 million was
disbursed in 2020.
Superstars are Born from Scars
In 2019, the CIB Foundation allocated EGP 2
million 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. The collaboration came in
response to a severe lack of medical care available
for burn victims across Egypt, with children under
18 years old making up approximately one-quarter
of the total number of victims. EGP 1.72 million
was disbursed in 2020.
Healing Hands
The Foundation allocated EGP 11.6 million to equip
Cairo University Hospital with a state-of-the-art CT
Scanner (128 slices) to detect congenital defects and
tumors in the nervous, motor, digestive, urinary,
and reproductive systems, along with examinations
of heart arteries. The device is expected to provide
scans for 6,000 children each year. To date, a total of
EGP 3.9 million has been disbursed.
A Bridge of Knowledge
The Foundation will fund a five-year education and
training program for 150 staff members of the Ain
Shams clinical team (including doctors, nurses, and
technicians) in partnership with Great Ormond Street
Hospital for Children (GOSH) in London. This initia-
tive follows the upgrade 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 capacity
and serve an additional 67,000 children each year
along with enhancing its overall level of care.
GOSH is an international centre of excellence in
paediatric care, globally recognised as one of the
few world-class hospitals for children suffering from
rare, complex, or multiple conditions. The emphasis
on education and training is key to the delivery
of improved patient outcomes. GOSH train more
paediatric specialist doctors than any other centre
in Europe and have Europe’s largest paediatric
nurse education programme, and will work with
Ain Shams University Children’s Hospital to deliver
bespoke education and training with specific focus
on paediatric/neonatal intensive care and haema-
tology/oncology.
Volunteering/Entertainment Events
CIB Family Bag Packing Event
In February 2020, the Foundation held an event for
CIB staff and families to participate in the packing of
more than 11,550 school bags that include health and
hygiene kits, coloring books, and colors for beneficia-
ries of the 6/6 Eye Exam Convoys.
Supporting Squash: Best Bank – Best
Players
In 2020, CIB continued to positively impact local
communities by strengthening the support for sports
in Egypt, as well as nurturing the country’s athletic
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.
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At CIB, we recognized early on the true potential of
Egypt’s squash players, who are not only dominating
world rankings, but completely revolutionizing
how the game is played. This year, we extended our
support of the sport to capitalize on the traction its
players are carrying out globally. We believe that
through supporting these talents, more opportuni-
ties are generated for Egypt’s athletic community and
more opportunities are presented to raise Egypt’s
ranking on the global arena.
Egyptian squash players have especially gained
traction due to their innovative techniques that has
in turn both entertained worldwide spectators and
brought home trophies.
Egypt has produced five number ones in the men’s
game and three in the women’s game in global
competitions. As of December 2020, five Egyptian
males and five Egyptian females have made it to their
respective world’s top 10 players lists.
The country’s dominant position in the game stems
from a tight-knit squash community, which embodies
the values that CIB strives to instill in its own staff
and promote to the wider Egyptian community.
Young players from all walks of life have the oppor-
tunity to display their skills on the global stage owing
to their perseverance, openness to competition,
support from peers, and the availability of resources.
Squash Tournament Sponsorships
CIB has expanded its squash-related sponsorships to
allow for more Egyptian athletes to progress in the
PSA world rankings.
The most notable sponsorship in 2020 was the CIB
Egyptian Squash Open Women’s and Men’s Platinum,
which took place at the Great Pyramids of Giza and
brought together 96 athletes for a total prize of USD
540,000. The tournament made significant tides in
both the local and global sporting arena due to the
unprecedented move toward women’s equality. In
2021, CIB is committed to becoming the title sponsor
of future squash tournaments in Egypt.
Sponsoring the Egyptian Squash Federation
CIB maintained its sponsorship of the Egyptian
Squash Federation for the ninth consecutive year. The
Bank also expanded its commitment by sponsoring
the National Women’s and Junior Squash Teams.
Currently, Egyptian players hold the Men’s World
Team Championship, the Women’s World Team
Championships, 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 sponsorships to
help eight talented players maintain their rankings
and continue representing the country around the
world. As of November 2020, the following players
were recipients of the sponsorships:
• Ali Farag: #1 on the Men’s PSA World Squash List
—The 2019-2020 season may have seen Farag lose
the World No.1 spot, but his form was fantastic,
reaching the final in five of the six tournaments
he played in, along with achieving success for his
country on the global front. Farag made it to the
quarter-finals of the Manchester Open, the first
event back after the PSA World Tour resumed
following its six-month suspension due to COVID-
19. He then lost out to Marwan ElShorbagy for the
second straight event in Cairo, after reaching the
last four of the CIB PSA World Tour Finals. The
2018-2019 World Champion found his form again
at the CIB Egyptian Open, though, as he won the
title after dropping just three games throughout
the tournament, and with the victory at the
Platinum event, he reclaimed the World No.1 spot
from November 2020.
• Nour El-Tayeb: #3 on the Women’s PSA World
Squash List — The ‘Black Widow’ began the
2019-2020 campaign in the best possible way, as
she got the better of World No.1 Raneem El Welily
to win the J.P. Morgan China Squash Open in
September. She then made the final of the Oracle
NetSuite Open in San Francisco three weeks
later, but the 2017 World Champion exacted
her revenge. In the first tournament back after
the tour’s six-month suspension, El Tayeb took
the Manchester Open crown, downing Camille
Serme in a high-quality final. She then made it
to the final of the season-ending CIB PSA World
Tour Finals in Cairo, losing out to Hania El
Hammamy. El Tayeb also reached the last four
of the CIB Egyptian Open, losing out to eventual
champion Nour El Sherbini.
• Karim Abdel Gawad: #5 on the Men’s PSA
World Squash List — Karim Abdel Gawad made
it through to the final of the Manchester Open,
Ali Farag
Nour El-Tayeb
Karim Abdel Gawad
the first event back after the PSA World Tour
returned, but lost out in four games to World No.1
Mohamed ElShorbagy. He then lost out in the
final of the season-ending CIB PSA World Tour
Finals in Cairo, defeated by the younger of the
ElShorbagy brothers.
• Tarek Momen: #3 on the Men’s PSA World
Squash List and current world champion ‘The
Viper’ started the 2019-2020 campaign with an
appearance in the final of the Oracle NetSuite
Open, where he lost out to Mohamed ElShorbagy.
After reaching the semi-finals at the FS
Investments U.S. Open Squash Championships,
Momen secured the biggest crown of his career,
as he was named PSA Men’s World Champion
following victory over Paul Coll in the final
in Qatar. The start of 2020 was consistent for
Momen, as he finished runner-up to Mohamed
ElShorbagy at the J.P. Morgan Tournament of
Champions, before winning the Troilus Canada
Cup. He then made appearances in the last
four of both the Windy City Open presented
by the Walter Family and the St. James’s Place
Canary Wharf Classic before the suspension of
the Tour due to COVID-19. The reigning World
Champion could only make the quarter-finals in
Manchester as the sport returned, losing out to
Paul Coll in an epic five-game clash. ‘The Viper’
then reached the final of the CIB Egyptian Open,
making a first final on home soil. However,
he came stuck against Ali Farag, losing out in
straight games.
• Hania El-Hammamy: #5 on the Women’s PSA
World Squash List — Hania El Hammamy started
the 2019-2020 season with a semi-final appear-
ance at the Open de France - Nantes presented
by Tailor Capital. She lost out to Camille Serme,
the first of four tightly-contested battles with the
Frenchwoman over the course of the campaign.
She got the better of the World No.3 at the Women’s
World Championship en route to a first semi-final
appearance at a major tournament just six weeks
later. In the final event before the suspension of the
PSA World Tour due to the COVID-19 pandemic
in early 2020, El-Hammamy wrote her name into
the history books of the sport, becoming a major
winner for the first time at the age of just 19-years-
old. She downed Serme once again, before
overcoming tough challenges from Amanda Sobhy,
Sarah-Jane Perry, and Nour El Sherbini to win the
Black Ball Open. The young starlet of Egyptian
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Responsible Banking // Social Development
squash reached the semi-finals in Manchester,
losing out in another five-game battle with Camille
Serme. She made up for that loss in Cairo a week
later, downing the Frenchwoman in the group
stages route to winning the CIB PSA World Tour
Finals, her second major title of the year. ‘The
Gazelle’ continued her good form by reaching
the last four of the firs Platinum event of the new
campaign, losing out to Nouran Gohar in the semis
of the CIB Egyptian Open.
• Mohamed Abouelghar: #12 on the Men’s PSA
World Squash List —
‘The Bullet’ struggled
through 2020, but ended the year strongly, with
a quarter-final appearance at the CIB Blackball
Squash Open on home soil in Cairo.
• Marwan ElShorbagy: #6 on the Men’s PSA World
Squash List — ElShorbagy started the 2019-2020
campaign in good form, reaching the last four of
both the J.P. Morgan China Squash Open and the
Oracle NetSuite Open in San Francisco, before
making it to the quarter-finals of the CIB Egyptian
Squash Open held in front of the Pyramids in
November. He then made it through to the semi-
finals of the PSA Men’s World Championships in
Qatar, before quarter-final appearances at both the
Channel VAS Championships and the Motor City
Open. His final tournament before the COVID-19
enforced suspension of the Tour came at the St.
James’s Place Canary Wharf Classic, where he
made it through to the last four. The younger of the
ElShorbagy brothers made it through to the last
four in Manchester, as the sport returned following
six months. ‘The Jackal’ then excelled at the CIB
PSA World Tour Finals, winning the title with a
straight games victory over Karim Abdel Gawad
in the final. His good form continued with a semi-
final appearance at the CIB Egyptian Open.
• Salma Hany: #10 on the Women’s PSA World
Squash List — Hany started the 2019-2020 season
by reaching the quarter-finals of the J.P. Morgan
China Squash Open, before consistently reaching
the last 16 of the major tournaments throughout
the campaign, including at the CIB PSA Women’s
World Championship in front of the Pyramids.
The young Egyptian reached the quarter-finals
of the J.P. Morgan Tournament of Champions for
7
squash champions supported
by CIB
the second consecutive year, before also reaching
the last four of the Carol Weymuller Open just a
couple of weeks later. A quarter-final appearance
at the Manchester Open, as squash returned
following its six-month suspension due to COVID-
19, was enough to see Hany move into the top ten
of the World Rankings for the first time in her
career in October 2020. She followed that up with
another last eight result, making that mark at the
Platinum level CIB Egyptian Open.
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 of the Bank’s
strategy to support up-and-coming talents from the
ground up. CIB sponsors Wadi Degla athletes Nouran
Gohar, Ali Farag, and Karim Abdel Gawad.
Nouran Gohar: #2 on the Women’s PSA World Squash
List — Nouran Gohar won her first Tour title at the Prague
Open in December 2013 at just 16. During the 2018/19
campaign, she made her way back into the top five in
the rankings, starting with the semifinal appearances at
the Hong Kong Open and the CIB Black Ball Open. She
reached the final stage of the El Gouna International
and won the British Open, attaining her first trophy.
She gained a second major title by winning the 2019
FS Investments U.S. Open Squash Championships,
defeating Nour El Tayeb at the final in Philadelphia, also
claiming a bronze-level victory at the Carol Weymuller
Open. Gohar went on to succeed the retiring Raneem El
Welily as women’s World No. 1, securing the top spot in
the July 2020 rankings, reaching the summit for the first
time in her career. She reached the CIB Egyptian Open
finals but lost to Nour El Sherbini.
Tarek Momen
USD
540,000
Grand prize at the 2020 CIB
Egyptian Squash Open
Women’s and Men’s Platinum.
Hania El-Hammamy
Marwan ElShorbagy
Mohamed Abouelghar
Salma Hany
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Responsible Banking
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.
CIB has always been keen to adopt the international
best practices of corporate governance as part of
its mission to become the best financial institution
in Egypt. The governance framework seeks to drive
long-term value for shareholders, employees, and
other stakeholders. It is anchored in a distinguished
group of
independent non-executive directors
(NED), as well as its competent board commit-
tees and experienced management team. A set of
internal policies and processes helps the Board and
senior management make the proper decisions.
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.
Besides the support provided by the commit-
tees, CIB’s Board of Directors is also supported
by internal and external auditors, as well as other
internal control departments (Risk, Compliance,
Corporate Governance, Internal Audit, and Legal).
Work carried out by these functions is fully utilized
by the Board to ensure the Bank adheres to local and
international 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 Board works to ensure proper imple-
mentation of internal and external regulations and
mitigate all possible risks.
These mandates are complemented by a set of
governance policies designed to promote a corpo-
rate culture that emphasizes building trust with key
stakeholders. This culture is aligned with the Bank’s
purpose and business strategy while promoting
integrity within the Bank.
The Code of Corporate Governance is the foundation of
CIB’s governance framework, setting forth the gover-
nance policies and procedures with an eye toward
building an environment of trust, transparency, and
accountability necessary
long-term
investment, financial stability, and business integrity.
fostering
for
The Code of Conduct sets out the standards of
behavior expected from all employees, providing
staff, senior management, and the Board with a
comprehensive frame of reference regarding their
rights and duties. The code further enshrines the
principles of equal employment opportunity and
gender equality.
forthcoming about any conflict of interest between
the Bank and their personal, professional, and
business interests, providing guidance on how to
handle such cases.
The Disclosure policy is designed to help engage
with shareholders and potential investors, while
increasing their confidence and satisfaction in the
credibility and accessibility of the Bank’s infor-
mation. The policy aims to minimize the risks of
violating relevant laws and regulations in relation to
communicating information to the investing public
and regulators of the capital and financial markets.
This comprehensive policy structure reflects CIB’s
prioritization of a strong governance framework,
one that is fully backed by each of the Bank’s
board members 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 Board of Directors and properly imple-
menting the Bank’s policies.
Board of Directors
CIB is headed by a competent Board of Directors,
which provides the Bank with the necessary lead-
ership and experience to manage its business with
integrity, efficiency, and, most importantly, excel-
lence. The Bank’s board structure is in line with
local regulations and international best practices
and allows for the position of a lead director. CIB’s
Board of Directors enjoys an optimal mix of skills,
experience, and diversity in terms of gender and
nationality. Some 86% of the Board of Directors
are NEDs and 29% of the members are women.
The Board maintains an independence level of 86%
among its members.
CIB’s Conflict of Interest policy guarantees that
all staff and board members remain aware of and
The Bank’s business and affairs are subject to
the general oversight of the Board of Directors.
86%
independence rate among board
members
The Board ensures that the Bank’s accounts and
financial statements are fair, balanced, and under-
standable and provide information necessary to
shareholders to asses CIB’s position, performance,
business model, and strategy.
The Board of Directors’ primary focus is CIB’s
long-term financial and non-financial success and
seeking the best interests of all related stakeholders.
The Board is also responsible for setting CIB’s
strategic objectives, overseeing the implementa-
tion of said strategy, providing 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 perfor-
mance goals and managing director nominations,
evaluations, and succession planning. It oversees
CIB’s economic, social, and environmental sustain-
ability initiatives, while performing its duties with
entrepreneurial leadership and in good faith. The
Board also sets the seal on the existence of a sound
strategy, and risk management oversight to ensure
that risks are properly assessed and managed.
Changes to the Board of Directors During 2020
In January 2020, the Board of Directors consisted of
nine members, seven of whom were non-executive
directors, of which six were independent:
• Mr. Hisham Ezz Al-Arab – Chairman and MD
• Mr. Hussein Abaza – CEO
• Mr. Jawaid Mirza – Independent NED
• Mr. Mark Richards –Independent NED
• Mr. Bijan Khosrowshahi – NED Representative of
Fairfax Financial Holding
• Dr. Amani Abou Zeid – Independent NED
• Mrs. Magda Habib – Independent NED
• Mr. Paresh Sukthankar – Independent NED
• Mr. Rajeev Kakar – Independent NED
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Responsible Banking // Corporate Governance
In compliance with CBE corporate governance
directives, both Mr. Jawaid Mirza and Mr. Mark
Richards stepped down on 2 February 2020 and
2 March 2020, respectively, having concluded six
years of service on the Board.
CIB’s General Assembly Meeting was held on
15 March, during which the AMG elected and
appointed the Board of Directors for a new term for
three years, commencing 2020. Accordingly starting
March, the elected Board was composed as follows:
• Mr. Hisham Ezz Al-Arab – Chairman and MD
• Mr. Hussein Abaza – CEO
• Mr. Bijan Khosrowshahi – NED Representative of
Fairfax Financial Holding
• Dr. Amani Abou Zeid – Independent NED
• Mrs. Magda Habib – Independent NED
• Mr. Rajeev Kakar – Independent NED
• Mr. Paresh Sukthankar – Independent NED
• Mr. Sherif Samy – Independent NED
On 13 October, Mr. Bijan Khosrowshahi stepped
down as an NED, after concluding six years of service
on the Board. Fairfax Financial Holdings selected
Mr. Paresh Sukthankar to represent its interest in
CIB through its wholly-owned subsidiaries, subject
to CBE approval on the matter. Moreover, Mr.
Jay-Michael Baslow joined CIB’s Board of Directors
as an Independent NED.
On 23 October, Mr. Hisham Ezz Al- Arab decided
to step down from his responsibilities as Chairman
and Managing Director, after receiving a letter from
the CBE stipulating that, in light of the findings
of a limited review inspection, the CBE’s Board of
Directors issued a resolution to discharge the Bank’s
Chairman and Managing Director. The letter also
noted that CIB’s board must elect a Non-Executive
Chairman from among its NEDs, in accordance
with article 144 (I) of the Central Bank and Banking
Law 194 for the year 2020. The Board unanimously
decided to appoint Mr. Sherif Samy, Chairman of
both the Audit and Governance and Nomination
committees, to assume the responsibilities of
Non-Executive Chairman of the Board. The decision
has received CBE approval.
CIB’s Board of Directors currently consists of seven
members who possess an appropriate balance of expe-
rience, competencies, and individual qualifications.
These collective qualities give the Bank a distinct
competitive edge. Over the course of 2020, with the
changes to the Board, CIB’s Board of Directors met
17 times, three of which were attended in person, 13
conducted via video conferencing, and one meeting
attended in person by the directors who were present
in Cairo, with directors residing abroad joining via
video conference, in view of the prevailing preventive
measures due to the COVID-19 pandemic.
Being the single strategic 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 Board of Directors.
Board Committees
Backed by an experienced executive management
team, CIB’s highly qualified Board of Directors are
also supported by specialized board committees.
Committees are chaired by the NEDs, who brief the
Board on major points raised by their respective
committee. CIB’s Board of Directors has seven standing
committees that assist in fulfilling its responsibilities:
five non-executive and two executive committees.
Each committee chairperson is responsible for briefing
the Board of Directors on the major issues raised by the
committee that he or she chairs. Such briefings enable
the members of the Board of Directors to carry out their
duties in an effective manner. Each committee operates
under a written charter that sets out its responsibilities
and composition requirements, reporting to the Board
on a regular basis. Separate committees may be set up
by the Board of Directors to consider specific issues
when the need arises.
Non-Executive Committees
Audit Committee
Responsibilities: The committee was established
to provide oversight of the integrity of the Bank’s
financial reporting process, the effectiveness of the
Bank’s internal control system, and its compliance
with all statutory requirements. 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 auditors, to ensure the indepen-
dence and objectivity of each, in addition to the
quality of the applied processes and outcomes. In
the second half of the year, a new entity was estab-
lished entitled Customer Protection, reporting to
Compliance, becoming among the areas on which
the committee has oversight.
additions and amendments to the Board and
committee charters. This entails a periodic review
of the Bank’s corporate governance structure, with
the issuance of recommendations for change when
and if necessary. The GNC contributes to the Board’s
effectiveness and governance, sets the criteria for
selecting new directors, and assists the Board in
identifying suitable individuals for nomination as
non-shareholder representative board members.
The committee’s duties extend to board succession
planning, including the Bank’s Chief Executive
Officer. The committee met seven times in 2020.
The committee met nine times in 2020.
2020 Audit Committee Highlights: During 2020,
as mandated in its charter by the Board, the Audit
committee reviewed the financial statements and
clarifications prepared for publication, discussed
them with the relevant bank officers and external
auditors, receiving assurances that the financial
statements comply with the applicable reporting
standards and with CBE and FRA directives. The
committee also monitored the outcome of the IFRS
9 model, with a validation exercise and assessment
of the policies and methodology for expected credit
loss (ECL) calculation as of 30 June 2020. This was
an important undertaking in light of the COVID-19
measures and their impact.
In March 2020, the committee chair stepped down
after concluding six years as a board member, as
mandated by the CBE. He was replaced by Mr. Sherif
Samy, who chaired the committee as of its second
meeting for the year.
2020 Governance and Nomination Committee
Highlights: Throughout 2020, the committee
regularly advised the Board on governance matters
based on its periodic review of the Bank’s corporate
governance structure. The GNC assisted the Board
in operating as effectively as possible and governing
the Bank’s operations, to be executed in accordance
with
international governance best practices.
The committee reviewed the Bank’s 2020 Annual
Corporate Governance Report. The results of the
Board of Directors’ annual assessment affirmed
that board discussions are conducted openly and
transparently, creating an environment for sustain-
able and robust debate. During 2020, three directors
stepped down after completing six years of service
on the Board, and two independent NEDs were
appointed. Several potential candidates were iden-
tified and assessed by the committee throughout
the year. The GNC ensured that the newly appointed
candidates received proper induction, and the
Non-Executive Board committee was formed to
accommodate the new directors and leverage their
knowledge and experience.
Chairperson:
Mr. Sherif Samy
Members:
Mrs. Magda Habib
Mr. Paresh Sukthankar
Chairperson:
Mr. Sherif Samy
Members:
All non-executive directors
Governance and Nomination Committee (GNC)
Responsibilities: The committee, which reflects
the Board’s voice on governance, advises the Board
on the Bank’s governance framework and reviews
Compensation Committee
Responsibilities: The committee was estab-
lished
the
appropriate compensation for the Board and
to provide guidance
regarding
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Responsible Banking // Corporate Governance
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 compensation schemes are
in place, and that they are effective at attracting
and retaining the best caliber professionals. The
committee met three times in 2020.
2020 Compensation Committee Highlights:
During 2020, the committee assessed executive
officers’ and expatriates’ performance for the year
2019, and recommended the appropriate compensa-
tion accordingly. The committee also reviewed and
approved the Bank’s overall variable compensation
guidelines for 2019.
Chairperson:
Mr. Rajeev Kakar
Members:
All non-executive directors
Risk Committee
Responsibilities: This committee oversees risk
management functions through periodic reports
submitted by the Risk Group. The committee
assesses compliance, concurs, and makes recom-
mendations to the Board of Directors regarding risk
management strategies, the Bank’s risk appetite
and risk related policies. This includes those related
to capital adequacy, liquidity management, and
various types of financial and non-financial risks
such as credit, market, operations, compliance,
reputation, and any other risks to which the Bank
may be exposed.
The committee met eight times during 2020, with
one meeting conducted in person, and seven held
via video conferencing in light of the prevailing
preventive measures due to the COVID-19 outbreak,
as allowed by the CBE and FRA.
2020 Risk Committee Highlights: During 2020,
in light of the heightened risk posed by the global
pandemic, the committee supported a number of
initiatives to ensure the Bank’s critical operations
were maintained, and employees’ health safe-
guarded. Besides regular periodic risk reporting,
the committee closely monitored the new risks
encountered during the crisis, the impact on
the Bank’s operations, the challenges facing the
business, and economic and regulatory capital
adequacy. It also reviewed and challenged the
Expected Credit Loss (ECL) calculation, and,
accordingly, more unscheduled meetings were
held during the year.
Given the inevitability of economic implications
arising from the negative impact of COVID-19 on
the Bank’s portfolio quality and impairments, the
committee was confident of the Bank’s relatively
better and more stable portfolio quality and healthy
coverage ratios in the face of the crisis.
During the year, two committee members stepped
down after concluding six years of service on the
Board, as mandated by regulations. The vacan-
cies were promptly filled to ensure a quorum for
all meetings.
Chairperson:
Mr. Paresh Sukthankar
Members:
Dr. Amani Abou-Zeid
Mr. Jay-Michael Baslow1
2020 Operations and Technology Committee
Highlights: During 2020, the committee’s activi-
ties involved maintaining oversight of Operations
and Technology’s 2020 strategy and associated
budget for the different business segments and IT.
Special focus was given to Digital Transformation
and Robotics Process Automation (RPA), ATMs,
the CIB Flex Program, agile transformation and
business banking strategies. The value at stake
calculation methodology of the Bank’s key proj-
ects and initiatives was reviewed and validated.
The committee reviewed the Bank’s key opera-
tions and technology risk exposure and validated
the steps management has taken to monitor and
control such exposure, including, but not limited
to disaster recovery, physical security, cyber secu-
rity risks, model risk, and compliance risk, with
key focus on the KYC update efforts and customer
service charter. The committee also focused on
outstanding internal and external audit issues
in terms of their associated risk criticality and
business impact, to ensure proper categoriza-
tion, compensating controls, and mitigation are
in place. In preparation for the 2021 budget, the
committee reviewed, challenged, and validated
the IT strategy in alignment with the anticipated
business strategy, ensuring consideration of the
key business transformation priorities as a top-
down approach, with focus on an appropriate
sourcing model, vendor selection, applicable
trends, enhanced customer
future banking
journey, and running rather than changing the
Bank’s investments.
Chairperson:
Mr. Paresh Sukthankar
Members:
Dr. Amani Abou-Zeid
Mr. Jay-Michael Baslow1
its oversight
Operations and Technology Committee
Responsibilities: The Operations and Technology
committee assists the Board of Directors in
responsibilities over
fulfilling
Operations and Technology, with respect to direc-
tion and alignment with the Bank’s strategy,
efficiency and support of the business, robustness,
and resilience. This is in addition to ensuring they
are at the forefront of developments, adopting
cost justified best practices, with the objective of
increasing bank competitiveness and reducing
risks. The committee met eight times in 2020.
2020 Operations and Technology Committee
Highlights: During 2020, the committee’s activities
involved maintaining oversight of Operations and
Technology’s 2020 strategy and associated budget
for the different business segments and IT. Special
focus was given to Digital Transformation and
Robotics Process Automation (RPA), ATMs, the CIB
Flex Program, agile transformation and business
banking strategies. The value at stake calculation
methodology of the Bank’s key projects and initia-
tives was reviewed and validated. The committee
reviewed the Bank’s key operations and technology
risk exposure and validated the steps management
has taken to monitor and control such exposure,
including but not limited to disaster recovery,
physical security, cyber security risks, model risk,
and compliance risk, with key focus on the KYC
update efforts and customer service charter. The
committee also focused on outstanding internal
and external audit issues in terms of their associ-
ated risk criticality and business impact, to ensure
proper categorization, compensating controls, and
mitigation are in place. In preparation for the 2021
budget, the committee reviewed, challenged, and
validated the IT strategy in alignment with the
anticipated business strategy, ensuring consider-
ation of the key business transformation priorities
as a top-down approach, with focus on an appro-
priate sourcing model, vendor selection, applicable
future banking
trends, enhanced customer
journey, and running rather than changing the
Bank’s investments.
Chairperson:
Mr. Rajeev Kakar
Members:
Mrs. Magda Habib
Mr. Sherif Samy
Executive Committees
Management Committee
Responsibilities: The committee is responsible
for executing the Bank’s strategy as approved by
the Board. The committee manages the Bank’s day-
to-day functions to ensure alignment with strategy,
effective controls, risk assessment, and efficient
use of the Bank’s resources. It also monitors the
Bank’s strategic associates and subsidiaries. The
committee met 34 times in 2020.
1 Mr. Jay-Michael Baslow joined the Board of Directors in October 2020.
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Responsible Banking // Corporate Governance
Chairperson:
Mr. Hussein Abaza
Voting Members: Mr. Ahmed Issa – CEO Retail Banking
Mr. Amr El Ganainy – CEO Institutional Banking
Mr. Mohamed Sultan – Chief Operating Officer
Ms. Hanan El Borollossy – Deputy Chief Risk Officer (acting as CRO effective 19
January 2020)
Ms. Nevine Wefky – President of Corporate Credit and Investment
• The remuneration of NEDs.
• The appointment of the external auditor.
• The appointment, suspension, or dismissal of
the members of the Board of Directors.
• The issuance of shares or rights to shares, restriction
or exclusion of preemptive rights of shareholders,
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 Assembly
Meeting of Shareholders. Moreover, the Board
Audit committee evaluates the performance of the
external auditor and endorses the prepared finan-
cial 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 every five years to
ensure objectivity and exposure to new practices.
High Lending and Investment Committee (HLIC)
Responsibilities: This committee is responsible
for managing the asset side of the balance sheet,
through monitoring asset allocation, quality, and
development, as stipulated in the Bank’s Credit
and Investment Policies. The HLIC is the authority
for monitoring the decisions and
responsible
performance of the Bank’s other credit committees.
The committee convened weekly throughout 2020,
meeting a total of 54 times.
Chairperson:
Mr. Hussein Abaza
Members:
CIB Senior Management
Alternate
Members:
Senior Officers of the Bank
Shareholders’ Rights
CIB’s Annual General Meeting of Shareholders is held
in March of each year, no later than three months
after the end of the Bank’s financial year. Additional
extraordinary general shareholder meetings may be
convened at any time by the Board of Directors. The
General Assembly provides a platform for shareholders
to engage with the Board of Directors, ask questions,
and exercise their voting rights. Shareholder consent is
required for key decisions such as:
• The adoption of financial statements.
• Voting on proposed dividends by the Board
of Directors.
• Significant changes to the Bank’s corporate
governance practices.
• The remuneration policy.
148 |
Annual Report 2020
2020 Annual Report
| 149
07
Subsidiaries
and Affiliates
4
strategic subsidiaries and
affiliates
150 |
Annual Report 2020
CIB’s subsidiaries and affiliate
ORGANIZATIONS
are part and parcel of its strategy to build out
a diversified institution.
0107070707 Subsidiaries and Affiliates
Subsidiaries and Affiliates
CVentures
CVentures is an early-stage, cross-border venture
capital firm primarily focused on investing in compa-
nies creating meaningful change in financial services.
CVentures
forward-thinking
fast-moving,
teams with deep market insights and high-perfor-
mance cultures. The firm backs groundbreaking
businesses with fundamentally distinguishable char-
acteristics and disruptive business models.
favors
2020 Highlights
In 2020, CVentures developed promising industry
relationships and a robust pipeline of companies
in digital finance and digital financial services.
This included:
• Three new investments, two of which have been
disclosed, growing our portfolio size to four
companies;
• Expanding CVentures’ network across different
technology hubs and entrepreneurship ecosys-
tems; and
• Engaging with early-stage companies and inves-
tors in four continents.
CVentures continued to implement a patient deploy-
ment strategy during its second year of operations.
The Investment team continued to work toward
concluding other investments in emerging and
disruptive digital financial services while keeping a
close eye on changing market dynamics and startup
activity in light of the COVID-19 outbreak.
2021 Forward-Looking Strategy
In addition to continuing to focus on comple-
menting CIB’s strategy, CVentures remains focused
on actively growing its portfolio while targeting
above industry-average returns and expanding its
local, regional, and global footprint.
Mayfair CIB Bank Limited (MCIB)
Located in Kenya, Mayfair CIB Bank Limited,
formerly known has Mayfair Bank Kenya, was estab-
lished in 2017. With five branches in Nairobi, Eldoret,
and Mombasa, it is Kenya’s fourth smallest lender,
focusing on high-net-worth individuals and the
corporate market.
In April 2020, CIB acquired 51% of the bank, marking
CIB’s first cross-border acquisition into Sub-Saharan
Africa. CIB’s strategy for Mayfair focuses on trade
finance activities, particularly growing the Egypt-
Kenya trade corridor, enabling Egyptian
large
corporates and SMEs to do business in the hub of
Eastern Africa.
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 services including: security,
money transfer, technical systems and security
products, public services and project management,
and tourism 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. Its key strength lies in its single-
point-of-contact solutions that ensure it provides
consistent services at the highest quality, lowest risk,
and with great flexibility at a reasonable cost.
Falcon for Security Services
Falcon for Security Services has been the main
security service provider
for several top-tier
government and non-government organizations,
such as 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.
2020 Highlights
Falcon for Security Services achieved its 2020 goal of
working with numerous prominent institutions and
added new clients, securing several projects such
as ones for Tahrir Square, Porto New Cairo Mall,
Alamein University, GlobeMed Egypt for Healthcare,
Glala University, and King Salman University.
We secured numerous public events in 2020,
organizing the Aswan International Women Film
Festival, Tamer Hosni Festival at Hilton Green Plaza,
and the El Gouna International Marathon.
2021 Forward-looking Strategy
We captured a market share of 70% this year and will
work to maintain our market leadership by growing
both organically and through acquisitions. In 2020, the
Group plans to expand its market presence by 25%.
As part of the Group’s goal of providing top-notch
solutions, Falcon companies plan to use managed
service providers for its activities. The Group also
expects to target prominent institutions and clients
such as SAIB, General Motors, and other companies
to add to its roster of clients while simultaneously
expanding its product and service offering to ensure
clients remain fully satisfied and confident in them
as their number one choice in terms of efficiency
and customer service.
99.99%
CIB Ownership in CVentures
51%
CIB Ownership in Mayfair CIB
Limited
30%
CIB Ownership in Falcon Group
Falcon for Public Services and Project
Management
Falcon for Public Services and Project Management
operates all facility systems to the comfort and
satisfaction of facility occupants. The company offers
general cleaning, landscaping, façade cleaning, and
marble polishing at the highest quality, efficiency,
and cost effectiveness. Falcon for Public Services and
Project Management holds a market share of 20%,
serving a large client base out of 330 different loca-
tions as of 2020.
152 |
Annual Report 2020
2020 Annual Report
| 153
Subsidiaries and Affiliates
2020 Highlights
Through considerable efforts to build solid relation-
ships and gain the trust and confidence of public
and private institutions, the company succeeded
in signing on several new clients such as Arab
Maritime Petroleum Transport Company (AMPTC),
Galal University, Alamein University, and King
Salman University.
The company also renewed important contracts
such as with the Port Said Security Directorate, the
Embassy of the Sultanate of Oman, the Embassy of
the State of Kuwait, and the Social and Health Care
Improvement Fund for Police Staff.
2021 Forward-looking Strategy
The company’s strategy is based in its firm belief
that their performance is measured by their clients’
success. Over the next year, the company plans to
sign sizeable several contracts with new customers
such as the Ministry of Tourism and Antiquities,
Mansoura University, and Hurghada University.
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 transportation
through a highly qualified team.
2020 Highlights
The company signed several new contracts to
increase its market position, increasing cash volume
20% y-o-y. It added 14 armored vehicles to its fleet in
2020 for a total of 20 vehicles and was able to boost
the number of armored safes in some governorates to
make them cash centers. It also added 21 new motor-
cycles as a new special team service and worked to
lay the foundations for several other service rollouts.
2021 Forward-looking Strategy
The company plans to grow the segment’s market
share through providing new services for retail,
having already integrated new solutions to collect
cash from shopping centers. Falcon for Cash in
Transit will also use the latest technology to develop
ATM services and in its 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 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.
2020 Highlights
Falcon Tech succeeded in expanding its market share
to 70% by signing several new contracts to provide
security systems to airports, commercial malls, and
universities, including ones with:
• Ministry of the Armed Forces
• New CIB branches
• Red Sea Port
• Alexandria Port
• Damietta Port
• Egypt Post for Investment
• Maintenance and supply contract with Cairo
Airport Company
• Maintenance and supply contract with Egyptian
Airport Company
• Maintenance contract with the Ministry of
Interior’s Department of Technical Assistance
Falcon for PR and Communications (Tawasul)
Falcon for PR and Communications (Tawasul)
specializes in communication services and consul-
tancy as well as event and conference management.
It also offers media services.
Fawry Plus
Fawry Plus was established in 2017 as a joint venture
between CIB, Banque Misr, Fawry, and ACIS to
become Egypt’s first banking agent and forerunner
in the nation’s strategy to achieve 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 including
limited KYC services as well as a document collection
services for mobile wallet registration, prepaid and
credit card issuance, and loan issuance. Other services
include mail and bank correspondence collection,
loan and credit card payments, cash withdrawals and
deposits, as well as various bill payments including utili-
ties, telecom, subscription fees, taxes, and fines.
2020 Highlights
In 2020, Fawry Plus opened an additional nine
branches, bringing the total number of operating
branches to 90, and signed an agreement to triple
the number of branches by using a shop-in-shop
model that will allow consumers even easier access
to the business. It also witnessed a growth of more
than 80% in revenues because of this expansion in
operations. Fawry Plus also partnered with several
banks and received CBE approvals to introduce the
Meeza prepaid card KYC service and international
remittance disbursement service in addition to the
wallet registration services, expanding the portfolio
of agent banking services.
2021 Forward-Looking Strategy
Fawry Plus seeks to become the banking destination
of choice for customers in 2021, attracting customers
through the convenience of its branches, which are
less crowded, more accessible, and operate longer
working hours than banks.
The company will also seek to expand its scope
of services through a multitude of avenues. It will
enter into partnerships with some of Egypt’s leading
banks, financial institutions, and industry players to
offer their services through Fawry Plus. In addition,
it will focus on serving the e-commerce industry
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.
Other Subsidiaries and Affiliates
In addition to CIB’s strategic subsidiaries and
affiliates, the Bank has direct ownership in Al Ahly
Computer Equipment Company (ACE) and Damietta
and Shipping Marine Services (DSMS).
Al Ahly Computer Equipment Company (ACE)
Established in October 1996 as a joint stock company,
ACE has a long track record in the field of trading and
maintenance of specialized information technology
hardware. The company is well-positioned as the
system integrator of choice for the government,
major banks, and large institutions. ACE sources its
original hardware products from recognized compa-
nies in the field, such as Sedco, Fujitsu, HP, and Cisco.
In 2020, ACE worked with numerous prominent
institutions and was awarded a mega tender project
from one of the largest national banks in Egypt.
Despite tough market conditions arising from the
23.5%
CIB Ownership in Fawry Plus
49.95%
CIB Ownership in ACE
39.34%
CIB Ownership in DSMS
COVID-19 pandemic, the company’s management
successfully increased its maintenance contracts
to offset the decline in trading activity, ensuring
revenue and profitability sustainability.
For the coming year, ACE looks to continue focusing on
enhancing its maintenance experience and expanding
its client base, along with introducing new products and
exploring additional strategic technology partnerships.
The ultimate objective is to increase the company’s
market share and value against competitors.
Damietta Shipping and Marine Services
Damietta Shipping and Marine Services (DSMS) is a
shareholding company, established in 1986 through
a public offering. CIB acquired stake in the company
in July 2018, with its ownership reached 49.95% in
October 2020. DSMS is a small-sized company, with
minimal operations focusing on marine services,
mainly container repairs, fuel tank rentals, and
electricity generators.
154 |
Annual Report 2020
2020 Annual Report
| 155
08
Financial
Statements
156 |
Annual Report 2020
08080808 Auditors’ Report
158 |
Annual Report 2020
2020 Annual Report
| 159
Financial Statements // Separate Separate balance sheet
as at December 31, 2020
Separate income statement
for the year ended December 31, 2020
Notes
Dec. 31, 2020
Dec. 31, 2019
EGP Thousands
Notes
Dec. 31, 2020
Dec. 31, 2019
EGP Thousands
Assets
Cash and balances at the central bank
Due from banks
Loans and advances to banks, net
Loans and advances to customers, net
Derivative financial instruments
Investments
- Financial Assets at Fair Value through P&L
- Financial Assets at Fair Value through OCI
- Amortized cost
- Investments in associates and subsidiaries
Other assets
Deferred tax assets (Liabilities)
Property 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
21
21
22
23
31
24
25
26
20
28
27
29
30
33
33
33
33,572,597
86,997,034
776,980
118,854,880
248,759
359,959
147,646,432
25,020,917
874,348
9,095,212
437,772
2,259,940
426,144,830
8,815,561
340,086,524
331,073
859,582
5,679,266
7,746,946
3,221,252
366,740,204
14,776,813
33,085,554
1,064,648
10,477,611
59,404,626
426,144,830
28,273,962
28,353,366
625,264
119,321,103
216,383
418,781
89,897,257
107,225,613
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
The accompanying notes are an integral part of these financial statements.
(Audit report attached)
*Including net profit for the current year
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
6
7
8
9
21
10
11
12
13
31 - 13
14
42,070,598
(16,980,635)
25,089,963
42,600,957
(21,022,838)
21,578,119
3,053,536
(983,450)
2,070,086
98,175
395,701
922,832
(5,552,800)
(2,737,550)
-
(4,989,288)
15,297,119
(5,084,670)
87,433
10,299,882
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
6.26
6.24
7.12
7.09
Hussein Abaza
CEO & Board member
Sherif Samy
Chairman
Hussein Abaza
CEO & Board member
160 |
Annual Report 2020
Sherif Samy
Chairman
2020 Annual Report
| 161
Financial Statements // Separate Separate statement of other comprehensive
income for the year ended December 31, 2020
Separate cash flow
for the year ended December 31, 2020
Net profit for the year
EGP Thousands
Dec. 31, 2020
Dec. 31, 2019
10,299,882
11,803,555
Other comprehensive income items that will not be reclassified to the
Profit or Loss:
Change in fair value of equity instruments measured at fair value through other
comprehensive income
Other comprehensive income items that is or may be reclassified to the
profit or loss:
Change in fair value of debt instruments measured at fair value through other
comprehensive income
(13,966)
212,967
(255,293)
5,944,586
Transferred from reserve on disposal of financial assets at fair value through OCI
(76,717)
-
Effect of ECL in fair value of debt instruments measured at fair value through
OCI
205,182
(184,921)
Total other comprehensive income for the year
10,159,088
17,776,187
162 |
Annual Report 2020
Cash flow from operating activities
Profit before income tax
Adjustments to reconcile net profit to net cash provided
by operating activities
Fixed assets depreciation
Impairment charge for credit losses (Loans and advances
to customers and banks)
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) losses from selling property, plant and equipment
(Profits) losses from selling financial investments
Shares based payments
Released (Impairment) charges of investments in associ-
ates and subsidiaries
Operating profits before changes in operating assets and
liabilities
Net decrease (increase) in assets and liabilities
Due from banks
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 used in (generated from) operating activities
Cash flow from investing activities
Proceeds from investments in associates.
Payments for investment in subsidiaries 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 generated from (used in) investing activities
Notes
Dec. 31, 2020
Dec. 31, 2019
EGP Thousands
15,297,119
16,537,441
24
12
29
12
12
23
21
21
29
29
29
11
21
21
15
21
20
18 - 19
40
25
26
28
11
21
21
21
677,501
4,777,592
1,232,731
6,514
205,182
69,217
249,642
-
79,126
(2,382)
(13,273)
(7,193)
(1,094)
(1,018,469)
552,438
16,511
576,544
1,610,878
461,869
9,503
(184,921)
(93,313)
1,593,030
238,715
47,197
(28,135)
(6,910)
(110,062)
(1,439)
(497,894)
464,539
-
22,121,162
20,617,042
(10,899,927)
58,822
16,109
(4,276,558)
649,301
(2,995,046)
35,602,869
(3,779,782)
(7,700,878)
28,796,072
750
(721,352)
(987,061)
1,094
82,203,469
-
(112,382,696)
54,970,226
23,084,430
(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
21,655,009
-
-
(1,301,415)
1,439
43,937,957
(76,516,842)
(50,954,311)
54,813,449
(30,019,723)
2020 Annual Report
| 163
Financial Statements // Separate Separate cash flow for the year ended
December 31, 2020 (Cont.)
Notes
Dec. 31, 2020
Dec. 31, 2019
EGP Thousands
Cash flow from financing activities
Received (Repaid) in long term loans
Dividend paid
Capital increase
Net cash generated from (used in) financing activities
Net increase (decrease) in cash and cash equivalent during the year
Beginning balance of cash and cash equivalent
Cash and cash equivalent at the end of the year
Cash and cash equivalent comprise:
Cash and balances at the 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
4,474,200
(3,370,464)
85,992
1,189,728
53,070,230
22,895,017
75,965,247
33,572,597
87,020,365
39,464,714
(27,610,380)
(16,280,760)
(40,201,289)
75,965,247
(448,783)
(2,700,544)
105,413
(3,043,914)
(11,408,628)
34,303,645
22,895,017
28,273,962
28,370,183
27,634,062
(22,397,310)
(10,593,903)
(28,391,977)
22,895,017
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164 |
Annual Report 2020
2020 Annual Report
| 165
Financial Statements // Separate
Proposed appropriation account for
the year ended December 31, 2020
Net profit after tax
Profits selling property, plant and equipment transferred to capital reserve ac-
cording 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 bonus
CIB's foundation
Support and development of banking sector fund
EGP Thousands
Dec. 31, 2020
Dec. 31, 2019
10,299,882
11,803,555
(1,094)
(2,718)
(1,439)
(1,258)
10,296,070
11,800,858
514,939
8,420,479
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1,029,607
73,643
154,441
102,961
590,106
7,840,287
1,836,353
1,180,086
177,013
177,013
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Total
10,296,070
11,800,858
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166 |
Annual Report 2020
2020 Annual Report
| 167
Financial Statements // Separate
Notes to the separate financial statements for
the year ended December 31, 2020
1. General information
Commercial International Bank (Egypt) S.A.E. provides retail, corporate and investment banking services in various
parts of Egypt through 182 branches, and 27 units employing 7071 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 28, 2021.
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 the Central Bank of Egypt regulations approved
by the Board of Directors on December 16, 2008 as modified by 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 the Egyptian
Accounting Standards for policies not specifically mentioned in the instructions of the Central Bank of Egypt, under the
historical cost convention, as modified by the initial recognition of financial instruments at fair value, financial instru-
ments categorized at fair value through profit or loss (“FVTPL”) and at fair value through other comprehensive income
(“FVOCI”). The principal accounting policies applied in the preparation of these financial statements have been consis-
tently applied to all periods presented and are set below.
Subsidiaries 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 voting rights or has the ability to control the financial and op-
erating 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 31 December, 2020 to get complete information on the Bank’s financial position, results of operations, cash flows
and changes in ownership rights.
2.2. Subsidiaries and associates
2.2.1. Subsidiaries
Subsidiaries are those investees, including structured entities, that the Bank controls because the Bank (i) has power to
direct relevant activities of the investees that significantly affect their returns, (ii) has exposure, or rights, to variable
returns from its involvement with the investees, and (iii) has the ability to use its power over the investees to affect the
amount of investor’s returns. The existence and effect of substantive rights, including substantive potential voting rights,
are considered when assessing whether the Bank has power over another entity. For a right to be substantive, the holder
must have practical ability to exercise that right when decisions about the direction of the relevant activities of the in-
vestee need to be made. The Bank may have power over an investee even when it holds less than majority of voting power
in an investee. In such a case, the Bank assesses the size of its voting rights relative to the size and dispersion of holdings
of the other vote holders to determine if it has de-facto power over the investee. Protective rights of other investors, such
as those that relate to fundamental changes of investee’s activities or apply only in exceptional circumstances, do not pre-
vent the Bank from controlling an investee. Subsidiaries are consolidated in the Bank’s consolidated financial statements
from the date on which control is transferred to the Bank, and are deconsolidated from the date on which control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries [other than those acquired
from parties under common control]. Identifiable assets acquired and liabilities and contingent liabilities assumed in
a business combination are measured at their fair values at the acquisition date, irrespective of the extent of any non-
controlling interest.
The Bank measures non-controlling interest that represents present ownership interest and entitles the holder to a pro-
portionate share of net assets in the event of liquidation on a transaction by transaction basis, either at: (a) fair value, or
(b) the non-controlling interest’s proportionate share of net assets of the acquiree. Non-controlling interests that are not
present ownership interests are measured at fair value.
Goodwill is measured by deducting the net assets of the acquiree from the aggregate of the consideration transferred
for the acquiree, the amount of non-controlling interest in the acquiree and fair value of an interest in the acquiree held
immediately before the acquisition date. Any negative amount (“negative goodwill”) is recognized in profit or loss, after
management reassesses whether it identified all the assets acquired and all liabilities and contingent liabilities assumed,
and reviews appropriateness of their measurement.
The consideration transferred for the acquiree is measured at the fair value of the assets given up, equity instruments issued
and liabilities incurred or assumed, including fair value of assets or liabilities from contingent consideration arrangements,
but excludes acquisition related costs such as advisory, legal, valuation and similar professional services. Transaction costs
incurred for issuing equity instruments are deducted from equity; transaction costs incurred for issuing debt are deducted
from its carrying amount and all other transaction costs associated with the acquisition are expensed.
Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated;
unrealized losses are also eliminated unless the cost cannot be recovered. The Bank and all its subsidiaries use uniform
accounting policies consistent with the Group’s policies.
Non-controlling interest is that part of the net results and of the equity of a subsidiary attributable to interests which are
not owned, directly or indirectly, by the Bank. Non-controlling interest forms a separate component of the Group’s equity.
Purchases and sales of non-controlling interests. The Bank applies the economic entity model to account for transactions
with owners of non-controlling interest. Any difference between the purchase consideration and the carrying amount
of non-controlling interest acquired is recorded as a capital transaction directly in equity. The Bank recognizes the dif-
ference between sales consideration and carrying amount of non-controlling interest sold as a capital transaction in the
statement of changes in equity.
2.2.2. Associates
Associates are entities over which the Bank has significant influence (directly or indirectly), but not control, generally
accompanying a shareholding of between 20 and 50 percent of the voting rights. Investments in associates are accounted
for using the equity method of accounting and are initially recognized at cost. The carrying amount of associates includes
goodwill identified on acquisition less accumulated credit losses, if any. Dividends received from associates reduce the
carrying value of the investment in associates. Other post-acquisition changes in Group’s share of net assets of an associ-
ate are recognized as follows: (i) the Group’s share of profits or losses of associates is recorded in the consolidated profit or
loss for the year as share of result of associates, (ii) the Group’s share of other comprehensive income is recognized in other
comprehensive income and presented separately, (iii); all other changes in the Group’s share of the carrying value of net as-
sets of associates are recognized in profit or loss within the share of result of associates. However, when the Group’s share
of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the
Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest
in the associates; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred.
The Bank applies the impairment requirements in IFRS 9 to long-term loans, preference shares and similar long-term in-
terest that in substance form part of the investment in associate before reducing the carrying value of the investment by a
share of a loss of the investee that exceeds the amount of the Group’s interest in the ordinary shares.
168 |
Annual Report 2020
2020 Annual Report
| 169
Financial Statements // Separate Disposals of subsidiaries, associates or joint ventures. When the Group ceases to have control or significant influence, any
retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in profit
or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive
income in respect of that entity, are accounted for as if the Group had directly disposed of the related assets or liabilities.
This may mean that amounts previously recognised in other comprehensive income are recycled to profit or loss.
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.
2.5. Financial assets
Key Measurement Terms:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The best evidence of fair value is price in an active market. An active market
is one in which transactions for the asset or liability take place with enough frequency and volume to provide pricing in-
formation on an ongoing basis. Fair value of financial instruments traded in an active market is measured as the product
of the quoted price for the individual asset or liability and the quantity held by the entity.
Valuation techniques such as discounted cash flow models or models based on recent arm’s length transactions or consid-
eration of financial data of the investees, are used to measure fair value of certain financial instruments for which external
market pricing information is not available. Fair value measurements are analyzed by level in the fair value hierarchy as
follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities,
(ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not
based on solely observable market data (that is, the measurement requires significant unobservable inputs).
Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial
instrument. An incremental cost is one that would not have been incurred if the transaction had not taken place. Transac-
tion costs include fees and commissions paid. Transaction costs do not include debt premiums or discounts.
Amortized cost is the amount at which the financial instrument was recognized at initial recognition less any principal
repayments, plus accrued interest, and for financial assets less any allowance for expected credit losses. Accrued interest
includes amortization of transaction costs deferred at initial recognition and of any premium or discount to maturity
amount using the effective interest method.
The effective interest method is a method of allocating interest income or interest expense over the relevant period, so as
to achieve a constant periodic rate of interest (effective interest rate) on the carrying amount. The effective interest rate
is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial
instrument or a shorter period, if appropriate, to the gross carrying amount of the financial instrument.
The effective interest rate discounts cash flows of variable interest instruments to the next interest repricing date, except
for the premium or discount, which reflects the credit spread over the floating rate specified in the instrument, or other
variables that are not reset to market rates. Such premiums or discounts are amortized over the expected life of the instru-
ment. The present value calculation includes all fees paid or received between parties to the contract that are an integral
part of the effective interest rate.
Financial instruments – initial recognition.
Financial instruments at FVTPL are initially recorded at fair value. Fair value at initial recognition is best evidenced by
the transaction price. A gain or loss on initial recognition is only recorded if there is a difference between fair value and
transaction price which can be evidenced by other observable current market transactions in the same instrument or by
a valuation technique whose inputs include only data from observable markets. After the initial recognition, an ECL al-
lowance is recognized for financial assets measured at amortized cost and investments in debt instruments measured at
FVOCI, resulting in an immediate accounting loss. All purchases and sales of financial assets that require delivery within
the time frame established by regulation or market convention (“regular way” purchases and sales) are recorded at trade
date, which is the date on which the bank commits to deliver a financial asset. All other purchases are recognized when
the entity becomes a party to the contractual provisions of the instrument.
Financial assets – classification and subsequent measurement – measurement categories.
The bank classifies financial assets in the following measurement categories: FVTPL, FVOCI and AC. The classification
and subsequent measurement of debt financial assets depends on: (i) the bank’s business model for managing the related
assets portfolio and (ii) the cash flow characteristics of the asset.
The following table summarizes measurement categories
Methods of Measurement according to Business Models
Fair Value
Financial Instrument Amortized Cost
Equity Instruments
Not Applicable
Debt Instruments /
Loans & Facilities
Business Model of Assets held
for Collecting Contractual
Cash Flows
Through Other
Comprehensive Income
An irrevocable election at Ini-
tial Recognition
Business Model of Assets held
for Collecting Contractual Cash
Flows & Selling
Through Profit or Loss
Normal treatment of equity
instruments
Business Model of Assets held
for Trading
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Financial Statements // Separate Financial assets – classification and subsequent measurement – business model.
The business model reflects how the bank manages the assets in order to generate cash flows – whether the bank’s objec-
tive is: (i) solely to collect the contractual cash flows from the assets (“hold to collect contractual cash flows”,) or (ii) to
collect both the contractual cash flows and the cash flows arising from the sale of assets (“hold to collect contractual cash
flows and sell”) or, if neither of (i) and (ii) is applicable, the financial assets are classified as part of “other” business model
and measured at FVTPL.
Business model is determined for a group of assets (on a portfolio level) based on all relevant evidence about the activities
that the bank undertakes to achieve the objective set out for the portfolio available at the date of the assessment. Factors
considered by the bank in determining the business model include the purpose and composition of a portfolio, past expe-
rience on how the cash flows for the respective assets were collected, how risks are assessed and managed, how the assets’
performance is assessed.
Financial assets – classification and subsequent measurement – cash flow characteristics.
Where the business model is to hold assets to collect contractual cash flows or to hold contractual cash flows and sell, the
bank assesses whether the cash flows represent solely payments of principal and interest (“SPPI”). Financial assets with
embedded derivatives are considered in their entirety when determining whether their cash flows are consistent with the
SPPI feature. In making this assessment, the bank considers whether the contractual cash flows are consistent with a ba-
sic lending arrangement, i.e. interest includes only consideration for credit risk, time value of money, other basic lending
risks and profit margin.
Where the contractual terms introduce exposure to risk or volatility that is inconsistent with a basic lending arrange-
ment, the financial asset is classified and measured at FVTPL. The SPPI assessment is performed on initial recognition of
an asset and it is not subsequently reassessed.
The following table summarizes the classification of the Banks Financial Assets in accordance with the business model:
Financial asset
Business model
Basic characteristics
Financial Assets at Am-
ortized Cost (AC)
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 credit-
worthiness of the issuer of the financial instrument.
• Lowest sales in terms of turnover and value.
• The Bank makes clear and reliable documentation of the rea-
sons for each sale and its compliance with the requirements of
the Standard.
Financial Assets at Fair
Value through Other
Comprehensive Income
(FVTOCI)
Business model of
financial assets held
to collect cash flows
and sales
• Both the collection of contractual cash flows and sales are
complementary 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.
Financial Assets at Fair
Value through Profit or
Loss (FVTPL)
Other business
models include trad-
ing - management of
financial assets at fair
value - maximizing
cash flows by selling)
• 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.
Financial assets – reclassification. Financial instruments are reclassified only when the business model for managing
the portfolio as a whole changes. The Bank did not change its business model during the current and comparative period
and did not make any reclassifications.
Financial assets impairment – credit loss allowance for ECL. The bank assesses, on a forward-looking basis, the ECL
for debt instruments measured at AC and FVOCI and for the exposures arising from loan commitments and financial
guarantee contracts. The bank measures ECL and recognizes credit loss allowance at each reporting date. The measure-
ment of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible
outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue
cost and effort at the end of each reporting date about past events, current conditions and forecasts of future conditions.
The bank applies a three-stage model for impairment, based on changes in credit quality since initial recognition. A finan-
cial instrument that is not credit-impaired on initial recognition is classified in Stage 1. Financial assets in Stage 1 have
their ECL measured at an amount equal to the portion of lifetime ECL that results from default events possible within the
next 12 months or until contractual maturity, if shorter (“12 Months ECL”). If the bank identifies a significant increase in
credit risk (“SICR”) since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a
lifetime basis, that is, up until contractual maturity but considering expected prepayments, if any (“Lifetime ECL”). If the
bank determines that a financial asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured as a
Lifetime ECL.
Financial assets – write-off. Financial assets are written-off, in whole or in part, when the bank exhausted all practical
recovery efforts and has concluded that there is no reasonable expectation of recovery. The write-off represents a derecog-
nition event.
Financial assets – derecognition. The bank derecognizes financial assets when (a) the assets are redeemed or the rights
to cash flows from the assets otherwise expired or (b) the bank has transferred the rights to the cash flows from the finan-
cial assets or entered into a qualifying pass-through arrangement while (i) also transferring substantially all risks and
rewards of ownership of the assets or (ii) neither transferring nor retaining substantially all risks and rewards of owner-
ship, but not retaining control. Control is retained if the counterparty does not have the practical ability to sell the asset
in its entirety to an unrelated third party without needing to impose restrictions on the sale.
Financial liabilities – measurement categories.Financial liabilities are classified as subsequently measured at AC, ex-
cept for financial liabilities at FVTPL: this classification is applied to derivatives or financial liabilities held for trading
(e.g. short positions in securities)
2.6. Financial liabilities – derecognition.
Financial liabilities are derecognized when they are extinguished (i.e. when the obligation specified in the contract is
discharged, cancelled or expires).
2.7. 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.
2.8. 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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Financial Statements // Separate 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
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.
2.8.1. Fair value hedge
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recognized in profit
and loss immediately together with any changes in the fair value of the hedged asset or liability that is attributable to the
hedged risk. The effective portion of changes in the fair value of the interest rate swaps and the changes in the fair value of
the hedged item attributable to the hedged risk are recognized in the ‘net interest income’ line item of the income state-
ment. Any ineffectiveness is recognized in profit and loss in ‘net trading income’.
When the hedging instrument is no longer qualified for hedge accounting, the adjustment to the carrying amount of a
hedged item, measured at amortized cost, arising from the hedged risk is amortized to profit and loss from that date using
the effective interest method.
2.8.2. 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
2.9.
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.
2.10. Fee and commission income
Fees charged for servicing a loan or facility that is measured at amortized cost, are recognized as revenue as the service
is provided. Fees and commissions on non-performing or impaired loans or receivables cease to be recognized as income
and are rather recorded off balance sheet. These are recognized as revenue, on a cash basis, only when interest income
on those loans is recognized in profit and loss, at that time, fees and commissions that represent an integral part of the
effective interest rate of a financial asset, are treated as an adjustment to the effective interest rate of that financial asset.
Commitment fees and related direct costs for loans and advances where draw down is probable are deferred and recog-
nized as an adjustment to the effective interest on the loan once drawn. Commitment fees in relation to facilities where
draw down is not probable are recognized at the maturity of the term of the commitment.
Fees are recognized on the debt instruments that are measured at fair value through profit and loss on initial recognition
and syndicated loan fees received by the Bank are recognized when the syndication has been completed and the Bank
does not hold any portion of it or holds a part at the same effective interest rate used for the other participants portions.
Commission and fee arising from negotiating, or participating in the negotiation of a transaction for a third party such as
the arrangement of the acquisition of shares or other securities and the purchase or sale of properties are recognized upon
completion of the underlying transaction in the income statement.
Other management advisory and service fees are recognized based on the applicable service contracts, usually on accrual
basis. Financial planning fees related to investment funds are recognized steadily over the period in which the service is
provided. The same principle is applied for wealth management; financial planning and custody services that are provided
on the long term are recognized on the accrual basis also.
2.11. Dividend income
Dividends are recognized in the income statement when the right to collect it is declared.
2.12. 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.
2.13. Investment property
The investment property represents 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 is carrying out its operations through or those that
have owned by the Bank as settlement of debts. The accounting treatment is the same used with property and equipment.
2.14. Property 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.
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Financial Statements // Separate 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.
2.15.2. Other intangible assets
The intangible assets other than goodwill and computer programs (trademarks, licenses, contracts for benefits, the ben-
efits of contracting with clients).
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
3/5 years
3 years
3 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, on each balance sheet date. De-
preciable assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recovered. An asset’s carrying amount is written down immediately to its recoverable value if the as-
set’s carrying amount exceeds its estimated recoverable amount. The recoverable amount is the higher of the asset’s fair
value less costs to sell and value in use.
Gains and losses on disposals are determined by comparing the selling proceeds with the asset carrying amount and
charged to other operating expenses in the income statement.
2.15. Impairment of non-financial assets
Assets that have an indefinite useful life are not amortized -except goodwill- and are tested annually for impairment. As-
sets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
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 on an annual basis or shorter when trigger event took
place, 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.
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 the instructions of Central Bank of Egypt, 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 pay-
ments 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 and equipment in the balance sheet and amortized over the expected
useful life of this asset in the same manner as similar assets. Lease income is recognized on the basis of rate of return on
the lease in addition to an amount corresponding to the cost of depreciation for the period. The difference between the
recognized rental income and the total finance lease clients’ accounts is transferred to the in the income statement until
the expiration of the lease to be reconciled with a net book value of the leased asset. Maintenance and insurance expenses
are charged to the income statement when incurred to the extent that they are not charged to the tenant.
In case there is objective evidence that the Bank will not be able to collect the of financial lease obligations, the finance
lease payments are reduced to the recoverable amount.
For assets leased under operating lease it appears in the balance sheet under property, plant and equipment, and depreci-
ated 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).
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Financial Statements // Separate Provisions for obligations, other than those for credit risk or employee benefits, due in more than 12 months from the bal-
ance 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.
The bank’s contributions to the employees’ social insurance fund
Bank employees benefit from the Social Insurance Fund that has been established under the Law No. 64 of year 84 regard-
ing alternative social insurance systems. This system is considered an alternative to state regulations and is subject to the
supervision of the Ministry of Social Insurance. A Ministerial Resolution No. 22 of year 83 was issued regarding approval
of the establishment of the Social Fund for Employees. The bank is obliged to pay to the fund the contributions due for
each month represented in the employer’s share and the share of the insured and pay his obligations towards the fund in
implementation of the provisions of the fund system. This is a system of benefits enjoyed by employees, a system of specific
benefits for the bank, according to the Egyptian accounting standards.
2.20. Income tax
Income tax on the profit and loss for the period and deferred tax are recognized in the income statement except for income
tax relating to items of equity that are recognized directly in equity.
Income tax is recognized based on net taxable profit using the tax rates applicable on the date of the balance sheet in ad-
dition to tax adjustments for previous years.
Deferred taxes arising from temporary time differences between the book value of assets and liabilities are recognized in
accordance with the principles of accounting and value according to the foundations of the tax, this is determining the
value of deferred tax on the expected manner to realize or settle the values of assets and liabilities, using tax rates appli-
cable on the date of the balance sheet.
Deferred tax assets of the Bank recognized when there is likely to be possible to achieve profits subject to tax in the future
to be possible through to use that asset, and is reducing the value of deferred tax assets with part of that will come from
tax benefit expected during the following years, that in the case of expected high benefit tax, deferred tax assets will in-
crease within the limits of the above reduced.
2.21. Borrowings
Borrowings are recognized initially at fair value net of transaction costs incurred. Borrowings are subsequently stated at
amortized cost also any difference between proceeds net of transaction costs and the redemption value is recognized in
the income statement over the period of the borrowings using the effective interest method.
2.22. Dividends
Dividends on ordinary shares and profit sharing are recognized as a charge of equity upon the general assembly approval.
Profit sharing includes the employees’ profit share and the Board of Directors’ remuneration as prescribed by the Bank’s
articles of incorporation and the corporate law.
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
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.
Important Accounting Estimates, and Judgements in Applying Accounting Policies
The bank makes estimates and assumptions that affect the amounts recognized, and the carrying amounts of assets and li-
abilities within the next financial year. Estimates and judgements are continually evaluated and are based on management’s
experience and other factors, including expectations of future events that are believed to be reasonable under the circum-
stances. Management also makes certain judgements, apart from those involving estimations, in the process of applying the
accounting policies. Judgements that have the most significant effect on the amounts recognized and estimates that can
cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year include:
ECL measurement. Measurement of ECLs is a significant estimate that involves determination of methodology, models
and data inputs. The following components have a major impact on credit loss allowance: definition of default, SICR, prob-
ability of default (“PD”), exposure at default (“EAD”), and loss given default (“LGD”), as well as models of macro-economic
scenarios. The bank regularly reviews and validates the models and inputs to the models to reduce any differences be-
tween expected credit loss estimates and actual credit loss experience.
The bank used supportable forward-looking information for measurement of ECL, primarily an outcome of its own mac-
ro-economic forecasting model. The most significant forward-looking assumptions, for both corporate and retail, that
correlate with ECL level and their assigned weights were CBE key interest rate, GDP growth rate, Foreign currency index
and Inflation rate. In addition to these assumptions, unemployment rate has been used for the retail sector.
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Financial Statements // Separate The bank reduced the weights assigned to the upside scenario during 2020 as a result of the most recent developments
related to COVID 19.
A change in the assigned weight to the base scenario of the forward looking macro-economic variables by 10% towards
the downturn scenario would result in an increase in ECL by EGP633,535 thousand as of 31 December 2020 (31 December
2019: by EGP495,372 thousand). A corresponding change towards the upturn scenario would result in a decrease in ECL
by EGP386,041 thousand as of 31 December 2020 (31 December 2019: by EGP348,267 thousand). A 10% increase or decrease
in LGD estimates would result in an increase or decrease in total expected credit loss allowances of EGP879,960 thousand
at 31 December 2020 (31 December 2019: increase or decrease of EGP 773,549 thousand).
Credit exposure on revolving credit facilities. For certain loan facilities, the bank’s exposure to credit losses may extend
beyond the maximum contractual period of the facility. This exception applies to certain revolving credit facilities, which
include both a loan and an undrawn commitment component and where the bank’s contractual ability to demand repay-
ment and cancel the undrawn component in practice does not limit its exposure to credit losses.
For such facilities, the bank measures ECLs over the period that the bank is exposed to credit risk and ECLs are not
mitigated by credit risk management actions. Application of this exception requires judgement. Management applied
its judgement in identifying the facilities, both retail and commercial, to which this exception applies. The bank applied
this exception to facilities with the following characteristics: (a) there is no fixed term or repayment structure, (b) the
contractual ability to cancel the contract is not in practice enforced as a result of day-to-day management of the credit
exposure and the contract may only be cancelled when the bank becomes aware of an increase in credit risk at the level
of an individual facility, and (c) the exposures are managed on a collective basis. Further, the bank applied judgement in
determining a period for measuring the ECL, including the starting point and the expected end point of the exposures.
The bank considered historical information and experience about: (a) the period over which the bank is exposed to credit
risk on similar facilities, including when the last significant modification of the facility occurred and that therefore de-
termines the starting point for assessing SICR, (b) the length of time for related defaults to occur on similar financial
instruments following a SICR and (c) the credit risk management actions (eg the reduction or removal of undrawn limits),
prepayment rates and other factors that drive expected maturity. In applying these factors, the bank segments the port-
folios of revolving facilities into sub-groups and applies the factors that are most relevant based on historical data and
experience as well as forward-looking information.
Significant increase in credit risk (“SICR”). In order to determine whether there has been a significant increase in credit
risk, the bank compares the risk of a default occurring over the life of a financial instrument at the end of the reporting
date with the risk of default at the date of initial recognition. The assessment considers relative increase in credit risk rath-
er than achieving a specific level of credit risk at the end of the reporting period using, for Corporate and Business Bank-
ing: transition in risk ratings, delinquency status, industry and restructured status and for retail: watch list, individual
profile, restructured status, and delinquency status. The bank considers all reasonable and supportable forward-looking
information available without undue cost and effort, which includes a range of factors, including behavioral aspects of
particular customer portfolios. The bank identifies behavioral indicators of increases in credit risk prior to delinquency
and incorporated appropriate forward-looking information into the credit risk assessment, either at an individual instru-
ment, or on a portfolio level.
Business model assessment. The business model drives classification of financial assets. Management applied judgement
in determining the level of aggregation and portfolios of financial instruments when performing the business model assess-
ment. When assessing sales transactions, the bank considers their historical frequency, timing and value, reasons for the
sales and expectations about future sales activity. Sales transactions aimed at minimizing potential losses due to credit
deterioration are considered consistent with the “hold to collect” business model. Other sales before maturity, not related to
credit risk management activities, are also consistent with the “hold to collect” business model, provided that they are infre-
quent or insignificant in value, both individually and in aggregate. The bank assesses significance of sales transactions by
comparing the value of the sales to the value of the portfolio subject to the business model assessment over the average life of
the portfolio. In addition, sales of financial asset expected only in stress case scenario, or in response to an isolated event that
is beyond the bank’s control, is not recurring and could not have been anticipated by the bank, are regarded as incidental to
the business model objective and do not impact the classification of the respective financial assets.
180 |
Annual Report 2020
The “hold to collect and sell” business model means that assets are held to collect the cash flows, but selling is also integral
to achieving the business model’s objective, such as, managing liquidity needs, achieving a particular yield, or matching
the duration of the financial assets to the duration of the liabilities that fund those assets.
The residual category includes those portfolios of financial assets, which are managed with the objective of realizing cash
flows primarily through sale, such as where a pattern of trading exists. Collecting contractual cash flow is often incidental
for this business model.
Assessment whether cash flows are solely payments of principal and interest (“SPPI”). Determining whether a financial
asset’s cash flows are solely payments of principal and interest required judgement.
The time value of money element may be modified, for example, if a contractual interest rate is periodically reset but the fre-
quency of that reset does not match the tenor of the debt instrument’s underlying base interest rate. The effect of the modified
time value of money was assessed by comparing relevant instrument’s cash flows against a benchmark debt instrument with
SPPI cash flows, in each period and cumulatively over the life of the instrument. The assessment was done for all reasonably
possible scenarios, including reasonably possible financial stress situation that can occur in financial markets.
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 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
Bank’s rating
1
2
3
4
Description of the grade
Performing loans
Regular watching
Watch list
Non-performing loans
2020 Annual Report
| 181
Financial Statements // Separate 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.
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.
3.1.1.2. 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
generally unsecured. In addition, in order to minimize the credit loss the Bank will seek additional collateral from the
counterparty as soon as impairment indicators are noticed for the relevant individual loans and advances.
Collateral held as security for financial assets other than loans and advances is determined by the nature of the instru-
ment. Debt securities, treasury and other governmental securities are generally unsecured, with the exception of asset-
backed securities and similar instruments, which are secured by portfolios of financial instruments.
3.1.2.2. Derivatives
The Bank maintains strict control limits on net open derivative positions (i.e., the difference between purchase and sale
contracts), by both amount and term. At any one time, the amount subject to credit risk is limited to the current fair value
of instruments that are favorable to the Bank (i.e., assets with positive fair value), which in relation to derivatives is only a
small fraction of the contract, or notional values used to express the volume of instruments outstanding. This credit risk
exposure is managed as part of the overall lending limits with customers, together with potential exposures from market
movements. Collateral or other security is not usually obtained for credit risk exposures on these instruments, except
where the Bank requires margin deposits from counterparties.
3.1.2.3. Master netting arrangements
The Bank further restricts its exposure to credit losses by entering into master netting arrangements with counterpar-
ties with which it undertakes a significant volume of transactions. Master netting arrangements do not generally result
in an offset of balance sheet assets and liabilities, as transactions are usually settled on a gross basis. However, the credit
risk associated with favorable contracts is reduced by a master netting arrangement to the extent that if a default occurs,
all amounts with the counterparty are terminated and settled on a net basis. The Bank overall exposure to credit risk on
derivative instruments subject to master netting arrangements can change substantially within a short period, as it is af-
fected by each transaction subject to the arrangement.
3.1.2.4. Credit related commitments
The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and
standby letters of credit carry the same credit risk as loans. Documentary and commercial letters of credit – which are
written undertakings by the Bank on behalf of a customer authorizing a third party to draw drafts on the Bank up to a
stipulated amount under specific terms and conditions – are collateralized by the underlying shipments of goods to which
they relate and therefore carry less risk than a direct loan.
Commitments to extend credit represent unused portions of authorizations to extend credit in the form of loans, guaran-
tees or letters of credit. With respect to credit risk on commitments to extend credit, the Bank is potentially exposed to
loss in an amount equal to the total unused commitments. However, the likely amount of loss is less than the total unused
commitments, as most commitments to extend credit are contingent upon customers maintaining specific credit stan-
dards. The Bank monitors the term to maturity of credit commitments because longer-term commitments generally have
a greater degree of credit risk than shorter-term commitments.
3.1.3. Impairment and provisioning policies
The internal rating system described in Note 3.1.1 focus on the credit-quality mapping from the lending and investment
activities perspective. Conversely, for only financial reporting purposes impairment losses are recognized for that has
been incurred on the balance sheet date when there is an objective evidence of impairment. Due to the different method-
ologies applied, the amount of incurred impairment losses in balance sheet are usually lower than the amount determined
from the expected loss model that is used for internal operational management and CBE regulation purposes.
The impairment provision reported in balance sheet at the end of the period is derived from each of the four internal credit
risk ratings. However, the majority of the impairment provision is usually driven by the last two rating degrees. The follow-
ing table illustrates the proportional distribution of loans and advances reported in the balance sheet for each of the four
internal credit risk ratings of the Bank and their relevant impairment losses:
Bank’s rating
1-Performing loans
2-Regular watching
3-Watch list
4-Non-Performing loans
December 31, 2020
December 31, 2019
Loans and
advances (%)
Impairment
provision (%)
Loans and
advances (%)
Impairment
provision (%)
80.16
11.14
4.43
4.27
22.79
17.60
25.74
33.87
85.63
6.88
3.50
3.99
19.27
8.76
28.15
43.82
182 |
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2020 Annual Report
| 183
Financial Statements // Separate The internal rating tools assists management to determine whether objective evidence of impairment exists, based on the
following criteria set by the Bank:
3.1.5. Maximum exposure to credit risk before collateral held
• 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 ad-
vances based on more detailed subgroups in accordance with instructions for the implementation of the International 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, fi-
nancial 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 provisions
needed for assets impairment related to credit risk:
CBE Rating
1
2
3
4
5
6
7
8
9
10
Categorization
Low risk
Average risk
Satisfactory risk
Reasonable risk
Acceptable risk
Marginally
acceptable risk
Watch list
Substandard
Doubtful
Bad debts
Provision%
0%
1%
1%
2%
2%
Internal rating
1
1
1
1
1
3%
5%
20%
50%
100%
2
3
4
4
4
Categorization
Performing loans
Performing loans
Performing loans
Performing loans
Performing loans
Regular watching
Watch list
Non performing loans
Non performing loans
Non performing loans
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 cus-
tomer classification
In balance sheet items exposed to credit risk
Cash and balances at the 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
Unamortized syndicated loans discount
Impairment provision
Unearned interest
Suspended credit account
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
EGP Thousands
Dec. 31, 2020
Dec. 31, 2019
33,572,597
86,997,034
786,605
(9,625)
1,511,221
4,864,404
27,792,367
2,025,630
23,541,904
44,736,272
31,110,813
21,391
(104,176)
(210,680)
(16,395,749)
-
(38,517)
248,759
170,994,957
6,759,229
418,204,436
5,463,960
2,701,590
5,848,427
73,986,785
88,000,762
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)
(8,236)
(33,672)
216,383
196,046,335
4,011,196
376,847,609
6,085,760
3,188,757
5,866,630
61,143,216
76,284,363
The above table represents the Bank’s Maximum exposure to credit risk on December 31, 2020, 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, 28.61% of the total maximum exposure is derived from loans and advances to banks and customers against
31.83% on December 31, 2019, while investments in debt instruments represent 40.89% against 52.02% on December 31, 2019.
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:
• 91.30% of the loans and advances are concentrated in the top two grades of the internal credit risk rating system against
92.51% on December 31, 2019
• Loans and advances assessed individualy are valued EGP 5,830,098 thousand against EGP 5,261,976 thousand on Decem-
ber 31, 2019
• The Bank has implemented more prudent processes when granting loans and advances during the financial year ended
on December 31, 2020.
• 95.33% of the investments in debt Instruments are Egyptian sovereign instruments against 97.54% on December 31, 2019.
184 |
Annual Report 2020
2020 Annual Report
| 185
Financial Statements // Separate 3.1.6. Loans and advances
Loans and advances are summarized as follows:
Dec.31, 2020
Dec.31, 2019
EGP Thousands
Loans and
advances to
customers
135,604,002
16,395,749
104,176
210,680
-
38,517
118,854,880
Loans and
advances to
banks
786,605
9,625
-
-
-
-
776,980
Loans and
advances to
customers
131,244,095
11,825,887
55,197
-
8,236
33,672
119,321,103
Loans and
advances to
banks
629,780
4,516
-
-
-
-
625,264
Gross Loans and advances
Less:
Impairment provision
Unamortized bills discount
Unamortized syndicated loans
discount
Unearned interest
Suspended credit account
Net
Impairment provision losses for loans and advances reached EGP 16,405,374 thousand.
During the year, the Bank’s total loans and advances increased by 3.43%.
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 to customers divided by stages:
Stage 1:
Expected credit
losses over 12
months
34,674,902
50,379,160
85,054,062
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
942,359
43,777,483
44,719,842
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
576,361
5,253,737
5,830,098
Dec.31, 2020
Individuals
Institutions and Business Banking
Total
Expected credit losses for loans and facilities to customers divided by stages:
Stage 1:
Expected credit
losses over 12
months
705,482
1,395,756
2,101,238
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
22,779
8,756,070
8,778,849
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
348,551
5,167,111
5,515,662
Dec.31, 2020
Individuals
Institutions and Business Banking
Total
EGP Thousands
Total
36,193,622
99,410,380
135,604,002
EGP Thousands
Total
1,076,812
15,318,937
16,395,749
Loans, advances and expected credit losses 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
786,605
(9,625)
776,980
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
-
-
-
Dec.31, 2020
Time and term loans
Expected credit losses
Net
Off balance sheet items exposed to credit risk and ecpected credit losses divided by stages:
Stage 1:
Expected credit
losses over 12
months
54,078,581
(1,439,401)
52,639,180
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
28,364,823
(1,400,364)
26,964,459
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
93,398
(88,729)
4,669
Dec.31, 2020
Facilities and guarantees
Expected credit losses
Net
Total balances of loans and facilities divided by stages:
Stage 1:
Expected credit
losses over 12
months
26,734,506
63,749,864
90,484,370
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
339,408
35,158,341
35,497,749
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
202,357
5,059,619
5,261,976
Dec.31, 2019
Individuals
Institutions and Business Banking
Total
Expected credit losses
Stage 1:
Expected credit
losses over 12
months
96,469
1,208,722
1,305,191
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
10,394
5,325,121
5,335,515
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
210,068
4,975,113
5,185,181
Dec.31, 2019
Individuals
Institutions and Business Banking
Total
EGP Thousands
Total
786,605
(9,625)
776,980
EGP Thousands
Total
82,536,802
(2,928,494)
79,608,308
EGP Thousands
Total
27,276,271
103,967,824
131,244,095
EGP Thousands
Total
316,931
11,508,956
11,825,887
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Annual Report 2020
2020 Annual Report
| 187
Financial Statements // Separate Loans and advances to banks divided by stages:
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
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
Off balance sheet items exposed to credit risk and ecpected credit losses divided by stages:
Stage 1:
Expected credit
losses over 12
months
49,459,621
(1,118,319)
48,341,302
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
20,662,650
(603,614)
20,059,036
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
76,331
(68,759)
7,572
Dec.31, 2019
Facilities and guarantees
Expected credit losses
Net
Expected credit losses divided by internal classification:
Corporate and Business Banking loans:
EGP Thousands
Total
629,780
(4,516)
625,264
EGP Thousands
Total
70,198,602
(1,790,692)
68,407,910
EGP Thousands
Scope of
probability of
default (PD)
1%-14%
15%-21%
21%-28%
100%
Stage 1:
Expected credit
losses over 12
months
1,026,133
369,623
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
1,993,166
2,598,500
4,164,404
-
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
1,802
1,842
5,163,467
Total
3,019,299
2,969,925
4,166,246
5,163,467
EGP Thousands
Scope of
probability of
default (PD)
(0% - 5%)
(5% - 10%)
(> 10%)
100%
Stage 1:
Expected credit
losses over 12
months
704,246
1,236
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
-
-
22,779
-
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
-
348,551
Total
704,246
1,236
22,779
348,551
Dec.31, 2020
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
Individual Loans:
Dec.31, 2020
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
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Annual Report 2020
EGP Thousands
Scope of
probability of
default (PD)
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
1%-12%
12%-21%
21%-27%
100%
46,553,362
3,825,798
-
-
27,385,358
11,288,228
5,103,897
-
-
8,551
1,842
5,243,344
Total
73,938,720
15,122,577
5,105,739
5,243,344
EGP Thousands
Scope of
probability of
default (PD)
Stage 1:
Expected credit
losses over 12
months
(0% - 5%)
(5% - 10%)
(> 10%)
100%
34,602,984
71,918
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
942,359
-
-
-
-
576,361
Total
34,602,984
71,918
942,359
576,361
Dec.31, 2020
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
Individual Loans:
Dec.31, 2020
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
Expected credit losses divided by internal classification:
Corporate and Business Banking loans:
EGP Thousands
Scope of
probability of
default (PD)
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
1%-14%
15%-21%
21%-28%
100%
1,041,456
167,266
-
-
1,137,990
867,786
3,319,345
-
-
-
-
4,975,113
Total
2,179,446
1,035,052
3,319,345
4,975,113
Dec.31, 2019
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
2020 Annual Report
| 189
Financial Statements // Separate Individual Loans:
The following table provides information on the quality of financial assets during the financial year:
EGP Thousands
Dec.31, 2020
Scope of
probability of
default (PD)
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
(0% - 5%)
(5% - 10%)
(> 10%)
100%
95,234
1,235
-
-
-
-
10,394
-
-
-
-
210,068
Total
95,234
1,235
10,394
210,068
Dec.31, 2019
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
The total balances of loans and facilities divided according to the internal classification:
Corporate and Business Banking loans:
EGP Thousands
Scope of
probability of
default (PD)
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
1%-12%
12%-21%
21%-27%
100%
61,291,934
2,457,930
-
-
24,935,477
5,944,147
4,278,717
-
-
-
-
5,059,619
Total
86,227,411
8,402,077
4,278,717
5,059,619
EGP Thousands
Scope of
probability of
default (PD)
Stage 1:
Expected credit
losses over 12
months
(0% - 5%)
(5% - 10%)
(> 10%)
100%
26,059,247
675,259
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
339,408
-
-
-
-
202,357
Total
26,059,247
675,259
339,408
202,357
Dec.31, 2019
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
Individual Loans:
Dec.31, 2019
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
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
Corporate and Business Banking
loans:
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
Stage 1
12 months
77,096,865
9,923,500
-
-
87,020,365
(23,331)
86,997,034
Stage 1
12 months
34,602,984
71,918
-
-
34,674,902
(705,482)
33,969,420
Stage 1
12 months
46,553,362
3,825,798
-
-
50,379,160
(1,395,756)
48,983,404
Stage 2
Life time
Stage 3
Life time
-
-
-
-
-
-
-
Stage 2
Life time
-
-
942,359
-
942,359
(22,779)
919,580
Stage 2
Life time
27,385,358
11,288,228
5,103,897
-
43,777,483
(8,756,070)
35,021,413
-
-
-
-
-
-
-
Stage 3
Life time
-
-
-
576,361
576,361
(348,551)
227,810
Stage 3
Life time
-
8,551
1,842
5,243,344
5,253,737
(5,167,111)
86,626
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
115,663,918
30,310,122
-
-
145,974,040
(619,577)
145,354,463
-
-
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Total
77,096,865
9,923,500
-
-
87,020,365
(23,331)
86,997,034
EGP Thousands
Total
34,602,984
71,918
942,359
576,361
36,193,622
(1,076,812)
35,116,810
EGP Thousands
Total
73,938,720
15,122,577
5,105,739
5,243,344
99,410,380
(15,318,937)
84,091,443
EGP Thousands
Total
115,663,918
30,310,122
-
-
145,974,040
(619,577)
145,354,463
190 |
Annual Report 2020
2020 Annual Report
| 191
Financial Statements // Separate The following table provides information on the quality of financial assets during the financial year:
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
Corporate and Business Banking
loans:
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
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
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 1
12 months
61,291,934
2,457,930
-
-
63,749,864
(1,208,722)
62,541,142
Stage 1
12 months
59,915,108
28,905,614
-
-
88,820,722
(414,395)
88,406,327
Stage 2
Life time
Stage 3
Life time
-
-
-
-
-
-
-
Stage 2
Life time
-
-
339,408
-
339,408
(10,394)
329,014
Stage 2
Life time
24,935,477
5,944,147
4,278,717
-
35,158,341
(5,325,121)
29,833,220
-
-
-
-
-
-
-
Stage 3
Life time
-
-
-
202,357
202,357
(210,068)
(7,711)
Stage 3
Life time
-
-
-
5,059,619
5,059,619
(4,975,113)
84,506
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
EGP Thousands
Total
26,059,247
675,259
339,408
202,357
27,276,271
(316,931)
26,959,340
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
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192 |
Annual Report 2020
2020 Annual Report
| 193
Financial Statements // Separate
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The following table shows changes in expected ECL losses between the beginning and end of the year as a result of these factors:
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
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 de-
fault 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
Individual Loans:
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:
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 de-
fault and loss in case of default and
the exposure at default"
Changes to model assumptions and
methodology
Recoveries
Write off during the year
Cumulative foreign currencies trans-
lation differences
Ending balance
160
16,816
(158)
-
-
-
(1)
-
-
-
16,817
Stage 1
12 months
72,092
24,377
-
-
-
96,469
7,155
-
(7,155)
-
-
-
-
-
-
-
-
Stage 2
Life time
24,843
(14,449)
-
-
-
EGP Thousands
Total
7,315
16,816
(7,313)
-
-
-
(1)
-
-
-
16,817
-
-
-
-
-
-
-
-
-
-
-
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
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)
-
(772,859)
-
-
2,409,875
1,825,968
(2,036,175)
(200,817)
5,490
(149,199)
93,395
1,509,405
3,051
1,605,851
5,845
401,743
-
-
-
-
(124,860)
1,208,722
(551,032)
5,325,121
-
399,429
(1,262,286)
(511,193)
407,588
399,429
(1,262,286)
(1,187,085)
4,975,113
11,508,956
194 |
Annual Report 2020
2020 Annual Report
| 195
Financial Statements // Separate
EGP Thousands
Dec.31, 2020
EGP Thousands
Financial Assets at Fair Value
through OCI
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 de-
fault 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
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
595,511
183,940
(282,223)
931
-
-
(83,764)
-
-
-
414,395
3,803
-
(773)
(3,030)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
599,314
183,940
(282,996)
(2,099)
-
-
(83,764)
-
-
-
414,395
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 perfor-
mance 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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
4,794,419
4,794,419
4,682,243
4,682,243
3.1.7. 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.
Dec.31, 2020
Amortized
cost
AAA
AA+ to -AA
A to -A+
Less than -A
Not rated
Total
Stage 1:
Expected credit
losses over 12
months
-
-
-
25,020,917
-
25,020,917
“Stage 2:
Expected credit
losses
Over a lifetime
that is not
creditworthy”
“Stage 3:
Expected credit
losses
Over a lifetime
Credit default”
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
“Individually
impaired”
-
-
-
-
-
-
Total
-
-
-
25,020,917
-
25,020,917
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
-
-
-
145,974,040
-
145,974,040
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
-
-
-
-
-
-
-
-
-
-
-
-
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
145,974,040
-
145,974,040
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, 2020
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
-
-
-
38,454,165
-
38,454,165
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
38,454,165
-
38,454,165
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.
Dec.31, 2019
EGP Thousands
Amortized
cost
AAA
AA+ to -AA
A+ to -A
Less than -A
Not rated
Total
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
-
-
-
-
-
-
-
-
-
-
-
-
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
107,225,613
-
107,225,613
196 |
Annual Report 2020
2020 Annual Report
| 197
Financial Statements // Separate Dec.31, 2019
EGP Thousands
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
-
-
-
-
-
-
-
-
-
-
-
-
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
88,820,722
-
88,820,722
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
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
-
-
-
414,395
-
414,395
-
-
-
-
-
-
-
-
-
-
-
-
Fair value
through OCI
AAA
AA+ to -AA
A+ to -A
Less than -A
Not rated
Total
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, 2020
Cash and balances at the 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
Unamortized syndicated loans
discount
Impairment provision
Unearned interest
Suspended credit account
Derivative financial instruments
Financial investments:
-Debt instruments
Total
Total as at December 31, 2019
Cairo
33,572,597
86,997,034
786,605
(9,625)
1,000,304
3,807,958
18,483,815
1,928,463
21,102,760
28,340,275
28,771,413
16,391
(104,176)
(210,680)
(11,851,162)
-
(38,517)
248,759
170,994,957
383,837,171
345,106,302
Alex, Delta and
Sinai
Upper Egypt
Total
EGP Thousands
-
-
-
-
417,515
898,858
7,913,359
85,331
1,433,121
11,285,312
2,218,123
5,000
-
-
-
-
-
93,402
157,588
1,395,193
11,836
1,006,023
5,110,685
121,277
-
-
33,572,597
86,997,034
786,605
(9,625)
1,511,221
4,864,404
27,792,367
2,025,630
23,541,904
44,736,272
31,110,813
21,391
(104,176)
-
-
(210,680)
(3,512,766)
-
-
-
-
20,743,853
21,081,215
(1,031,821)
-
-
-
-
6,864,183
6,648,896
(16,395,749)
-
(38,517)
248,759
170,994,957
411,445,207
372,836,413
198 |
Annual Report 2020
2020 Annual Report
| 199
Financial Statements // Separate s
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3.2. Market risk
Market risk represents the 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 submit-
ted 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 com-
mercial banking assets and liabilities, financial investments designated as FVTOCI and amortized cost.
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. 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 is calculating the Market Risk Capital Requirements by applying Basel II “Standardised Measurement Method”,
according to the Central Bank of Egypt regulatory requirements.
3.2.1.2. Stress testing
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.
200 |
Annual Report 2020
2020 Annual Report
| 201
Financial Statements // Separate
3.2.2. Value at risk (VaR) Summary
Total VaR by risk type
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
EGP Thousands
Last 12 months ended 31/12/2020
Last 12 months ended 31/12/2019
Medium
954
441,614
448,956
290
6,552
-
443,036
High
Low
4,940
776,180
790,500
290
14,894
-
780,053
109
260,701
264,703
290
3,337
-
261,342
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
Foreign exchange risk
Interest rate risk
- For trading purposes
Funds managed by others risk
Investment fund
Total VaR
EGP Thousands
Last 12 months ended 31/12/2020
Last 12 months ended 31/12/2019
Medium
954
290
290
6,552
-
6,752
High
4,940
290
290
14,894
-
14,696
Low
109
290
290
3,337
-
3,398
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
Non trading portfolio VaR by risk type
Last 12 months ended 31/12/2020
Last 12 months ended 31/12/2019
Medium
High
Low
Medium
High
Low
EGP Thousands
Interest rate risk
- For non trading purposes
Total VaR
448,956
448,956
790,500
790,500
264,703
264,703
609,137
609,137
1,186,564
1,186,564
271,813
271,813
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, 2020
EGP
USD
EUR
GBP
Other
Total
Equivalent EGP Thousands
Financial assets
Cash and balances at the 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
- Investments in associates and
subsidiaries
Total financial assets
Financial liabilities
Due to banks
Due to customers
Derivative financial instruments
Other loans
Total financial liabilities
30,124,865
44,696,639
-
89,104,919
49,476
2,037,732
41,266,271
786,605
40,877,651
199,283
656,261
610,710
-
5,557,616
-
83,244
366,864
-
63,815
-
33,572,597
670,495
87,020,365
79,881
-
786,605
1 135,604,002
248,759
-
152,329,829
153,557
20,439,255
159,828
2,205,197
-
-
-
- 174,974,281
874,348
560,963
316,459,285 105,766,625
9,029,784
513,923
1,311,340 433,080,957
106,231
252,811,651
147,168
21,391
253,086,441
8,663,783
78,455,485
183,905
7,725,555
95,028,728
34,251
7,623,112
-
-
7,657,363
11,269
925,623
-
-
936,892
27
8,815,561
270,653 340,086,524
331,073
7,746,946
270,680 356,980,104
-
-
Net on-balance sheet financial
position
Total financial assets as of December
31, 2019
Total financial liabilities as of De-
cember 31, 2019
Net on-balance sheet financial
position as of December 31, 2019
63,372,844
10,737,897
1,372,421
(422,969)
1,040,660
76,100,853
274,021,131 103,563,099
8,402,003
909,285
914,829 387,810,347
216,664,024
93,357,846
8,552,640
878,388
396,698 319,849,596
57,357,107
10,205,253
(150,637)
30,897
518,131
67,960,751
3.2.4. Interest rate risk
The Bank takes on exposure to the effects of fluctuations in the prevailing levels of market interest rates on both its fair
value and cash flow risks. Interest margins may increase as a result of such changes but profit may decrease in the event
that unexpected movements arise.The Board sets limits on the gaps of interest rate repricing that may be undertaken,
which is monitored by the bank’s Risk Management Department.
202 |
Annual Report 2020
2020 Annual Report
| 203
Financial Statements // Separate 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
-
-
-
77,008,765
9,923,500
86,527
-
-
786,605
-
-
-
-
-
-
33,572,597
33,572,597
1,573
87,020,365
-
786,605
81,743,186
16,852,628
13,996,242
16,976,960
6,034,986
-
135,604,002
7,266
4,737,712
3,870,718
2,466,062
6,418
-
11,088,176
5,371,975
2,600,844
36,844,848
82,656,113
46,313,638
1,186,863
174,974,281
-
-
-
-
-
874,348
874,348
164,131,192
34,114,684
55,584,940 102,099,135
52,355,042
35,635,381 443,920,374
1,032,135
177,446,064
7,472,747
32,107,020
78,660
25,986,755
-
54,588,241
-
58,540
232,019
49,899,904
8,815,561
340,086,524
2,423,241
3,756,876
80,072
6,766
4,903,535
-
4,589,135
3,153,656
4,155
-
-
-
11,170,490
7,746,946
180,901,440
47,925,778
29,299,143
54,599,162
4,962,075
50,131,923 367,819,521
(16,770,248)
(13,811,094)
26,285,797
47,499,973
47,392,967 (14,496,542)
76,100,853
107,147,723
64,307,164
94,406,289
61,344,661
39,777,608
29,707,476 396,690,921
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
Dec.31, 2020
Financial assets
Cash and balances
at the central bank
Gross due from
banks
Gross loans and
advances to banks
Gross loans and
advances to cus-
tomers
Derivatives finan-
cial instruments
(including IRS
notional amount)
Financial invest-
ments
Gross financial in-
vestment securities
- Investments in
associates and
subsidiaries
Total financial
assets
Financial liabili-
ties
Due to banks
Due to customers
Derivatives finan-
cial instruments
(including IRS
notional amount)
Other loans
Total financial
liabilities
Total interest re-
pricing gap
Total financial as-
sets as of Decem-
ber 31, 2019
Total financial
liabilities as of De-
cember 31, 2019
Total interest
re-pricing gap as
of December 31,
2019
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 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.
The Bank maintained a solid LCY & FCY Liquidity position with decent buffers to meet both the global and local increase
in risk profile related to the Covid-19 pandemic. CIB will continue with its robust Liability strategy with reliance on cus-
tomer deposits (stable funding) as the main contributor of total liabilities, and low dependency on the Wholesale Funding.
CIB has ample level of High Quality Liquid Assets (HQLA) based on its LCY & FCY Sovereign Portfolio investments, which
positively reflects the Bank’s solid Liquidity Ratios and Basel III LCR & NSFR ratios, with a large buffer maintained above
the Regulatory ratios 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.
204 |
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| 205
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.
Dec.31, 2020
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, 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)
Up to 1
month
One to
three
months
Three
months to
one year
One year to
five years
Over five
years
Total
EGP Thousands
1,264,151
32,792,022
-
7,472,749
32,480,332
10,079
78,661
97,124,044
2,629,252
-
166,850,344
2,445,156
-
10,839,782
2,662,459
8,815,561
340,086,524
7,746,946
34,056,173
39,963,160
99,831,957 169,295,500
13,502,241 356,649,031
84,620,725
49,072,630
59,598,235 157,255,071
82,285,536 432,832,197
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
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.
Derivative cash flows
3.3.4
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
16,230
-
16,230
30,061
44,100
-
44,100
51,676
80,072
-
80,072
125,307
6,766
-
6,766
-
-
183,905
183,905
75,544
147,168
183,905
331,073
282,588
Dec.31, 2020
Liabilities
Derivatives financial
instruments
Foreign exchange derivatives
Interest rate derivatives
Total
Total as of Dec. 31, 2019
Off balance sheet items
Dec.31, 2020
Up to 1 year
1-5 years
Over 5 years
Total
Letters of credit, guarantees and
other commitments
Total
Total as of Dec. 31, 2019
49,680,180
23,421,797
9,434,825
82,536,802
49,680,180
50,210,710
23,421,797
14,264,820
9,434,825
5,723,073
82,536,802
70,198,603
EGP Thousands
Dec.31, 2020
Credit facilities commitments
Total
Up to 1 year
3,511,831
3,511,831
1-5 years
5,383,579
5,383,579
EGP Thousands
Total
8,895,410
8,895,410
206 |
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| 207
Financial Statements // Separate 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, 2020
Dec.31, 2019
Dec.31, 2020
Dec.31, 2019
87,020,365
786,605
28,353,366
629,780
87,018,791
786,605
28,370,754
629,780
135,604,002
131,244,095
135,421,732
128,740,476
25,020,917
248,431,889
107,225,613
267,452,854
26,172,861
249,399,989
106,016,744
263,757,754
8,815,561
340,086,524
7,746,946
356,649,031
11,810,607
304,483,655
3,272,746
319,567,008
8,698,421
339,293,107
7,746,946
355,738,474
11,702,778
302,292,025
3,272,746
317,267,549
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 assets and liabilities according to EAS.
Quantitative disclosures fair value measurement hierarchy for assets as at 31 December 2020:
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, 2020
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 customers
Total
Liabilities for which fair values
are disclosed:
Other loans
Due to customers
Total
Date of
Valuation
Total
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs (level 2)
Valuation
techniques
(level 3)
31-Dec-20
359,959
359,959
-
31-Dec-20
147,646,432
107,691,850
39,954,582
148,006,391
108,051,809
39,954,582
-
-
-
31-Dec-20
31-Dec-20
248,759
331,073
579,832
31-Dec-20
31-Dec-20
31-Dec-20
26,172,861
786,605
135,421,732
162,381,198
31-Dec-20
31-Dec-20
7,746,946
339,293,107
347,040,053
-
-
-
-
-
-
-
-
-
-
-
-
-
248,759
331,073
579,832
26,172,861
-
-
26,172,861
-
786,605
135,421,732
136,208,337
7,746,946
-
7,746,946
-
339,293,107
339,293,107
208 |
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| 209
Financial Statements // Separate Dec.31, 2019
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 customers
Total
Liabilities for which fair values
are disclosed:
Other loans
Due to customers
Total
Date of
Valuation
Total
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs (level 2)
Valuation
techniques
(level 3)
31-Dec-19
418,781
418,781
-
31-Dec-19
89,897,257
61,689,580
28,207,677
90,316,038
62,108,361
28,207,677
-
-
-
31-Dec-19
31-Dec-19
216,383
282,588
498,971
31-Dec-19
31-Dec-19
31-Dec-19
106,016,744
629,780
128,740,476
235,387,000
31-Dec-19
31-Dec-19
3,272,746
302,292,025
305,564,771
-
-
-
-
-
-
-
-
-
-
-
-
-
216,383
282,588
498,971
106,016,744
-
-
106,016,744
-
629,780
128,740,476
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.
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.
• 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 associates investments.
When calculating the numerator of capital adequacy ratio, the rules set limits of total tier 2 to no more than tier 1 capital
and also limits the subordinated to no more than 50% of tier1.
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.
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.
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.
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.
210 |
Annual Report 2020
2020 Annual Report
| 211
Financial Statements // Separate
The tables below summarize the compositions of teir 1, teir 2 , the capital adequacy ratio and leverage ratio .
4. Critical accounting estimates and judgments
1-The capital adequacy ratio
Tier 1 capital
Share capital
Goodwill
Reserves
Retained Earnings (Losses)
Total deductions from tier 1 capital common equity
Net profit for the year
Total qualifying tier 1 capital
Tier 2 capital
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, 2020
Dec.31, 2019
14,776,813
(178,782)
33,427,234
256,266
(842,792)
8,906,131
56,344,870
4,579,135
2,072,612
6,651,747
62,996,617
165,944,439
701,776
33,923,864
200,570,079
31.41%
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.
2-Leverage ratio
Total qualifying tier 1 capital
On-balance sheet items & derivatives
Off-balance sheet items
Total exposures
*Percentage
EGP Thousands
Dec.31, 2020
Dec.31, 2019
56,344,870
430,849,350
54,025,891
484,875,241
11.62%
47,056,046
409,689,485
46,195,165
455,884,650
10.32%
*Based on consolidated financial statement figures and in accordance with Centeral Bank of Egypt regulation issued on 14 July 2015.
For December 2020 NSFR ratio record 250.96% (LCY 301.42% and FCY 168.09%), and LCR ratio record 1358.58% (LCY
1976.64% and FCY 336.99%).
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%).
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 – incorporating financial instruments Trading, structured financing, Corporate leasing,and merger and ac-
quisitions 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, 2020
Net revenue according to business
segment *
Expenses according to business
segment
Profit before tax
Tax
Profit for the year
Total assets
Corporate
banking
SME’s Investments
EGP Thousands
Retail
banking
Asset
Liability
Mangement
Total
11,509,020
1,566,102
7,952,088
6,912,740
636,807
28,576,757
(8,534,961)
(880,520)
(437,153)
(3,425,209)
(1,795) (13,279,638)
2,974,059
(971,560)
2,002,499
137,464,591
685,582
(223,965)
461,617
7,514,935
(2,454,966)
5,059,969
1,067,415 182,133,166
3,487,531
(1,139,301)
2,348,230
35,348,914
635,012
(207,445)
427,567
15,297,119
(4,997,237)
10,299,882
70,130,744 426,144,830
* Represents the net interest income and other income.
212 |
Annual Report 2020
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| 213
Financial Statements // Separate EGP Thousands
6. Net interest income
Dec.31, 2019
Revenue according to business
segment
Expenses according to business
segment
Profit before tax
Tax
Profit for the year
Total assets at 31 December
2019
Corporate
banking
SME’s Investments
Retail
banking
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
1,336,428
(382,556)
953,872
5,139,811
(1,471,285)
3,668,526
4,238,912
(1,213,400)
3,025,512
803,172
(229,910)
573,262
16,537,441
(4,733,886)
11,803,555
103,509,368
1,398,063 200,721,627
26,524,730
54,542,870 386,696,658
5.2. By geographical segment
Dec.31, 2020
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
Total
24,786,619
3,033,434
756,704
28,576,757
(11,548,921)
(1,471,486)
(259,231)
(13,279,638)
13,237,698
(4,330,267)
8,907,431
395,946,324
1,561,948
(505,857)
1,056,091
22,705,248
497,473
(161,113)
336,360
7,493,258
15,297,119
(4,997,237)
10,299,882
426,144,830
Dec.31, 2019
Revenue according to geographical
segment
Expenses according to geographical
segment
Profit before tax
Tax
Profit for the year
Total assets at 31 December 2019
Cairo
Alex, Delta &
Sinai
Upper Egypt
Total
21,218,087
3,309,436
694,651
25,222,174
(7,293,433)
(1,143,218)
(248,082)
(8,684,733)
13,924,654
(3,985,969)
9,938,685
358,860,383
2,166,218
(620,086)
1,546,132
21,081,215
446,569
(127,831)
318,738
6,755,060
16,537,441
(4,733,886)
11,803,555
386,696,658
Interest and similar income
- Banks
- Clients
Total
Treasury bills and bonds
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
7. Net fee and commission income
Fee and commission income
Fee and commissions related to credit
Custody fee
Other fee
Total
Fee and commission expense
Other fee paid
Total
Net income from fee and commission
8. Dividend income
Financial assets at fair value through P&L
Financial assets at fair value through OCI
Subsidiaries and associates
Total
EGP Thousands
Dec.31, 2020
Dec.31, 2019
2,189,215
12,644,831
14,834,046
26,539,074
4,067
693,411
42,070,598
(458,190)
(16,027,482)
(16,485,672)
(209,975)
(284,988)
(16,980,635)
25,089,963
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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
1,185,000
159,082
1,709,454
3,053,536
(983,450)
(983,450)
2,070,086
1,258,672
141,907
2,051,109
3,451,688
(1,170,893)
(1,170,893)
2,280,795
EGP Thousands
Dec.31, 2020
Dec.31, 2019
10,596
36,879
50,700
98,175
7,307
46,116
-
53,423
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| 215
Financial Statements // Separate 9. Net trading income
13. Adjustments to calculate the effective tax rate
Profit (Loss) from foreign exchange transactions
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, 2020
Dec.31, 2019
434,920
36,861
(5,744)
(5,577)
(64,759)
395,701
749,591
(85,657)
(29,521)
3,238
50,408
688,059
EGP Thousands
Dec.31, 2020
Dec.31, 2019
(2,897,496)
(123,625)
(125,338)
(2,406,341)
(5,552,800)
(2,604,675)
(95,408)
(108,367)
(2,236,487)
(5,044,937)
*The expenses related to the activity for which the bank obtains a commodity or service, donations and depreciation.
11. Other operating (expenses) income
Profits (losses) of non-trading assets and liabilities
Profits of selling property 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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
25,536
1,094
(1,288,675)
(1,475,505)
(2,737,550)
91,979
1,439
(361,649)
(1,526,309)
(1,794,540)
EGP Thousands
Dec.31, 2020
Dec.31, 2019
(4,777,592)
(6,514)
(205,182)
(4,989,288)
(1,610,878)
(9,503)
184,921
(1,435,460)
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 attributable to shareholders
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
15. Cash and balances at the central bank
Cash
Obligatory reserve balance with CBE
- Current accounts
Total
Non-interest bearing balances
EGP Thousands
Dec.31, 2020
Dec.31, 2019
15,297,119
22.50%
3,441,852
2,806,489
(4,224,616)
2,973,512
4,997,237
32.67%
16,537,441
22.50%
3,720,924
1,465,811
(1,493,292)
1,040,443
4,733,886
28.63%
EGP Thousands
Dec.31, 2020
Dec.31, 2019
10,296,070
(73,643)
(1,029,607)
9,192,820
1,467,555
6.26
1,473,666
6.24
11,800,858
(177,013)
(1,180,086)
10,443,759
1,467,555
7.12
1,473,666
7.09
EGP Thousands
Dec.31, 2020
Dec.31, 2019
5,962,217
5,876,652
27,610,380
33,572,597
33,572,597
22,397,310
28,273,962
28,273,962
216 |
Annual Report 2020
2020 Annual Report
| 217
Financial Statements // Separate 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
Repos - treasury bills
Net
Governmental bonds
Governmental bonds
Repo
Net
218 |
Annual Report 2020
EGP Thousands
Dec.31, 2020
Dec.31, 2019
2,932,060
84,088,305
-
(23,331)
86,997,034
54,425,073
1,268,079
31,303,882
86,997,034
1,573
8,872,165
78,123,296
86,997,034
86,997,034
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
Stage 1
87,020,365
(23,331)
86,997,034
EGP Thousands
Dec.31, 2020
Dec.31, 2019
22,426
98,825
42,049,022
(1,946,973)
40,223,300
(758,586)
39,464,714
6,025
749,625
29,112,513
(1,470,340)
28,397,823
(763,761)
27,634,062
Dec.31, 2020
Financial Assets
at Fair Value
through OCI
105,998,913
(7,472,925)
98,525,988
EGP Thousands
Dec.31, 2019
Financial Assets
at Fair Value
through OCI
58,769,618
(2,406,225)
56,363,393
Treasury bills and other government securities are classified to financial instruments through other comprehensive in-
come when applying IFRS 9 Note 21
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
Beginning balance
Additions during the year
Ending balance
Analysis for impairment provision of loans and advances to banks
Beginning Balance
Addition during the year
Ending balance
Below is an analysis of outstanding balance:
EGP Thousands
Dec.31, 2020
Dec.31, 2019
786,605
(9,625)
776,980
776,980
776,980
629,780
(4,516)
625,264
625,264
625,264
EGP Thousands
Dec.31, 2020
Dec.31, 2019
(4,516)
(5,109)
(9,625)
Stage 2
(4,516)
(5,109)
(9,625)
(3,246)
(1,270)
(4,516)
Stage 2
(3,246)
(1,270)
(4,516)
Rating
B-
Balance
776,980
Rating
B-
Balance
625,264
2020 Annual Report
| 219
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
Unamortized syndicated loans discount
"Effect of applying IFRS 9 "
Impairment provision
Unearned interest
Suspended credit account
Net loans and advances to customers
Distributed to
Current balances
Non-current balances
Total
EGP Thousands
Dec.31, 2020
Dec.31, 2019
1,511,221
4,864,404
27,792,367
2,025,630
36,193,622
23,541,904
44,736,272
31,110,813
21,391
99,410,380
135,604,002
(104,176)
(210,680)
-
(16,395,749)
-
(38,517)
118,854,880
52,667,054
66,187,826
118,854,880
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)
(8,236)
(33,672)
119,321,103
51,682,809
67,638,294
119,321,103
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220 |
Annual Report 2020
2020 Annual Report
| 221
Financial Statements // Separate
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)
20.1.2. Fair value hedge
Dec.31, 2020
Dec.31, 2019
Notional
amount
9,070,529
3,364,578
1,339
Assets
Liabilities
41,790
7,686
-
49,476
142,579
4,589
-
147,168
Notional
amount
8,315,292
4,904,151
1,365
Assets
Liabilities
52,183
24,756
-
76,939
189,833
16,082
-
205,915
Interest rate derivatives
- Customers deposits hedging
Total (2)
Total financial derivatives (1+2)
Dec.31, 2020
Dec.31, 2019
Notional
amount
10,839,417
Assets
Liabilities
199,283
199,283
248,759
183,905
183,905
331,073
Notional
amount
8,880,574
Assets
Liabilities
139,444
139,444
216,383
76,673
76,673
282,588
20.2. Hedging derivatives
Fair value hedge
Losses arose from hedged items at December 31, 2020 reached EGP 7,034 thousand against losses of EGP 29,742 thousand
at December 31, 2019.
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 15,378
thousand at the end of December 31, 2020 against EGP 62,771 thousand at December 31, 2019, resulting in losses from
hedging instruments at December 31, 2020 of EGP 47,393 thousand against gains of EGP 87,619 thousand at December 31,
2019. Losses arose from the hedged items at December 31, 2020 reached EGP 55,573 thousand against losses EGP 171,993
thousand at December 31 , 2019.
222 |
Annual Report 2020
2020 Annual Report
| 223
Financial Statements // Separate 21. Movement of financial investment securities:
Beginning balance
Effect of applying IFRS 9
Addition
Disposals
Exchange revaluation differences for foreign financial assets
Profit (losses) from fair value difference
Ending Balance as of Dec.31, 2019
Beginning balance
Addition
Disposals
Profit (losses) from fair value difference
Exchange revaluation differences for foreign financial assets
Ending Balance as of Dec.31, 2020
Financial investments securities
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
Financial Assets
at Fair Value
through OCI
89,897,257
112,404,036
(54,137,187)
(269,259)
(248,415)
147,646,432
Amortized cost
73,630,764
1,020,895
76,516,842
(43,937,957)
(4,931)
-
107,225,613
Amortized cost
107,225,613
-
(82,203,469)
-
(1,227)
25,020,917
Dec.31, 2020
Investments listed in the market
Governmental bonds
Other bonds
Equity instruments
Portfolio managed by others
Sukuk *
Investments not listed in the market
“Treasury bills and other governmental
notes”
Equity instruments
Mutual funds
Total
Financial Assets
at Fair Value
through P&L
Financial Assets
at Fair Value
through OCI
-
-
-
359,959
-
98,525,988
7,983,338
480,792
-
701,732
EGP Thousands
Total
123,546,905
7,983,338
480,792
359,959
701,732
Amortized
cost
25,020,917
-
-
-
-
-
39,464,714
-
39,464,714
-
-
359,959
243,596
246,272
147,646,432
-
-
25,020,917
243,596
246,272
173,027,308
* During the fourth quarter, Commercial International Bank subscribed in 7 million bonds, of the first issuance of Tharwa Company, with
a nominal value of 100 EGP per unit - excluding the issuance fees - with a variable return paid from the month following the closing of the
subscription, and the deposit was made with the custodian: Commercial International Bank (Egypt)
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 governmental
notes"
Equity instruments
Mutual funds
Total
Financial Assets
at Fair Value
through P&L
Financial Assets
at Fair Value
through OCI
-
-
-
418,781
56,363,393
4,823,267
502,920
-
EGP Thousands
Total
163,589,006
4,823,267
502,920
418,781
Amortized
cost
107,225,613
-
-
-
-
27,634,062
-
27,634,062
-
-
418,781
344,929
228,686
89,897,257
-
-
107,225,613
344,929
228,686
197,541,651
disclosure and measurement of financial assets and financial liabilities:
The following table shows the financial assets and the net financial commitments according to the business model classification:
Dec.31, 2020
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
Amortized
cost
33,572,597
86,997,034
-
118,854,880
-
-
25,020,917
-
264,445,428
8,815,561
340,086,524
-
7,746,946
3,221,252
359,870,283
Debt
financial
Assets at Fair
value through
OCI
Equity
financial
Assets at Fair
value through
OCI
Financial
Assets/
Liabilities at
Fair value
through P&L
-
-
39,464,714
-
-
107,211,058
-
-
146,675,772
-
-
-
-
-
-
-
-
-
-
-
970,660
-
-
970,660
-
-
-
-
-
-
-
-
-
-
248,759
-
-
359,959
608,718
-
-
331,073
-
-
331,073
Total book
value
33,572,597
86,997,034
39,464,714
118,854,880
248,759
108,181,718
25,020,917
359,959
412,700,578
8,815,561
340,086,524
331,073
7,746,946
3,221,252
360,201,356
224 |
Annual Report 2020
2020 Annual Report
| 225
Financial Statements // Separate 21.1. Profits (Losses) on financial investments
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, 2020
Dec.31, 2019
6,759,229
285,585
1,195,099
755,836
169,855
40,608
9,206,212
(111,000)
9,095,212
4,011,196
217,484
942,781
4,333,966
356,382
36,130
9,897,939
(150,000)
9,747,939
*A provision with amount EGP 69 million has been charged against pending installments.
This item includes other assets that are not classified under specific items of balance sheet assets, such as: accrued income and
prepaid expenses, custodies, debit accounts under settlement and any balance that has no place in another asset category.
Profit (Loss) from selling FVOCI financial instruments
Released (Impairment) charges of FVOCI
Released (Impairment) charges of investments in associates and subsidiaries
Total
1,018,469
(79,126)
(16,511)
922,832
497,894
(47,197)
-
450,697
EGP Thousands
Dec.31, 2020
Dec.31, 2019
22. Investments in associates and subsidiaries
Company’s
country
Company’s
assets
Company’s
liabilities
(without
equity)
Company’s
revenues
Company’s
net profit
(loss)
Investment
book value
Stake %
EGP Thousands
Egypt
Egypt
Kenya
Egypt
Egypt
146,693
613
743
(6,331)
159,828
81,416
5,095
38,521
33,558
122,366
1,856,285
1,242,561
295,723
(118,241)
560,963
82,094
122,518
49,824
143,914
49,254
45,506
7,140
(11,011)
22,191
-
Egypt
1,062,033
799,693
472,714
723
9,000
3,351,039
2,241,700
902,461
(94,162)
874,348
99.99
49.95
51.00
39.34
23.50
30.00
Company’s
country
Company’s
assets
Company’s
liabilities
(without
equity)
Company’s
revenues
Company’s
net profit
(loss)
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
Dec.31, 2020
Subsidiaries
- CVenture Capital
- Damietta shipping &
marine services
- Mayfair Bank
Associates
- Al Ahly Computer
- Fawry Plus
- International Co. for
Security and Services
(Falcon)
Total
Dec.31, 2019
Subsidiaries
- CVenture Capital
Associates
- Fawry Plus
- International Co. for
Security and Services
(Falcon)
Total
226 |
Annual Report 2020
2020 Annual Report
| 227
Financial Statements // Separate s
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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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
392,725
8,422,836
8,815,561
114,786
5,233,885
3,466,890
8,815,561
232,019
871,427
7,712,115
8,815,561
8,815,561
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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
107,404,782
57,875,676
100,130,108
70,737,586
3,938,372
340,086,524
140,253,514
199,833,010
340,086,524
49,899,904
33,533,480
256,653,140
340,086,524
237,899,134
102,187,390
340,086,524
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
228 |
Annual Report 2020
2020 Annual Report
| 229
Financial Statements // Separate
27. Other loans
29. Provisions
Interest rate
%
Loan
duration
Due within
one year
CDC subordinated loan
European Bank for Reconstruction and
Development (EBRD)
Floating rate
10 years
Floating rate
2 years
International Finance Corporation (IFC)
Floating rate
Environmental Compliance Project (ECO)
Agricultural Research and Development
Fund (ARDF)
Social Fund for Development (SFD)
European Bank for Reconstruction and De-
velopment (EBRD) subordinated Loan
International Finance Corporation (IFC)
subordinated Loan
Balance
1 renewable
year
3-5 years
Fixed rate
Fixed rate
3-5 years*
Floating rate
04/01/2020*
Floating rate
10 years
Floating rate
10 years
EGP
Thousands
Dec.31, 2020 Dec.31, 2019
EGP
Thousands
EGP
Thousands
-
-
-
314
17,000
-
-
-
1,432,715
1,573,210
1,573,210
1,391
20,000
-
-
-
-
-
61,578
2,868
1,573,210
1,604,150
1,573,210
1,604,150
17,314
7,746,946
3,272,746
Dec.31, 2020
Provision for legal claims
Provision for contingent
Provision for other claim
Total
Beginning
balance
66,106
1,790,692
154,571
2,011,369
Charged
during the
year
Exchange
revaluation
difference
Utilized
during the
year
-
1,143,171
89,560
1,232,731
(44)
(5,369)
(1,780)
(7,193)
(185)
-
(2,197)
(2,382)
Dec.31, 2019
Provision for income tax claims
Provision for legal claims
Provision for contingent
Provision for other claim
Total
Beginning
balance
6,910
57,677
1,449,690
180,330
1,694,607
Charged
during the
year
Exchange
revaluation
difference
Utilized
during the
year
-
11,299
444,786
5,784
461,869
-
(244)
(103,784)
(6,034)
(110,062)
-
(2,626)
-
(25,509)
(28,135)
EGP Thousands
Reversed
amounts
(13,273)
-
-
(13,273)
Ending
balance
52,604
2,928,494
240,154
3,221,252
EGP Thousands
Reversed
amounts
(6,910)
-
-
-
(6,910)
Ending
balance
-
66,106
1,790,692
154,571
2,011,369
Interest rates on variable-interest subordinated loans are determined in advance every 3 months. Subordinated loans are
not repaid before their repayment dates.
* To face the potential risk of banking operations.
*Represents the date of loan repayment to the lending agent.
30. Equity
28. Other liabilities
Accrued interest payable
Accrued expenses
Accounts payable
Other credit balances
Total
EGP Thousands
Dec.31, 2020
Dec.31, 2019
1,165,714
1,316,093
3,083,529
113,930
5,679,266
1,090,649
1,027,526
6,097,077
181,235
8,396,487
30.1. Capital
The authorized capital is EGP 50 billion according to the extraordinary general assembly decision on 12 June 2019.
• Issued and Paid in Capital increased by an amount of EGP 85,992 thousand on September 21 ,2020 to reach EGP 14,776,813
thousand according to Board of Directors decision on January 5, 2020 by issuance of eleventh tranche for E.S.O.P program.
• Issued and Paid in Capital increased by an amount of EGP 105,413 thousand on November 18,2019 to reach EGP 14,690,821
thousand according to Board of Directors decision on February 4, 2019 by issuance of tenth tranche for E.S.O.P program.
• Issued and Paid in Capital increased by an amount of 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.
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.
230 |
Annual Report 2020
2020 Annual Report
| 231
Financial Statements // Separate 31. Deferred tax assets (Liabilities)
Deferred tax assets and liabilities are attributable to the following:
Details of the rights to share outstanding during the year are as follows:
Assets
(Liabilities)
Dec.31, 2020
EGP Thousands
Assets
(Liabilities)
Dec.31, 2019
Fixed assets (depreciation)
Other provisions (excluded loan loss, contingent liabilities and income tax provi-
sions)
Other investments impairment
Reserve for employee stock ownership plan (ESOP)
Interest rate swaps revaluation
Trading investment revaluation
Forward foreign exchange deals revaluation
Balance
(84,418)
210,526
97,925
239,545
1,292
(20,059)
(7,039)
437,772
(79,162)
146,675
76,407
216,709
6,642
(35,477)
18,545
350,339
Movement of Deferred Tax Assets and Liabilities:
Beginning Balance
Effect of applying IFRS 9
Additions / disposals
Ending Balance
Assets
(Liabilities)
Dec.31, 2020
350,339
-
87,433
437,772
EGP Thousands
Assets
(Liabilities)
Dec.31, 2019
308,370
136,491
(94,522)
350,339
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.
232 |
Annual Report 2020
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding at the end of the year
Details of the outstanding tranches are as follows:
Dec.31, 2020
No. of shares in
thousand
EGP Thousands
Dec.31, 2019
No. of shares in
thousand
27,428
11,313
(1,196)
(8,599)
28,946
29,697
9,152
(880)
(10,541)
27,428
Maturity date
Exercise price
Fair value
EGP
EGP
2021
2022
2023
Total
10.00
10.00
10.00
54.51
50.53
72.71
No. of shares in
thousand
9,323
8,560
11,063
28,946
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%
14th tranche
13th tranche
10
83.02
3
13.66%
1.50%
25%
10
59.26
3
18.14%
1.70%
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
Reserve for financial assets at fair value through OCI
Reserve for employee stock ownership plan
Banking risks reserve
General risk reserve
Ending balance
EGP Thousands
Dec.31, 2020
Dec.31, 2019
2,778,135
24,765,658
14,906
10,477,611
3,970,987
1,064,648
6,423
1,549,445
44,627,813
2,188,029
16,474,429
13,466
11,803,555
4,111,781
963,152
5,164
1,549,445
37,109,021
2020 Annual Report
| 233
Financial Statements // Separate 33.1. Banking risks reserve
33.6. General risk reserve
Beginning balance
Transferred to banking risk reserve
Ending balance
33.2 . Legal reserve
Beginning balance
Transferred to legal reserve
Ending balance
33.3. Reserve for financial assets at fair value through OCI
EGP Thousands
Dec.31, 2020
Dec.31, 2019
5,164
1,259
6,423
4,323
841
5,164
EGP Thousands
Dec.31, 2020
Dec.31, 2019
2,188,029
590,106
2,778,135
1,710,293
477,736
2,188,029
EGP Thousands
Dec.31, 2020
Dec.31, 2019
Beginning balance
Transferred from reserve on disposal of financial assets at fair value through OCI
Net unrealised gain/(loss) on financial assets at fair value through OCI
Effect of applying IFRS 9
Effect of ECL in fair value of debt instruments measured at fair value through OCI
Ending balance
4,111,781
(76,717)
(269,259)
-
205,182
3,970,987
(3,750,779)
-
6,157,553
1,889,928
(184,921)
4,111,781
33.4. Retained earnings
EGP Thousands
Dec.31, 2020
Dec.31, 2019
Beginning balance
Transferred to reserves
Dividend paid
Net profit for the year
Transferred ( from) to banking risk reserve
Transferred from previous years' outstanding balances
Transferred from reserve on disposal of financial assets at fair value through OCI
Ending balance
11,803,555
(8,431,833)
(3,370,464)
10,299,882
(1,259)
101,013
76,717
10,477,611
9,555,755
(6,854,370)
(2,700,544)
11,803,555
(841)
-
-
11,803,555
33.5. Reserve for employee stock ownership plan
Beginning balance
Effect of applying IFRS 9
Transferred to general risk reserve
Ending balance
34. Cash and cash equivalent
Cash and balances at the 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, 2020
Dec.31, 2019
1,549,445
-
-
1,549,445
-
117,251
1,432,194
1,549,445
EGP Thousands
Dec.31, 2020
Dec.31, 2019
33,572,597
87,020,365
39,464,714
(27,610,380)
(16,280,760)
(40,201,289)
75,965,247
28,273,962
28,370,183
27,634,062
(22,397,310)
(10,593,903)
(28,391,977)
22,895,017
• There is a number of existing cases against the bank on December 31, 2020 and 2019 for which no provisions are made 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. (Note 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 27,512 thousand as follows:
Financial Assets at Fair value through OCI
Financial investments in subsidiaries
Investments
value
157,321
157,318
Paid
129,809
157,318
Remaining
27,512
-
35.3. Letters of credit, guarantees and other commitments
Beginning balance
Transferred to reserves
Cost of employees stock ownership plan (ESOP)
Ending balance
234 |
Annual Report 2020
EGP Thousands
Dec.31, 2020
Dec.31, 2019
963,152
(450,942)
552,438
1,064,648
738,320
(239,707)
464,539
963,152
Letters of guarantee
Letters of credit (import and export)
Customers acceptances
Total
EGP Thousands
Dec.31, 2020
Dec.31, 2019
73,986,785
5,848,427
2,701,590
82,536,802
61,143,216
5,866,630
3,188,757
70,198,603
2020 Annual Report
| 235
Financial Statements // Separate 35.4. Credit facilities commitments
Takamol fund
EGP Thousands
Dec.31, 2020
Dec.31, 2019
8,895,410
6,857,510
• 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 131,456 with redeemed value of EGP 23,086 thousands.
• The market value per certificate reached EGP 175.62 on December 31, 2020.
• The Bank portion got 50,000 certificates with redeemed value of EGP 8,781 thousands.
Credit facilities commitments
36. Mutual funds
Osoul fund
• 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 4,049,086 with redeemed value of EGP 1,855,534 thousands.
• The market value per certificate reached EGP 458.26 on December 31, 2020.
• The Bank portion got 137,112 certificates with redeemed value of EGP 62,833 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 369,394 with redeemed value of EGP 62,132 thousands.
• The market value per certificate reached EGP 168.20 on December 31, 2020.
• The Bank portion got 50,000 certificates with redeemed value of EGP 8,410 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 281,716 with redeemed value of EGP 24,887 thousands.
• The market value per certificate reached EGP 88.34 on December 31, 2020.
• The Bank portion got 34,596 certificates with redeemed value of EGP 3,056 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 90,255 with redeemed value of EGP 23,498 thousands.
• The market value per certificate reached EGP 260.35 on December 31, 2020.
• The Bank portion got 50,000 certificates with redeemed value of EGP 13,018 thousands.
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 152,949 with redeemed value of EGP 51,688 thousands.
• The market value per certificate reached EGP 337.94 on December 31, 2020.
• The Bank portion got 50,000 certificates with redeemed value of EGP 16,897 thousands.
37. Transactions with related parties
All banking transactions with related parties are conducted in accordance with the normal banking practices and regu-
lations applied to all other customers without any discrimination.
37.1. Loans, advances, deposits and contingent liabilities
Loans, advances and other assets
Deposits
Contingent liabilities
37.2. Other transactions with related parties
International Co. for Security & Services
CVenture Capital
Fawry plus
Mayfair bank
Damietta shipping & marine services
Al ahly computer
EGP Thousands
Dec.31, 2020
15,049
149,217
1,210
EGP Thousands
Income
Expenses
70
80
739
17
5
5
213,668
279
-
-
9,469
57
236 |
Annual Report 2020
2020 Annual Report
| 237
Financial Statements // Separate 38. Main currencies positions
Egyptian pound
US dollar
Sterling pound
Japanese yen
Swiss franc
Euro
EGP Thousands
Dec.31, 2020
Dec.31, 2019
(750,477)
97,057
3,487
(8)
2,175
(218,881)
(387,742)
(79,511)
248
6
484
32,890
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 of salary tax since the start of activity till 2019
Stamp duty tax
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 2019
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Impairment charge for other assets
Total 2
Change (1-2)
41. Significant events during the year
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
• Based on both banks’ Board of Directors’ approval, and after obtaining all necessary approvals from the Central Bank of
Egypt and the Central Bank of Kenya, in May 2020, CIB has acquired 51% of what is to be renamed as Mayfair CIB Bank
Limited in Kenya in the form of a capital increase, for a total transaction value of USD 35.35 million. The bank has consoli-
dated financial results starting from the second quarter of 2020.
• In May 2020, CIB gained significant influence in “Damietta Shipping and Marine Services” Company, upon controlling
majority seats in the Company’s Board of Directors, besides 32% of the Company’s shares previously owned by the Bank.
The Company’s financial results have been consolidated starting Q2 2020.
• Starting from Q3 2020, CIB has combined AL-Ahly Computer company financial results as an associate using the equity
• The period since the start of activity till 31/07/2006 was examined & paid, disputed points have been transferred to the
method.
court for adjudication.
• The period from 01/08/2006 till 31/12/2019 was examined & paid in accordance with the protocol signed between the Fed-
eration of Egyptian Banks & the Egyptian Tax Authority
Loans:
During the period, CIB has obtained a total debt of $300mn USD as follows:
40. Other assets - net increase (decrease)
Total other assets by end of 2019
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Total 1
Total other assets by end of year
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Impairment charge for other assets
Total 2
Change (1-2)
EGP Thousands
Dec.31, 2020
9,747,939
(356,382)
(942,781)
8,448,776
9,095,212
(169,855)
(1,195,099)
69,217
7,799,475
649,301
$100mn USD subordinated debt from CDC.
$100mn USD senior debt from the European Bank for Reconstruction and Development (EBRD).
$100mn USD senior debt from the International Finance Corporation (IFC).
• In September 2020, the Central Bank and Banking Institutions Law No. 194 for the year 2020 was issued which cancelled
the Central Bank, Banking and Monetary Institutions Law No. 88 for the year 2003. Article No. 4 of Law No. 194 for the year
2020 allows the addressees a transition period for the compliance with the new law.
238 |
Annual Report 2020
2020 Annual Report
| 239
Financial Statements // Separate Subsequent event
• On Thursday October 22nd 2020 the Bank’s Directors received a letter from the Central Bank of Egypt (CBE) informing
them that in light of the findings of a limited review inspection, the CBE Board of Directors agreed on a resolution to
discharge the Chairman and Managing Director of CIB and that its Board should elect a Non-Executive Chairman from
among its Non-Executive Directors. On the following day the CIB Board convened, during that meeting the Chairman and
Managing Director stepped down from his position and resigned from the board with immediate effect and Mr. Sherif
Samy was elected Non-Executive Chairman.
• CBE issued its report to the Bank on 10 November 2020 and it covered a number of areas that needed immediate remedia-
tion covering the Internal Control Environment, Credit facilities and provisions, Governance and Compliance and also
referred to instances of violations of certain provisions of the applicable laws (Articles 57, 64 and 111 of Law 88 for year
2003, and Articles 19 and 42 of the Executive Regulation of the said law), and other instances of violations of CBE regula-
tions. The Board of the Bank mandated management to review the CBE report findings and propose necessary corrective
actions. The Bank carefully assessed all the findings and other similar matters. Since 22 October the Bank management
and Board met with the CBE several times to address the matters raised, the findings and compliance requirements. The
Bank also engaged external legal counsel to support in the characterization and assessment of the findings. The Bank’s
management applied its judgement and experience and included in these financial statements, their assessment of the
impact of the CBE findings, including credit losses and legal and other charges. (see notes 19 and 29).
• The Board of the Bank assessment is that the design of the internal controls over financial reporting remain appropriate
and continue to operate effectively to ensure fair presentation of the financial position of the Bank and its financial per-
formance. Management developed a corrective action plan for the CBE to address all the findings and to further enhance
regulatory compliance and strengthen controls. Additionally, as directed by the Non-Executive Directors, the Audit Com-
mittee appointed an independent international professional services firm to conduct an in depth review of the Bank’s
controls and lending functions with a view to addressing specific and related areas from the CBE inspection, based on best
practice and to further enhance regulatory compliance and strengthen controls at CIB, as part of the Bank’s commitment
to enhancing risk management and the governance culture at the Bank. The said review is currently ongoing up to the date
of issue of the financial statements. Any additional recommendations of the said review will be considered in the Bank’s
future actions.
Impact of covid-19
The coronavirus (“COVID-19”) pandemic has spread across various geographies globally, causing disruption to business
and economic activities. COVID-19 has brought about uncertainties in the global economic environment. The fiscal and
monetary authorities, both domestic and international, have announced various fiscal and stimulus measures across the
globe to counter possible adverse implications.
Business continuity planning
The Bank is closely monitoring the situation and taking rightful measures to ensure the safety and security of the bank’s
staff and an uninterrupted service to its customers. Remote working arrangements have been implemented and part of
the Bank staff are working from home in line with government directions.
Business continuity plans are in place. The Bank has taken measures to ensure that services levels are maintained, cus-
tomer complaints are resolved, and the Bank continues to serve its customers as they would do in normal conditions.
CIB regularly conducts stress tests to assess the resilience of the statement of position and the capital adequacy. CIB is
closely monitoring the situation and has activated its risk management practices managing the potential business disrup-
tion COVID-19 outbreak may have on its operations and financial performance.
Impact on expected credit losses
In the determination of the impact over the ECL, CIB has considered the potential impact of the uncertainties considering
the available information caused by the Covid-19 pandemic and taken into account the economic support and relief mea-
sures taken by the Central Bank of Egypt. The Bank has reviewed the potential impact of COVID-19 outbreak on the inputs
and assumptions for ECL measurement. In addition, the Bank has analyzed the risk of the credit portfolio by focusing
on economic sector wise segmentation analysis using both a top-down approach and the Bank own experience. Overall,
the COVID-19 situation remains fluid and is rapidly evolving at this point, which makes it challenging to reliably reflect
impacts in our ECL estimates. In addition to the assumptions outlined above, CIB has given specific consideration to the
relevant impact of COVID-19 on the qualitative and quantitative factors when determining the significant increase in
credit risk (SICR) leading to reclassifying loans from stage 1 to stage 2 and assessing the indicators of impairment for the
exposures in potentially affected sectors. The bank has implemented the CBE initiative of payment relief for the customers
by deferring interest/principal due for six months.
The relief offered to customers may at some cases indicate a SICR. However, the bank believes that the extension of these
payment reliefs does not automatically trigger a SICR and a stage migration for the purposes of calculating ECL, as these
are being made available to assist borrowers affected by the Covid-19 outbreak to resume regular payments. The Bank
has reassessed its ECL models, underlying assumptions including relevant available macroeconomic data, and the judg-
mental overlays on the basis of macroeconomic variations reflected in models pertaining to particular industries rather
than on customer-account basis. The ECL amounts recognized in the bank’s financial statements for the period ending
December 31, 2020 were mainly increased as a result of the Covid 19 impact . The impact of current uncertain economic
environment is judgmental and management will keep assessing the current position and its related impact regularly.
It should be also considered that the assumptions used about economic forecasts are subject to high degree of inherent
uncertainty and therefore the actual outcome may be significantly different from forecasted information. CIB has consid-
ered potential impacts of the current economic volatility in determination of the reported amounts of the bank’s financial
and non-financial assets and these are considered to represent management’s best assessment based on observable infor-
mation. Markets however remain volatile and the recorded amounts remain sensitive to market fluctuations.
Liquidity management
The Bank’s approach is to maintain a prudent Liquidity position with a Liability driven strategy, as almost the entire fund-
ing base is customer based rather than wholesale funding; which is a core component of the Risk Appetite. This is coupled
with ample amounts of Liquid Assets. To limit potential Liquidity shocks, the Bank has a well-established Contingency
Funding Plan (CFP), where Liquidity Risk is assessed in line with all Regulatory and Internal Liquidity Measurements, and
Basel II and III requirements; including Liquidity Stress Testing; and Basel III Ratios; Net Stable Funding Ratio (NSFR) and
Liquidity Coverage Ratio (LCR).
240 |
Annual Report 2020
2020 Annual Report
| 241
Financial Statements // Separate Auditors’ Report
242 |
Annual Report 2020
2020 Annual Report
| 243
Financial Statements // Consolidated Consolidated balance sheet
as at December 31, 2020
Consolidated income statement for
the year ended December 31, 2020
Notes
Dec. 31, 2020
Dec. 31, 2019
EGP Thousands
Notes
Dec. 31, 2020
Dec. 31, 2019
EGP Thousands
Assets
Cash and balances at the central bank
Due from banks
Loans and advances to banks, net
Loans and advances to customers, net
Derivative financial instruments
Investments
- Financial Assets at Fair Value through P&L
- Financial Assets at Fair Value through OCI
- Amortized cost
- Investments in associates
Other assets
Goodwill
Intangible assets
Deferred tax assets (Liabilities)
Property 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
Minority interest
Total minority interest, equity and net profit for the year
Total liabilities and equity
15
16
18
19
20
21
21
21
22
23
42
43
31
24
25
26
20
28
27
29
30
33
33
33
The accompanying notes are an integral part of these financial statements .
(Audit report attached)
*Including net profit for the current year
33,768,549
87,426,301
776,980
119,570,005
248,759
359,959
148,118,372
25,285,225
139,871
9,175,525
178,782
44,920
437,772
2,311,147
427,842,167
8,817,535
341,169,450
331,073
859,582
5,735,269
7,746,946
3,223,501
367,883,356
14,776,813
33,094,580
1,064,648
10,539,715
59,475,756
483,055
59,958,811
427,842,167
28,273,962
28,353,366
625,264
119,321,103
216,383
418,781
89,897,257
107,225,613
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
-
51,880,445
386,742,368
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
Goodwill amortization
Intangible assets amortization
Impairment release (charges) for credit losses
Profits from subsidiaries acquisition
Bank's share in the profits of associates
Profit before income tax
Income tax expense
Deferred tax assets (Liabilities)
Net profit for the year
Minority interest
Bank shareholders
Earning per share
Basic
Diluted
6
7
8
9
21
10
11
12
13
31 - 13
14
42,196,235
(17,023,815)
25,172,420
3,059,264
(983,450)
2,075,814
50,175
406,631
922,832
(5,625,883)
(2,742,996)
(27,505)
(6,911)
(5,018,781)
8,086
22,426
15,236,308
(5,087,418)
87,433
10,236,323
(1,834)
10,238,157
42,600,957
(21,022,338)
21,578,619
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
6.26
6.24
7.11
7.09
Hussein Abaza
CEO & Board member
Sherif Samy
Chairman
Hussein Abaza
CEO & Board member
244 |
Annual Report 2020
Sherif Samy
Chairman
2020 Annual Report
| 245
Financial Statements // Consolidated Consolidated statement of other comprehensive
income for the year ended December 31, 2020
Consolidated cash flow for the year
ended December 31, 2020
Net profit for the year
Other comprehensive income items that will not be reclassified to the
Profit or Loss:
Change in fair value of equity instruments measured at fair value through other
comprehensive income
Other comprehensive income items that is or may be reclassified to the
profit or loss:
Change in fair value of debt instruments measured at fair value through other
comprehensive income
Transferred from reserve on disposal of financial assets at fair value through OCI
Cumulative foreign currencies translation differences
Effect of ECL in fair value of debt instruments measured at fair value through OCI
EGP Thousands
Dec. 31, 2020
Dec. 31, 2019
10,236,323
11,800,995
(13,966)
212,967
(250,766)
5,944,586
(76,717)
(3,684)
205,182
-
2,501
(184,921)
Total other comprehensive income for the year
10,096,372
17,776,128
As follows:
Bank's shareholders
Minority interest
Total other comprehensive income for the year
10,098,206
17,776,128
(1,834)
-
10,096,372
17,776,128
246 |
Annual Report 2020
Cash flow from operating activities
Profit before income tax from continued operations
Adjustments to reconcile net profit to net cash provided by
operating activities
Fixed assets depreciation
Impairment charge for credit losses (Loans and advances to custom-
ers and banks)
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
Goodwill amortization
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
Released (Impairment) charges of investments in associates and
subsidiaries
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 used in (generated from) operating activities
Cash flow from investing activities
Proceeds from Investments in 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
Proceeds from investment in subsidiaries.
Net cash generated from (used in) investing activities
Notes
Dec. 31, 2020
Dec. 31, 2019
EGP Thousands
15,236,308
16,534,881
24
12
29
12
12
23
21
42
43
21
29
29
29
11
21
21
15
21
20
18 - 19
40
25
26
28
11
21
21
21
733,032
4,806,518
1,234,980
7,081
205,182
69,217
249,642
27,505
6,911
79,126
(2,382)
(13,273)
(7,193)
(1,094)
(1,018,469)
16,511
552,438
(22,426)
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)
22,159,614
20,566,150
(10,899,927)
-
58,822
16,109
(5,020,609)
568,988
(2,993,072)
36,720,995
(3,779,782)
(7,645,182)
29,185,956
(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
750
-
(1,091,829)
(1,303,181)
1,094
82,309,481
(233,765)
(112,791,966)
54,137,187
194,722
22,525,674
1,439
43,937,957
(76,516,842)
(50,954,311)
54,855,966
-
(29,978,972)
2020 Annual Report
| 247
Financial Statements // Consolidated Consolidated cash flow for the year ended
December 31, 2020 (Cont.)
Notes
Dec. 31, 2020
Dec. 31, 2019
EGP Thousands
Cash flow from financing activities
Received (Repaid) in long term loans
Dividend paid
Capital increase
Net cash generated from (used in) financing activities
Net increase (decrease) in cash and cash equivalent during the year
Beginning balance of cash and cash equivalent
Cash and cash equivalent at the end of the year
Cash and cash equivalent comprise:
Cash and balances at the 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
4,474,200
(3,370,464)
85,992
1,189,728
52,901,358
22,895,017
75,796,375
33,768,549
87,450,490
39,497,692
(27,744,700)
(16,974,367)
(40,201,289)
75,796,375
(448,783)
(2,700,544)
105,413
(3,043,914)
(11,408,628)
34,303,645
22,895,017
28,273,962
28,370,183
27,634,062
(22,397,310)
(10,593,903)
(28,391,977)
22,895,017
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248 |
Annual Report 2020
2020 Annual Report
| 249
Financial Statements // Consolidated
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Notes to the consolidated financial statements
for the year ended December 31, 2020
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1. General information
Commercial International Bank (Egypt) S.A.E. provides retail, corporate and investment banking services in various
parts of Egypt through 182 branches, and 27 units employing 7071 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 subsidiaries “C-Ventures”, “May Fair” and “Damietta Shipping” in which the bank’s shares
are 99.99%, 51% and 49.95% respectively.
Financial statements have been approved by board of directors on February 28, 2021.
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 the instructions of the Central Bank of
Egypt approved by the Board of Directors on December 16, 2008 as modified by the instructions for applying the Interna-
tional 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.
2.2. Subsidiaries and associates
2.2.1. Subsidiaries
Subsidiaries are those investees, including structured entities, that the Bank controls because the Bank (i) has power to
direct relevant activities of the investees that significantly affect their returns, (ii) has exposure, or rights, to variable
returns from its involvement with the investees, and (iii) has the ability to use its power over the investees to affect the
amount of investor’s returns. The existence and effect of substantive rights, including substantive potential voting rights,
are considered when assessing whether the Bank has power over another entity. For a right to be substantive, the holder
must have practical ability to exercise that right when decisions about the direction of the relevant activities of the in-
vestee need to be made. The Bank may have power over an investee even when it holds less than majority of voting power
in an investee. In such a case, the Bank assesses the size of its voting rights relative to the size and dispersion of holdings
of the other vote holders to determine if it has de-facto power over the investee. Protective rights of other investors, such
as those that relate to fundamental changes of investee’s activities or apply only in exceptional circumstances, do not pre-
vent the Bank from controlling an investee. Subsidiaries are consolidated in the Bank’s consolidated financial statements
from the date on which control is transferred to the Bank, and are deconsolidated from the date on which control ceases.
250 |
Annual Report 2020
2020 Annual Report
| 251
Financial Statements // Consolidated
The acquisition method of accounting is used to account for the acquisition of subsidiaries [other than those acquired
from parties under common control]. Identifiable assets acquired and liabilities and contingent liabilities assumed in
a business combination are measured at their fair values at the acquisition date, irrespective of the extent of any non-
controlling interest.
The Bank measures non-controlling interest that represents present ownership interest and entitles the holder to a pro-
portionate share of net assets in the event of liquidation on a transaction by transaction basis, either at: (a) fair value, or
(b) the non-controlling interest’s proportionate share of net assets of the acquiree. Non-controlling interests that are not
present ownership interests are measured at fair value.
Goodwill is measured by deducting the net assets of the acquiree from the aggregate of the consideration transferred
for the acquiree, the amount of non-controlling interest in the acquiree and fair value of an interest in the acquiree held
immediately before the acquisition date. Any negative amount (“negative goodwill”) is recognized in profit or loss, after
management reassesses whether it identified all the assets acquired and all liabilities and contingent liabilities assumed,
and reviews appropriateness of their measurement.
The consideration transferred for the acquiree is measured at the fair value of the assets given up, equity instruments issued
and liabilities incurred or assumed, including fair value of assets or liabilities from contingent consideration arrangements,
but excludes acquisition related costs such as advisory, legal, valuation and similar professional services. Transaction costs
incurred for issuing equity instruments are deducted from equity; transaction costs incurred for issuing debt are deducted
from its carrying amount and all other transaction costs associated with the acquisition are expensed.
Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated;
unrealized losses are also eliminated unless the cost cannot be recovered. The Bank and all its subsidiaries use uniform
accounting policies consistent with the Group’s policies.
Non-controlling interest is that part of the net results and of the equity of a subsidiary attributable to interests which are
not owned, directly or indirectly, by the Bank. Non-controlling interest forms a separate component of the Group’s equity.
Purchases and sales of non-controlling interests. The Bank applies the economic entity model to account for transactions
with owners of non-controlling interest. Any difference between the purchase consideration and the carrying amount
of non-controlling interest acquired is recorded as a capital transaction directly in equity. The Bank recognizes the dif-
ference between sales consideration and carrying amount of non-controlling interest sold as a capital transaction in the
statement of changes in equity.
2.2.2. Associates
Associates are entities over which the Bank has significant influence (directly or indirectly), but not control, generally
accompanying a shareholding of between 20 and 50 percent of the voting rights. Investments in associates are accounted
for using the equity method of accounting and are initially recognized at cost. The carrying amount of associates includes
goodwill identified on acquisition less accumulated credit losses, if any. Dividends received from associates reduce the
carrying value of the investment in associates. Other post-acquisition changes in Group’s share of net assets of an associ-
ate are recognized as follows: (i) the Group’s share of profits or losses of associates is recorded in the consolidated profit or
loss for the year as share of result of associates, (ii) the Group’s share of other comprehensive income is recognized in other
comprehensive income and presented separately, (iii); all other changes in the Group’s share of the carrying value of net as-
sets of associates are recognized in profit or loss within the share of result of associates. However, when the Group’s share
of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the
Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest
in the associates; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred.
The Bank applies the impairment requirements in IFRS 9 to long-term loans, preference shares and similar long-term in-
terest that in substance form part of the investment in associate before reducing the carrying value of the investment by a
share of a loss of the investee that exceeds the amount of the Group’s interest in the ordinary shares.
Disposals of subsidiaries, associates or joint ventures. When the Group ceases to have control or significant influence, any
retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in profit
or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive
income in respect of that entity, are accounted for as if the Group had directly disposed of the related assets or liabilities.
This may mean that amounts previously recognised in other comprehensive income are recycled to profit or loss.
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.
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.
2.5. Financial assets
Key Measurement Terms:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The best evidence of fair value is price in an active market. An active market
is one in which transactions for the asset or liability take place with enough frequency and volume to provide pricing in-
formation on an ongoing basis. Fair value of financial instruments traded in an active market is measured as the product
of the quoted price for the individual asset or liability and the quantity held by the entity.
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Financial Statements // Consolidated Valuation techniques such as discounted cash flow models or models based on recent arm’s length transactions or consid-
eration of financial data of the investees, are used to measure fair value of certain financial instruments for which external
market pricing information is not available. Fair value measurements are analyzed by level in the fair value hierarchy as
follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities,
(ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not
based on solely observable market data (that is, the measurement requires significant unobservable inputs).
Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial
instrument. An incremental cost is one that would not have been incurred if the transaction had not taken place. Transac-
tion costs include fees and commissions paid. Transaction costs do not include debt premiums or discounts.
Amortized cost is the amount at which the financial instrument was recognized at initial recognition less any principal
repayments, plus accrued interest, and for financial assets less any allowance for expected credit losses. Accrued interest
includes amortization of transaction costs deferred at initial recognition and of any premium or discount to maturity
amount using the effective interest method.
The effective interest method is a method of allocating interest income or interest expense over the relevant period, so as
to achieve a constant periodic rate of interest (effective interest rate) on the carrying amount. The effective interest rate
is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial
instrument or a shorter period, if appropriate, to the gross carrying amount of the financial instrument.
The effective interest rate discounts cash flows of variable interest instruments to the next interest repricing date, except
for the premium or discount, which reflects the credit spread over the floating rate specified in the instrument, or other
variables that are not reset to market rates. Such premiums or discounts are amortized over the expected life of the instru-
ment. The present value calculation includes all fees paid or received between parties to the contract that are an integral
part of the effective interest rate.
Financial instruments – initial recognition.
Financial instruments at FVTPL are initially recorded at fair value. Fair value at initial recognition is best evidenced by
the transaction price. A gain or loss on initial recognition is only recorded if there is a difference between fair value and
transaction price which can be evidenced by other observable current market transactions in the same instrument or by
a valuation technique whose inputs include only data from observable markets. After the initial recognition, an ECL al-
lowance is recognized for financial assets measured at amortized cost and investments in debt instruments measured at
FVOCI, resulting in an immediate accounting loss.
All purchases and sales of financial assets that require delivery within the time frame established by regulation or market
convention (“regular way” purchases and sales) are recorded at trade date, which is the date on which the bank commits
to deliver a financial asset. All other purchases are recognized when the entity becomes a party to the contractual provi-
sions of the instrument.
Financial assets – classification and subsequent measurement – measurement categories.
The bank classifies financial assets in the following measurement categories: FVTPL, FVOCI and AC. The classification
and subsequent measurement of debt financial assets depends on: (i) the bank’s business model for managing the related
assets portfolio and (ii) the cash flow characteristics of the asset.
The following table summarizes measurement categories
Methods of Measurement according to Business Models
Fair Value
Financial Instrument Amortized Cost
Equity Instruments
Not Applicable
Debt Instruments /
Loans & Facilities
Business Model of Assets held
for Collecting Contractual
Cash Flows
Through Other
Comprehensive Income
An irrevocable election at Ini-
tial Recognition
Business Model of Assets held
for Collecting Contractual Cash
Flows & Selling
Through Profit or Loss
Normal treatment of equity
instruments
Business Model of Assets held
for Trading
Financial assets – classification and subsequent measurement – business model.
The business model reflects how the bank manages the assets in order to generate cash flows – whether the bank’s objec-
tive is: (i) solely to collect the contractual cash flows from the assets (“hold to collect contractual cash flows”,) or (ii) to
collect both the contractual cash flows and the cash flows arising from the sale of assets (“hold to collect contractual cash
flows and sell”) or, if neither of (i) and (ii) is applicable, the financial assets are classified as part of “other” business model
and measured at FVTPL.
Business model is determined for a group of assets (on a portfolio level) based on all relevant evidence about the activities
that the bank undertakes to achieve the objective set out for the portfolio available at the date of the assessment. Factors
considered by the bank in determining the business model include the purpose and composition of a portfolio, past expe-
rience on how the cash flows for the respective assets were collected, how risks are assessed and managed, how the assets’
performance is assessed.
Financial assets – classification and subsequent measurement – cash flow characteristics.
Where the business model is to hold assets to collect contractual cash flows or to hold contractual cash flows and sell, the
bank assesses whether the cash flows represent solely payments of principal and interest (“SPPI”). Financial assets with
embedded derivatives are considered in their entirety when determining whether their cash flows are consistent with the
SPPI feature. In making this assessment, the bank considers whether the contractual cash flows are consistent with a ba-
sic lending arrangement, i.e. interest includes only consideration for credit risk, time value of money, other basic lending
risks and profit margin. Where the contractual terms introduce exposure to risk or volatility that is inconsistent with a
basic lending arrangement, the financial asset is classified and measured at FVTPL. The SPPI assessment is performed on
initial recognition of an asset and it is not subsequently reassessed.
The following table summarizes the classification of the Banks Financial Assets in accordance with the business model:
Financial asset
Business model
Basic characteristics
Financial Assets at Am-
ortized Cost (AC)
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 credit-
worthiness of the issuer of the financial instrument.
• Lowest sales in terms of turnover and value.
• The Bank makes clear and reliable documentation of the rea-
sons for each sale and its compliance with the requirements of
the Standard.
Financial Assets at Fair
Value through Other
Comprehensive Income
(FVTOCI)
Business model of
financial assets held
to collect cash flows
and sales
• Both the collection of contractual cash flows and sales are
complementary 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.
Financial Assets at Fair
Value through Profit or
Loss (FVTPL)
Other business
models include trad-
ing - management of
financial assets at fair
value - maximizing
cash flows by selling)
• 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.
Financial assets – reclassification. Financial instruments are reclassified only when the business model for managing
the portfolio as a whole changes. The Bank did not change its business model during the current and comparative period
and did not make any reclassifications.
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Financial Statements // Consolidated Financial assets impairment – credit loss allowance for ECL. The bank assesses, on a forward-looking basis, the ECL
for debt instruments measured at AC and FVOCI and for the exposures arising from loan commitments and financial
guarantee contracts. The bank measures ECL and recognizes credit loss allowance at each reporting date. The measure-
ment of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible
outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue
cost and effort at the end of each reporting date about past events, current conditions and forecasts of future conditions.
The bank applies a three-stage model for impairment, based on changes in credit quality since initial recognition. A financial
instrument that is not credit-impaired on initial recognition is classified in Stage 1. Financial assets in Stage 1 have their
ECL measured at an amount equal to the portion of lifetime ECL that results from default events possible within the next 12
months or until contractual maturity, if shorter (“12 Months ECL”). If the bank identifies a significant increase in credit risk
(“SICR”) since initial recognition, the asset is transferred to Stage 2 and its ECL is measured based on ECL on a lifetime basis,
that is, up until contractual maturity but considering expected prepayments, if any (“Lifetime ECL”). If the bank determines
that a financial asset is credit-impaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL.
Financial assets – write-off. Financial assets are written-off, in whole or in part, when the bank exhausted all practical recovery
efforts and has concluded that there is no reasonable expectation of recovery. The write-off represents a derecognition event.
Financial assets – derecognition. The bank derecognizes financial assets when (a) the assets are redeemed or the rights
to cash flows from the assets otherwise expired or (b) the bank has transferred the rights to the cash flows from the finan-
cial assets or entered into a qualifying pass-through arrangement while (i) also transferring substantially all risks and
rewards of ownership of the assets or (ii) neither transferring nor retaining substantially all risks and rewards of owner-
ship, but not retaining control. Control is retained if the counterparty does not have the practical ability to sell the asset
in its entirety to an unrelated third party without needing to impose restrictions on the sale.
Financial liabilities – measurement categories. Financial liabilities are classified as subsequently measured at AC,
except for financial liabilities at FVTPL: this classification is applied to derivatives or financial liabilities held for trading
(e.g. short positions in securities)
2.6. Financial liabilities – derecognition.
Financial liabilities are derecognized when they are extinguished (i.e. when the obligation specified in the contract is
discharged, cancelled or expires).
2.7. 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.
2.8. Derivative financial instruments and hedge accounting
Derivatives are recognized initially, and subsequently, at fair value. Fair values of exchange traded derivatives are ob-
tained from quoted market prices. Fair values of over-the-counter derivatives are obtained using valuation techniques,
including discounted cash flow models and option pricing models. Derivatives are classified as assets when their fair value
is positive and as liabilities when their fair value is negative.
Embedded derivatives in other financial instruments, such as conversion option in a convertible bond, are treated as
separate derivatives when their economic characteristics and risks are not closely related to those of the host contract,
provided that the host contract is not classified as at fair value through profit and loss. These embedded derivatives are
measured at fair value with changes in fair value recognized in income statement unless the Bank chooses to designate
the hybrid 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)
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• 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.
2.8.1. Fair value hedge
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recognized in profit or
loss immediately together with any changes in the fair value of the hedged asset or liability that are attributable to the
hedged risk. The effective portion of changes in the fair value of the interest rate swaps and the changes in the fair value of
the hedged item attributable to the hedged risk are recognized in the ‘net interest income’ line item of the income state-
ment. Any ineffectiveness is recognized in profit or loss in ‘net trading income’.
When the hedging instrument is no longer qualified for hedge accounting, the adjustment to the carrying amount of a
hedged item, measured at amortized cost, arising from the hedged risk is amortized to profit or loss from that date using
the effective interest method.
2.8.2. 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
2.9.
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 exactly dis-
counts 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 op-
tions) 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.
2.10. 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 inter-
est rate of a financial asset, are treated as an adjustment to the effective interest rate of that financial asset. Commitment fees
and related direct costs for loans and advances where draw down is probable are deferred and 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.
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Financial Statements // Consolidated 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.
2.11. Dividend income
Dividends are recognized in the income statement when the right to collect is established.
2.12. 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.
2.13. Investment property
The investment property represents 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 is carrying out its operations through or those that
have owned by the Bank as settlement of debts. The accounting treatment is the same used with property and equipment.
2.14. Property 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
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20 years
3 years, or over the period of the lease if less
3/5 years
5 years
3/5 years
3 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.
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 on an annual basis or shorter when trigger event took
place, 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
The intangible assets other than goodwill and computer programs (trademarks, licenses, contracts for benefits, the ben-
efits 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 the instructions of Central Bank of Egypt, 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 pay-
ments representing at least 90% of the value of the asset. The other leases contracts are considered operating leases contracts.
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Financial Statements // Consolidated 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 and equipment in the balance sheet and amortized over the expected
useful life of this asset in the same manner as similar assets. Lease income is recognized on the basis of rate of return on
the lease in addition to an amount corresponding to the cost of depreciation for the period. The difference between the
recognized rental income and the total finance lease clients’ accounts is transferred to the in the income statement until
the expiration of the lease to be reconciled with a net book value of the leased asset. Maintenance and insurance expenses
are charged to the income statement when incurred to the extent that they are not charged to the tenant.
In case there is objective evidence that the Bank will not be able to collect the of financial lease obligations, the finance
lease payments are reduced to the recoverable amount.
For assets leased under operating lease it appears in the balance sheet under property, plant and equipment, and depreci-
ated 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.
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.
The bank’s contributions to the employees’ social insurance fund
Bank employees benefit from the Social Insurance Fund that has been established under the Law No. 64 of year 84 regard-
ing alternative social insurance systems. This system is considered an alternative to state regulations and is subject to the
supervision of the Ministry of Social Insurance. A Ministerial Resolution No. 22 of year 83 was issued regarding approval
of the establishment of the Social Fund for Employees. The bank is obliged to pay to the fund the contributions due for
each month represented in the employer’s share and the share of the insured and pay his obligations towards the fund in
implementation of the provisions of the fund system. This is a system of benefits enjoyed by employees, a system of specific
benefits for the bank, according to the Egyptian accounting standards.
2.20. Income tax
Income tax on the profit or loss for the period and deferred tax are recognized in the income statement except for income
tax relating to items of equity that are recognized directly in equity.
Income tax is recognized based on net taxable profit using the tax rates applicable at the date of the balance sheet in ad-
dition to tax adjustments for previous years.
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.
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.
2.18. 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.
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.
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 in more than 12 months from the bal-
ance 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.
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:
(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;
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Financial Statements // Consolidated 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.
Important Accounting Estimates, and Judgements in Applying Accounting Policies
The bank makes estimates and assumptions that affect the amounts recognized, and the carrying amounts of assets and li-
abilities within the next financial year. Estimates and judgements are continually evaluated and are based on management’s
experience and other factors, including expectations of future events that are believed to be reasonable under the circum-
stances. Management also makes certain judgements, apart from those involving estimations, in the process of applying the
accounting policies. Judgements that have the most significant effect on the amounts recognized and estimates that can
cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year include:
ECL measurement. Measurement of ECLs is a significant estimate that involves determination of methodology, models
and data inputs. The following components have a major impact on credit loss allowance: definition of default, SICR, prob-
ability of default (“PD”), exposure at default (“EAD”), and loss given default (“LGD”), as well as models of macro-economic
scenarios. The bank regularly reviews and validates the models and inputs to the models to reduce any differences be-
tween expected credit loss estimates and actual credit loss experience.
The bank used supportable forward-looking information for measurement of ECL, primarily an outcome of its own mac-
ro-economic forecasting model. The most significant forward-looking assumptions, for both corporate and retail, that
correlate with ECL level and their assigned weights were CBE key interest rate, GDP growth rate, Foreign currency index
and Inflation rate. In addition to these assumptions, unemployment rate has been used for the retail sector.
The bank reduced the weights assigned to the upside scenario during 2020 as a result of the most recent developments
related to COVID 19.
A change in the assigned weight to the base scenario of the forward looking macro-economic variables by 10% towards
the downturn scenario would result in an increase in ECL by EGP633,535 thousand as of 31 December 2020 (31 December
2019: by EGP495,372 thousand). A corresponding change towards the upturn scenario would result in a decrease in ECL
by EGP386,041 thousand as of 31 December 2020 (31 December 2019: by EGP348,267 thousand). A 10% increase or decrease
in LGD estimates would result in an increase or decrease in total expected credit loss allowances of EGP879,960 thousand
at 31 December 2020 (31 December 2019: increase or decrease of EGP 773,549 thousand).
Credit exposure on revolving credit facilities. For certain loan facilities, the bank’s exposure to credit losses may extend
beyond the maximum contractual period of the facility. This exception applies to certain revolving credit facilities, which
include both a loan and an undrawn commitment component and where the bank’s contractual ability to demand repay-
ment and cancel the undrawn component in practice does not limit its exposure to credit losses.
For such facilities, the bank measures ECLs over the period that the bank is exposed to credit risk and ECLs are not
mitigated by credit risk management actions. Application of this exception requires judgement. Management applied
its judgement in identifying the facilities, both retail and commercial, to which this exception applies. The bank applied
this exception to facilities with the following characteristics: (a) there is no fixed term or repayment structure, (b) the
contractual ability to cancel the contract is not in practice enforced as a result of day-to-day management of the credit
exposure and the contract may only be cancelled when the bank becomes aware of an increase in credit risk at the level
of an individual facility, and (c) the exposures are managed on a collective basis. Further, the bank applied judgement in
determining a period for measuring the ECL, including the starting point and the expected end point of the exposures.
The bank considered historical information and experience about: (a) the period over which the bank is exposed to credit
risk on similar facilities, including when the last significant modification of the facility occurred and that therefore de-
termines the starting point for assessing SICR, (b) the length of time for related defaults to occur on similar financial
instruments following a SICR and (c) the credit risk management actions (eg the reduction or removal of undrawn limits),
prepayment rates and other factors that drive expected maturity. In applying these factors, the bank segments the port-
folios of revolving facilities into sub-groups and applies the factors that are most relevant based on historical data and
experience as well as forward-looking information.
Significant increase in credit risk (“SICR”). In order to determine whether there has been a significant increase in credit
risk, the bank compares the risk of a default occurring over the life of a financial instrument at the end of the reporting
date with the risk of default at the date of initial recognition. The assessment considers relative increase in credit risk rath-
er than achieving a specific level of credit risk at the end of the reporting period using, for Corporate and Business Bank-
ing: transition in risk ratings, delinquency status, industry and restructured status and for retail: watch list, individual
profile, restructured status, and delinquency status. The bank considers all reasonable and supportable forward-looking
information available without undue cost and effort, which includes a range of factors, including behavioral aspects of
particular customer portfolios. The bank identifies behavioral indicators of increases in credit risk prior to delinquency
and incorporated appropriate forward-looking information into the credit risk assessment, either at an individual instru-
ment, or on a portfolio level.
Business model assessment. The business model drives classification of financial assets. Management applied judgement in
determining the level of aggregation and portfolios of financial instruments when performing the business model assess-
ment. When assessing sales transactions, the bank considers their historical frequency, timing and value, reasons for the
sales and expectations about future sales activity. Sales transactions aimed at minimizing potential losses due to credit
deterioration are considered consistent with the “hold to collect” business model. Other sales before maturity, not related to
credit risk management activities, are also consistent with the “hold to collect” business model, provided that they are infre-
quent or insignificant in value, both individually and in aggregate. The bank assesses significance of sales transactions by
comparing the value of the sales to the value of the portfolio subject to the business model assessment over the average life of
the portfolio. In addition, sales of financial asset expected only in stress case scenario, or in response to an isolated event that
is beyond the bank’s control, is not recurring and could not have been anticipated by the bank, are regarded as incidental to
the business model objective and do not impact the classification of the respective financial assets.
The “hold to collect and sell” business model means that assets are held to collect the cash flows, but selling is also integral
to achieving the business model’s objective, such as, managing liquidity needs, achieving a particular yield, or matching
the duration of the financial assets to the duration of the liabilities that fund those assets.
The residual category includes those portfolios of financial assets, which are managed with the objective of realizing cash
flows primarily through sale, such as where a pattern of trading exists. Collecting contractual cash flow is often incidental
for this business model.
Assessment whether cash flows are solely payments of principal and interest (“SPPI”). Determining whether a financial
asset’s cash flows are solely payments of principal and interest required judgement.
The time value of money element may be modified, for example, if a contractual interest rate is periodically reset but the fre-
quency of that reset does not match the tenor of the debt instrument’s underlying base interest rate. The effect of the modified
time value of money was assessed by comparing relevant instrument’s cash flows against a benchmark debt instrument with
SPPI cash flows, in each period and cumulatively over the life of the instrument. The assessment was done for all reasonably
possible scenarios, including reasonably possible financial stress situation that can occur in financial markets.
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Financial Statements // Consolidated 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 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
Bank’s rating
1
2
3
4
description of the grade
performing loans
regular watching
watch list
non-performing loans
Loss given default or loss severity represents the Bank expectation of the extent of loss on a claim should default occur. It is
expressed as percentage loss per unit of exposure and typically varies by type of counterparty, type and seniority of claim
and availability of collateral or other credit mitigation.
3.1.1.2. Debt instruments and treasury and other bills
For debt instruments and bills, external rating such as standard and poor’s rating or their equivalents are used for man-
aging of the credit risk exposures, and if this rating is not available, then other ways similar to those used with the credit
customers are uses. The investments in those securities and bills are viewed as a way to gain a better credit quality map-
ping and maintain a readily available source to meet the funding requirement at the same time.
3.1.2. Risk limit control and mitigation policies
The Bank manages, limits and controls concentrations of credit risk wherever they are identified − in particular, to indi-
vidual counterparties and banks, and to industries and countries.
The Bank structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation to
one borrower, or groups of borrowers, and to geographical and industry segments. Such risks are monitored on a revolving
basis and subject to an annual or more frequent review, when considered necessary. Limits on the level of credit risk by
individual, counterparties, product, and industry sector and by country are approved quarterly by the Board of Directors.
The exposure to any one borrower including banks and brokers is further restricted by sub-limits covering on- and off-
balance sheet exposures, and daily delivery risk limits in relation to trading items such as forward foreign exchange con-
tracts. Actual exposures against limits are monitored daily.
Exposure to credit risk is also managed through regular analysis of the ability of borrowers and potential borrowers to
meet interest and capital repayment obligations and by changing these lending limits where appropriate.
Some other specific control and mitigation measures are outlined below:
3.1.2.1. Collateral
The Bank 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
generally unsecured. In addition, in order to minimize the credit loss the Bank will seek additional collateral from the
counterparty as soon as impairment indicators are noticed for the relevant individual loans and advances.
Collateral held as security for financial assets other than loans and advances is determined by the nature of the instru-
ment. Debt securities, treasury and other governmental securities are generally unsecured, with the exception of asset-
backed securities and similar instruments, which are secured by portfolios of financial instruments.
3.1.2.2. Derivatives
The Bank maintains strict control limits on net open derivative positions (i.e., the difference between purchase and sale
contracts), by both amount and term. At any one time, the amount subject to credit risk is limited to the current fair value
of instruments that are favorable to the Bank (i.e., assets with positive fair value), which in relation to derivatives is only a
small fraction of the contract, or notional values used to express the volume of instruments outstanding. This credit risk
exposure is managed as part of the overall lending limits with customers, together with potential exposures from market
movements. Collateral or other security is not usually obtained for credit risk exposures on these instruments, except
where the Bank requires margin deposits from counterparties.
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.
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Financial Statements // Consolidated Commitments to extend credit represent unused portions of authorizations to extend credit in the form of loans, guaran-
tees or letters of credit. With respect to credit risk on commitments to extend credit, the Bank is potentially exposed to
loss in an amount equal to the total unused commitments. However, the likely amount of loss is less than the total unused
commitments, as most commitments to extend credit are contingent upon customers maintaining specific credit stan-
dards. The Bank monitors the term to maturity of credit commitments because longer-term commitments generally have
a greater degree of credit risk than shorter-term commitments.
3.1.3. Impairment and provisioning policies
The internal rating system described in Note 3.1.1 focus on the credit-quality mapping from the lending and investment
activities perspective. Conversely, for only financial reporting purposes impairment losses are recognized for that has
been incurred 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, 2020
December 31, 2019
Loans and
advances (%)
Impairment
provision (%)
Loans and
advances (%)
Impairment
provision (%)
80.16
11.14
4.43
4.27
22.76
18.11
25.53
33.60
85.63
6.88
3.50
3.99
19.27
8.76
28.15
43.82
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
1
2
3
4
5
6
7
8
9
10
Categorization
Low risk
Average risk
Satisfactory risk
Reasonable risk
Acceptable risk
Marginally
acceptable risk
Watch list
Substandard
Doubtful
Bad debts
Provision%
0%
1%
1%
2%
2%
Internal rating
1
1
1
1
1
3%
5%
20%
50%
100%
2
3
4
4
4
Categorization
Performing loans
Performing loans
Performing loans
Performing loans
Performing loans
Regular watching
Watch list
Non performing loans
Non performing loans
Non performing loans
“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”
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Financial Statements // Consolidated 3.1.5. Maximum exposure to credit risk before collateral held
3.1.6. Loans and advances
Loans and advances are summarized as follows:
In balance sheet items exposed to credit risk
Cash and balances at the 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
Unamortized syndicated loans discount
Impairment provision
Unearned interest
Suspended credit account
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
EGP Thousands
Dec. 31, 2020
Dec. 31, 2019
33,768,549
87,450,490
786,605
(33,814)
1,519,369
4,864,404
27,882,072
2,033,349
23,698,784
45,228,009
31,110,813
21,391
(104,176)
(210,680)
(16,434,813)
-
(38,517)
248,759
171,497,994
6,759,229
420,047,817
5,463,960
2,701,590
5,861,017
74,023,239
88,049,806
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)
(8,236)
(33,672)
216,383
196,046,335
4,011,196
376,847,609
6,085,760
3,188,757
5,866,630
61,143,216
76,284,363
The above table represents the Bank’s Maximum exposure to credit risk on December 31, 2020, 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, 28.65% of the total maximum exposure is derived from loans and advances to banks and customers against
31.83% on December 31, 2019, while investments in debt instruments represent 40.83% against 52.02% on December 31, 2019.
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:
• 91.30% 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 5,830,098 thousand against EGP 5,261,976 thousand on Decem-
ber 31, 2019
• The Bank has implemented more prudent processes when granting loans and advances during the financial year ended
on December 31, 2020.
• 95.33% of the investments in debt Instruments are Egyptian sovereign instruments against 97.54% on December 31, 2019.
Dec.31, 2020
Dec.31, 2019
EGP Thousands
Loans and
advances to
customers
136,358,191
16,434,813
104,176
210,680
-
38,517
119,570,005
Loans and
advances to
banks
786,605
9,625
-
-
-
-
776,980
Loans and
advances to
customers
131,244,095
11,825,887
55,197
-
8,236
33,672
119,321,103
Loans and
advances to
banks
629,780
4,516
-
-
-
-
625,264
Gross Loans and advances
Less:
Impairment provision
Unamortized bills discount
Unamortized syndicated loans
discount
Unearned interest
Suspended credit account
Net
Impairment provision losses for loans and advances reached EGP 16,444,438 thousand.
During the year, the Bank’s total loans and advances increased by 4.00%.
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 to customers divided by stages:
Stage 1:
Expected credit
losses over 12
months
34,766,758
50,932,314
85,699,072
Stage 2:
Expected credit
losses
Over a lifetime
that is not
creditworthy
947,900
43,863,497
44,811,397
Stage 3:
Expected credit
losses
Over a lifetime
Credit default
584,536
5,263,186
5,847,722
Dec.31, 2020
Individuals
Institutions and Business Banking
Total
Expected credit losses for loans and facilities to customers divided by stages:
Stage 1:
Expected credit
losses over 12
months
711,711
1,403,518
2,115,229
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
25,326
8,760,972
8,786,298
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
356,726
5,176,560
5,533,286
Dec.31, 2020
Individuals
Institutions and Business Banking
Total
EGP Thousands
Total
36,299,194
100,058,997
136,358,191
EGP Thousands
Total
1,093,763
15,341,050
16,434,813
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Financial Statements // Consolidated Loans, advances and expected credit losses to banks divided by stages:
Loans, advances and expected credit losses 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
786,605
(9,625)
776,980
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
-
-
-
Dec.31, 2020
Time and term loans
Expected credit losses
Net
Off balance sheet items exposed to credit risk and ecpected credit losses divided by stages:
Stage 1:
Expected credit
losses over 12
months
54,127,625
(1,441,650)
52,685,975
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
28,364,823
(1,400,364)
26,964,459
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
93,398
(88,729)
4,669
Dec.31, 2020
Facilities and guarantees
Expected credit losses
Net
Total balances of loans and facilities to customers divided by stages:
Stage 1:
Expected credit
losses over 12
months
26,734,506
63,749,864
90,484,370
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
339,408
35,158,341
35,497,749
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
202,357
5,059,619
5,261,976
Dec.31, 2019
Individuals
Institutions and Business Banking
Total
Expected credit losses for loans and facilities to customers divided by stages:
Stage 1:
Expected credit
losses over 12
months
96,469
1,208,722
1,305,191
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
10,394
5,325,121
5,335,515
Stage 3:
Expected credit
losses Over a
lifetime
Credit default
210,068
4,975,113
5,185,181
Dec.31, 2019
Individuals
Institutions and Business Banking
Total
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Annual Report 2020
EGP Thousands
Total
786,605
(9,625)
776,980
EGP Thousands
Total
82,585,846
(2,930,743)
79,655,103
EGP Thousands
Total
27,276,271
103,967,824
131,244,095
EGP Thousands
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
Off balance sheet items exposed to credit risk and ecpected credit losses divided by stages:
Stage 1:
Expected credit
losses over 12
months
49,459,621
(1,118,319)
48,341,302
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
20,662,650
(603,614)
20,059,036
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
76,331
(68,759)
7,572
Dec.31, 2019
Facilities and guarantees
Expected credit losses
Net
Expected credit losses divided by internal classification:
Corporate and Business Banking loans:
EGP Thousands
Total
629,780
(4,516)
625,264
EGP Thousands
Total
70,198,602
(1,790,692)
68,407,910
EGP Thousands
Scope of
probability of
default (PD)
1%-14%
15%-21%
21%-28%
100%
Stage 1:
Expected credit
losses over 12
months
1,033,895
369,623
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
1,993,166
2,603,402
4,164,404
-
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
1,802
10,884
5,163,874
Total
3,027,061
2,974,827
4,175,288
5,163,874
EGP Thousands
Scope of
probability of
default (PD)
(0% - 5%)
(5% - 10%)
(> 10%)
100%
Stage 1:
Expected credit
losses over 12
months
710,475
1,236
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
-
2,547
22,779
-
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
4,372
352,354
Total
710,475
3,783
27,151
352,354
Dec.31, 2020
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
Individual Loans:
Dec.31, 2020
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
2020 Annual Report
| 271
Financial Statements // Consolidated The total balances of loans and facilities divided according to the internal classification:
Corporate and Business Banking loans:
Individual Loans:
EGP Thousands
Scope of
probability of
default (PD)
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
1%-12%
12%-21%
21%-27%
100%
47,106,516
3,825,798
-
-
27,385,359
11,374,241
5,103,897
-
-
8,551
10,942
5,243,693
Total
74,491,875
15,208,590
5,114,839
5,243,693
Dec.31, 2020
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
Individual Loans:
EGP Thousands
Scope of
probability of
default (PD)
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
(0% - 5%)
(5% - 10%)
(> 10%)
100%
95,234
1,235
-
-
-
-
10,394
-
-
-
-
210,068
Total
95,234
1,235
10,394
210,068
Dec.31, 2019
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
The total balances of loans and facilities divided according to the internal classification:
Corporate and Business Banking loans:
EGP Thousands
EGP Thousands
Scope of
probability of
default (PD)
Stage 1:
Expected credit
losses over 12
months
(0% - 5%)
(5% - 10%)
(> 10%)
100%
34,694,840
71,918
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
5,541
942,359
-
-
-
4,681
579,855
Total
34,694,840
77,459
947,040
579,855
Dec.31, 2020
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
Expected credit losses divided by internal classification:
Corporate and Business Banking loans:
EGP Thousands
Scope of
probability of
default (PD)
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
1%-14%
15%-21%
21%-28%
100%
1,041,456
167,266
-
-
1,137,990
867,786
3,319,345
-
-
-
-
4,975,113
Total
2,179,446
1,035,052
3,319,345
4,975,113
Dec.31, 2019
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
Scope of
probability of
default (PD)
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
1%-12%
12%-21%
21%-27%
100%
61,291,934
2,457,930
-
-
24,935,477
5,944,147
4,278,717
-
-
-
-
5,059,619
Total
86,227,411
8,402,077
4,278,717
5,059,619
EGP Thousands
Scope of
probability of
default (PD)
Stage 1:
Expected credit
losses over 12
months
(0% - 5%)
(5% - 10%)
(> 10%)
100%
26,059,247
675,259
-
-
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected
credit losses
Over a lifetime
Credit default
-
-
339,408
-
-
-
-
202,357
Total
26,059,247
675,259
339,408
202,357
Dec.31, 2019
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
Individual Loans:
Dec.31, 2019
Performing loans (1-5)
Regular watching (6)
Watch list (7)
Non-performing loans (8-10)
272 |
Annual Report 2020
2020 Annual Report
| 273
Financial Statements // Consolidated The following table provides information on the quality of financial assets during the financial year:
The following table provides information on the quality of financial assets during the financial year:
Dec.31, 2020
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
Corporate and Business Banking
loans:
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
Stage 1
12 months
77,526,990
9,923,500
-
-
87,450,490
(24,189)
87,426,301
Stage 1
12 months
34,694,841
71,918
-
-
34,766,759
(711,711)
34,055,048
Stage 1
12 months
47,106,516
3,825,798
-
-
50,932,314
(1,403,518)
49,528,796
Stage 2
Life time
Stage 3
Life time
-
-
-
-
-
-
-
Stage 2
Life time
-
5,540
942,359
-
947,899
(25,326)
922,573
Stage 2
Life time
27,385,358
11,374,242
5,103,897
-
43,863,497
(8,760,972)
35,102,525
-
-
-
-
-
-
-
Stage 3
Life time
-
-
4,681
579,855
584,536
(356,726)
227,810
Stage 3
Life time
-
8,551
10,942
5,243,693
5,263,186
(5,176,560)
86,626
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
115,902,647
30,310,122
-
-
146,212,769
(619,577)
145,593,192
-
-
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Dec.31, 2019
Total
77,526,990
9,923,500
-
-
87,450,490
(24,189)
87,426,301
EGP Thousands
Total
34,694,841
77,458
947,040
579,855
36,299,194
(1,093,763)
35,205,431
EGP Thousands
Total
74,491,874
15,208,591
5,114,839
5,243,693
100,058,997
(15,341,050)
84,717,947
EGP Thousands
Total
115,902,647
30,310,122
-
-
146,212,769
(619,577)
145,593,192
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
Corporate and Business Banking
loans:
Credit rating
Performing loans
Regular watching
Watch list
Non-performing loans
Total
Less:Impairment provision
Book value
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
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 1
12 months
61,291,934
2,457,930
-
-
63,749,864
(1,208,722)
62,541,142
Stage 1
12 months
59,915,108
28,905,614
-
-
88,820,722
(414,395)
88,406,327
Stage 2
Life time
Stage 3
Life time
-
-
-
-
-
-
-
Stage 2
Life time
-
-
339,408
-
339,408
(10,394)
329,014
Stage 2
Life time
24,935,477
5,944,147
4,278,717
-
35,158,341
(5,325,121)
29,833,220
-
-
-
-
-
-
-
Stage 3
Life time
-
-
-
202,357
202,357
(210,068)
(7,711)
Stage 3
Life time
-
-
-
5,059,619
5,059,619
(4,975,113)
84,506
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
EGP Thousands
Total
26,059,247
675,259
339,408
202,357
27,276,271
(316,931)
26,959,340
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
274 |
Annual Report 2020
2020 Annual Report
| 275
Financial Statements // Consolidated s
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276 |
Annual Report 2020
2020 Annual Report
| 277
Financial Statements // Consolidated
The following table shows changes in expected ECL losses between the beginning and end of the year as a result of these factors:
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
Dec.31, 2019
Due from banks
Provision for credit losses on 1 Janu-
ary 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
Individual Loans:
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:
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
Recoveries
Write off during the year
Cumulative foreign currencies trans-
lation differences
Ending balance
160
16,816
(158)
-
-
-
(1)
-
-
-
16,817
Stage 1
12 months
72,092
24,377
-
-
-
96,469
7,155
-
(7,155)
-
-
-
-
-
-
-
-
Stage 2
Life time
24,843
(14,449)
-
-
-
EGP Thousands
Total
7,315
16,816
(7,313)
-
-
-
(1)
-
-
-
16,817
-
-
-
-
-
-
-
-
-
-
-
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
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)
-
(772,859)
-
-
2,409,875
1,825,968
(2,036,175)
(200,817)
5,490
(149,199)
93,395
1,509,405
3,051
1,605,851
5,845
401,743
-
-
-
-
(124,860)
1,208,722
(551,032)
5,325,121
-
399,429
(1,262,286)
(511,193)
407,588
399,429
(1,262,286)
(1,187,085)
4,975,113
11,508,956
Financial Assets at Fair Value
through OCI
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 de-
fault 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
Stage 1
12 months
Stage 2
Life time
Stage 3
Life time
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
Loans and advances restructured
Restructuring activities include rescheduling arrangements, applying obligatory management programs, modifying and de-
ferral 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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
5,537,596
5,537,596
4,682,243
4,682,243
3.1.7. 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.
Dec.31, 2020
Amortized
cost
AAA
AA+ to -AA
A to -A+
Less than -A
Not rated
Total
Stage 1:
Expected credit
losses over 12
months
-
-
-
25,285,225
-
25,285,225
“Stage 2:
Expected credit
losses
Over a lifetime
that is not
creditworthy”
“Stage 3:
Expected credit
losses
Over a lifetime
Credit default”
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
“Individually
impaired”
-
-
-
-
-
-
Total
-
-
-
25,285,225
-
25,285,225
278 |
Annual Report 2020
2020 Annual Report
| 279
Financial Statements // Consolidated Dec.31, 2020
EGP Thousands
Dec.31, 2019
EGP Thousands
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
-
-
-
146,212,769
-
146,212,769
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
-
-
-
-
-
-
-
-
-
-
-
-
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
146,212,769
-
146,212,769
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
-
-
-
-
-
-
-
-
-
-
-
-
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
88,820,722
-
88,820,722
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.
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, 2020
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
-
-
-
38,454,165
-
38,454,165
Stage 2:
Expected
credit losses
Over a lifetime
that is not
creditworthy
Stage 3:
Expected credit
losses Over a
lifetime Credit
default
-
-
-
-
-
-
-
-
-
-
-
-
EGP Thousands
Dec.31, 2019
EGP Thousands
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
38,454,165
-
38,454,165
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
-
-
-
-
-
-
-
-
-
-
-
-
Fair value
through OCI
AAA
AA+ to -AA
A to -A+
Less than -A
Not rated
Total
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
414,395
-
414,395
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.
Dec.31, 2019
EGP Thousands
Amortized
cost
AAA
AA+ to -AA
A to -A+
Less than -A
Not rated
Total
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
-
-
-
-
-
-
-
-
-
-
-
-
Individually
impaired
-
-
-
-
-
-
Total
-
-
-
107,225,613
-
107,225,613
280 |
Annual Report 2020
2020 Annual Report
| 281
Financial Statements // Consolidated 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, 2020
Cash and balances at the 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
Unamortized syndicated loans
discount
Impairment provision
Suspended credit account
Derivative financial instruments
Financial investments:
-Debt instruments
Total
Total as at December 31, 2019
Alex, Delta
Cairo
and Sinai Upper Egypt
Outside Egypt
(Kenya)
EGP
Thousands
Total
33,620,434
87,021,223
786,605
(9,625)
1,000,304
3,807,958
18,483,815
1,928,463
21,102,760
28,351,287
28,771,413
16,391
(104,176)
(210,680)
-
-
-
-
-
-
-
-
148,115
33,768,549
429,267
-
-
87,450,490
786,605
(9,625)
417,515
898,858
7,913,359
85,331
1,433,121
11,285,312
2,218,123
5,000
-
93,402
157,588
1,395,193
11,836
1,006,023
5,110,685
121,277
-
-
8,148
-
89,705
7,719
156,880
480,725
-
-
-
1,519,369
4,864,404
27,882,072
2,033,349
23,698,784
45,228,009
31,110,813
21,391
(104,176)
-
-
-
(210,680)
(11,851,162)
(38,517)
248,759
-
171,024,092
383,949,344
345,106,302
(3,512,766)
-
-
-
-
20,743,853
21,081,215
(1,031,821)
-
-
-
-
6,864,183
6,648,896
(39,064)
-
-
-
473,902
1,755,397
-
(16,434,813)
(38,517)
248,759
-
171,497,994
413,312,777
372,836,413
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282 |
Annual Report 2020
2020 Annual Report
| 283
Financial Statements // Consolidated
3.2. Market risk
Market risk represents the fluctuations in fair value, future cash flow, foreign exchange rates and commodity prices, in-
terest 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 FVTOCI and amortized cost.
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. 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 is calculating the Market Risk Capital Requirements by applying Basel II “Standardised Measurement Method”,
according to the Central Bank of Egypt regulatory requirements.
3.2.1.2. Stress testing
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
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
EGP Thousands
Last 12 months ended 31/12/2020
Last 12 months ended 31/12/2019
Medium
954
441,614
448,956
290
6,552
-
443,036
High
Low
4,940
776,180
790,500
290
14,894
-
780,053
109
260,701
264,703
290
3,337
-
261,342
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
Foreign exchange risk
Interest rate risk
- For trading purposes
Funds managed by others risk
Investment fund
Total VaR
EGP Thousands
Last 12 months ended 31/12/2020
Last 12 months ended 31/12/2019
Medium
954
290
290
6,552
-
6,752
High
4,940
290
290
14,894
-
14,696
Low
109
290
290
3,337
-
3,398
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
Non trading portfolio VaR by risk type
Last 12 months ended 31/12/2020
Last 12 months ended 31/12/2019
Medium
High
Low
Medium
High
Low
EGP Thousands
Interest rate risk
- For non trading purposes
Total VaR
448,956
448,956
790,500
790,500
264,703
264,703
609,137
609,137
1,186,564
1,186,564
271,813
271,813
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.
284 |
Annual Report 2020
2020 Annual Report
| 285
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, 2020
EGP
USD
EUR
GBP
Other
Total
Equivalent EGP Thousands
Financial assets
Cash and balances at the 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
Investments in associates
Total financial assets
Financial liabilities
Due to banks
Due to customers
Derivative financial instruments
Other loans
Total financial liabilities
Net on-balance sheet financial
position
30,172,703
44,696,639
-
89,104,919
49,476
2,054,467
41,542,328
786,605
41,040,287
199,283
658,403
611,381
-
5,558,181
-
85,910
370,516
-
63,815
-
797,066
229,626
-
590,989
-
33,768,549
87,450,490
786,605
136,358,191
248,759
152,360,903
139,871
20,439,255
-
316,524,11 106,062225
2,205,197
-
9,033,162
-
-
520,241
473,902
-
2,091,583
175,479,257
139,871
434,31,722
106,231
252,811,651
147,168
21,391
253,86,441
8,663,783
78,463,342
183,905
7,725,555
95,036,585
36,225
7,623,289
-
-
7,659,514
11,269
931,677
-
-
942,946
27
1,339,491
-
-
8,817,535
341,169,450
331,073
7,746,946
1,339,518 358,065004
63,438,070
11,025,640
1,373,648
(422,705)
752,065
76,166,718
Total financial assets as of December
31, 2019
Total financial liabilities as of
December 31, 2019
Net on-balance sheet financial
position as of December 31, 2019
274,14,974
103,22,996
8,402,003
909,285
914,829
387,84,087
216,628,824
93,357,846
8,552,640
878,388
396,698 319,814,396
57,476,150
10,165,150
(150,637)
30,897
518,131
68,039,691
3.2.4. Interest rate risk
The Bank takes on exposure to the effects of fluctuations in the prevailing levels of market interest rates on both its fair
value and cash flow risks. Interest margins may increase as a result of such changes but profit may decrease in the event
that unexpected movements arise.The Board sets limits on the gaps of interest rate repricing that may be undertaken,
which is monitored by 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
36,818
-
-
77,197,664
10,146,784
86,527
-
-
786,605
-
-
-
-
-
-
33,731,731
33,768,549
19,515
87,450,490
-
786,605
82,486,363
16,852,628
14,007,254
16,976,960
6,034,986
-
136,358,191
7,266
4,737,712
3,870,718
2,466,062
6,418
-
11,088,176
5,432,365
2,600,844
36,844,848
82,746,208
46,668,129
1,186,863
175,479,257
-
-
-
-
-
139,871
139,871
165,160,476
34,337,968
55,595,952
102,189,230
52,709,533
35,077,980
445,071,139
1,034,109
177,458,413
7,472,747
32,691,721
78,660
26,372,246
-
54,588,241
-
58,540
232,019
50,000,289
8,817,535
341,169,450
2,423,241
3,756,876
80,072
6,766
4,903,535
-
4,589,135
3,153,656
4,155
-
-
-
11,170,490
7,746,946
180,915,763
48,510,479
29,684,634
54,599,162
4,962,075
50,232,308
368,904,421
(15,755,287) (14,172,511)
25,911,318
47,590,068
47,747,458
(15,154,328)
76,166,718
107,147,723
64,307,164
94,406,289
61,344,661
39,777,608
29,751,216
396,734,661
187,481,537
38,196,955
21,690,398
34,839,667
1,937,061
44,549,352
328,694,970
(80,333,814)
26,110,209
72,715,891
26,504,994
37,840,547
(14,798,136)
68,039,691
Dec.31, 2020
Financial assets
Cash and balances
at the central bank
Gross due from
banks
Gross loans and
advances to banks
Gross loans and
advances to cus-
tomers
Derivatives finan-
cial instruments
(including IRS
notional amount)
Financial invest-
ments
Gross financial in-
vestment securities
Investments in as-
sociates
Total financial
assets
Financial liabili-
ties
Due to banks
Due to customers
Derivatives finan-
cial instruments
(including IRS
notional amount)
Other loans
Total financial
liabilities
Total interest re-
pricing gap
Total financial as-
sets as of Decem-
ber 31, 2019
Total financial
liabilities as of De-
cember 31, 2019
Total interest
re-pricing gap as
of December 31,
2019
* After adding Reverse repos and deducting Repos.
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Financial Statements // Consolidated 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
provisions 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
expectations 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.
The Bank maintained a solid LCY & FCY Liquidity position with decent buffers to meet both the global and local increase
in risk profile related to the Covid-19 pandemic. CIB will continue with its robust Liability strategy with reliance on cus-
tomer deposits (stable funding) as the main contributor of total liabilities, and low dependency on the Wholesale Funding.
CIB has ample level of High Quality Liquid Assets (HQLA) based on its LCY & FCY Sovereign Portfolio investments, which
positively reflects the Bank’s solid Liquidity Ratios and Basel III LCR & NSFR ratios, with a large buffer maintained above
the Regulatory ratios 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.
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, 2020
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, 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)
Up to 1
month
One to
three
months
Three
months to
one year
One year to
five years
Over five
years
Total
EGP Thousands
1,266,125
32,904,756
-
7,472,749
33,065,033
10,079
78,661
97,509,535
2,629,252
-
166,850,344
2,445,156
-
10,839,782
2,662,459
8,817,535
341,169,450
7,746,946
34,170,881
40,547,861 100,217,448 169,295,500
13,502,241 357,733,931
84,620,725
49,072,630
59,598,235 157,255,071
82,285,536 432,832,197
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
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.
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Financial Statements // Consolidated 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
16,230
-
16,230
30,061
44,100
-
44,100
51,676
80,072
-
80,072
125,307
6,766
-
6,766
-
-
183,905
183,905
75,544
147,168
183,905
331,073
282,588
Dec.31, 2020
Liabilities
Derivatives financial
instruments
Foreign exchange derivatives
Interest rate derivatives
Total
Total as of Dec. 31, 2019
Off balance sheet items
Dec.31, 2020
Up to 1 year
1-5 years
Over 5 years
Total
Letters of credit, guarantees and
other commitments
Total
Total as of Dec. 31, 2019
49,712,249
23,438,772
9,434,825
82,585,846
49,712,249
50,210,710
23,438,772
14,264,820
9,434,825
5,723,073
82,585,846
70,198,603
EGP Thousands
Dec.31, 2020
Credit facilities commitments
Total
Up to 1 year
3,511,831
3,511,831
1-5 years
5,383,579
5,383,579
EGP Thousands
Total
8,895,410
8,895,410
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, 2020
Dec.31, 2019
Dec.31, 2020
Dec.31, 2019
87,426,301
786,605
28,353,366
629,780
87,448,058
786,605
28,370,754
629,780
136,358,191
131,244,095
136,164,909
128,740,476
25,285,225
249,856,322
107,225,613
267,452,854
26,437,169
250,836,741
106,016,744
263,757,754
8,817,535
341,169,450
7,746,946
357,733,931
11,810,607
304,448,455
3,272,746
319,531,808
8,700,395
340,481,150
7,746,946
356,928,491
11,702,778
302,292,025
3,272,746
317,267,549
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 assets and liabilities according to EAS.
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Financial Statements // Consolidated Quantitative disclosures fair value measurement hierarchy for assets as at 31 December 2020:
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, 2020
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 customers
Total
Liabilities for which fair values
are disclosed:
Other loans
Due to customers
Total
Date of
Valuation
Total
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs (level 2)
Valuation
techniques
(level 3)
31-Dec-20
359,959
359,959
-
31-Dec-20
148,118,372
108,161,597
39,956,775
148,478,331
108,521,556
39,956,775
-
-
-
31-Dec-20
31-Dec-20
248,950
331,073
580,023
31-Dec-20
31-Dec-20
31-Dec-20
26,340,253
786,605
136,164,909
163,291,767
31-Dec-20
31-Dec-20
7,746,946
341,579,117
349,326,063
-
-
-
-
-
-
-
-
-
-
191
-
191
248,759
331,073
579,832
26,172,861
-
-
26,172,861
167,392
786,605
136,164,909
137,118,906
7,746,946
-
7,746,946
-
341,579,117
341,579,117
Dec.31, 2019
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 customers
Total
Liabilities for which fair values
are disclosed:
Other loans
Due to customers
Total
Date of
Valuation
Total
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs (level 2)
Valuation
techniques
(level 3)
31-Dec-19
418,781
418,781
-
31-Dec-19
89,897,257
61,689,580
28,207,677
90,316,038
62,108,361
28,207,677
-
-
-
31-Dec-19
31-Dec-19
216,383
282,588
498,971
31-Dec-19
31-Dec-19
31-Dec-19
106,016,744
629,780
128,740,476
235,387,000
31-Dec-19
31-Dec-19
3,272,746
302,256,825
305,529,571
-
-
-
-
-
-
-
-
-
-
-
-
-
216,383
282,588
498,971
106,016,744
-
-
106,016,744
-
629,780
128,740,476
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.
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.
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Financial Statements // Consolidated 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 associates investments.
When calculating the numerator of capital adequacy ratio, the rules set limits of total tier 2 to no more than tier 1 capital
and also limits the subordinated to no more than 50% of tier1.
Assets risk weight scale ranging from zero to 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
Goodwill
Reserves
Retained Earnings (Losses)
Total deductions from tier 1 capital common equity
Net profit for the year
Total qualifying tier 1 capital
Tier 2 capital
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, 2020
Dec.31, 2019
14,776,813
(178,782)
33,427,234
256,266
(842,792)
8,906,131
56,344,870
4,579,135
2,072,612
6,651,747
62,996,617
165,944,439
701,776
33,923,864
200,570,079
31.41%
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.
2-Leverage ratio
Total qualifying tier 1 capital
On-balance sheet items & derivatives
Off-balance sheet items
Total exposures
*Percentage
EGP Thousands
Dec.31, 2020
Dec.31, 2019
56,344,870
430,849,350
54,025,891
484,875,241
11.62%
47,056,046
409,689,485
46,195,165
455,884,650
10.32%
*Based on consolidated financial statement figures and in accordance with Centeral Bank of Egypt regulation issued on 14 July 2015.
For December 2020 NSFR ratio record 250.96% (LCY 301.42% and FCY 168.09%), and LCR ratio record 1358.58% (LCY
1976.64% and FCY 336.99%).
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%).
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Financial Statements // Consolidated 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.
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 – incorporating financial instruments Trading, structured financing, Corporate leasing,and merger and ac-
quisitions 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, 2020
Net revenue according to business
segment *
Expenses according to business
segment
Profit before tax
Tax
Profit for the year
Total assets
Corporate
banking
SME’s Investments
EGP Thousands
Retail
banking
Asset
Liability
Mangement
Total
11,470,314
1,566,102
7,957,829
6,923,229
636,807
28,554,281
(8,546,440)
(880,520)
(444,245)
(3,443,139)
2,923,874
(974,308)
1,949,566
137,873,519
685,582
(223,965)
461,617
7,513,584
(2,454,966)
5,058,618
1,067,415 182,713,109
3,480,090
(1,139,301)
2,340,789
36,057,380
(1,795)
(13,316,139)
15,238,142
(4,999,985)
10,238,157
70,130,744 427,842,167
635,012
(207,445)
427,567
Dec.31, 2019
Revenue according to business
segment
Expenses according to business
segment
Profit before tax
Tax
Profit for the year
Total assets at 31 December
2019
Corporate
banking
SME’s Investments
EGP Thousands
Retail
banking
Asset
Liability
Mangement
Total
7,074,284
1,694,437
3,393,932
5,216,412
644,066
18,023,131
(3,263,706)
(669,620)
(177,131)
(2,114,904)
(24,044)
(6,249,405)
3,810,578
(1,048,033)
2,762,545
1,024,817
(281,597)
743,220
3,216,801
(883,907)
2,332,894
3,101,508
(852,227)
2,249,281
620,022
(170,368)
449,654
11,773,726
(3,236,132)
8,537,594
103,555,078
1,398,063 200,721,627
26,524,730
54,542,870 386,742,368
5.2. By geographical segment
Dec.31, 2020
Revenue according to geographical
segment
Expenses according to
geographical segment
Profit before tax
Tax
Profit for the year
Total assets
Alex, Delta &
Cairo
Sinai Upper Egypt
Outside Egypt
(Kenya)
Total
24,736,451
3,033,434
756,704
27,692
28,554,281
(11,548,921)
(1,471,486)
(259,231)
(36,501)
(13,316,139)
13,187,530
(4,333,015)
8,854,515
395,769,335
1,561,948
(505,857)
1,056,091
22,705,248
497,473
(161,113)
336,360
7,493,258
(8,809)
-
(8,809)
1,874,326
15,238,142
(4,999,985)
10,238,157
427,842,167
Dec.31, 2019
Revenue according to geographical
segment
Expenses according to geographical
segment
Profit before tax
Tax
Profit for the year
Total assets at 31 December 2019
Cairo
Alex, Delta &
Sinai
Upper Egypt
Total
15,066,374
2,456,125
500,632
18,023,131
(5,015,999)
(1,042,810)
(190,596)
(6,249,405)
10,050,375
(2,762,593)
7,287,782
358,906,093
1,413,315
(388,348)
1,024,967
21,081,215
310,036
(85,191)
224,845
6,755,060
11,773,726
(3,236,132)
8,537,594
386,742,368
* Represents the net interest income and other income.
296 |
Annual Report 2020
2020 Annual Report
| 297
Financial Statements // Consolidated
6. Net interest income
9. Net trading income
Interest and similar income
- Banks
- Clients
Total
Treasury bills and bonds
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, 2020
Dec.31, 2019
2,204,633
12,696,383
14,901,016
26,597,741
4,067
3,308,719
14,630,606
17,939,325
24,277,671
-
693,411
383,961
42,196,235
42,600,957
(458,210)
(16,070,642)
(16,528,852)
(597,877)
(19,893,262)
(20,491,139)
(209,975)
(232,055)
(284,988)
(17,023,815)
25,172,420
(299,144)
(21,022,338)
21,578,619
Profit (Loss) from foreign exchange transactions
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, 2020
Dec.31, 2019
445,272
37,439
(5,744)
(5,577)
(64,759)
406,631
749,591
(85,657)
(29,521)
3,238
50,408
688,059
EGP Thousands
Dec.31, 2020
Dec.31, 2019
(2,924,411)
(123,625)
(125,338)
(2,452,509)
(5,625,883)
(2,604,675)
(95,408)
(108,367)
(2,240,472)
(5,048,922)
7. Net fee and commission income
*The expenses related to the activity for which the bank obtains a commodity or service, donations and depreciation.
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
Associates
Total
298 |
Annual Report 2020
EGP Thousands
Dec.31, 2020
Dec.31, 2019
1,189,068
159,082
1,711,114
3,059,264
(983,450)
(983,450)
2,075,814
1,258,672
141,907
2,051,109
3,451,688
(1,170,893)
(1,170,893)
2,280,795
EGP Thousands
Dec.31, 2020
Dec.31, 2019
10,596
36,879
2,700
50,175
7,307
46,116
-
53,423
11. Other operating (expenses) income
Profits (losses) of non-trading assets and liabilities
Profits of selling property 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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
24,845
1,094
(1,287,326)
(1,481,609)
(2,742,996)
91,769
1,439
(361,649)
(1,526,309)
(1,794,750)
EGP Thousands
Dec.31, 2020
Dec.31, 2019
(4,806,518)
(7,081)
(205,182)
(1,610,878)
(9,503)
184,921
(5,018,781)
(1,435,460)
2020 Annual Report
| 299
Financial Statements // Consolidated 13. Adjustments to calculate the effective tax rate
16. Due from banks
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 attributable to shareholders
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.
15. Cash and balances at the central bank
Cash
Obligatory reserve balance with CBE
- Current accounts
Total
Non-interest bearing balances
EGP Thousands
Dec.31, 2020
Dec.31, 2019
15,236,308
22.50%
3,428,169
2,822,920
(4,224,616)
2,973,512
4,999,985
32.82%
16,534,881
22.50%
3,720,348
1,466,387
(1,493,292)
1,040,443
4,733,886
28.63%
EGP Thousands
Dec.31, 2020
Dec.31, 2019
10,296,070
(73,643)
(1,029,607)
9,192,820
1,467,555
6.26
1,473,666
6.24
11,798,161
(176,973)
(1,179,816)
10,441,372
1,467,555
7.11
1,473,666
7.09
EGP Thousands
Dec.31, 2020
Dec.31, 2019
6,023,849
5,876,652
27,744,700
33,768,549
33,768,549
22,397,310
28,273,962
28,273,962
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
Repos - treasury bills
Net
Governmental bonds
Governmental bonds
Repo
Net
EGP Thousands
Dec.31, 2020
Dec.31, 2019
2,950,002
84,500,488
-
(24,189)
87,426,301
54,425,073
1,681,684
31,319,544
87,426,301
19,515
8,872,165
78,534,621
87,426,301
87,426,301
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
Stage 1
87,450,490
(24,189)
87,426,301
EGP Thousands
Dec.31, 2020
Dec.31, 2019
22,425
98,825
42,083,940
(1,948,912)
40,256,278
(758,586)
39,497,692
6,025
749,625
29,112,513
(1,470,340)
28,397,823
(763,761)
27,634,062
Dec.31, 2020
Financial Assets
at Fair Value
through OCI
106,208,507
(7,472,925)
98,735,582
EGP Thousands
Dec.31, 2019
Financial Assets
at Fair Value
through OCI
58,769,618
(2,406,225)
56,363,393
300 |
Annual Report 2020
Treasury bills and other government securities are classified to financial instruments through other comprehensive in-
come when applying IFRS 9 Note 21
2020 Annual Report
| 301
Financial Statements // Consolidated 18. Loans and advances to banks, net
19. Loans and advances to customers, net
Time and term loans
Impairment provision
Net
Current balances
Net
Analysis for impairment provision of loans and advances to banks
Beginning balance
Additions during the year
Ending balance
Analysis for impairment provision of loans and advances to banks
Beginning Balance
Addition during the year
Ending balance
Below is an analysis of outstanding balance:
EGP Thousands
Dec.31, 2020
Dec.31, 2019
786,605
(9,625)
776,980
776,980
776,980
629,780
(4,516)
625,264
625,264
625,264
EGP Thousands
Dec.31, 2020
Dec.31, 2019
(4,516)
(5,109)
(9,625)
Stage 2
(4,516)
(5,109)
(9,625)
(3,246)
(1,270)
(4,516)
Stage 2
(3,246)
(1,270)
(4,516)
Rating
B-
Balance
776,980
Rating
B-
Balance
625264
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
Unamortized syndicated loans discount
"Effect of applying IFRS 9 "
Impairment provision
Unearned interest
Suspended credit account
Net loans and advances to customers
Distributed to
Current balances
Non-current balances
Total
EGP Thousands
Dec.31, 2020
Dec.31, 2019
1,519,369
4,864,404
27,882,072
2,033,349
36,299,194
23,698,784
45,228,009
31,110,813
21,391
100,058,997
136,358,191
(104,176)
(210,680)
-
(16,434,813)
-
(38,517)
119,570,005
52,980,352
66,589,653
119,570,005
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)
(8,236)
(33,672)
119,321,103
51,682,809
67,638,294
119,321,103
302 |
Annual Report 2020
2020 Annual Report
| 303
Financial Statements // Consolidated l
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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)
Dec.31, 2020
Dec.31, 2019
Notional
amount
9,070,529
3,364,578
1,339
Assets
Liabilities
41,790
7,686
-
49,476
142,579
4,589
-
147,168
Notional
amount
8,315,292
4,904,151
1,365
Assets
Liabilities
52,183
24,756
-
76,939
189,833
16,082
-
205,915
304 |
Annual Report 2020
2020 Annual Report
| 305
Financial Statements // Consolidated
20.1.2. Fair value hedge
Financial investments securities
Interest rate derivatives
- Customers deposits hedging
Total (2)
Total financial derivatives (1+2)
Dec.31, 2020
Dec.31, 2019
Notional
amount
10,839,417
Assets
Liabilities
199,283
199,283
248,759
183,905
183,905
331,073
Notional
amount
8,880,574
Assets
Liabilities
139,444
139,444
216,383
76,673
76,673
282,588
20.2. Hedging derivatives
Fair value hedge
Losses arose from hedged items at December 31, 2020 reached EGP 7,034 thousand against losses of EGP 29,742 thousand
at December 31, 2019.
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 15,378
thousand at the end of December 31, 2020 against EGP 62,771 thousand at December 31, 2019, resulting in losses from
hedging instruments at December 31, 2020 of EGP 47,393 thousand against gains of EGP 87,619 thousand at December 31,
2019. Losses arose from the hedged items at December 31, 2020 reached EGP 55,573 thousand against losses EGP 171,993
thousand at December 31 , 2019.
21. Movement of financial investment securities:
Beginning balance
Effect of applying IFRS 9
Addition
Disposals
Exchange revaluation differences for foreign financial assets
Profit (losses) from fair value difference
Ending Balance as of Dec.31, 2019
Beginning balance
Acquired during the year (MAYFAIR)
Addition
Disposals
Profit (losses) from fair value difference
Exchange revaluation differences for foreign financial assets
Ending Balance as of Dec.31, 2020
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
Financial Assets
at Fair Value
through OCI
89,897,257
74,353
112,791,966
(54,137,187)
(259,602)
(248,415)
148,118,372
Amortized cost
73,630,764
1,020,895
76,516,842
(43,937,957)
(4,931)
-
107,225,613
Amortized cost
107,225,613
136,555
233,765
(82,309,481)
-
(1,227)
25,285,225
Dec.31, 2020
Investments listed in the market
Governmental bonds
Other bonds
Equity instruments
Portfolio managed by others
Sukuk *
Investments not listed in the market
"Treasury bills and other governmental
notes"
Equity instruments
Mutual funds
Total
Financial Assets
at Fair Value
through P&L
Financial Assets
at Fair Value
through OCI
-
-
-
359,959
-
98,735,582
8,008,811
714,003
-
701,732
EGP Thousands
Total
123,991,491
8,008,811
714,003
359,959
701,732
Amortized
cost
25,255,909
-
-
-
-
-
39,468,376
29,316
39,497,692
-
-
359,959
243,596
246,272
148,118,372
-
-
25,285,225
243,596
246,272
173,763,556
*During the fourth quarter, Commercial International Bank subscribed in 7 million bonds, of the first issuance of Tharwa Company, with
a nominal value of 100 EGP per unit - excluding the issuance fees - with a variable return paid from the month following the closing of the
subscription, and the deposit was made with the custodian: Commercial International Bank (Egypt)
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 governmental
notes
Equity instruments
Mutual funds
Total
Financial Assets
at Fair Value
through P&L
Financial Assets
at Fair Value
through OCI
Amortized
cost
-
-
-
418,781
56,363,393
4,823,267
502,920
-
107,225,613
-
-
-
EGP Thousands
Total
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
-
-
107,225,613
344,929
228,686
197,541,651
306 |
Annual Report 2020
2020 Annual Report
| 307
Financial Statements // Consolidated disclosure and measurement of financial assets and financial liabilities:
22. Investments in associates
The following table shows the financial assets and the net financial commitments according to the business model classification:
Dec.31, 2020
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
Amortized
cost
33,768,549
87,426,301
29,316
119,570,005
-
-
25,285,225
-
266,079,396
8,817,535
341,169,450
-
7,746,946
3,223,501
360,957,432
21.1. Profits (Losses) on financial investments
Debt
financial
Assets at Fair
value through
OCI
Equity
financial
Assets at Fair
value through
OCI
Financial
Assets/
Liabilities at
Fair value
through P&L
-
-
39,468,376
-
-
107,679,336
-
-
147,147,712
-
-
-
-
-
-
-
-
-
-
-
970,660
-
-
970,660
-
-
-
-
-
-
-
-
-
-
248,759
-
-
359,959
608,718
-
-
331,073
-
-
331,073
Total book
value
33,768,549
87,426,301
39,497,692
119,570,005
248,759
108,649,996
25,285,225
359,959
414,806,486
8,817,535
341,169,450
331,073
7,746,946
3,223,501
361,288,505
Company’s
country
Company’s
assets
Company’s
liabilities
(without
equity)
Company’s
revenues
Company’s
net profit
(loss)
Investment
book value
Stake %
EGP Thousands
Egypt
Egypt
82,094
122,518
49,824
143,914
49,254
45,506
7,140
(11,011)
27,724
-
39.34
23.50
Egypt
1,062,033
799,693
472,714
723
112,147
30.00
1,266,645
993,431
567,474
(3,148)
139,871
Company’s
country
Company’s
assets
Company’s
liabilities
(without
equity)
Company’s
revenues
Company’s
net profit
(loss)
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
Dec.31, 2020
Associates
- Al Ahly Computer
- Fawry Plus
- International Co. for
Security and Services
(Falcon)
Total
Dec.31, 2019
Associates
- Fawry Plus
- International Co. for
Security and Services
(Falcon)
Total
EGP Thousands
Dec.31, 2020
Dec.31, 2019
23. Other assets
Profit (Loss) from selling FVOCI financial instruments
Released (Impairment) charges of FVOCI
Released (Impairment) charges of investments in associates and subsidiaries
Total
1,018,469
(79,126)
(16,511)
922,832
497,894
(47,197)
-
450,697
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, 2020
Dec.31, 2019
6,759,229
291,468
1,195,099
830,266
169,855
40,608
9,286,525
(111,000)
9,175,525
4,011,196
217,484
942,985
4,333,966
356,382
36,130
9,898,143
(150,000)
9,748,143
*A provision with amount EGP 69 million has been charged against pending installments.
This item includes other assets that are not classified under specific items of balance sheet assets, such as: accrued income and
prepaid expenses, custodies, debit accounts under settlement and any balance that has no place in in another asset category.
308 |
Annual Report 2020
2020 Annual Report
| 309
Financial Statements // Consolidated s
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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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
392,725
8,424,810
8,817,535
114,786
5,233,885
3,468,864
8,817,535
232,019
871,427
7,714,089
8,817,535
8,817,535
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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
107,514,953
58,877,291
100,027,684
70,806,502
3,943,020
341,169,450
140,615,573
200,553,877
341,169,450
50,113,153
33,602,396
257,453,901
341,169,450
240,170,103
100,999,347
341,169,450
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
310 |
Annual Report 2020
2020 Annual Report
| 311
Financial Statements // Consolidated
27. Other loans
29. Provisions
Interest rate
%
Loan
duration
Due within
one year
CDC subordinated loan
European Bank for Reconstruction and
Development (EBRD)
Floating rate
10 years
Floating rate
2 years
International Finance Corporation (IFC)
Floating rate
Environmental Compliance Project (ECO)
Agricultural Research and Development
Fund (ARDF)
Social Fund for Development (SFD)
European Bank for Reconstruction and De-
velopment (EBRD) subordinated Loan
International Finance Corporation (IFC)
subordinated Loan
Balance
1 renewable
year
3-5 years
Fixed rate
Fixed rate
3-5 years*
Floating rate
04/01/2020*
Floating rate
10 years
Floating rate
10 years
EGP
Thousands
Dec.31, 2020 Dec.31, 2019
EGP
Thousands
EGP
Thousands
-
-
-
314
17,000
-
-
-
1,432,715
1,573,210
1,573,210
1,391
20,000
-
-
-
-
-
61,578
2,868
1,573,210
1,604,150
1,573,210
1,604,150
17,314
7,746,946
3,272,746
Dec.31, 2020
Provision for legal claims
Provision for contingent
Provision for other claim*
Total
Beginning
balance
66,106
1,790,692
154,571
2,011,369
Charged
during the
year
Exchange
revaluation
difference
Utilized
during the
year
-
1,145,420
89,560
1,234,980
(44)
(5,369)
(1,780)
(7,193)
(185)
-
(2,197)
(2,382)
Dec.31, 2019
Provision for income tax claims
Provision for legal claims
Provision for contingent
Provision for other claim
Total
Beginning
balance
6,910
57,677
1,449,690
180,330
1,694,607
Charged
during the
year
Exchange
revaluation
difference
Utilized
during the
year
-
11,299
444,786
5,784
461,869
-
(244)
(103,784)
(6,034)
(110,062)
-
(2,626)
-
(25,509)
(28,135)
EGP Thousands
Reversed
amounts
(13,273)
-
-
(13,273)
Ending
balance
52,604
2,930,743
240,154
3,223,501
EGP Thousands
Reversed
amounts
(6,910)
-
-
-
(6,910)
Ending
balance
-
66,106
1,790,692
154,571
2,011,369
Interest rates on variable-interest subordinated loans are determined in advance every 3 months. Subordinated loans are
not repaid before their repayment dates.
*To face the potential risk of banking operations.
*Represents the date of loan repayment to the lending agent.
30. Equity
28. Other liabilities
Accrued interest payable
Accrued expenses
Accounts payable
Other credit balances
Total
EGP Thousands
Dec.31, 2020
Dec.31, 2019
1,165,714
1,319,652
3,127,411
122,492
5,735,269
1,090,649
1,027,526
6,097,077
181,542
8,396,794
30.1. Capital
The authorized capital is EGP 50 billion according to the extraordinary general assembly decision on 12 June 2019.
• Issued and Paid in Capital increased by an amount of EGP 85,992 thousand on September 21 ,2020 to reach EGP 14,776,813
thousand according to Board of Directors decision on January 5, 2020 by issuance of eleventh tranche for E.S.O.P program.
• Issued and Paid in Capital increased by an amount of EGP 105,413 thousand on November 18,2019 to reach EGP 14,690,821
thousand according to Board of Directors decision on February 4, 2019 by issuance of tenth tranche for E.S.O.P program.
• Issued and Paid in Capital increased by an amount of 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.
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.
312 |
Annual Report 2020
2020 Annual Report
| 313
Financial Statements // Consolidated 31. Deferred tax assets (Liabilities)
Deferred tax assets and liabilities are attributable to the following:
Assets
(Liabilities)
Dec.31, 2020
EGP Thousands
Assets
(Liabilities)
Dec.31, 2019
Fixed assets (depreciation)
Other provisions (excluded loan loss, contingent liabilities and income tax provi-
sions)
Other investments impairment
Reserve for employee stock ownership plan (ESOP)
Interest rate swaps revaluation
Trading investment revaluation
Forward foreign exchange deals revaluation
Balance
(84,418)
210,526
97,925
239,545
1,292
(20,059)
(7,039)
437,772
(79,162)
146,675
76,407
216,709
6,642
(35,477)
18,545
350,339
Movement of Deferred Tax Assets and Liabilities:
Beginning Balance
Effect of applying IFRS 9
Additions / disposals
Ending Balance
Assets
(Liabilities)
Dec.31, 2020
350,339
-
87,433
437,772
EGP Thousands
Assets
(Liabilities)
Dec.31, 2019
308,370
136,491
(94,522)
350,339
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
314 |
Annual Report 2020
Dec.31, 2020
No. of shares in
thousand
EGP Thousands
Dec.31, 2019
No. of shares in
thousand
27,428
11,313
(1,196)
(8,599)
28,946
29,697
9,152
(880)
(10,541)
27,428
Details of the outstanding tranches are as follows:
Maturity date
Exercise price
Fair value
EGP
EGP
2021
2022
2023
Total
10.00
10.00
10.00
54.51
50.53
72.71
No. of shares in
thousand
9,323
8,560
11,063
28,946
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%
14th tranche
13th tranche
10
83.02
3
13.66%
1.50%
25%
10
59.26
3
18.14%
1.70%
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
Reserve for transactions under common control
Reserve for financial assets at fair value through OCI
Reserve for employee stock ownership plan
Banking risks reserve
Cumulative foreign currencies translation differences
General risk reserve
Ending balance
33.1. Banking risks reserve
Beginning balance
Transferred to banking risk reserve
Ending balance
EGP Thousands
Dec.31, 2020
Dec.31, 2019
2,778,135
24,765,658
14,906
10,539,715
8,183
3,975,514
1,064,648
6,423
(3,684)
1,549,445
44,698,943
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
EGP Thousands
Dec.31, 2020
Dec.31, 2019
5,164
1,259
6,423
4,323
841
5,164
2020 Annual Report
| 315
Financial Statements // Consolidated 33.2. Legal reserve
Beginning balance
Transferred to legal reserve
Ending balance
33.3. Reserve for financial assets at fair value through OCI
EGP Thousands
Dec.31, 2020
Dec.31, 2019
2,188,029
590,106
2,778,135
1,710,293
477,736
2,188,029
EGP Thousands
Dec.31, 2020
Dec.31, 2019
Beginning balance
Transferred from reserve on disposal of financial assets at fair value through OCI
Net unrealised gain/(loss) on financial assets at fair value through OCI
Effect of applying IFRS 9
Effect of ECL in fair value of debt instruments measured at fair value through OCI
Ending balance
4,111,781
(76,717)
(264,732)
-
205,182
3,975,514
(3,750,779)
-
6,157,553
1,889,928
(184,921)
4,111,781
33.4. Retained earnings
EGP Thousands
Dec.31, 2020
Dec.31, 2019
11,881,657
(8,431,833)
45,727
(3,370,464)
10,238,157
(1,259)
-
101,013
76,717
9,637,083
(6,854,370)
(2,700,544)
11,800,995
(841)
(666)
-
-
Beginning balance
Transferred to reserves
Change in retained earnings from acquisition of subsidiaries
Dividend paid
Net profit of the year
Transferred ( from) to banking risk reserve
Cumulative foreign currencies translation differences
Transferred from previous years' outstanding balances
Transferred from reserve on disposal of financial assets at fair value
through OCI
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
316 |
Annual Report 2020
34. Cash and cash equivalent
Cash and balances at the 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, 2020
Dec.31, 2019
33,768,549
87,450,490
39,497,692
(27,744,700)
(16,974,367)
(40,201,289)
75,796,375
28,273,962
28,370,183
27,634,062
(22,397,310)
(10,593,903)
(28,391,977)
22,895,017
• There is a number of existing cases against the bank on December 31, 2020 and 2019 for which no provisions are made 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. (Note 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 27,512 thousand as follows:
Financial Assets at Fair value through OCI
Financial investments in subsidiaries
Investments
value
157,321
157,318
Paid
129,809
157,318
Remaining
27,512
-
Fixed assets and branches constructions
35.2.2.
The value of commitments for the purchase of fixed assets, contracts, and branches constructions that have not been imple-
mented till the date of the financial statements amounted to EGP 751,736 thousand against EGP 911,159 thousand in 2019.
10,539,715
11,881,657
35.3. Letters of credit, guarantees and other commitments
EGP Thousands
Dec.31, 2020
Dec.31, 2019
963,152
(450,942)
552,438
1,064,648
738,320
(239,707)
464,539
963,152
EGP Thousands
Dec.31, 2020
Dec.31, 2019
1,549,445
-
-
1,549,445
-
117,251
1,432,194
1,549,445
Letters of guarantee
Letters of credit (import and export)
Customers acceptances
Total
35.4. Credit facilities commitments
Credit facilities commitments
EGP Thousands
Dec.31, 2020
Dec.31, 2019
74,023,239
5,861,017
2,701,590
82,585,846
61,143,216
5,866,630
3,188,757
70,198,603
EGP Thousands
Dec.31, 2020
Dec.31, 2019
8,895,410
6,857,510
2020 Annual Report
| 317
Financial Statements // Consolidated 36. Mutual funds
Osoul fund
37.1. Loans, advances, deposits and contingent liabilities
• 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 4,049,086 with redeemed value of EGP 1,855,534 thousands.
• The market value per certificate reached EGP 458.26 on December 31, 2020.
• The Bank portion got 137,112 certificates with redeemed value of EGP 62,833 thousands.
Loans, advances and other assets
Deposits
Contingent liabilities
Istethmar fund
37.2. Other transactions with related parties
• 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 369,394 with redeemed value of EGP 62,132 thousands.
• The market value per certificate reached EGP 168.20 on December 31, 2020.
• The Bank portion got 50,000 certificates with redeemed value of EGP 8,410 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 281,716 with redeemed value of EGP 24,887 thousands.
• The market value per certificate reached EGP 88.34 on December 31, 2020.
• The Bank portion got 34,596 certificates with redeemed value of EGP 3,056 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 90,255 with redeemed value of EGP 23,498 thousands.
• The market value per certificate reached EGP 260.35 on December 31, 2020.
• The Bank portion got 50,000 certificates with redeemed value of EGP 13,018 thousands.
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 152,949 with redeemed value of EGP 51,688 thousands.
• The market value per certificate reached EGP 337.94 on December 31, 2020.
• The Bank portion got 50,000 certificates with redeemed value of EGP 16,897 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 131,456 with redeemed value of EGP 23,086 thousands.
• The market value per certificate reached EGP 175.62 on December 31, 2020.
• The Bank portion got 50,000 certificates with redeemed value of EGP 8,781 thousands.
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.
EGP Thousands
Dec.31, 2020
125,540
709,933
1,210
EGP Thousands
Income
Expenses
70
80
739
17
5
5
213,668
279
-
-
9,469
57
EGP Thousands
Dec.31, 2020
Dec.31, 2019
(750,477)
100,004
3,518
(8)
2,175
(219,313)
(387,742)
(79,511)
248
6
484
32,890
International Co. for Security & Services
CVenture Capital
Fawry plus
Mayfair bank
Damietta shipping & marine services
Al ahly computer
38. Main currencies positions
Egyptian pound
US dollar
Sterling pound
Japanese yen
Swiss franc
Euro
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 of salary tax since the start of activity till 2019
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 31/12/2019 was examined & paid in accordance with the protocol signed between the Fed-
eration of Egyptian Banks & the Egyptian Tax Authority
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Financial Statements // Consolidated 40. Other assets - net increase (decrease)
Total other assets by end of 2019
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Total 1
Total other assets by end of year
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 2018
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Total 1
Total other assets by end of 2019
Assets acquired as settlement of debts
Advances to purchase of fixed assets
Impairment charge for other assets
Total 2
Change (1-2)
EGP Thousands
Dec.31, 2020
9,747,939
(356,382)
(942,781)
8,448,776
9,175,525
(169,855)
(1,195,099)
69,217
7,879,788
568,988
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
41. Significant events during the year
Based on both banks’ Board of Directors’ approval, and after obtaining all necessary approvals from the Central Bank of
Egypt and the Central Bank of Kenya, in May 2020, CIB has acquired 51% of what is to be renamed as Mayfair CIB Bank
Limited in Kenya in the form of a capital increase, for a total transaction value of USD 35.35 million. The bank has consoli-
dated financial results starting from the second quarter of 2020.
In May 2020, CIB gained significant influence in “Damietta Shipping and Marine Services” Company, upon controlling
majority seats in the Company’s Board of Directors, besides 32% of the Company’s shares previously owned by the Bank.
The Company’s financial results have been consolidated starting Q2 2020.
Starting from Q3 2020, CIB has combined AL-Ahly Computer company financial results as an associate using the equity method.
Loans:
During the period, CIB has obtained a total debt of $300mn USD as follows:
• $100mn USD subordinated debt from CDC.
• $100mn USD senior debt from the European Bank for Reconstruction and Development (EBRD).
• $100mn USD senior debt from the International Finance Corporation (IFC).
• In September 2020, the Central Bank and Banking Institutions Law No. 194 for the year 2020 was issued which cancelled
the Central Bank, Banking and Monetary Institutions Law No. 88 for the year 2003. Article No. 4 of Law No. 194 for the year
2020 allows the addressees a transition period for the compliance with the new law.
On Thursday October 22nd 2020 the Bank’s Directors received a letter from the Central Bank of Egypt (CBE) informing
them that in light of the findings of a limited review inspection, the CBE Board of Directors agreed on a resolution to
discharge the Chairman and Managing Director of CIB and that its Board should elect a Non-Executive Chairman from
among its Non-Executive Directors. On the following day the CIB Board convened, during that meeting the Chairman and
Managing Director stepped down from his position and resigned from the board with immediate effect and Mr. Sherif
Samy was elected Non-Executive Chairman.
CBE issued its report to the Bank on 10 November 2020 and it covered a number of areas that needed immediate remedia-
tion covering the Internal Control Environment, Credit facilities and provisions, Governance and Compliance and also
referred to instances of violations of certain provisions of the applicable laws (Articles 57, 64 and 111 of Law 88 for year
2003, and Articles 19 and 42 of the Executive Regulation of the said law), and other instances of violations of CBE regula-
tions. The Board of the Bank mandated management to review the CBE report findings and propose necessary corrective
actions. The Bank carefully assessed all the findings and other similar matters. Since 22 October the Bank management
and Board met with the CBE several times to address the matters raised, the findings and compliance requirements. The
Bank also engaged external legal counsel to support in the characterization and assessment of the findings. The Bank’s
management applied its judgement and experience and included in these financial statements, their assessment of the
impact of the CBE findings, including credit losses and legal and other charges. (see notes 19 and 29).
The Board of the Bank assessment is that the design of the internal controls over financial reporting remain appropriate and
continue to operate effectively to ensure fair presentation of the financial position of the Bank and its financial performance.
Management developed a corrective action plan for the CBE to address all the findings and to further enhance regulatory
compliance and strengthen controls. Additionally, as directed by the Non-Executive Directors, the Audit Committee ap-
pointed an independent international professional services firm to conduct an in depth review of the Bank’s controls and
lending functions with a view to addressing specific and related areas from the CBE inspection, based on best practice and
to further enhance regulatory compliance and strengthen controls at CIB, as part of the Bank’s commitment to enhancing
risk management and the governance culture at the Bank. The said review is currently ongoing up to the date of issue of the
financial statements. Any additional recommendations of the said review will be considered in the Bank’s future actions.
Impact of COVID-19
The coronavirus (“COVID-19”) pandemic has spread across various geographies globally, causing disruption to business
and economic activities. COVID-19 has brought about uncertainties in the global economic environment. The fiscal and
monetary authorities, both domestic and international, have announced various fiscal and stimulus measures across the
globe to counter possible adverse implications.
Business continuity planning
The Bank is closely monitoring the situation and taking rightful measures to ensure the safety and security of the bank’s
staff and an uninterrupted service to its customers. Remote working arrangements have been implemented and part of
the Bank staff are working from home in line with government directions.
Business continuity plans are in place. The Bank has taken measures to ensure that services levels are maintained, cus-
tomer complaints are resolved, and the Bank continues to serve its customers as they would do in normal conditions. CIB
regularly conducts stress tests to assess the resilience of the statement of position and the capital adequacy. CIB is closely
monitoring the situation and has activated its risk management practices managing the potential business disruption
COVID-19 outbreak may have on its operations and financial performance.
Impact on expected credit losses
In the determination of the impact over the ECL, CIB has considered the potential impact of the uncertainties considering
the available information caused by the Covid-19 pandemic and taken into account the economic support and relief measures
taken by the Central Bank of Egypt. The Bank has reviewed the potential impact of COVID-19 outbreak on the inputs and as-
sumptions for ECL measurement. In addition, the Bank has analyzed the risk of the credit portfolio y focusing on economic sec-
tor wise segmentation analysis using both a top-down approach and the Bank own experience. Overall, the COVID-19 situation
remains fluid and is rapidly evolving at this point, which makes it challenging to reliably reflect impacts in our ECL estimates.
In addition to the assumptions outlined above, CIB has given specific consideration to the relevant impact of COVID-19 on the
qualitative and quantitative factors when determining the significant increase in credit risk (SICR) leading to reclassifying
loans from stage 1 to stage 2 and assessing the indicators of impairment for the exposures in potentially affected sectors. The
bank has implemented the CBE initiative of payment relief for the customers by deferring interest/principal due for six months.
320 |
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Financial Statements // Consolidated Goodwill at acquisition date
Amortization
Net book value
EGP Thousands
Mayfair Bank
Dec.31, 2020
206,287
(27,505)
178,782
According to Central Bank of Egypt regulation issued on Dec 16, 2008, an amortization of 20% annually has been applied
on Goodwill starting from acquisition date.
43. Intangible assets
Intangible Assets at acquisition date
Amortization
Net book value
EGP Thousands
Mayfair Bank
Dec.31, 2020
51,831
(6,911)
44,920
The relief offered to customers may at some cases indicate a SICR. However, the bank believes that the extension of these
payment reliefs does not automatically trigger a SICR and a stage migration for the purposes of calculating ECL, as these
are being made available to assist borrowers affected by the Covid-19 outbreak to resume regular payments. The Bank
has reassessed its ECL models, underlying assumptions including relevant available macroeconomic data, and the judg-
mental overlays on the basis of macroeconomic variations reflected in models pertaining to particular industries rather
than on customer- account basis. The ECL amounts recognized in the bank’s financial statements for the period ending
December 31, 2020 were mainly increased as a result of the Covid 19 impact . The impact of current uncertain economic
environment is judgmental and management will keep assessing the current position and its related impact regularly.
It should be also considered that the assumptions used about economic forecasts are subject to high degree of inherent
uncertainty and therefore the actual outcome may be significantly different from forecasted information. CIB has consid-
ered potential impacts of the current economic volatility in determination of the reported amounts of the bank’s financial
and non-financial assets and these are considered to represent management’s best assessment based on observable infor-
mation. Markets however remain volatile and the recorded amounts remain sensitive to market fluctuations.
Liquidity management
The Bank’s approach is to maintain a prudent Liquidity position with a Liability driven strategy, as almost the entire fund-
ing base is customer based rather than wholesale funding; which is a core component of the Risk Appetite. This is coupled
with ample amounts of Liquid Assets. To limit potential Liquidity shocks, the Bank has a well-established Contingency
Funding Plan (CFP), where Liquidity Risk is assessed in line with all Regulatory and Internal Liquidity Measurements,
and Basel II and III requirements; including Liquidity Stress Testing; and Basel III Ratios; Net Stable Funding Ratio (NSFR)
and Liquidity Coverage Ratio (LCR).
42. Goodwill
• Based on both banks’ Board of Directors’ approval, and after obtaining all necessary approvals from the Central
Bank of Egypt and the Central Bank of Kenya, in May 2020, CIB has acquired 51% of what is to be renamed as Mayfair
CIB Bank Limited in Kenya in the form of a capital increase, for a total transaction value of USD 35.35 million. The
bank has consolidated financial results starting from the second quarter of 2020. In May 2020, CIB gained significant
influence in “Damietta Shipping and Marine Services” Company, upon controlling majority seats in the Company’s
Board of Directors, besides 32% of the Company’s shares previously owned by the Bank. The Company’s financial
results have been consolidated starting Q2 2020.
• Starting from Q3 2020, CIB has combined AL-Ahly Computer company financial results as an associate using the equity
method.
Acquisition cost
Net assets value
*Goodwill
EGP Thousands
Mayfair Bank
Dec.31, 2020
560,963
354,676
206,287
*The bank applied provisional fair value accounting as allowed under the Egyptian accounting standards, the bank will revise the fair value
during a period of 12 months from the acquisition date.
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Financial Statements // Consolidated