EconomyEgypt

CIB net profits up 5-10%, analysts predict

's biggest private bank CIB is expected to post net profit growth of 5-10% for the calendar year 2000, despite high provisions and dividend payouts, analysts said.

Their forecasts of net profit for Commercial International Bank (CIB) range from LE369.6 million ($96.20 million) to LE386 million, up from LE350.8 million in 1999.

“CIB's 2000 results are expected to be much better than its 1999 results, despite the poor market conditions last year,” said Nashwa Saleh, an analyst at HC Brokerage.

Economists say Egypt's slowed in 2000 due to liquidity shortages that kept interest rates high, amid uncertainty about the government's exchange rate policy. Analysts attributed CIB's forecast profit growth to an aggressive policy of diversification into retail and other fee-generating businesses, while keeping costs down.

“CIB had good income growth and tight cost control and that's why their operating income growth is so high,” noted a London-based analyst who asked not to be named.

London-based CSFB's analyst Ghassan Medawar forecast relatively flat loan growth for 2000 and customer deposit growth of 7% over 1999, implying a year-end loan to deposits ratio of 91M. He forecast LE606 million in pre-tax pre-provision profit and 220 million pounds of provisions and tax charges.

Analysts said they were concerned about the high level of provisions, forecast at LE214 to 224 million.

“Large loan loss provisions are expected for 2000 to maintain coverage of non-performing loans (NPLs) given the deterioration of asset quality… These provisions undercut the bottom line,” said an analyst at HSBC Securities, who forecast net profit of LE386 million.

See also  The mysterious death of the "perfect" spy

“Large provisions are not necessarily a bad thing because the bank wants to be on the safe side and maintain high coverage of NPLs,” another analyst said.

Some brokers expressed concern at dividend pay-outs.

Medawar puts CIB's pay out ratio at 65 to 70% of net earnings since it was listed in 1996. “We strongly believe the bank should significantly reduce its pay-out ratio this year. A lower pay-out ratio would boost the bank's book value and improve its valuation outlook considerably,” he added.

_______

This article was first published by Reuters on 26 February 2001.

Author

  • Khaled Diab

    Khaled Diab is an award-winning journalist, blogger and writer who has been based in Tunis, Jerusalem, Brussels, Geneva and Cairo. Khaled also gives talks and is regularly interviewed by the print and audiovisual media. Khaled Diab is the author of two books: for the Politically Incorrect (2017) and Intimate Enemies: Living with Israelis and in the Holy Land (2014). In 2014, the Anna Lindh Foundation awarded Khaled its Mediterranean Journalist Award in the press category. This website, The Chronikler, won the 2012 Best of the Blogs (BOBs) for the best English-language blog. Khaled was longlisted for the Orwell journalism prize in 2020. In addition, Khaled works as communications director for an environmental NGO based in Brussels. He has also worked as a communications consultant to intergovernmental organisations, such as the and the UN, as well as civil . Khaled lives with his beautiful and brilliant wife, Katleen, who works in humanitarian aid. The foursome is completed by Iskander, their smart, creative and artistic son, and Sky, their mischievous and footballing cat. Egyptian by birth, Khaled's life has been divided between the Middle East and . He grew up in Egypt and the , and has lived in Belgium, on and off, since 2001. He holds dual Egyptian-Belgian nationality.

See also  The irreverent and the faithless of the Muslim world

For more insights

Sign up to receive the latest from The Chronikler

We don't spam!

For more insights

Sign up to receive the latest from The Chronikler

We don't spam!

Khaled Diab

Khaled Diab is an award-winning journalist, blogger and writer who has been based in Tunis, Jerusalem, Brussels, Geneva and Cairo. Khaled also gives talks and is regularly interviewed by the print and audiovisual media. Khaled Diab is the author of two books: Islam for the Politically Incorrect (2017) and Intimate Enemies: Living with Israelis and Palestinians in the Holy Land (2014). In 2014, the Anna Lindh Foundation awarded Khaled its Mediterranean Journalist Award in the press category. This website, The Chronikler, won the 2012 Best of the Blogs (BOBs) for the best English-language blog. Khaled was longlisted for the Orwell journalism prize in 2020. In addition, Khaled works as communications director for an environmental NGO based in Brussels. He has also worked as a communications consultant to intergovernmental organisations, such as the EU and the UN, as well as civil society. Khaled lives with his beautiful and brilliant wife, Katleen, who works in humanitarian aid. The foursome is completed by Iskander, their smart, creative and artistic son, and Sky, their mischievous and footballing cat. Egyptian by birth, Khaled’s life has been divided between the Middle East and Europe. He grew up in Egypt and the UK, and has lived in Belgium, on and off, since 2001. He holds dual Egyptian-Belgian nationality.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

error

Enjoyed your visit? Please spread the word