Egypt’s CIB says 2011 net profit fell 20 percent
Commercial International Bank (CIB), Egypt's biggest private bank by assets, said on Wednesday its consolidated net profit fell 20.1 pct in 2011 as the economy slowed in the wake of Egypt's popular uprising.
February 23, 2012 10:27 by Reuters
The decline in full-year profit was “primarily driven by much higher provisions” taken “as a pre-emptive measure to cope with the on-going economic upheaval Egypt is witnessing,” the bank said in an emailed press release.
Egypt’s business sector has been struggling to recover from the disruption in the wake of the uprising a year ago that led to President Hosni Mubarak’s overthrow.
Egypt’s banks have also been hurt by a weak financial market and an exodus of foreign investors.
CIB said its net profit slid to 1.62 billion Egyptian pounds ($268.4 million) from 2.02 billion in 2010.
Net profit for the fourth quarter fell by 9.0 percent to 549.1 million pounds, Reuters calculated by subtracting out the bank’s nine-month figures.
CIB’s increased its provisions to 321 million pounds in 2011 from 6 million pounds in 2010, it said.
Capital gains from the sale of investments in 2011 fell 80 percent to 39 million pounds after the bank chose not to sell investments at current market prices, it said.
Net interest income rose 19.2 percent, helped by higher treasury bill and local currency interest rates, the bank said.
The average yield on one-year Egyptian T-bills climbed from 10.44 percent in January 2011 to 15.19 percent in December as the government sought to finance its burgeoning budget deficit, according to central bank figues.
Interest rates on loans also rose as government borrowing crowded out lending to the private sector.
CIB said non-interest income fell 26.6 percent because of a slowdown the banking sector brought about by Egypt’s uprising, while dividend income dropped by 63 percent as companies retained more of their earnings as a precautionary measure.
Net loans increased to 41.07 billion pounds at the end of 2011 from 35.18 billion pounds a year arlier, CIB said. ($1 = 6.0362 Egyptian pounds) (Reporting by Patrick Werr) *image from globalarabnetwork.com