Investment case

Investment case • Egypt’s largest private bank, and one of its most profitable (RoAE averaged c.29% last 3 years). • One of the most cost efficient amongst covered peers, with strong revenue generation ability. • One of the most liquid versus peers in terms of loans/deposits ratio. • Leading corporate lender, while retail portfolio started to take-off (c.10% of total loans). Benefits from ACTIS’s expertise in retail and SME lending. • Strong risk management and low NPLs ratio of (2.9%) and over 125% provisions coverage ratio. • Solid CAR (15.7%) well above CBE requirement (10%). • Led by strong management. • Fully integrated banking model, with exposure to capital market through its almost fully owned subsidiary CI Capital Holding (CICH). • Business exposure mainly in Egypt. Upside Catalysts • Faster-than-expected recovery from the current political and economic unrest reflecting on operations. • Any unexpected one-off gain or better than expected operating performance. Downside Risks • Larger or longer than expected economic slowdown due to political unrest, and lower balance sheet growth, both loans and deposits. • Worse than expected banking revenues. • Lower asset quality and higher provision charge or one-off expenses. Banking – Commercial International Bank (CIB) Company Profile Founded by National Bank of Egypt (NBE) and Chase Manhattan Bank (CMB) in 1975. COMI has since become Egypt’s leading private-sector bank. After its successful IPO in September 1993, the bank has been one of the Egyptian stock market’s blue chips. CIB offers a full-fledged business exposure varying among corporate and retail banking, investment banking, securities brokerage, mutual funds, asset management, research and insurance. CIB presence amounted to over 150 branches and 502 ATMs. Shareholder Structure • ACTIS 9.3% • Free Float (of which around 9.25% in GDRs) 90.7% 52-Week Performance & (*EGX suspended between 27 th Jan – 23 rd Mar 2011) COMI.CA/COMI EY | N/R*| Analyst: Alia Abdoun *Not Rated as it owns c.100% of CICH Key Performance Indicators Sector: B anking ISIN : EG S60121C 018 LastP rice (EG P) 31.88 52 W eek H igh 47.70 52 W eek Low 27.04 100-dayA v. Volum e 2,436 (000' shares perday) N o. ofShares (m n) 590.1 M arketC ap (EG Pmn 18,814 *P rices as atclose on 30th M ay2011 - 5 10 15 20 25 30 22.0 27.0 32.0 37.0 42.0 47.0 52.0 Jun-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Shrs(mn) EGP Volume COMI EGX 30rebased S ector: B anking EG P m n/FY E D ecem ber 2008a 2009a* 2010a* 2011e 2012e 2013e NII 1,799 2,030 2,258 2,693 2,906 3,485 G rowth R ate (% ) n/a 12.9 11.2 19.3 7.9 19.9 N on interestIncom e 1,484 1,313 1,674 1,422 1,698 2,018 G rowth R ate (% ) n/a -11.6 27.5 -15.1 19.4 18.8 NPAT 1,365 1,745 2,007 1,894 2,073 2,522 G rowth R ate (% ) n/a 27.8 15.0 -5.6 9.5 21.7 Loans 26,330 27,242 35,046 37,926 43,943 53,413 D eposits 48,790 54,649 63,364 66,830 74,796 87,347 NIM 3.91% 3.76% 3.63% 3.90% 3.84% 4.02% R O A E ** 30.6% 35.5% 33.9% 25.0% 23.7% 24.7% R O A A ** 2.5% 3.0% 3.2% 2.6% 2.5% 2.7% P ER ** 13.7x 10.8x 9.4x 9.9x 9.1x 7.5x P B V ** 3.5x 2.9x 2.4x 2.1x 1.9x 1.6x S o urc e: B ank F inanc ials & C IC R F o rec as ts *R es tated B alanc e S heet **E x-go o dwill

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Banking – Commercial International Bank (CIB). COMI.CA/COMI EY | N/R*| Analyst: Alia Abdoun *Not Rated as it owns c.100% of CICH. Investment case - PowerPoint PPT Presentation

Transcript of Investment case

Investment case• Egypt’s largest private bank, and one of its most profitable (RoAE averaged c.29%

last 3 years).• One of the most cost efficient amongst covered peers, with strong revenue

generation ability.• One of the most liquid versus peers in terms of loans/deposits ratio.• Leading corporate lender, while retail portfolio started to take-off (c.10% of total

loans). Benefits from ACTIS’s expertise in retail and SME lending.• Strong risk management and low NPLs ratio of (2.9%) and over 125% provisions

coverage ratio.• Solid CAR (15.7%) well above CBE requirement (10%).• Led by strong management.• Fully integrated banking model, with exposure to capital market through its almost

fully owned subsidiary CI Capital Holding (CICH).• Business exposure mainly in Egypt.Upside Catalysts• Faster-than-expected recovery from the current political and economic unrest

reflecting on operations.• Any unexpected one-off gain or better than expected operating performance.Downside Risks• Larger or longer than expected economic slowdown due to political unrest, and

lower balance sheet growth, both loans and deposits.• Worse than expected banking revenues.• Lower asset quality and higher provision charge or one-off expenses.

Banking – Commercial International Bank (CIB)

Company ProfileFounded by National Bank of Egypt (NBE) and Chase Manhattan Bank (CMB) in 1975. COMI has since become Egypt’s leading private-sector bank. After its successful IPO in September 1993, the bank has been one of the Egyptian stock market’s blue chips. CIB offers a full-fledged business exposure varying among corporate and retail banking, investment banking, securities brokerage, mutual funds, asset management, research and insurance. CIB presence amounted to over 150 branches and 502 ATMs.

Shareholder Structure

• ACTIS 9.3%• Free Float (of which around 9.25% in GDRs) 90.7%

52-Week Performance & (*EGX suspended between 27th Jan – 23rd Mar 2011)

COMI.CA/COMI EY | N/R*| Analyst: Alia Abdoun *Not Rated as it owns c.100% of CICH

Key Performance Indicators

Sector: BankingISIN: EGS60121C018

Last P rice (EGP ) 31.88

52 Week High 47.7052 Week Low 27.04

100-day Av. Volume 2,436 (000' shares per day)

No. of Shares (mn) 590.1

Market Cap (EGP mn) 18,814

*P rices as at close on 30th May 2011

22.0

27.0

32.0

37.0

42.0

47.0

52.0

Jun-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11

Shrs (mn)EGP Volume COMI EGX 30 rebased

Sector: BankingEGP mn/ FY End:December 2008a 2009a* 2010a* 2011e 2012e 2013e

NII 1,799 2,030 2,258 2,693 2,906 3,485 Growth Rate (%) n/a 12.9 11.2 19.3 7.9 19.9

Non interest Income 1,484 1,313 1,674 1,422 1,698 2,018 Growth Rate (%) n/a -11.6 27.5 -15.1 19.4 18.8

NP AT 1,365 1,745 2,007 1,894 2,073 2,522 Growth Rate (%) n/a 27.8 15.0 -5.6 9.5 21.7

Loans 26,330 27,242 35,046 37,926 43,943 53,413 Deposits 48,790 54,649 63,364 66,830 74,796 87,347

NIM 3.91% 3.76% 3.63% 3.90% 3.84% 4.02%ROAE ** 30.6% 35.5% 33.9% 25.0% 23.7% 24.7%ROAA ** 2.5% 3.0% 3.2% 2.6% 2.5% 2.7%P ER ** 13.7x 10.8x 9.4x 9.9x 9.1x 7.5xP BV ** 3.5x 2.9x 2.4x 2.1x 1.9x 1.6x

Source: Bank Financials & CICR Forecasts *Restated Balance Sheet **Ex-goodwill