Commercial International Bank (Egypt) S.A.E. Q3 Earnings Call Highlights

Key Points

• CIB reported EGP 63.1 billion in nine-month net income, up 2% year over year; normalized net income rose 18% after excluding prior-year and current-period one-offs. Net interest income grew 19%, but the net interest margin narrowed 53 basis points to 8.40% amid rate cuts.
• The bank raised its 2026 deposit growth forecast to 30% from 20%–25%, after deposits grew 31% year to date to EGP 1.45 trillion. It maintained guidance for 15%–17% normalized net income growth and 20%–25% loan growth.
• CIB expects yomo, its wholly owned digital bank, to be technically ready by the end of Q1 2027, subject to regulatory review and approval. The planned $300 million investment will primarily fund technology and staffing, with break-even expected in the third or fourth year after launch.

Commercial International Bank (Egypt) S.A.E. LON: CBKD reported net income of EGP 63.1 billion for the first nine months of 2026, up 2% year over year, as deposit and loan growth helped offset pressure on lending margins.

Head of Investor Relations Yasmine Hemeda said net income rose 18% on a normalized basis, after adjustments for a large provision release in 2025 and two non-recurring items in the latest period. Consolidated revenue reached EGP 103 billion.

The bank raised its full-year deposit growth forecast to 30% from 20% to 25%, while maintaining its other guidance. Management also outlined plans for its wholly owned digital bank, yomo, including an expected break-even between the third and fourth years after launch.

Underlying income rises as margins narrow

Hemeda said the normalized earnings calculation adjusted for an EGP 13.1 billion provision recalibration release in the third quarter of 2025, as well as an EGP 2 billion regulatory expense reversal and an EGP 2.1 billion provision release tied to a corporate client repayment. Normalized net income grew 9% in U.S. dollar terms.

Net interest income increased 19% year over year, while normalized non-interest income rose 46%. Hemeda said growth in fees and commissions helped drive a 43% increase in the sustainable component of non-interest income. The normalized top line grew 20%.

The bank’s net interest margin was 8.40%, down 53 basis points amid cumulative monetary policy rate cuts of 600 basis points, Hemeda said. Reported return on equity was 34.3%, or approximately 32.7% on a normalized basis, while the cost-to-income ratio stood at 15.6%.

Group CFO Islam Zekry said the bank’s blended cost of funds fell 290 basis points. Its funding strategy includes current and savings accounts, payroll services, acquiring business and small and medium-sized enterprise customers, he said.

Deposit forecast raised; other guidance maintained

Deposits increased 31% year to date to EGP 1.45 trillion, including 42% growth in local-currency deposits. Gross loans rose 22% to EGP 705 billion, with local-currency loans up 15%. Hemeda said current and savings accounts represented 63% of total deposits.

For full-year 2026, Hemeda reiterated expectations for:

• Net income growth of 15% to 17% over a base normalized for the EGP 13.1 billion recalibration.
• Blended loan growth of 20% to 25%, including local-currency growth of 25% to 30% and foreign-currency growth in the low teens.
• Net interest margin compression of 60 to 70 basis points and return on equity of 33% to 35%.
• Cost of risk of 0.5% to 0.7%.

Hemeda said at least 50% to 60% of deposit growth was expected to come from current and savings accounts. Management said it was still working on its 2027 budget and did not provide a definitive outlook for next year.

Capital, provisions and payout

The capital adequacy ratio stood at 28.8%, including a common equity tier one ratio of 25.3%. Non-performing loans represented 1.47% of loans, with a coverage ratio of 343%, Hemeda said.

Zekry described the EGP 2.1 billion provision release as a one-off transaction involving a tourism client. He also said the EGP 2 billion regulatory expense reversal was non-recurring. The bank had accrued expenses since 2020 for a bank resolution fund, but reversed them after the fund was established this year with a new calculation mechanism, he said.

Chief Risk Officer Walid Fawzy said Egypt’s credit upgrade was already reflected through the economic indicators used in the bank’s expected credit loss model. Future changes in those indicators and in the weighting of scenarios could still affect calculations, he said.

Hemeda said CIB considers a capital adequacy ratio of around 20% sufficient in normal conditions, but targets 25% or more during periods of uncertainty. She said it was too early to specify a payout, though it should be between the historical low of 5% and the exceptional 30% paid last year.

Yomo launch preparations

Hemeda confirmed that CIB currently owns 100% of yomo. Zekry said the digital bank’s holding company was established in Abu Dhabi Global Market after a review of factors including taxes, geography and regulation. The structure provides options for future expansion and bringing in additional capital, he said.

Most of the planned $300 million investment will go toward technology and the people building it, with some also covering operating losses in the first two years, Zekry said. He added that the bank expects to complete technical readiness by the end of the first quarter of 2027, after which it would await Central Bank of Egypt review and approval to launch.

Zekry acknowledged that yomo could attract some existing CIB customers, but said management expects the digital platform to offer better group economics and reach customer segments that conventional banks may not be able to serve economically.

About Commercial International Bank (Egypt) S.A.E. (LON:CBKD)

Commercial International Bank (Egypt) SAE. provides financial products and services in Egypt. The company operates in four segments: Corporate Banking, Investment, Retail Banking, and Assets and Liabilities Management. It offers current and saving accounts, business accounts, time deposits, and certificates of deposit; car, personal, travel, solar, education, and overdraft loans; fund investment management; mortgages services; and insurance products. The company also provides credit, debit, and prepaid cards; smart wallet, mobile, internet, and phone banking; and ATM services.

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