A Note From


People are the cornerstone on which our strategy is built — brick by brick, byte by byte, transaction by transaction, day in and day out.

At tellers’ counters and in our operation centres, in conversations with large corporate clients, and by sitting down with fresh graduates just entering the workforce, our people are helping Egyptians chart their financial futures. As they do so, every one of them plays an essential role in delivering a multi-track strategy that creates value for all stakeholders, from our clients to our shareholders and the communities in which we do business — and for the staff themselves, the vast majority of whom are shareholders in this institution.

This is the cornerstone of our success: Banking is fundamentally a people business, and our talented employees are the people who are building the bank of the future and leading the conversation about our industry’s role in building a stronger nation. From our management committee to the most junior of support staff, these people delivered on an aggressive strategy that generated outstanding operational results — results that translated directly into outperformance in our financials in 2018.

Our staff of more than 6,750 people delivered these results because we have consistently provided them with the training, motivation, compensation, and sense of ownership they need to give their all every day. In doing so, they know they are not alone: Our management team practices an open-door policy at all levels, and we have ramped up our effort in the past year to broaden lines of communication and to hold small group meetings between regional staff and senior management nationwide.

In the year ahead, we will redouble our effort to reach our clients — current and potential — through the channels that matter, from the electronic to the physical. Yes, the physical: Digital banks are the wave of the future in Egypt, as they are in developed markets, and CIB has clearly and consistently made significant headway in building out some of the most innovative digital banking frameworks the market has seen in recent years. But as experience as far away as Canada has shown, branches remain important in drawing new clients into the banking system, whether they are business owners or new entrants to the workforce, employees or retirees.

And this is the very lynchpin of our strategy to champion financial inclusion in Egypt. From the business press to the halls of power, financial inclusion is the topic of the day — as it should be. It has also been central to our mission for years as we have sought to bring employers and their people into the banking system. By combining the strength of our long-standing branch network and digital solutions that bring us ever closer to a cashless society, bringing in as many people into the banking fold as possible becomes not just a mission but a reality. That’s why our people work tirelessly to make it easier for our clients to bank with us, be that through tellers at brick-and-mortar branches or strategists developing our digital channels.

In terms of how we’ve accomplished this on the ground in 2018, our consumer banking arm delivered another very strong year, and we see substantial room for continued growth in 2019 on both the asset and liabilities side. But we are particularly excited about the outlook in 2019 and 2020 for our institutional banking arm — the traditional growth engine of our bank. This outlook is underpinned by a cautiously optimistic reading of the macroeconomic climate in Egypt today.

The government of Egypt has stayed the course through an aggressive reform process that is leaving us on a much stronger footing. Our four key sources of hard currency inflows — tourism, remittances, the Suez Canal, and the oil and gas industry — are all on the upswing. The state continues to have access to foreign debt markets, and global institutional investors returned in early 2019 to Egyptian local-currency debt. As a nation, our foreign exchange position is strong, and the volatility we have so far seen in 2019 in the official exchange rate is fundamentally healthy.

In parallel, inflation is edging down toward the single digits and it is now clear that consumer purchasing power is coming back: Egyptians are, by and large, shaking off the effects of the devaluation. While this is obviously good news for our consumer banking arm, it is better on the institutional side of the business: Capacity utilization for our corporate clients is rising in lock-step with the return of consumer sentiment.

These utilization rates set businesses on a straight-line path to a single destination: Borrowing not to finance working capital, but to fund capital expenditure on expansion. Borrowing by corporate Egypt will send all the right signals to foreign investors who have (outside of the petroleum industry) largely sat out the last two years. It will signal that local businesses have confidence in the domestic economy.

All of us at CIB look forward to the real business of banking: The prudent management of risk as we extend capital to businesses and people who will use it to drive growth in our economy. It is why we all became bankers. It is why our five-year strategy is what it is. It is why we are actively leading the conversation about the future of our industry. And it is what makes us so passionate about leaving the communities with which we do business better than we found them.

Hussein Abaza

Chief Executive Officer