Throughout 2018, the Financial Control Group has continued to expand its scope of influence, tackling new functional areas and bettering the level of its workforce, thereby adding to CIB’s overall efficiency and contributing effectively to its continuous market-leading performance.
Committing to CIB’s continuous record of compliance with both local and international accounting regulations and further adding to its edge over peers in the early adoption of standards, the Financial Control Group, in collaboration with the Bank’s Risk Group, successfully finalized the implementation phase of IFRS 9, which the CBE mandated to be met by all banks by 1 January 2019. The “Impairment Calculation” model launched successfully this year and received official validation from McMillan Woods, in accordance with the CBE’s requirement for an external audit validation. CIB became the first bank in Egypt to communicate trial financial statements to the CBE in accordance with IFRS 9 for three consecutive quarters in 2018. This ensures the Bank has complied with both CBE regulations and those set by the International Accounting Standards Board (IASB), with the latter being requisite for CIB’s GDR program on the London Stock Exchange.
Particularly relevant to its scope, the Financial Control Group continues to play a key role in driving the Bank’s financial performance and in adding to its overall competitive position. The group worked in close and regular collaboration with the Treasury Group throughout the year to adjust the dynamics of the Bank’s balance sheet in a way that sails efficiently with changing market conditions and upcoming regulations such as the capital charge required by the CBE to account for Interest Rate Risk in the Banking Book (IRRBB) and the new tax law recently enforced by the Egyptian Tax Authority. In 2018, the group also widened its role in Enterprise Risk Management (ERM). It set the roadmap required to take the Bank’s Economic Capital Model to the next level, in alignment with international best practices. This is expected to enhance the quality of the Bank’s Capital Allocation Models and of the entire pricing strategy for all Bank products and exposures.
Striving to increase the group’s, and hence the overall Bank’s, efficiency, this year saw the launch of a number of automation mechanisms to achieve both strategic and regulatory milestones in a timely and meticulous manner. The group’s units successfully collaborated to launch the SAS Project as an automation mechanism to calculate the Bank’s CAR in a more accurate and systematic way. Furthermore, an effectual automation process was completed to clean up the non-performing portion of the Bank’s retail loan portfolio. With effective collaboration from the CBE, CIB also managed to finalize its Digital Reporting Project, particularly with regards to the process of reporting non-performing clients to the CBE, reducing turnaround times, and paper consumption required for such reporting.
During the year, the group played an important role in upholding the Bank’s responsibility to the Egyptian economy overall. In line with the ongoing push toward financial inclusion across the banking sector, CIB’s Financial Control Group helped kick off the first phase in the Digital Lending Process. The endeavor, which the group completed in collaboration with a dedicated taskforce from different groups across the Bank, provided lending facilities to micro businesses. As a member of the Tax Committee of the Federation of Egyptian Banks (FEB), CIB played a leadership role in formulating a protocol between the FEB and the Egyptian Tax Authority, which aims to settle tax disputes currently outstanding at courts between banks and the Tax Authority.
In line with management’s aim to elevate the quality of human capital and contributing to the development of staff, the Financial Control Group successfully launched the second phase of the Financial Control School – an in-house training facility tailored to aligning the group’s staff with continuous market developments. The course tackles key topic areas that provide the theoretical and practical foundations deemed necessary to better position finance staff for various prestigious certifications, mainly in international financial reporting, economics, derivatives and fixed income, and business ethics. Moving forward, the course is planned to eventually serve as a mandatory requirement and prerequisite for joining the Financial Control Group and as a promotion eligibility criterion.