Institutional

Banking

Corporate and Global Customer Relations Group

Capitalizing on its extensive experience in the Egyptian market and its large client base, the Corporate Banking Group continued to support the Egyptian economy in 2018 despite a persistently challenging macroeconomic environment.

CIB’s creative financial structuring capabilities and experienced credit teams have preserved our position as the top corporate bank in Egypt. The Bank offers a wide range of innovative credit products tailored to its clients’ specific financing needs and developed with an eye on maximizing shareholder return on investment.

In 2018, the Corporate Banking Group financed mega-projects in the power, construction, food and beverages, petrochemicals, and oil and gas sectors. This effort is in line with the group’s strategy of targeting business opportunities created by the government’s stimulus efforts and prioritization of economic development.

The group also continued to support medium-sized companies by offering customized financial solutions catering to their business needs, ensuring their integration into the financial sector, and promoting financial inclusion.

2018 Highlights

2018 posed a number of challenges to the Egyptian banking sector. Chief among these, the CBE maintained interest rates almost at the previous year’s level, emerging markets witnessed substantial capital outflows, and continuous subsidy cuts added to inflationary pressure on the Egyptian economy. Despite these and other hurdles, the group’s strategy of growing its loan portfolio across different sectors met with continued success in 2018. As of December 2018, CIB’s corporate loan portfolio grew by 20% to a record EGP 88.4 billion compared to EGP 73.9 billion in December 2017. The group finalized several key transactions during the period, including but not limited to:

  • Arrangement of a syndicated facility coupled with the extension of a bilateral facility to finance Egypt’s petroleum sector. The Bank helped ease the liquidity pressure the government faced in settling its outstanding dues to international oil companies.
  • Extension of several short-term transactions to the telecom industry mainly to finance companies’ capital and operating requirements for the 4G network rollout.
  • Advancement of direct facilities and aggregate contingent business to finance the upgrade of Egypt’s national electricity grid and renewable energy plants under the second round of Egypt’s solar feed-in tariff scheme.
  • Finance the working investment needs of leading companies in the food and beverage sector, a strategic, non-cyclical, and defensive sector.

2019 Forward-Looking Strategy

CIB’s Corporate Banking Group plans to capitalize on the Egyptian economy’s growing resilience to macroeconomic pressures. As such, the group will focus on the following areas:

  • In support of the government’s declaration of 2019 as the Year of Education and its introduction of associated initiatives, the group will explore opportunities to finance efforts to overhaul the education sector.
  • The group is exploring new opportunities for financing mega infrastructure projects in the following areas: ports, transportation, infrastructure, and petrochemicals. We will also continue to support strategic sectors such as oil and gas, refineries, food and beverage, and healthcare.
  • Tourism receipts grew by 77% during the first half of 2018 to reach USD 4.8 billion, indicating a strong recovery and the success of Egypt’s worldwide marketing campaign. In 2019, the group will target the growth of untapped touristic destinations, such as New Alamein City, and support the renovation of existing hotels.
  • The group will work to introduce a number of new business segments and products, including but not limited to:
    • Bundling export products
    • Financing private sector gas trading
    • Developing new sustainable finance products
    • Further promoting digital solutions
    • Financing industrial parks

Financial Institutions Group

The Financial Institutions Group (FIG) consists of three teams: Correspondent Banking, Non-Bank Financial Institutions, and Development Finance. Together, these teams are CIB’s first point of contact for credit institutions and manage the Bank’s relationships with different global institutions.

2018 Highlights

  • 2018 was an exceptional year for contingent business, FIG’s key income driver, reaching EGP 18.4 billion in new business. The group’s L/G fees contributed to 18% of FIG’s total fee growth in 2018.
  • FIG’s investment portfolio grew in 2018 due to an exponential increase in its securitization business. CIB’s participation in bonds issued under securitization transactions reached EGP 733 million, which led the non-banking FI investment portfolio to reach EGP 1.2 billion in December 2018.
  • FIG’s portfolio of developmental programs reached a total of EGP 2.64 billion by the end of December 2018.

2019 Forward-Looking Strategy

FIG will grow its business through several efforts, which include:

  • Continuing to aggressively attract LGs for new projects launched in 2018 with a focus on Europe and Asia by capitalizing on our strong relationships with correspondents;
  • Growing the loan portfolio by increasing penetration in existing sectors such as leasing, microfinance, and auto finance;
  • Launching digital cash management solutions to grow the microfinance loan portfolio;
  • Targeting insurance, investment, and brokerage companies to increase their LCY deposits;
  • Developing the cash business to include new products on the Vostro platform to enhance payment process for corresponding Vostro and launching the new factoring business;
  • Continuing to strengthen and activate communication channels with exporters and associations targeting African markets, giving the group better exposure to trade trends and allowing it to provide clients with banking solutions that cater to their needs. FIG will continue to strengthen its relationship with select banks in Kenya, the COMESA region’s trade hub, to facilitate trade with East Africa; and
  • Maintaining CIB’s leading position in agency and participating bank services and solutions with donor and government entities.

Treasury Group

CIB’s Treasury Group is one of the best in Egypt, delivering exceptional services in liquidity and cash management, capital markets, and FX and derivatives. The Treasury Group consists of two main teams: Trading and Sales. The Trading Team’s main responsibility is to capitalize on movements in FX, fixed income, and money markets to enhance the Bank’s profits on outstanding positions and portfolios. The Sales Team’s task is to attract new customers and increase the flow of business to trading desks.

2018 Highlights

CIB’s FX exposure makes a consistently positive contribution to the Bank’s consolidated reported earnings. As of year-end 2018, total FX gains stood at EGP 697.21 million, the highest FX profitability among all Egyptian private banks.

CIB’s FX desk positively impacted the Bank’s non-interest income, growing the volume of trade products opened at CIB from the sale of foreign currency through free market, incoming documentary collections (IDCs), and letters of credit (LCs).

CIB’s FX desk won several prestigious global awards in 2018, including:

  • Best FX Services in North Africa from EMEA
  • Best FX Provider in Egypt from Global Finance
  • Best Treasury & Cash Management Providers in Egypt from Global Finance

2019 Forward-Looking Strategy

Over the coming quarters, the Treasury Team will seek to further enhance the performance of its trading and sales activities. The group has set the following goals for its teams:

  • Manage liquidity efficiently
  • Cultivate strong and profitable relationships with customers
  • Take all necessary steps to ensure proper risk management
  • Maximize the group’s profitability
  • Build on the trust our customers have in our institution and the group

Debt Capital Markets

CIB’s Debt Capital Markets Division (DCM) is one of the most experienced divisions in the market, with an unmatched record in underwriting, structuring, and arranging large-ticket syndicated loans, in addition to securitization transactions, bonds, and project finance.

DCM is a dedicated agency and security agency desk raising medium- and large-ticket project financing, PPP financing, and syndicated loans for its clients by:

  • Undertaking the role of principal arranger, book runner, and financial advisor
  • Evaluating feasibility studies to effectively advise on bankable structure for the transactions
  • Preparing financial models and term sheets
  • Underwriting debt
  • Ensuring contractual, legal, and technical risks are properly mitigated by acting as technical bank or documentation bank and applying due diligence
  • Providing one of the only dedicated agent and security agent units in the banking sector

2018 Highlights

  • Project Finance and Syndications: DCM organized and restructured syndicated medium-term loans worth EGP 69.1 billion for public sector companies and quasi-sovereigns in the power and oil and gas sectors. CIB captured the lion’s share of public sector debt arrangements in 2018.

  • Private Sector Borrowers: DCM concentrated this year on the oil and gas, telecoms, ports, refineries, power, and petrochemicals sectors. Additionally, the division focused on refinancing, restructuring, and re-engineering balance sheets for private sector borrowers. It continued to play a pivotal role in advising and arranging securitization issuances in cooperation with several partner banks.

  • Securitization: In 2018, DCM closed securitization deals worth EGP 4.4 billion out of a total EGP 5 billion in the Egyptian market, firmly cementing CIB’s position as the top Egyptian bank structuring securitizations in the local market. The division also penetrated new sectors in 2018 including micro and consumer finance.

DCM Awards in 2018

  • Best Securitization Deal in Africa for Corplease’s seventh securitization worth EGP 1.072 billion at the EMEA Finance Achievement Awards 2018
  • Best Securitization House at the EMEA Finance Achievement Awards 2018
  • Best Syndicated Facility in Africa for the EGP 13.5 billion EGPC transaction at the EMEA Finance Achievement Awards 2018
  • Best Project Finance Deal in Africa for the USD 900 million Egyptian Electricity Holding Company deal at the EMEA Finance Achievement Awards 2018

On the Bloomberg Africa Bookrunner League Table, CIB ranked 7th among African banks in 3Q2018, a remarkable jump from our 11th place ranking in 2017. DCM was third among Egyptian banks on the table with a market share in Africa of 3.7%.

Regarding the role of Initial Mandated Lead Arranger, CIB ranked third among Egyptian banks and 8th among African banks, up from 15th in 2017. DCM’s market share stood at 3.1% for 3Q2018, positioning CIB as the top-ranking private sector bank in Egypt in both arrangement of syndicated loans and bookrunning.

2019 Forward-Looking Strategy

  • Project Finance and Syndications: In line with the Egyptian government’s economic reform program, DCM will continue capitalizing on key industries and focus on expanding into alternative energy, utilities, and infrastructure plays, such as railways, ports, and new economic zones. DCM deals in the pipeline for 2019 amount to EGP 60 billion.

  • Securitizations: DCM has deals valued at EGP 6.05 billion in the pipeline for 2019, and the division plans to introduce new structures in the debt capital market.

Direct Investment Group

CIB’s investment arm, the Direct Investment Group (DIG), is responsible for the Bank’s direct equity acquisitions, divestitures, and equity portfolio management across local and regional markets. DIG maximizes CIB’s return on investment by utilizing the Bank’s designated funds to invest in sectors with high potential for growth.

2018 Highlights

DIG has expanded its deal-sourcing process to include SMEs as well as big-ticket transactions, whether independently or through co-investing, leveraging DIG’s expansive network in the market. During 2018, the team screened many new SMEs that operate in financial services, IT, food and beverage, healthcare, education, and renewable energy. DIG also finalized the establishment of CIB’s fully owned venture capital firm CVentures.

On the divestiture side, DIG succeeded in fully exiting one of its portfolio investment companies operating in the electricity sector, achieving an IRR of c. 50%. DIG also partially exited two of the Bank’s investments and affiliates operating in the financial services and security services sectors.

On the portfolio acquisitions front, DIG acquired a minority stake in a financial services and investments company. Additionally, and in line with the Bank’s direction to support the government’s financial inclusion initiative, CIB partnered with strategic shareholders and established a greenfield investment in an agent banking services company.

2019 Forward-Looking Strategy

In 2019, DIG will continue expanding its portfolio by making quality equity investments that provide CIB with the opportunity to create synergies and strategic alliances, generating lucrative financial returns.

Strategic Relations Group

The Strategic Relations Group (SRG) is an institutional banking group dedicated to initiating, nurturing, and growing a banking relationship with strategic institutional depositors who are essential contributors to CIB’s stable funding base. The group’s primary goal is to offer a first-class banking experience while maintaining the delicate balance between mainstream commercial banking activities and the non-commercial needs of its clients.

SRG’s strategic clientele comprise more than 180 diplomatic missions, NGOs, educational entities, and distinguished international and local donor agencies. The team works tirelessly to facilitate its clients’ business operations and meet their banking requirements by creating innovative, tailored products and services:

  • Customized digital solutions
  • Collection of tuition and visa fees
  • Monitoring and reporting of deposits activities
  • Fund management and pension savings plans
  • Providing a settlement system between tourism companies and airlines
  • Dispatching mobile tellers upon customer request to act as a temporary small banking unit at the customer’s premises
  • Special offerings for staff loans

2019 Forward-Looking Strategy

  • The group aims to become one of CIB’s primary corporate lead generators, focusing on existing relationships while simultaneously capturing new-to-bank opportunities by leveraging a wider networking base.
  • It recently designed a tailor-made, short-term bridge finance facility for the education sector (including universities and schools) to eliminate cash flow gaps that develop during the year. This product is poised to become a major attraction for these institutions, helping expand our institutional depositor rate.

Enterprises and Governmental Relations

The Enterprises and Governmental Relations (EGR) Group manages the Bank’s relationship with customers falling under the umbrella of state-owned enterprises, government entities, and sovereign authorities. The EGR Group functions as a relationship manager under the Bank’s IB groups, catering to the needs of these strategic customers and growing CIB’s business with these sectors.

The team possesses a deep understanding of client operations that allows its members to act as clients’ advocates within the Bank while also providing continuous support and financial advice. EGR clients require higher flexibility and constant support in their transactions as well as financial and advisory assistance.

EGR Group’s mission is to become the market leader in the provision of banking services to government and public sector entities. The group works tirelessly to acquire new business in these areas, capitalizing on our highly experienced staff, strong customer base, healthy and diversified portfolio, and broad coverage of different sectors and industries.

2018 Highlights

2018 was another successful year as the EGR Group managed to attract EGP 5 billion in deposits, growing its balance sheet by 26% to EGP 24.3 billion in deposits.

2019 Forward-Looking Strategy

  • In 2019, the group plans to focus on government and public sector entities, which are expected to see increased cash flow due to the planned privatization of 23 public sector companies, the restructuring of others, and the establishment of a new sovereign wealth fund. We are also planning to attract cash-rich holding companies and their subsidiaries.
  • For the enterprise sector, the group is working on retaining existing customers as well as attracting new-to-bank companies in this sector.