Driving Digital Change ANNUAL REPORT 2019 01 02 CIB Introduction Strategic Direction TABLE OF 06 | At a Glance 38 | Strategy 08 | Key Financial Highlights 42 | A Note From Our Chairman 10 | Leadership 46 | A Note from Our CEO 24 | What We Do 50 | BOD’s Report 28 | CIB’s Stock 30 | Our History and Timeline CONTENTS 35 | Awards 03 04 Our Businesess Support Functions 68 | Institutional Banking 94 | Operations and IT 75 | Retail Banking 100 | Human Resources 82 | Digital Banking 104 | Marketing and Corporate Communications 05 06 Our Controls Evironmental, Social, and Governance (ESG) 112 | Risk Group 124 | Environmental Sustainability 118 | Compliance Group 128 | Social Development 121 | Internal Audit 140 | Corporate Governance 07 08 Subsidiaries and Associates 156 | Financial Statements 148 | CVentures 150 | Falcon Group 152 | Fawry Plus Hi, I’m Zaki the Bot, CIB’s virtual assistant. I’m one of the first Digital Banking of my kind in the Egyptian banking industry, using advanced artificial intelligence to assist customers, gather key data, and Reimagined help CIB revolutionize digital banking as it stands today. Conversations with Zaki in this annual report are not an accurate representation of the chat bot’s current functionality. This report is the first CIB annual report that is being disseminated solely through digital channels. Closer to 100 trees and 26.9 KgCO2e in GHG emissions were saved by not printing this report. Annual Report 2019 3 Zaki the Bot CIB Your Personal Virtual Assistant My name is Zaki and I am CIB’s Introduction virtual digital assistant designed to help you understand more about CIB. CIB is Egypt’s leading private-sector bank, offering a full range of financial products and services to enterprises of What can you do for me, Zaki? all sizes, institutions, households, and individuals. I can tell you about your accounts, help you make a transfer, show you the nearest ATMs, and answer whatever banking questions you have. And I’m always learning. Try me. What kind of accounts do you offer? CIB offers a variety of current and savings accounts. Which are you interested in? Current accounts. Here are CIB’s current account offerings. Scroll through and tap the one you’re interested in to get started! 3 key subsidiaries Classic Easy and affiliates Annual Report 2019 5 CIB Introduction At a Key Facts Glance +1.4 MN Ranked #1 bank among Clients all Egyptian private-sector banks in terms of revenues, net worth, total assets, and deposits. 207 6,900 Branches Employees CIB is Egypt’s leading private-sector bank. It is an The Bank has one fully owned subsidiary, CVentures, award-winning institution dedicated to creating out- and two associates, Falcon Group and Fawry Plus, in standing stakeholder value and providing superior which it owns stakes of 32.5% and 23.5%, respectively. customer service solutions to a broad range of clients. CVentures was established in 2018 and is Egypt’s The Bank furnishes clients with innovative solutions first corporate venture capital firm owned by a bank that satisfy their banking needs and facilitate their focused primarily on investing in category-defining financial lives. Its dynamic business model and com- companies in the field of financial services. Falcon mitment to fully integrating superior technology Group is a provider of security services, cash-in- into its products and services allow it to maintain its transit, property management, and general and market leadership and to offer staff an engaging work technical services. Fawry Plus offers agent banking EGP EGP environment, while generating mounting value. financial services, including limited KYC services, BN BN the collection of documents needed for mobile wallet 122 11.8 The Bank serves an expansive network of retail registration, prepaid and credit card issuance, loan customers, high-net-worth (HNW) individuals, and issuance, and account opening, while also taking Market Cap Net Profit enterprises and institutions that drive the Egyp- care of repaying loan and credit card dues and other tian economy. With a well-established network of payments such as utility, telecom, taxes, and fines. 207 branches and banking units and a workforce comprising 6,900 employees, CIB provides tailored, For several years, CIB has also enjoyed the titles of EGP client-centric services to clients in the corporate, most profitable bank operating in Egypt and the 23BN commercial, retail, wealth, and small- and medium- bank of choice for over 500 of Egypt’s largest corpora- size enterprise (SME) spheres, while working to de- tions. It has been awarded numerous accolades from liver the most streamlined, efficient banking service prestigious bodies throughout the year, including the Revenues offering in the Egyptian market. World’s Best Emerging Markets Bank at the Global Finance 2018 special awards ceremony, one year after CIB also operates two representative offices, one in it was awarded the same title from Euromoney. Dubai and the other in Addis Ababa, as channels driving business through these key markets while capitalizing on the synergies inherent in the Bank’s business model as a means of driving value for clients. 6 Annual Report 2019 Annual Report 2019 7 CIB Introduction Key Financial Highlights FY19 FY18 FY 17 FY 16 FY 15 FY19 FY18 FY 17 FY 16 FY 15 FY19 FY18 FY 17 FY 16 FY 15 FY 14 FY 13 FY 12 FY 11 FY 10 FY 09 FY19 FY18 FY 17 FY 16 FY 15 FY 14 FY 13 FY 12 FY 11 FY 10 FY 09 Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Financial Measures Common Share Information Per Share Cost : Income 21.59% 20.33% 20.79% 21.36% 19.61% 21.58% 20.35% 20.38% 21.26% 19.69% 22.91% 22.89% 28.01% 35.26% 33.11% 32.31% Earning Per Share (EPS) * 7.33 7.26 5.76 4.56 3.58 3.55 2.67 2.42 2.43 3.00 2.63 Return on Average 29.49% 33.14% 32.45% 34.24% 33.46% 29.55% 33.13% 32.71% 34.03% 32.80% 30.25% 24.77% 24.18% 22.23% 30.46% 31.18% Dividends (DPS) ** 1.25 1.00 1.00 0.50 0.75 1.20 1.00 1.25 1.00 1.00 1.50 Common Equity (ROAE)***** Book Value Net Interest Margin (NII/ (BV/No of Share) 35.26 29.26 24.43 18.44 14.39 16.31 13.46 18.94 15.03 14.59 23.75 average interest earning 6.48% 6.43% 4.97% 5.47% 5.74% 5.41% 5.36% 4.74% 3.71% 3.62% 3.81% Share Price (EGP) *** assets) Return on Average Assets 3.26% 3.03% 2.69% 2.71% 2.95% 3.26% 3.02% 2.72% 2.70% 2.90% 2.87% 2.54% 2.47% 2.20% 3.11% 2.97% High 83.5 96.5 88.8 73.6 47.4 51.3 45.4 39.8 47.4 79.49 59.7 (ROAA) Regular Workforce 6,900 6,759 6,551 6,714 6,332 6,900 6,759 6,551 6,422 5,983 5,403 5,193 4,867 4,517 4,360 4,162 Low 82.7 67.0 71.1 30.8 28.9 32.6 27.4 21.1 18.5 33.75 29.5 Headcount Closing 83.0 74.1 77.4 76.4 38.1 49.2 32.6 34.6 18.7 47.4 54.68 Balance Sheet and Off Balance Sheet Information (EGP millions) Shares Outstanding 1,469.1 1,166.8 1,161.8 1,153.9 1,147.1 908.2 900.2 597.2 593.5 590.1 292.5 Sheet Information (millions) (EGP millions) Market Capitalization 121,963 86,439 89,865 88,155 43,692 44,673 29,330 20,646 11,098 27,973 15,994 Cash Resources and (EGP millions) Securities 63,270 69,068 63,684 77,523 34,808 63,226 69,030 63,673 73,035 34,097 19,430 16,646 16,764 19,821 16,854 16,125 (Non. Governmental) Value Measures Net Loans and Acceptances 119,946 106,377 88,428 85,384 56,836 119,946 106,377 88,428 86,152 57,211 49,398 41,970 41,877 41,065 35,175 27,443 Price to Earnings Multiple 11.3 10.2 13.4 16.8 10.6 13.9 12.2 14.3 7.7 15.8 20.8 (P/E) Assets 386,742 342,461 294,782 267,544 179,500 386,697 342,423 294,771 263,852 179,193 143,647 113,752 94,405 85,628 75,093 64,063 Dividend Yield (based on 1.51% 1.35% 1.29% 0.65% 1.97% 2.44% 3.07% 3.62% 5.35% 2.11% 2.74% closing share price) Deposits 304,448 285,297 250,723 231,741 155,234 304,484 285,340 250,767 231,965 155,370 122,245 96,940 78,835 71,574 63,480 54,843 Dividend Payout Ratio 15.6% 15.3% 15.4% 9.7% 18.5% 29.9% 34.4% 33.9% 33.9% 27.6% 24.6% Common Shareholders Equity 51,880 34,228 28,439 21,374 16,535 51,800 34,147 28,384 21,276 16,512 14,816 12,115 11,311 8,921 8,609 6,946 Market Value to Book 2.35 2.53 3.17 4.14 2.65 3.02 2.42 1.83 1.24 3.25 2.30 Value Ratio Average Assets 364,602 318,622 281,163 223,522 161,657 364,560 318,597 279,312 221,523 161,420 128,700 104,079 90,017 80,361 69,578 60,595 Average Interest Financial Results (EGP millions) Earning Assets 328,296 290,869 257,931 203,053 146,033 328,296 290,869 258,315 203,625 145,835 117,133 94,605 79,834 70,549 61,624 53,431 Average Common 43,054 31,334 24,907 18,955 15,645 42,973 31,265 24,830 18,894 15,664 13,465 11,713 10,116 8,765 7,777 6,288 Net Operating Income**** 23,019 20,379 14,890 11,315 10,189 23,018 20,351 15,192 11,370 10,165 7,717 6,206 5,108 3,837 3,727 3,173 Shareholders Equity Provision for Credit Losses Balance Sheet Quality Measures - Specific 1,435 3,076 1,742 893 1,682 1,435 3,076 1,742 893 1,682 589 916 610 321 6 9 Provision for Credit Losses Equity to Risk-Weighted 24.32% 16.93% 15.59% 13.34% 15.76% 24.28% 16.89% 15.56% 13.28% 15.74% 15.84% 15.50% 15.69% 14.49% 15.85% 15.34% - General Assets***** Risk-Weighted Assets Total Provisions 1,435 3,076 1,742 893 1,682 1,435 3,076 1,742 893 1,682 589 916 610 321 6 9 (EGP billions) 199 186 169 150 96 199 186 169 150 96 84 70 65 55 49 41 Non Interest Expense 5,049 4,224 3,119 2,433 2,025 5,045 4,223 3,119 2,433 2,028 1,705 1,450 1,445 1,337 1,188 1,041 Tier 1 Capital Ratio****** 23.59% 16.16% 14.93% 12.90% 15.01% 23.59% 16.16% 14.93% 12.90% 15.01% 15.70% 15.23% 14.33% 14.15% 15.66% 15.28% Adjusted Capital Adequacy Net Profits 11,801 9,582 7,516 6,009 4,729