2019 ANNUAL REPORT EGYPT 1 BANK AUDI ANNUAL REPORT 2019 BANK AUDI ANNUAL REPORT 2019 BANK AUDI “S.A.E.” INDEPENDENT AUDITOR’S REPORT AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 December 2019 ANNUAL REPORT 2019 BANK AUDI “S.A.E.” BANK AUDI “S.A.E.” Annual Report 2019 01 OVERVIEW 01 OVERVIEWA. The Chairman’s Statement.............................................................. 8 B. CEO,A. The Managing Chairman’s Director's Statement............................................................... Statement............................................. 10 6 C. B.Strategic Bank Audi Direction sae Strategic & Values Direction of Bank & AudiValues................................... sae.............................. 1210 D. C.Overview Bank Audi of Group...............................................................................Bank Audi Group.......................................................... 1310 E. KeyD. Bank Financial Audi sae highlights Key Financial of Bank Highlights......................................... Audi sae.................................. 1411 F. GlobalE. The Egyptian & Regional Economy Economy in 2019....................................................... in 2019............................................ 1412 G. The Egyptian Economy in 2019.................................................... 16 022 CORPORATE GOVERNANCE CORPORATEA. Board of Directors............................................................................. GOVERNANCE 16 02 B. Governance........................................................................................ A. Board of Directors............................................................................. 20 03 BUSINESS,B. Governance........................................................................................ RISK, SUPPORT 27 & CONTROLBUSINESS, PERFORMANCE RISK, SUPPORT 03 A. Business Performance:.................................................................................. 26 &I. CONTROLCorporate Banking & SMEs...............................................................PERFORMANCE 26 II. Retail Banking.................................................................................... 26 A. Business Performance.................................................................................. 32 III. Treasury............................................................................................ 26 I. Corporate Banking & SMEs........................................................... 32 IV. Capital Markets & Investment ........................................................ 27 II. Retail Banking.................................................................................... 32 V. Financial Institutions & Correspondent Banking............................27 III. Treasury............................................................................................... 33 VI. Islamic Banking................................................................................ 27 IV. Capital Markets & Investments................................................... 33 VII. Global Transaction Services (GTS) ............................................... 27 VIII. Financial Institutions & Correspondent Banking............... 34 VIII. Branches ........................................................................................ 28 Contents V. Islamic Banking................................................................................. 35 B. Risk Performance .......................................................................................... VI. Global Transaction Services (GTS)............................................28 35 Risk Performance & Capital Management ......................................... VIII. Branches ..........................................................................................28 35 C. ControlB. Risk & SupportPerformance Performance ........................................................................................... ................................................................... 30 37 I. SupportI. Credit Functions Risk............................................................................................. ............................................................................. 30 37 II. ControlII. Market Functions.............................................................................. Risk..........................................................................................33 37 III. Operational Risk................................................................................ 37 04 FINANCIALC. Control & Support STATEMENTS Performance......................................................................................................38 37 I. Support Functions.............................................................................. 37 II. Control Functions.............................................................................. 38 0405 OURFINANCIAL PEOPLE ............................................................................... STATEMENTS ......................................104 46 05 BRANCHES’OUR PEOPLE NETWORK............................................................................... & ATMS 112 06 LOCATIONS BY GOVERNORATE .............110 06 BRANCHES’ NETWORK & ATMS LOCATIONS BY GOVERNORATE ............. 116 4 5 01 OVERVIEW 6 7 BANK AUDI ANNUAL REPORT 2019 BANK AUDI ANNUAL REPORT 2019 1. Overview A | The Chairman’s Statement It has been most challenging for me to scribe an appropriate statement about Bank Audi Egypt in 2019 without referenc- The Bank’s consistent strategy and aligned culture has already created benefits. The pandemic has hastened the growing ing the current global, regional and local situation in 2020. The impressive achievements of our Bank have to be placed in use and importance of digital technology in helping to reach and serve the ever increasing requirements and range of that context and in many ways are dwarfed by the magnitude and importance of the human turmoil and tragedy caused banking customers in Egypt. Our forefront position and ongoing commitment to this transformation has become one of by an unprecedented and as yet unresolved global pandemic affecting all aspects of our current and foreseeable lives. the bedrocks of sustaining our development alongside sound governance practices and focusing on building lasting and reciprocal relationships with our customers. Ultimately our Bank is about people, from those who work within it to serve those who partner with us as customers, shareholders, suppliers, regulators or other interested parties such as the Egyptian community at large. I am humbled Our financial performance in 2019 was exemplary across key measurement indicators of tangible and intangible success. by the fact that despite everything beyond our control and remit our Bank has managed to sustain more than ever its I am delighted to report that so far in 2020 we have maintained that performnce along with continuing our branch consciously positive role and contributions to all stakeholders. expansion and introduction of new products. Our drive and efforts have limited the inevitable financial downsides and placed us in an even stronger position to sustain our development and contribution to the Bank’s stakeholders and the I must thank all those whose dedication, spirit and innovation continues to drive us and Egypt forward during this great Egyptian community at large. Despite COVID 19, glimmers of light exist and the Egyptian economy is still forecast to upheaval and uncertainty. We all admire their fortitude, leadership and management skills and with the unstinting support show positive growth in fiscal 2020 and 2021. Therefore, I remain hopeful that Bank Audi and the Egyptian community and stimulation initiatives of both the Central Bank of Egypt and our Government we have been able to steer a course that we serve, through the combined actions of working together as one great family, will prove ready, able and willing through these unchartered and disturbed waters. The Bank is also grateful to our shareholder representatives who have to reap the benefits of the opportunities that will eventually emerge from the current traumas that we face. I thank you continued to support and encourage all our endeavours despite the additional tragic and unsettling events in Lebanon. all most sincerely for your continued endeavours. Mr. Hatem Sadek Non-Executive Chairman Bank Audi Egypt 8 9 BANK AUDI ANNUAL REPORT 2019 BANK AUDI ANNUAL REPORT 2019 B | CEO and Managing Director Statement Dear Shareholders, Customers and Colleagues, The year 2019 marked another round of success and achievements for Bank Audi –Egypt. It was a remarkable year with On the Corporate Social Responsibility level, Bank Audi-Egypt has been fostering a number of initiatives as to integrate its significant accomplishments on many fronts that indicated Bank’s sustainable growth. social, environmental and economic practices into its core banking operations. This aims at helping improving the society, and ensuring long-term value to all stakeholders (employees, customers, community, shareholders and third parties), and Our strategy aims at driving profitable growth by creating value to all stakeholders while providing best-in-class customer this comes in line with Egypt’s commitment to achieve the “Egypt’s Vision 2030”. experiences based on innovation and operational excellence. As such, the Bank was recognized as “Best Data-Centric Transformation & Managing