1 BANK AUDI ANNUAL REPORT 2020 Contents Contents 01 OVERVIEW A. The Chairman’s Statement 6 • Payments, CD's &TD's 34 B. CEO, Managing Director's Statement 7 • Treasury Back Office achievements for 2020 34 C. Strategic Direction & Values of Bank Audi sae 8 • Centralized Account Opening 35 D. Overview of Bank Audi Group 9 • Capital Market Operations 35 E. Key Financial Highlights of Bank Audi sae 11 • Organization and Re-Engineering 35 F. Global & Regional Economy in 2020 10 Finance 35 G. The Egyptian Economy 12 Information Technology 35 • Business Technology Team 35 • IT Applications Unit 35 02 CORPORATE GOVERNANCE • Network and Security Infrastructure Enhancements Projects 35 • Application Development and Support 35 A. Board Members & Committees 16 • E-Channels & ATMs operation team 36 B. Governance 24 • Infrastructure System Administration and Support Team 36 Human Resources 36 BUSINESS, RISK, SUPPORT Marketing, Communications & Corporate Social Responsibility 36 03 • Marketing 36 & CONTROL PERFORMANCE • Communications 36 • Corporate Social Responsibility 36 A. Business Performance 28 Market Research 37 I. Corporate Banking & SMEs 28 Service Excellence 38 II. Retail Banking 28 II.Control Functions 38 III. Treasury & Capital Markets 29 • Legal 38 IV. Investments 30 V. Financial Institutions & Correspondent Banking 31 • Audit 39 • Programs & Multilateral Relations 31 • Compliance 39 • The main objectives of Bank Audi- Egypt's Financial 31 Institutions VI. Islamic Banking 31 VII. Global Transaction Services (GTS) 32 VIII. Governmental Entities & Public Sector Division 32 IX. The Branch Network 32 04 FINANCIAL STATEMENTS 42 B. Risk Performance I. Credit Risk 33 II. Market Risk 33 05 MANAGEMENT 110 III. Operational Risk Infosec" and Business continuity 33 management "BCM" 33 • The operational risk management framework "ORMF" 33 • The Information Security "InfoSec" 33 BRANCHES’ NETWORK & ATMS 116 • The Business Continuity Management "BCM" 33 06 iv. Retail Credit Risk 34 LOCATIONS BY GOVERNORATE C. Support & Control Performance 34 I. Support Functions 34 Operations 34 • Checks services, centralized cash, SI and Internal 34 Transfer 2 3 01 OVERVIEW 4 5 BANK AUDI ANNUAL REPORT 2020 BANK AUDI ANNUAL REPORT 2020 Overview B I CEO AND MANAGING DIRECTOR'S A | THE CHAIRMAN’S STATEMENT STATEMENT Thank you all very much. This has to be the key message pragmatism and compassion. At the same time, we have Despite 2020 being one of the most challenging years for added to our card activities and range of related services of our Annual Report covering the financial year of 2020. managed to produce highly credible financial results and Egypt’s economy and society, Bank Audi Egypt performed and apps, not least as these helped our customers during This report affords me the opportunity to state that phrase growth in activities and services during 2020 as seen in remarkably and again demonstrated resilience and com- the pandemic to make essential purchases whilst limiting not only in the context of the way our Bank, communi- these accounts and reports, and which further underpin mitment to our overarching Vision, Mission and Values. human interaction. At the same time, our branches con- ty and government rose to the challenge of the Covid-19 the sustainability of the Bank. The dedication of our team of management and staff to tinued to maintain welcomed contact and provide service pandemic but also for all the past efforts and contributions serving and supporting our customers and the reciprocal quality compassionately to our non-digital customers. From a personal perspective, I am rightly proud that we on which the platform has been built for a brighter future. response by all our stakeholders was highly credible. have been able to successfully pass the baton of leadership Our technology investment and innovation certainly ena- Looking back at our journey as part of the Bank Audi to a new generation of Executives and Managers, many The Egyptian Government managed to balance macroe- bled the Bank to assist the Egyptian community at a time group, I must remark on the significant and successful of whom have progressed through the Bank since its early conomic stability alongside providing responsible and pro- of great need but it has also positioned us at the forefront growth achieved across all aspects of our banking activi- years. They understand and apply the values and key char- active support to our people, communities and businesses of future development and delivery of financial services. ties. Therefore, my thanks are deeply deserved and equally acteristics of our Bank, which have been safely embedded during the ongoing Covid-19 pandemic. Their initial emer- Our participation in the Cairo ICT Exhibition in November shared among our shareholder representatives, executives, in readiness for its future. gency response package of EGP 100billion (representing 2020 reflected our belief in the importance of supporting management and staff. I would also be remiss in not men- some 1.7% of GDP) was used to augment health expend- the Egyptian Government and Central Bank’s plans to- Whilst the proposed change in the Bank’s share ownership tioning the personal contribution made since the outset of iture, scale up social protection and provide financial relief wards digital and technological transformation in all sec- and the uncertainties of the outcomes from the pandemic our Bank by Mr. Samir Hanna, Chairman and Group CEO for individuals and businesses. At the same time, $15 bil- tors of the economy and society. In this regard, the Bank will inevitably make 2021 a year of transition, I have no and until August 2020 a Bank Audi Egypt Board Director. lion of external financing was secured. received the award from Trusted Advisors for the Best Da- His leadership support, guidance and advice has been in- doubt that the Bank is well placed for the future. With ta-Centric Transformation & Managing Customer Journey valuable not least in allowing the local management team foresight, detailed planning, wise investment and hard Working in conjunction with the Central Bank of Egypt, in the MENA Region. This further aligns with our interest to forge ahead to establish ourselves amongst the most work, we have built a technology platform that will form we played our civil role by implementing financial forbear- to build on Egypt’s young, technologically skilled and ed- professionally respected Egyptian private sector banks. a critical part of our banking activities going forward. This ance measures relating to customer fees and charges. We ucated workforce in terms of employment opportunities platform has been carefully aligned and balanced with a also prepared for changes that might emanate from the and supporting diversified and sustainable businesses and The balanced foundations laid over these years have ena- growth in our physical branch network, enabling us to ex- new Banking and Central Bank Act. In line with the Central participating in financing national infrastructure enhance- bled our Bank to show resilience both in previous periods tend the Bank’s reach whilst maintaining high service qual- Bank of Egypt’s recommendation on financial inclusion, we ment projects. of economic and social crisis and again during the outset ity to our affinity customers. created a new department with a strategy for the next 3 of this pandemic. In view of the heavy toll that the Egyp- years and started new related product development. We Ultimately, our performance, innovation, reputation and In conclusion, our Bank’s reciprocal partnership approach tian population and our country have had to endure, the also obtained an E-Com Digital Acquiring License as part social contribution reflects our people. I am most grate- and balanced commitment and support to all our stake- Bank and our staff have continued to perform their im- of our ongoing roll out of digital services. Furthermore, we ful to our Board members, management colleagues, staff, holders, makes my simple but key message so personally portant roles in helping customers and the community at donated EGP 20 million to the initiative of the Federation customers and all those working for our other stakeholders large. We have assisted in implementing the initiatives of humbling. So once again I repeat, thank you all very of Egyptian Banks in order to confront the repercussions of who have become even closer partners and have helped us the Egyptian Government and Central Bank of Egypt with much. the pandemic. steer a safe and steady course in 2020 and beyond through these uncharted and uncertain times. From a business and financial perspective in 2020, we achieved further steady growth in both customer loans and deposits. Our total assets and equity reached nearly EGP 86 billion and EGP 8 billion respectively. Our net profit be- fore taxes of EGP 2.1billion matched 2019’s excellent per- formance. Our customer base, particularly in retail banking, Hatem Sadek continued to expand and we launched Royale alongside Mohamed Bedeir Chairman of the Board of Directors our Premiere and Select affinity customer segments. We Managing Director 6 7 BANK AUDI ANNUAL REPORT 2020 BANK AUDI ANNUAL REPORT 2020 C | STRATEGIC DIRECTION & VALUES OF BANK AUDI SAE D | OVERVIEW OF BANK AUDI GROUP VISION Bank Audi Group is a leading Lebanese banking group with footprints in Europe, the Mena region and turkey. To be the Egyptian partner of choice to Bank with, Work for and Invest in. The Bank offers universal financial products and services including Corporate, Commercial, Retail and Personal, and Private Banking services in addition to capital market activities and factoring. MISSION As at end-September 2020, based on unaudited financial statements, Bank Audi’s consolidated assets reached USD 35.2 billion1, principally driven by private customers’ deposits of USD 26.5 billion, with shareholders’ equity reaching USD 3.0 To deliver a superior level of service and provide easy access to innovative and tailored products and services for tar- billion.