Macroeconomic Environment: A year of Adjustment

While the world has been grappling with a pandemic for a year and a half, causing global ambiguity, economies have been forced to adopt a reliance-based approach to prevent, avoid, withstand, and absorb the impacts of this rapidly changing situation. 2021 was a year of adjustment to the new realities brought about by COVID-19.

Fortunately, Egypt’s macroeconomic environment has remained resilient in the aftermath of the pandemic, although long-standing issues remain. Macroeconomic reforms have aided the economy’s stabilization in recent years, allowing the country to mitigate the health and social impacts of the pandemic, while safeguarding economic stability and investor confidence.

The repercussions of the pandemic have, neverthe-less, challenged this recent progress, negatively impacting consumption and the main contributors to Egypt’s foreign currency inflows, namely tourism, the Suez Canal, and exports. However, with easing restrictions on cross-border travel and the return of direct flights into the country, along with the mass rollout of vaccination campaigns, Egypt’s tourism sector is gradually recovering.

Despite the impact of COVID-19 on tourism, Suez Canal revenues, and exports, the country’s international reserves remained more than adequate at USD 40.935 billion as of the end of December 2021. Remittances have also helped offset the impact of the decline in tourism receipts on the current account, rising to USD 31.4 billion in this fiscal year vs. USD 27.76 billion as of the same period of the previous year. The stability of inflows over the past years is expected to continue. With the anticipated recovery of global trade, Suez Canal and export revenues are set to pick up accordingly.

In light of the above, and especially in these unprecedented global circumstances, Egypt’s government was keen to keep the country’s sovereign instruments attractive for foreign investors to maintain a high FCY balance. Egypt’s sovereign instruments have remained extremely attractive to foreign investors due to their high yields in light of the exchange rate stability. The country’s real rates continue to be the highest in the world, at 3.8% according to Bloomberg, which tracks rates offered by 50 countries, followed by Vietnam and Turkey at 2.8%.

With Egypt’s inclusion in the JP Morgan GBI-EM bond index starting January 2022, the country’s sovereigns will gain more access to foreign investors, instigating further increases in foreign currency inflows. Egyptian bonds are expected to constitute c.1.8% of the index weight, with 14 categories valued at USD 26 billion, and USD 1 billion in new investments expected to be injected in the Egyptian government market. Additionally, as part of its continued support of the Egyptian economy, the International Monetary Fund (IMF) has provided Egypt with its last tranche worth USD 1.7 billion of the USD 5.4 billion loan as of June 2021. The program aimed to help Egypt cope with the challenges posed by the COVID-19 pandemic by providing balance of payments and budget support. The program also helped authorities safeguard the macroeconomic stability achieved over the previous three years, support health and social spending to protect vulnerable groups, and advance a set of key structural reforms to put Egypt on a strong footing for sustained recovery with higher and more inclusive growth and job creation over the medium term.

The successful correlation between fiscal and monetary decisions put the country’s economy and the banking system in an acceptable state. The Egyptian government curbed inflation and countered the negative impact on the foreign currency inflows, implementing a series of preventive actions to help boost economic activity. These efforts started with cutting policy rates by 400 basis points in 2020, and there was no need to change the policy rate throughout 2021. This helped curb inflation, which reached 5.9% as of December 2021, in line with the CBE’s inflation target of 5–9%.

Furthermore, Egypt is among the few emerging markets that maintained positive GDP growth over 2019–2020 and 2020–2021. With the gradual increase in production capacity and the resumption of economic activity, Egypt continued its GDP growth trend to record 3.3% in FY 20202021 ending in June, which more than offset the combined negative effect of gross domestic investments and net exports.

Economic growth is projected to accelerate further in 2022, mainly through stronger private consumption, exports, and investments. However, it is worth noting that some risks to the outlook stemming from global uncertainty remain, especially with the yet to be discovered potential impact of new strains of COVID-19, such as the Delta variant and Omicron, which could hinder recovery.

As previously mentioned, Egypt’s banking sector had a strong foundation moving into the pandemic. Due to its ample liquidity and healthy capitalization prior to the outbreak, alongside CBE support measures, the sector was well-equipped to weather the ensuing economic difficulties and provide stability to the economy. Annual total deposits growth reached 19.7% y-o-y in June 2021, 92% of which came from the private sector. The annual growth rate of total lending by the banking sector increased by 17.7% in June 2021, compared to 7.6% in the same period of 2020.

The CBE undertook several significant measures in an attempt to increase credit to SMEs, extend financial services to the unbanked, and promote digital financial solutions. Among the most notable SME support measures that came in 2021, when banks were instructed to increase micro, small, and medium enterprises’ share of their loan portfolios to 25%, by the end of 2022. Many efforts to improve financial inclusion have been aided by digitalization.

Executive regulations have yet to be issued; however, 2021 saw some operating banks apply to acquire the Digital Bank license in Egypt.

Since its onset, the COVID-19 pandemic caused significant policy and regulatory changes and accelerated digitalization trends that were already underway prior to the crisis. This has opened up new avenues for digital transformation and financial inclusion. Many efforts to improve financial inclusion have been aided by digitalization.

Overall, Egypt’s macroeconomic environment has remained relatively resilient in the face of the ever-changing circumstances instigated by the pandemic. The government and the CBE’S measures have successfully mitigated the impact, ensuring the banking sector came out in solid condition. Furthermore, the accelerated path to digitalization has bolstered financial inclusion efforts. This has reflected on CIB’s performance and developments in 2021. Driven by the pandemic, CIB expedited its digital transformation process, with a focus on data analytics, digital channels, and behavioral segmentation. The Bank made significant progress on a number of fronts, expanding both its online customer base and geographic reach. It also continued to further its financial inclusion efforts, steadfastly working on the implementation of its five-year financial inclusion strategy. On the ESG front, CIB continued to make marked impact, particularly on gender equity. The Bank’s financial position was further solidified with record bottom line profits, despite the challenges witnessed.

Strategic Pillars

Despite unprecedented global challenges, and in line with the Bank’s vision to be at the forefront of change, the shift in market dynamics accelerated by the pandemic has necessitated the recalibration of CIB’s strategy pillars and execution tactics. The Bank expedited its digital transformation efforts and adopted an agile operating model to continue to create both financial and non-financial value for all its stakeholders.

Core Business

CIB’s first strategic pillar focuses on strengthening its core business by enhancing operational efficiency and expanding its local reach to serve current and potential customers, as well as its business lines, while simultaneously tapping into financial inclusion opportunities. The focus has been and continues to be on data analytics, digital channels, and behavioral segmentation to create unique value propositions with individual needs in mind. This is achievable through investing in digital channels and innovative solutions to enhance customer experience and lower transactional costs.

Digital Transformation

Accelerating the Bank’s digital transformation journey and changing the way we do business was crucial to overcoming the effects of the pandemic. CIB remains committed to achieving its set strategy by directing more investments into upgrading its infrastructure, as well as digitizing and automating its products and services.

2021 witnessed solid progress in the Bank of the Future (BOTF) strategic program that aims to position CIB as the digital bank to trust. The program’s objective is to enrich service offerings in alignment with customers’ needs and add a new pillar, digital sales, that responds proactively to the traffic offloading that happens in branches. The impact of the first phase of BOTF remains on the rise, especially on retail individuals’ external and internal fund transfer migration rates, the online banking penetration rate, cost savings, and transaction volumes and value.

During the year, CIB’s online customer base reached one million users, with an activity rate of 66% as of December 2021. Online Banking subscribers increased 30% y-o-y. Internet Banking transactions grew by 22% y-o-y in volume, reaching 2.2 million, and 46% y-o-y in value, reaching EGP 58.1 billion. Meanwhile, mobile banking transactions were up 107% y-o-y, reaching 7.3 million transactions worth EGP 136.3 billion—a 159% y-o-y hike.

CIB Smart Wallet transactions grew 43% y-o-y to 10.7 million, while the transaction value surged 160% y-o-y to EGP 7.2 billion in October 2021. Smart Wallet’s customer base grew by 19% to one million as of December 2021 and maintained an activity rate of 18% (90 days). This was achieved by diversifying and enhancing the Bank’s sales channels and opening new ones to boost the Smart Wallet acquisition.

In an attempt to expand its geographical reach, CIB’s ATM network grew by 15% y-o-y to 1,284 ATMs, making it the largest ATM network among private banks. ATMs handled more than 71.7 million transactions with a value of EGP 124.6 billion, increasing y-o-y by 17% and 30%, respectively.

Zaki the bot, which was launched in December 2019, conducted over 482 thousand interactions in 2021, recording a 16% y-o-y growth on both the public website and Facebook Messenger, offloading the social media team by over 61%. The Bank changed the IVR top level menu to enforce mandatory customer identification before reaching an agent, resulting in an IVR resolve rate of 56% in 2021 vs. 49% in 2020.

CIB maintained its leading position in the Egyptian market in governmental e-payment transactions over the corporate payment services (CPS) platform during the year. CPS transactions increased by 104% y-o-y in volume, reaching 120,000, and 54% y-o-y in value, reaching EGP 23.4 billion.

During the year, the CIB SCF model won the Middle East and Africa Innovation Awards 2021 for the best supplier financing initiative and best financial supply chain initiative. The Bank officially launched the electronic supply chain finance (e-SCF) module for CIB Business Online and grew the SCF portfolio (loans booking) 256% y-o-y to EGP 245 million.

Additionally, in 2021, CIB Custody was ranked 1st in the Egyptian market in the number of securitization SPVs launched in 2021, with a total of 11 SPVs amounting to EGP 10.3 billion.

In light of the impact of the pandemic, the digital banking governance division continued to play a vital role in governing, managing, and coordinating different regulations issued by the regulator across GTB and digital banking channels.

Financial Inclusion and SMEs

In accordance with the national direction to promote financial inclusion, the Bank continuously works to develop its digital capabilities to offer tailored products and services through the appropriate distribution channels. CIB is advancing its five-year financial inclusion strategy to provide various segments of society easier access to financial services by harnessing its digital acumen. With more focus on understanding industry sub-segments and critical success factors for SMEs within those segments, advanced monitoring techniques, and an early warning independent function, CIB has gradually and consistently allocated unique strategic thinking and resources to grow its SME loan exposure and meet the CBE mandate of 25%.

Following Egypt’s efforts to encourage microbusinesses and SMEs, given their key role in boosting Egypt’s economic growth, CIB aims to position itself as an SME banking partner by leveraging on data analytics, behavioral segmentation, and its digital channels to create unique value propositions and expand its outreach. The Bank’s SME strategy also entails transforming the IT infrastructure and portfolio monitoring tools, with greater emphasis on process automation, from onboarding to credit decision-making.

CIB’s projected customer base and number of processed transactions growth will be more reliant on investments in digital channels and innovative solutions to enhance customer experience and lower transactional costs. To minimize operational costs and efficiently serve low-income segments, product offerings and customer interactions will be conducted through alternative channels (i.e. CIB’s e-wallet, digital platforms, and ATMs network). This will allow the Bank to expand its reach across Egypt, sustainably onboard previously unbanked individuals, and source viable new business opportunities. The distribution and acquisition strategy will be based on further analyzing customer demo-graphics to identify appropriate locations, awareness campaigns, and service offerings.

In 2021, CIB and its subsidiary CVentures worked together to identify and assess several possible fintech partnerships to provide tailored solutions that meet the needs of low-income customers. Such partnerships will enable the Bank to leverage data to facilitate the customers’ journey and make use of predictive analytics to segment clients and offer even more targeted products and services.

CIB also assisted in the national Hayah Karima initiative in 2021, which saw the Bank collaborate with the CBE, Ministry of Planning, World Food Program, CIB Foundation, and other stakeholders. The year also saw CIB facilitate numerous financial inclusion awareness campaigns, with over 50,000 new customer wallets and 10,000 accounts opened. Additionally, the Bank organized a summer internship program centered on financial inclusion, with over 10,000 students enrolled.

Geographical Expansion

Aiming to become a regional financial services provider and diversify its operations, balance sheet structure, and sources of income, CIB continues to view Sub-Saharan Africa as a key market opportunity for its cross-border expansion. The region is recognized for its geographical location, historic and cultural ties, and macroeconomic potential, boasting some of the fastest growing economies. CIB is particularly focused on East Africa, aiming to position itself as a business hub for Egypt and East Africa, with a focus on both corporates and SMEs.

CIB’s African expansion plan will capitalize on its investment in digital platforms, allowing for faster penetration and easier setup with minimal effort and negligible operational costs. CIB will continue to assess potential markets and suitable entry points for each market, while considering an asset light strategy that will complement its Africa expansion aspirations.

CIB’s first step on its journey to expand into Africa took place in 2020 with the acquisition of Mayfair CIB Bank (MCIB). MCIB broke even in 2021 and recorded Profit After Tax (PAT) of KES 36.57 million as at 30 September, compared to a loss of KES 379.27 million as at end of 2020 and beating the previously projected PAT figure of KES 11.54 million for the same period. Trade finance income surged by 300% compared to year-end 2020 from KES 5.60 million to KES 19.78 million, in line with the bank’s strategy to focus on trade finance activity.

Sustainable Banking

CIB’s sustainability strategy reflects its business approach of balancing the strategic goal of increasing profitability with serving broader socio-economic and environmental interests. CIB’s sustainability approach considers the United Nations Sustainable Development Goals (UN SDGs) and Egypt’s Vision 2030. The Bank is also committed to global Environmental, Social, and Governance (ESG) frameworks, such as the UNEP-FI Principles for Responsible Banking, UN Principles for Responsible Investment, UN Global Compact, the Task Force for Climate Related Disclosures, and the Net-Zero Banking Alliance.

CIB has been a forerunner in establishing a sound ESG structure; 2021 witnessed a new milestone in the Bank’s internal structure with the introduction of ESG working streams responsible for supporting the implementation of the sustainability strategy and system across the Bank. The working streams are governed by a steering committee chaired by the Chief Sustainability Officer (CSO). In efforts to combat climate change and support its clients’ business models to transform toward a low-carbon future, CIB issued Egypt’s first corporate Green Bond, in line with the Bank’s approach of making sustainability an integral part of its strategy and client offering.

The impact of CIB’s commitment to sustainability is reflected in its inclusion on national and international rankings, namely the Egyptian Stock Exchange Sustainability Index, FTSE4Good Index, and Carbon Disclosure Project (CDP). In recognition of the Bank’s gender equity performance in 2021, CIB was awarded the Egyptian Gender Equity Seal guided by the World Bank Gender Equity Model (GEM), and it was included in the Bloomberg Gender Equality Index.

Our Most Valuable Asset

Human capital development continues to play a vital role in CIB’s success. The Bank is committed to providing employees with a safe and secure working environment to enhance their level of satisfaction, engagement, loyalty, and commitment. CIB will continue to focus on linking competencies to performance management at all levels to support employee development plans and connect them to more personalized training needs. This year, CIB was named one of the world’s best employers in the Middle East by Forbes, valuing success, integrity, innovation, hard work, and diversity.

By the end of 2021, CIB’s total workforce stood at 7,307, 30% of which were female employees. As part of its continued efforts to encourage career mobility and progression within CIB, the Bank hired 1,030 new employees, encouraged the internal mobility of 1,422 employees, and promoted 559 others. Given the social distancing measures that were forced since the outbreak of the pandemic, CIB continued to carry out HR activities and participate in virtual employment fairs in lieu of sending recruiters to campuses, given they are a pivotal part of its headhunting process. In 2021, CIB participated in seven virtual employment fairs across different universities and local events, as well as four virtual sessions held for 400 students for the Tawarny initiative, which helps university students practice mock HR interviews and provides them with tips to enter the workforce.

HR continued to play its enabling role to enhance employees’ competencies by conducting more than 200,000 virtual training hours for 5,685 employees, in addition to more than 108,000 digital training hours delivered to 6,944 employees. CIB continued to administer series of specialized learning tracks that meet business aspirations, including Control Functions, Information and Cybersecurity, Small and Medium Enterprises Academy, and International Certifications.

In line with the Bank’s strategy to expand in Africa and after a thorough selection process, 19 African delegates from Uganda and Kenya graduated from the newly-established East Africa Analyst Program. Introduced in 2020, the program spanned nine months, seven of which were conducted virtually due to the pandemic, with two months of in-office training in Egypt. Of the 19 delegates, nine were successfully hired at Mayfair CIB Bank.

To promote an ESG and sustainability-oriented culture across the Bank, HR tailored a dedicated training program to raise awareness about the importance of ESG and sustainability. It also integrated a sustainability session in the exclusive Analyst Program and SME academy, as well as financial inclusion in the 2021 summer training program to highlight its importance. The program was delivered virtually to 10,986 undergraduates from 60 public and private universities across 24 governorates.

In efforts to promote organizational efficiency, HR continued to improve employee engagement and enablement levels and enhance its value proposition through various initiatives. The HR Help Desk continued to play a crucial role in the crisis management plan to ensure effective, accurate, and smooth communication with all employees during the global pandemic, in addition to playing a major role in coor-dinating CIB vaccination hubs.

In 2021, CIB launched the fifth Employee Effectiveness Survey (EES), which registered a 90% response rate compared to 92% in 2018. The engagement level, measured by employees’ loyalty, pride, and willingness to go the extra mile for the Bank, stood at 67% compared to 63% in 2018. Meanwhile, enablement, measured by the degree to which employees experience an environment that fosters engagement, reached 57% compared to 52% in 2018. Action plans for key focus areas were also developed to continue enhancing CIB’s effectiveness profile in the coming years.

As part of the CIB Employee Wellness Program, HR introduced a workplace counseling service to all employees to help them adjust to the new norms imposed by the pandemic. In the first quarter of 2021, the pilot phase of CIB Flex, a Flexible Work Arrangement (FWA) Program, was completed with a 97% satisfaction rate and c.10% enrollment of eligible employees. By year-end, a total of 46% of eligible functions and employees were enrolled.

In line with the Bank’s efforts to promote a diverse and inclusive workforce, CIB focused on various gender equality and women’s empowerment initiatives. Women’s empowerment was one of the main objectives of the newly introduced FWA program, which gives mothers with infant children the opportunity to work from home before applying for unpaid leave. In 2021, HR launched the second phase of the Helmik Yehmena initiative, a developmental online program targeting young female talents in Upper Egypt and the Delta. The team met more than 200 women, around 50 of whom underwent a selection process, with the top 12 selected to enter the program. The initiative aims to support young women to join the workforce in certain regions. CIB also held one round of the She is Back program during the year for more than 20 women to help them in their transition back to work from maternity leave. The Bank also launched the second iteration of the Women in Tech program in 2021. 12 candidates joined the program, and their rotation included the IT, Security and Resilience Management, and Digital Banking and Global Transaction Banking departments.

In alignment with CIB’s digital transformation strategy, HR automated several processes, including, but not limited to, introducing automated tools to calculate the employees’ annual taxes, access loan statements, and update all mandated and required employee personal data in order to strengthen the Know Your Employee (KYE) program. CIB also introduced a robust HR ticketing system to help streamline operations to manage the workforce and resolve issues quickly.

2021 Financial Position

CIB Performance

FY 2021 saw CIB’s consolidated net income increase by 30% y-o-y to EGP 13.27 billion. Standalone net income reached EGP 13.42 billion, up 30% from 2020. Standalone revenues grew 4% from the previous year to EGP 26.75 billion. Consolidated net interest income hit EGP 24.97 billion during the year, down 1% y-o-y. The Bank was able to maintain its operational efficiency in 2021, with the cost-to-income ratio standing at 22.8% compared to 20.7% in 2020. Return on average equity (ROAE) recorded 21.7% on a consolidated basis (post-profit appropriation) compared to 19.2% in 2020. Consolidated return on average assets (ROAA) stood at 2.88% (post-profit appropriation) in 2021, up from 2.53% in 2020. As of year-end 2021, CIB booked a net interest margin (NIM) of 5.67%, down from 6.75% a year earlier. The Bank’s gross loan portfolio stood at EGP 164.3 billion at year-end, growing 20% y-o-y from EGP 137.1 billion by 2020 year-end. This increase met the Bank’s strategic objectives in maintaining asset quality and enhancing profitability. CIB’s market share of total loans amounted to 5.20% in October 2021. The Bank pursued deposit growth in 2021, adding EGP 66.1 billion to its base, which grew to a total of EGP 407.2 billion over the year, an increase of 19% from 2020. CIB’s share of the deposits market reached 6.76% in October 2021. Loan-loss provision expense for 2021 amounted to EGP 1.68 billion, bringing the loan-loss provision balance to an unprecedented EGP 17.92 billion. This was not associated with any asset quality significant deterioration, as evident by a solid NPLs of the gross loan portfolio of 5.12%, up from 4.26% by 2020 year-end, cushioned by a solid 213% coverage ratio, but rather a result of the Bank’s conservative risk management strategy and management’s decision to cautiously frontload adequate provisions to mitigate any and all potential risks that might arise from such a fluid year. The Bank remains comfortably covered in terms of capital adequacy, with year-end capital adequacy ratio (CAR) recording 29.9% (post-profit appropriation)—well above the minimum regulatory requirement. This year’s financial results highlight CIB’s solid strategic direction, the Board’s invaluable oversight, management’s strong leadership capabilities, and concrete execution across the Bank’s channels, including brick and mortar operations, digital platforms, and the product and support functions.

Appropriation of Income for FY 2021

Following last year’s CBE’s instructions to withhold payment of cash distributions from 2020 profits and/or retained profits that are distributable to shareholders, the Board of Directors proposed the distribution of total cash dividends of EGP 2,684 million to shareholders this year, increasing its legal reserve by EGP 670.9 million to EGP 3.96 billion, and its general reserve by EGP 8.33 billion to EGP 36.59 billion. This reinforces the Bank’s solid financial position, as evidenced by its CAR of 29.9%. The proposed dividend distribution falls in line with the Bank’s strategy of maintaining a healthy capital structure to address more stringent regulations, mitigate associated risks, and support the Bank’s future growth plans.

Stock Performance and Equity Analysts’ Coverage

Throughout 2021, Egypt’s stock market faced major challenges, both on the macroeconomic side, impacted by COVID-19, and on the regulatory front, shedding light on COMI’s performance as well. COMI kicked off the year with an open price of EGP 44.3 and ended it at EGP 52.81 with 19% y-o-y change. As of August 2021, a stock dividend was distributed, on which one free share was dispersed for every three shares held by a shareholder. This led to an increase in the number of shares to 1,970,241,790 from 1,477,681,340. Capital eventually reached 19,702,417,900 up from 14,776,813,400.

The main highlight of 2021 is COMI’s price surpassing the dip that occurred in October 2020, reaching a peak of EGP 54.15 in November 2021 vs. EGP 50 in October 2020, a c.8% increase. In 2021, CIB’s price reached a trough of EGP 36.6, and the average VWAP during the year was EGP 45.50, with an average daily volume of more than two million shares and an average market capitalization of EGP 89.665 billion. CIB is widely covered by leading research houses both locally and internationally; 19 institutions regularly issued research reports on the Bank during 2021.

Investor Relations Activities in 2021

Throughout 2021, the Bank’s Investor Relations (IR) division dedicated its efforts to accommodate all conferences and calls to which CIB was invited. The team attended 14 virtual conferences, roadshows, and forums, and accommodated 157 meetings. It met with 405 companies and 571 investors and analysts incorporating a wide range of international, regional, and local institutions. Toward the end of 2021, six funds visited Egypt and met with CIB at its headquarters.

During the year, disclosures, including regular updates and releases, continued to be periodically made available on CIB’s IR website, as well as the EGX, LSEG, and OTCQX portals, in a timely manner that ensures fair access to information for investors from around the world, allowing them to make informed investment decisions. Thanks to the team’s continuous efforts to further enhance the program, CIB was named Leading Corporate for Investor Relations in Egypt and MENA by the Middle East Investor Relations Association (MEIRA) for the eighth consecutive year.

2021 Business Activities

Institutional Banking

Despite the pandemic’s continued repercussions on global and local markets, CIB’s Institutional Banking (IB) Group has further enhanced its resilient position.

CIB’s Corporate Banking (CBG) and Global Customer Relations (GCR) Groups continued to support their corporate clients’ portfolios by providing best-in-class financial and advisory services. The groups’ creativity and agility, coupled with the Bank’s strong liquidity and financial soundness, provided clients with a multitude of financial products and structures that helped alleviate the fiscal and operational challenges posed by the pandemic. Backed by a team of highly experienced bankers and the help of a strong credit culture across CIB’s core and support functions, the groups were able to support clients in key industries while preserving asset quality.

In 2021, the CBG and GCR Groups’ loan and investment portfolio recorded EGP 112.47 billion. Both groups sealed numerous deals throughout the year, including, but not limited to, participating in an EGP 5 billion syndicated MTL deal to finance the General Authority for Land and Dry Ports Company’s expansion plans, participating in an EGP 10 billion syndicated MTL deal to finance the development of the Suez Canal Economic Zone, and taking part in an EGP 11 billion syndicated MTL deal to finance the Egyptian National Railway’s (ENR) network expansion, including establishing new train lines, in addition to other major successful transactions in various sectors.

Debt Capital Markets (DCM) was active in the secondary market, working in conjunction with partner banks, as well as CBG and GCR, to close 18 transactions, resulting in a direct and immediate increase in CIB’s loan portfolio of EGP 19.3 billion in FY 2021. Additionally, DCM successfully closed syndicated and project finance loans equivalent to EGP 31.5 billion in FY 2021, of which CIB’s share amounted to EGP 4.4 billion, for public and private sector companies across several sectors, including oil and gas, ports, infrastructure, real estate, power, telecom, and construction. CIB also participated in the arrangement of one of the largest syndicate transactions in the construction sector to finance a landmark project through an EGP 12.2 billion syndicated loan, of which CIB’s share amounted to EGP 1 billion.

2021 saw a continuation of global correspondent banks working remotely and increasing their reliance on communication technology. Africa remained a priority for correspondent banking; CIB’s coverage has grown to 37 countries through a network of local and Pan-African banks, in addition to several African multilateral financial institutions. In 2021, correspondent banking continued to grow its contingent trade finance portfolio related to mega projects, recording a growth of 12% y-o-y, and thereby reflected in a growth in total trade finance fees and commissions by 10% compared to 2020. By the end of December 2021, the Development Finance (DF) segment had, through managing developmental programs, served 13,099 agri-business beneficiaries with approved developmental agri-loans worth a total of EGP 429.3 million.

Despite a pickup in the second quarter of the year, 2021 was challenging for direct loans under the Non-Banking Financial Institutions (NBFI) segment due to intense competition. The division captured significant market share of existing demand by introducing lower prices or new products. The NBFI division maintained strong asset quality of financed loan portfolios related to all clients, with zero defaults and minimal NPLs under various financed portfolios directed to the leasing, car finance, and microfinance sectors. NBFI focused on wider market coverage and succeeded in onboarding new-to-bank clients in the newly regulated consumer finance market. This strategy led to a loan portfolio growth of 97% y-o-y at the end of 2020, of which the microfinance portfolio grew by 107%, with the collaboration of DF. Some 42.77% of this was directed to women micro-entrepreneurs. On the investment side, while new issuances were minimal until the third quarter of the year, CIB participated in the second Sukuk issuance transaction of an NBFI company issued for EGP 700 million.

Retail Banking

Consumer Banking continued to advance its strategic agenda in cooperation with the IT, Risk, Compliance, Marketing, HR, and Data divisions in 2021. The year was positive in terms of financial and market performance, showing considerable growth across all indicators and laying the foundation for strong performance for the coming years.

Banking local currency deposits continued to increase at a phenomenal rate, reaching a total of EGP 207 billion by year-end, while foreign currency deposits also grew at a remarkable rate, reaching the equivalent of EGP 60 billion at the end of the year. The business’ most significant achievement in 2021 was the deposit acquisition; the Deposits Acquisition mix has remarkably shifted from 53%/ 47% to 58%/ 42% for CASA and Term Deposits, respectively. 2021 was a solid year for the Consumer Assets business as well, with the consumer loan portfolio growing by 14.7%, a 17.4% growth for credit cards and a 15.2% growth for personal loans. Straight-through-processing was successfully introduced for secured assets, setting the stage for further process enhancement initiatives in 2022.

On the SMEs front, and in line with the CBE directives and its strategy to acquire a bigger share in the SME credit market, Business Banking began working on an accelerated growth plan for SMEs. This includes amending the Bank’s credit policies, establishing an alternative score-lending model, investing in people, adding premises, IT developments, and wider distribution through business hubs. Additionally, Business Banking has built a well-established cash and trade management business, with average liability book growth rates of 26% and 41%, respectively, for the last two years. In 2021, operating profits for the division came in at EGP 1.9 billion and deposits hit EGP 41.7 billion, growing 41% y-o-y, while trade rose to EGP 34.2 billion. In the payment solutions space, the division processed EGP 48 billion in transactions. The Business Banking client base grew to more than 72,000 compa-nies during the year, up 12.5% y-o-y.

The division also made remarkable progress on the digital side, launching the new CIB website and making new online and offline requests and services available through its internet and mobile banking platforms. CIB kicked off the implementation plan of the CIB Pay App in 2021, set to transform the cards experience by simplifying the customer financial life process, allowing customers to track and monitor their spending and providing a new privacy and security experience. Credit, debit, and prepaid card customers will benefit from the app’s numerous features, which include tokenization and Tap and Pay for a superior payment experience, card controls, digital access to transaction history and balance information, and Pay with Rewards for a seam-less rewards redemption experience. Customers will have the choice between a digital version of their card, which will be more efficient and cost effective, or having both a physical and digital cards at different price points.

Additionally, to further enhance customers’ experience and reduce the turnaround time for loan applications while guaranteeing solid asset quality, the Consumer Loan division developed the Secured Lending Optimization plan. The plan shifts the review processes previously performed by the Credit Assessment and Fulfillment (CAF) department to a new automated and fully controlled approach led by the branch network. The same process changes have been applied to payroll unsecured lending with a ticket size of up to EGP 200,000.

2021 Operational highlights

Operations and IT

The COO area continues to be the main enabling arm for CIB’s business growth plans and transformation strategy. Ongoing focus on delivering the latest technologies allows for new services and products and increasing productivity and efficiency across the Bank, while reducing the cost to serve. Moreover, precautionary measures were taken to ensure employees’ safety and business continuity in the face of the COVID-19 outbreak.

Under the COVID-19 business continuity plan, the Bank’s Contact Center operated from four sites during Q1 2021, and a complete business plan was set in place to allow employees to work remotely or from different sites. CIB continues to focus on reducing current oper-ating costs by applying optimal cost synergies in context of many forms, starting from migrating more services to its digital channels from branch back-office services/ activities to promoting existing automation tools. These tools include Robotic Process Automation (RPA) for branch staff and across centralized operating areas.

This year marked the start of implementing open banking architecture as one of the Bank’s main busi-ness strategies, which will enable other fintechs and big corporates to directly interact with CIB banking systems. The implementation of the required platforms to support this strategic direction was designed through launching a set of programs to implement, such as an API gateway, enabling other systems to be connected to CIB systems, and Payment Hub, to enable automated payments capabilities with full visibility on customers’ payments analytics and transaction volumes.

Furthermore, a complete deep analysis of branch back-office transactional behavior was conducted to support senior management using data analysis for better resource utilization. This is a trend the Bank embeds in its business acumen to have a clear view on the headcount and staff requirements of each branch.

2021 also witnessed the successful rollout of the centralization of selected services, which included the introduction of a new delivery concept for customer requests. This initiative enhances customer experi-ence and reduces branch visits. Additionally, a new Post-Dated Cheques HUB was set up at the Bank’s head office this year to receive cheques, which will significantly impact TAT positively for corporate loan payoffs and bookings.

Customer satisfaction improved across all channels and exceeded the benchmark, confirming the impact of the efforts, focus, and technological transformation on digital banking over the last couple of years. Customers were highly satisfied with the diversity, availability, and user-friendly experience provided through the different channels.

On the real estate front, alignment with regulatory requirements progressed, as a state-of-the-art surveil- lance solution was implemented across the Bank. Real Estate and Premises Projects successfully passed and fulfilled the second surveillance audit for the ISO - 90012015 for Quality Management System certification. CIB also increased its branch network by 8 branches to reach a total of 215 branches as of December 2021. The reduction in staff on premises allowed us to renovate our headquarters and complete other projects, including the New Capital and Core and Shell.

Security and Resilience Management

In collaboration with the Ministry of Health, and in an effort to lower the transmission rate and spread of the virus in our community, the Bank initiated a COVID-19 vaccination program to avail vaccinations for all CIB staff and their family members, ensuring the safety of the Bank’s employees and customers. As of January 2022, a total of approximately 7,000 employees and family members were vaccinated, almost 5,000 of which were vaccinated in the Ein el Sira, MoH Medical Center, and 2,371 were vaccinated in CIB vaccination hubs on CIB premises.

In alignment with the Bank’s customer-centric strategy and efforts to secure our customers’ data and ensure proper privacy and protection controls, CIB finalized the Data Classification and Protection Program, with the key objective of efficient management and measurement to maintain the confidentiality, integrity, and availability of data.

For the second year, the Bank has successfully main-tained its ISO 27001 certification for Information Security Management System covering Alternative Channels and Digital Services, Contact Center, and Data Center. Similarly, the Bank maintained its Payment Card Industry – Data Security Standard (PCI-DSS) certification for the fourth year and assured full compliance with SWIFT Customer Security Program requirements. The ISO 22301 certification for Business Continuity Management, covering all the Bank’s services and related operations, was acquired for the fourth consecutive year.

Awards and Recognition in 2021

During 2021, CIB received a number of international awards that demonstrate its excellence across different business lines, cementing its position as a leading financial services provider in Egypt and Africa. Global Finance named CIB Best Bank and Best Digital Bank in Egypt for its excellence in innovation, its digitization and financial inclusion efforts, and serving retail and corporate clients despite challenges. CIB was also named Best Treasury, Cash Management, and Best Trade Finance Provider in Egypt, and it was recog-nized among the Financial Leadership in Sustaining Communities. Digital Banker awarded CIB the Best Transaction Banking, Best Bank for Payment Services, Best Bank for Cash Management, Best Supplier Financing, and Best Financial Chain Initiative in Egypt awards. The Bank was also dubbed Best Bank in Egypt by Euromoney. The Corporate Communication team worked extensively on a 360-degree brand campaign promoting the awards. Other accolades included Best Digital Bank in Africa by The Banker, Sustainable Bank of the Year by African Banker, Best Domestic Bank in Egypt by Asiamoney, Best CSR initiative in Asia and the Middle East by MEED, and Sustainable Bank of the Year by African Banker Awards 2021. CIB was one of Forbes’ World’s Best Employers 2021, and it was named Most Innovative Bank by EMEA finance in Pan-Africa.

Business and Operations in 2022

Approaching 2022, CIB will continue to be resilient against any foreseen issues given its management’s vigi-lant approach. Over the past decade, the Bank, alongside the Egyptian and global economies, faced major events that proved the strength of CIB’s capital base and demon-strated the true meaning of risk mitigation. Despite the pandemic’s negative effect on the world, it has positively affected Egypt’s digital transformation, backed by the government’s direction toward digitization, which shed light on CIB’s digital projects and plans. CIB is working tirelessly to position itself as the market leader on this front, and eventually provide more solutions to capture additional market share using digital channels that would eventually lead to cutting cost per client.

Environmental, Social, and Governance (ESG)

Environment and Climate Change

This year witnessed the Bank’s issuance of Egypt’s first corporate Green Bond. The issuance is a USD 100 million private placement with the International Finance Cooperation (IFC). The Green Bond Framework is aligned with the four core components of Green Bond Principles (GBP) 2018. The bond issuance serves as the latest addition to a suite of environmentally beneficial products to promote sustainable solutions for climate change and address key environmental issues, such as natural resource depletion, loss of biodiversity, and air, water, or soil pollution.

As of November 2021, CIB’s green bond approved pipeline has projects in various industrial sectors worth c.USD 70 million, including CIB’s building in the New Administrative Capital, which is currently in the process of being certified as a green building.

CIB has partnered with the IFC on the development of the first green building financing in Egypt, and it is believed that certified green buildings will constitute a major share of the financed projects.

In 2021, CIB became a founding member of the UN-Convened Net-Zero Banking Alliance (NZBA), committing to aligning its lending and investment portfolio with net-zero emissions. As a founding signatory, CIB was appointed to represent Africa in the NZBA Steering Group alongside member banks repre-senting diverse geographies and business models.

CIB understands that the de-carbonization action plan that the Bank developed and adopted should be based not only on the associated GHG reduction but also account for land and water footprint reduction to correctly establish priority actions, desired outcomes, and impacts. In this context, the Bank broadened its scope in the 2020 Carbon Footprint report to include its Ecological Footprint this year.

CIB has developed an overarching Environmental and Social Risk Assessment (ESRA) Framework to facilitate the implementation of the ESRMS across its operations. The Bank’s Environmental and Social (E&S) risk management system is in compliance with national regulations, the IFC and European Bank for Reconstruction and Development (EBRD) performance standards, and the Equator Principles (EP). In 2021, CIB expanded its portfolio Social and Environmental Impact Assessment to include its corporate banking activities.

As part of its leading role in advocating for climate action, CIB co-organized a panel discussion with the Ministry of Planning and Economic Development and the Ministry of Environment, as part of its contribution to UNFCCC – COP26 in Glasgow, titled Public-Private Partnerships for Improved Climate Finance in Africa and the Middle East. The panel was part of a series of sessions held on the margins of COP26 at the Egyptian Pavilion. The sessions emphasized Egypt’s active participation at the conference and highlighted the national interest to improve climate change adaptation and mitigation.

Society and Community Development

As Egypt’s leading private sector bank, CIB strives to create a positive impact on the local community. Accordingly, it has launched a number of initiatives to promote inclusive and sustainable development across the country, as well as provide support to underserved segments of the community through the Bank’s corporate social responsibility program, the CIB Foundation, and its dedication to supporting Egyptian squash champions.

COVID-19 Response and Vaccination

At the onset of the COVID-19 outbreak, CIB donated EGP 45 million, in accordance with the CBE directive seeking the banking sector’s participation in the COVID-19 national vaccine drive, under the auspices of the President of Egypt. The project aims to provide vaccines to the elderly and financially challenged segments of society, under the umbrella of social and health protection. An additional EGP 25 million was directed to the local production of a COVID-19 vaccine.

Corporate Social Responsibility

In 2021, CIB implemented various CSR projects and supported initiatives carried out by other organizations. In collaboration with eight other banks under the auspices of the Federation of Egyptian Banks, CIB supported the national project led by the Ministry of Housing, Utilities, and Urban Communities to partici-pate in building 55 housing units for the Egyptian students of the highest academic achievements with a total budget of EGP 930,000.

The Bank also donated EGP 15 million to support the fund, established by the government, honoring the martyrs, victims, missing persons, and causalities of anti-terrorism and security operations in Egypt and supporting their families.

Since the founding of the Bank’s partnership with KidZania in 2013, CIB has organized several annual trips to KidZania for underprivileged and special needs children and children with health conditions. The trips provide children with a fun setting in which they learn about different banking operations, such as debit cards, issuing cheques, and depositing and withdrawing money using KidZania’s official currency, Kidzos.

In addition, the Bank continued its sponsorship of the Egyptian Advance Society for Persons with Autism and Other Disabilities (ADVANCE). A number of activities took place in April, including the launch of a Media Awareness Campaign, Autism Awareness Week in schools and workplaces, Hybrid Conference at the Ministry of Social Solidarity in celebration of World Autism Awareness Day, and the lighting of CIB branches in blue.

2021 also witnessed the launch of the CIB community activity Every Child Deserves to Smile, through which CIB brought joy to children this Eid with two donation boxes at two of CIB’s headquarters in El Giza and Smart Village. CIB employees spread the joy by donating toys and clothes to children in need, dropping their donations in one of the CIB charity boxes. More than 1,000 pieces of clothes and toys were collected.

Gender Empowerment

CIB has been making great strides in providing equal opportunities within the workplace. Today, women constitute 25% of the Bank’s Board of Directors and 30% of the Bank’s workforce. CIB also provides employees with training programs tackling unconscious bias, in addition to the exclusive Women Leadership Program, with the aim of raising awareness about gender equality issues and ensuring the inclusion of women across CIB’s different lines of business.

CIB’s efforts extend to capacity building and finan-cial literacy programs for women in Egypt and lending support to microfinance institutions and women-led business.

In 2021, CIB became the first bank in the MENA region to receive Egypt’s Gender Equity Seal (EGES) certification from the National Council for Women (NCW). The certification is guided by the World Bank’s Gender Equity Model, which identifies the areas of focus and maps out the needed actions to accomplish the model’s objectives in each area. The EGES certification process promotes gender equity in the private sector by building a series of good practices in the four areas of recruitment, career development, family-work balance, and anti-sexual harassment policies.

Additionally, during 2021, CIB co-chaired Egypt’s Closing Gender Gap Accelerator, a national public-private collaboration model that enables the government and businesses to take decisive action toward closing economic gender gaps. Alongside leading businesses and ministers, CIB will lead the accelerator’s activities, shape its objectives, and monitor its impact. The accelerator will run under a three-year action plan aimed at preparing women for the post-COVID-19 world of work, closing gender gaps in remuneration between and within sectors, enabling women’s participation in the labor force, and advancing more women into management and leadership roles.

CIB Foundation

With a vision to ease the burden on families in need, the CIB Foundation works with private, public, and non-governmental healthcare providers that offer free-of-charge services to ensure the widest community reach and maximize the value of its work through achieving positive and sustainable results. Over the past years, the CIB Foundation has expanded its activities and initiatives to include different geographical areas throughout Egypt.

In 2021, the CIB Foundation board approved a number of new projects, in addition to its ongoing efforts to improve the quality of healthcare services provided to children across Egypt.

Maintaining its longstanding partnership with 57357, and to cover the increases in the cost of treatment, CIB Foundation allocated a fund amounting to EGP 30 million to be utilized in supporting the annual diag-nosis and treatment costs incurred by the hospital, such as conducting medical tests, examinations, chemotherapy, radiotherapy, and immunotherapy, among others. The fund served 7,000 children in 2021.

Additionally, the CIB Foundation built on its strategic partnership with the Magdi Yacoub Foundation, allocating EGP 30 million to fund 200 open heart surgeries and purchase 345 cath lab consumables at the Aswan Heart Center.

Since its inauguration, Al Nas Hospital, managed by Al Joud Foundation, have been a strategic partner for the CIB Foundation. The Foundation allocated EGP 24.46 million to fund the hospital’s NICU and PICU with new state-of-art equipment. The hospital operates in line with international standards, and the two units will serve approximately 2,000 children annually and offer its services free of charge to under-privileged communities.

Building on the fruitful and continuous cooperation between the CIB Foundation and the Egyptian Clothing Bank, the Board approved a budget of EGP 12.6 million to fund the eighth round of collaboration, which seeks to supply children across all 27 governorates with warm clothing during the winter months. The funding and manufacturing of 70,000 winter training suits and 70,000 pair of shoes will be distributed among children in underprivileged areas across the country.

The Foundation also allocated EGP 7.69 million to fund a project in partnership with the Ibrahim A. Badran Foundation. 48 convoys will take place in underprivileged areas in Beni Suef, and they will be led by a team of qualified doctors to offer examinations and treatment to children at schools and health centers in the area. The project aims to serve 65,000 children annually.

In line with the Foundation’s commitment to supporting children with special needs, it has allocated a budget of EGP 1 million to the National Foundation for Family and Community Development, to outfit the sensory, psychomotor, and occupational therapy rooms in the Asmarat Center to improve the sensory and motor skills of disabled children, espe-cially children with autism. The center is expected to serve 250 children annually.

The CIB Foundation allocated a total of EGP 2.17 million to support the annual operating costs of two residence facility shelters in 6th of October and Imbaba, operated and supervised by the Abnaa Al Ghad Foundation – Banati. The two shelters provide various types of protection and support for children at risk, including children who spend most of their time on the streets and children deprived of family care. They will serve approximately 200 children annually.

Supporting Squash

In 2021, CIB continued to positively impact local communities by strengthening the support for sports in Egypt, as well as nurturing the country’s athletic talents. This year, the Bank extended its support of the sport to capitalize on the traction its players are carrying out globally. CIB believes that through supporting these talents, more opportunities are generated for Egypt’s athletic community and are presented to raise Egypt’s ranking on the global arena. Egyptian squash players have especially gained traction due to their innovative techniques, entertaining worldwide spectators and bringing home trophies.

CIB expanded its squash-related sponsorships to allow for more Egyptian athletes to progress in the PSA world rankings by sponsoring several tournaments and supporting Egyptian stars in one of the most successful international tournaments. CIB, in cooperation with Karim Darwish Academy, brought to Egypt the PSA World Tour Finals for the third consecutive year at the Park, Mall of Arabia. The Bank was thrilled to sponsor the CIB PSA Platinum El Gouna International Squash Open 2021 for the first time in El Gouna, Red Sea. The most notable sponsorship in 2021 was the CIB Egyptian Squash Open Women’s and Men’s Platinum, which took place for the third consecutive year by the Great Pyramids of Giza and brought together 96 athletes for a total prize of USD 540,000. The tournament made significant tides in both the local and global sporting arenas.

The Bank also expanded its commitment by providing a series of Four Challenger Tour category tournaments to support young talents to improve their performance and rankings. Currently, Egyptian players hold the Men’s World Team Championship, the Women’s World Team Championship, and both Juniors’ Team World Championship titles, as well as all the individual world titles. In support of young players leading the world’s squash rankings, CIB has tailored special sponsorships to help eight talented players maintain their rankings and continue representing the country around the world. As of December 2021, the following players were recipients of the sponsorships: Ali Farag, Karim Abdel Gawad, Tarek Momen, Nouran Gohar, Hania El-Hammamy, Mohamed Abouelghar, Marwan ElShorbagy, Salma Hany, Fares Dessouky, Rowan El Araby, Farida Mohamed, and Nour El Tayeb.


CIB’s governance framework seeks to drive long-term value for shareholders, employees, and other stakeholders through robust implementation of sound governance practices. The Bank’s corporate governance practices aim to promote overall transparency, while explaining the rationale behind decision-making processes and insights into the formation of the Board of Directors, its related committees, responsibilities, executive management, and financial performance.

CIB’s governance structure consists of a strong, independent Board of Directors with a wide range of expertise, competent board committees, a profes-sional and highly-skilled management, transparent processes and reporting through its internal control departments (Risk, Compliance, Internal Audit, Corporate Governance, and Legal), in addition to objective and unbiased assurance performed by its external auditors. The board and executive management believe that corporate governance is an essential element to enhance shareholder confidence, specifically that of minority shareholders and stakeholders. Indisputably, investors’ outlook about the Bank is enhanced by increasing the level of transparency of ownership and control.

The Bank’s governance framework focuses on the clear segregation of duties and responsibilities of the Board of Directors and those of the senior management, the reporting mechanisms of the internal control departments, the independence of external and internal auditing, cooperation with supervisory and regulatory authorities, and the assurance of the disclosure and transparency of information. The framework ensures as well that timely, transparent, and accurate disclosures are made available with respect to material information regarding the Bank, its ownership, operations, and financial performance. It ensures the implementation of sound environmental management systems and elevates the Bank’s corporate social and environmental responsibility. It also advocates the equal treatment of all shareholders with sound protection for their voting rights.

Board of Directors

CIB’s board is comprised of a majority of independent, non-executive directors. Led by its non-executive Chairperson, the Board is primarily responsible for providing a sound base for good corporate governance in the Bank’s operations, setting the Bank’s strategic objectives, and providing oversight of senior management, ensuring the effectiveness of the Bank’s internal control systems, managing risk, and securing CIB’s institutional reputation and long-term sustainability.

The Bank’s board structure complies with the prevailing local regulations and international best practices and allows for the position of a lead director. The strength of our board is a product of the variety of our directors’ experience, diversity, differing perspectives, and institutional knowledge. We are committed to maintaining independence and fostering diversity in terms of gender and nationality on our board. As a result of this commitment, 25% of our directors are women and 88% are independent NEDs, according to the latest board structure.

The board ensures the Bank’s accounts and financial statements are fair, balanced, and understandable and provide information necessary to shareholders to assess CIB’s position, performance, business model, and strategy. It also ensures that the Bank has the proper focus on risk, reviews the Bank’s risk appetite as proposed by executive management, and constantly monitors the risk profile in relation to such appetite to ensure the proper mitigation of all possible risks.

CIB’s Board of Directors currently consists of eight members who possess an appropriate balance of experience, competencies, and individual qualifications. These collective qualities give the Bank a distinct competitive edge. Over the course of 2021, CIB’s Board of Directors met 14 times, 12 of which were conducted via video conferencing, and two meetings attended in person by the directors who were present in Cairo, with directors residing abroad joining via video conference.

Changes to the Board of Directors During 2021

On 8 March 2021, Mr. Tarek Rouchdy joined CIB’s Board of Directors as an independent NED, as approved by the CBE. Mr. Rouchdy brings a wealth of knowledge and experience in internal audit, controls, and risk management. He currently manages his consulting firm and is a Commissioner of the UK’s Independent Commission for Aid Impact.

On 24 June 2021, and pursuant to a decision approval by CBE, Mr. Hussein Abaza was granted the title of Managing Director in addition to his standing responsibilities as the Bank’s CEO.

Board Committees

In 2021, the Board revisited all committees’ structures to ensure their effectiveness and the absence of overlapping responsibilities. The objective of the review was to further tap the specific talents, skills, and knowledge of individual board directors to inform and educate the full board on particular areas of concern in order to serve the bank’s business growth.

Backed by an experienced executive management team, CIB’s highly qualified Board of Directors is also supported by specialized board committees. Committees are chaired by the NEDs, who brief the Board on major points raised by their respective committee. Such briefings enable the members of the Board of Directors to carry out their duties in an effective manner.

CIB’s Board of Directors has six standing committees that assist in fulfilling its responsibilities. Each committee operates under a written charter that sets out its responsibilities and composition requirements, and they all report to the Board on a regular basis. Separate committees may be set up by the Board of Directors to consider specific issues when the need arises.

2021 Highlights

Given the onset of the global pandemic in March that led to a global systemic crisis across sectors, including banking, and even the specific October 2020 events that were idiosyncratic to the Bank. 2021 was an exceptional year in terms of ensuring business continuity, delivery of strong growth, and a period where substantial new investments continued to prepare the Bank for the many new opportunities identified for success in business in the post-Covid era by reimagining customer needs, redesigning the preferred customer journeys, reworking the operating model, and realigning the people and organizational design in order to respond to the opportunities and challenges ahead with greater agility, while being better positioned to realize success against the emerging opportunities ahead.

Through such a focused, multi-dimensional, and balanced approach, the Bank’s Board of Directors and executive management were able to ensure very high levels of business continuity and resilience while continuing to serve its large customer base with high quality and excellence. They were also able to effectively respond to the ambiguities and uncertainties caused by COVID-19 and the unexpected challenges of ensuring continuity of business direction and focus, all while ensuring effective senior leadership transition in the Bank.

As directed by the Board, at the end of 2020, the Audit Committee appointed an independent international professional services firm to conduct an in-depth review of the Bank’s controls and lending functions in order to further enhance regulatory compliance and strengthen controls at CIB. The review started in early January 2021 and was completed in April 2021.The outcome validated and affirmed the robustness of the Bank’s control functions and proposed mild enhancements to CIB’s sound control environment. The findings also asserted CIB’s Management corrective action plan that was presented to the CBE last year.

Moreover, transforming the Bank’s compliance risk and control environment remains a strategic priority that will not only strengthen the Bank’s culture as an ethical organization, but serves as an enabler in the digital age as we drive value for all stakeholders. During the year, the Board oversaw the continuation of the Compliance Group’s efforts to further develop CIB’s risk framework while continuing to enhance foundation and synergies with our partners in the different lines of defense.

The board considers the selection of the CEO as a matter of utmost importance in decision-making, one that has significant impact on the Bank, and that the most appropriate person must be selected. In 2021, after a substantive screening exercise and a fair and thorough review, the Board of Directors reaffirmed the perpetuation of the Bank’s current CEO, Mr. Hussein Abaza. The board believes that the continuation of the current CEO serves the Bank’s business continuity and growth strategies.

From a Risk management governance stand-point, the Board believes in the importance of a holistic approach to managing both Financial and Non-Financial Risks, especially given the increased focus and sensitivity of regulators and stakeholders. Therefore, the Board drove greater improvements in this area by investing in the development of formal frameworks for this mater to ensure greater management responsibility, greater board oversight, and that there is auditable proof of appropriate risk-taking and risk-management decisions in line with the Board’s regulatory and legal accountability. This governance is being ensured through proactive input from both first and second lines and action-oriented reports on risk that align to a clear definition of the board-approved risk appetite. This is done to build a forward-looking perspective of the Bank’s top risks by continuously tracking and addressing control gaps, while tracking the adequacy of the overall control system in order to assure regulators and stakeholder of the Bank remaining within its agreed risk-tolerance thresholds.

Also as part of its commitment to highest standards of governance, in line with its commitment to ensure continuous talent development and a strong internal pipeline for talent continuity at various CEO-12 levels, the Bank invested in the engagement of a specialist independent international professional services firm to conduct a detailed Management Talent Assessment exercise to identify the strengths and developments needs of our key talent. This is in addition to developing appropriate personalized development action plans for each so as to invest in enhancing their potential and to prepare them with enhanced capabilities to grow and contribute even more strongly to the Bank.

As environmental and social issues have a deep and direct influence on economic stability, the Board of Directors topped the agenda with societal welfare and sustainability matters advancing financial services that promote sustainable development. A Board Sustainability Committee was established, after identifying the pertinent holistic charter, to support the Board’s ongoing commitment to ESG and management’s constant alignment with environmental, corporate social responsibility, and sustainability as relevant to the Bank. The committee will also ensure sustainable finance is well attended on the Bank’s agenda. A well-defined ESG roadmap and plan that set out clear targets to achieve our sustainable development ambitions were finalized under the leadership of a highly skilled Chief Sustainability Officer, who is responsible for sustainability risks and opportunities.

While we operate in a world where change is a constant, and challenges and disorders can be wide-reaching in a scale, the Bank decided to be well positioned and to have a clear and agile strategy that defines its purpose, in addition allowing it to anticipate change and continually adapt to the globe surrounding it. Taking this into consideration, the Board of Directors a new holistic strategy and transformation process started in 2021 that sets out the Bank’s 2030 vision, mission, goals, and priorities. Among these is to proactively identify the roadmap, invest in resources and talent to achieve this, and grow exponentially in its goal to retain continued leadership and growth and strive to be the world’s best emerging markets bank.

2021 Performance Measures Results
  • Maximize shareholder equity and deliver above-peer-average total shareholder return.
  • Grow earnings per share (EPS).
  • Deliver above-peer-average return on risk-weighted assets.
  • Focus on capital to cushion the Bank against any unforeseen external shocks.
  • Consolidated ROAE of 21.7% (after profit appropriation).
  • Consolidated EPS increased by 31%.
  • Total tier capital hit 29.9% of risk-weighted assets.

*2020 EPS as reported in 2021 Financial Statements, adjusted for stock dividends

  • Grow revenues faster than expenses.
  • Identify market gaps and attain first-mover advantage by laying the groundwork ahead of peers to allow the Bank to benefit from rising opportunities.
  • Standalone cost-to-income ratio of 22.4%.
  • Institutional Banking gross loans reached EGP 119.9 billion, 21% higher y-o-y, with 34% growth in local currency loans and 5% growth in foreign currency loans.
  • Institutional Banking deposits reached EGP 138.6 billion, 24% higher y-o-y, with a 27% growth in local currency deposits and a 16% growth in foreign currency deposits.
  • Business Banking gross loans reached EGP 3.2 billion, 93% higher y-o-y, solely in local currency.
  • Business Banking deposits reached EGP 41.7 billion, 41% higher y-o-y, mostly on a local currency deposit growth of 44%, along with a foreign currency deposit growth of 29%.
  • Retail Banking gross loans reached EGP 40.3 billion, 14% higher y-o-y, wholly on a 17% growth in local currency loans.
  • Retail Banking deposits reached EGP 225.8 billion, 14% higher y-o-y, driven by a local currency deposit growth of 18%.
  • Improve customer experience.
  • Invest in core businesses to enhance customer experience.
  • Much effort was exerted to improve cybersecurity, with a clear strategy and comprehensive plan to improve security capabilities and continuously provide a safe banking environment for customers.
  • For the second year, the Bank successfully maintained its ISO 27001 certification for Information Security Management System, covering Alternative Channels and Digital Services, Contact Center, and Data Center.
  • Similarly, the Bank maintained its Payment Card Industry – Data Security Standard (PCI-DSS) certification for the fourth year and assured full compliance with SWIFT Customer Security Program requirements.
  • ISO 22301 certification for Business Continuity Management, covering all the Bank’s services and related operations, was acquired for the fourth consecutive year.
  • Enhance the employee experience by:
    • Listening to employees
    • Providing a healthy, safe, and flexible work environment
    • Providing competitive pay, benefits, and performance-based compensation
    • Investing in training and development
  • CIB had an average of 7,184 employees in 2021 with an average annual income of EGP 276,000 per employee.
  • CIB implements an Employee Stock Ownership Plan (ESOP) as part of its compensation strategy, aimed at attracting, motivating, retaining, and rewarding outstanding employees, managers, and executive board members. ESOP allows designated employees to own CIB stocks at face value via promise-to-sell agreements. CIB allocates 10% of its issued and paid-in capital to ESOP. During 2021, CIB allocated a total of 12,271,570 stocks to 5,137 employees. Since the inception of the plan in 2006 and its renewal in 2015 and until 2021, the Bank has allocated 111,903,743 shares to its employees (taking into consideration capital increases throughout the stated period)