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.
The division made remarkable progress on the digital front, launching the new CIB website and making new online and offline requests and services available through its internet/mobile banking platforms. The Bank kicked off its CIB Pay App, which will transform the entire cards experience by simplifying the customer financial life process, helping customers track and monitor their spending and providing a new privacy and security experience.
Also during the year, CIB obtained CBE and FRA approvals for the Non-Life Bancassurance agreement with AXA, highlighting the importance of developing the Bank’s insurance business. CIB was also granted CBE approval to begin the establishment of Commercial International Company for Finance to provide mortgage and factoring activities.
CIB Private continued to lead the market, offering new services during 2021. The segment launched legal services in collaboration with Hatem Solaiman Esq., covering a wide range of legal matters from firm establishments to M&As and fundraising. CIB Private also developed medical concierge services in collaboration with VIDA, offering everything from pre-assessment and medical reservations to home nursing. Our services were further enhanced by the creation of an art collection and advisory service in collaboration with the most prestigious exhibitors and art galleries, such as Art D’Egypte, Ubuntu, and Picasso. Deposits for the year amounted to EGP 40 billion, while the total asset portfolio came in at EGP 5.6 billion.
Customer centricity remained the emphasis of Wealth’s strategy in 2021, with the aim of developing a comprehensive, enhanced value proposition supported by data analytics and customer insights. The year saw the Wealth segment implement new Wealth payroll asset requirements and an increase in the income band, with clear touch points and dedicated services. Wealth also partnered with A-class resorts during the summer to enhance our offering through promotions. Deposits for the segment amounted to EGP 126.5 billion, while the total asset portfolio came in at EGP 16.9 billion.
Given that Plus segment’s customers are primarily in their late adulthood to early middle-age, the year’s focus has been on consumption-related asset products, such as unsecured loans and credit cards, as well as liabilities products related to short-term savings, providing our customers with a diverse range of tailored products and services.
CIB Plus delivered the best digital experience, leveraging on the CIB Bank of the Future (BOTF) program, highlighting new online banking services and products that facilitate the banking experience. The newly added services include the ability to register with an account number, national ID, or passport number. They also enable customers to open additional sub accounts, book a certificate or time deposit, replace their credit or debit card, update KYC, and apply for a loan or credit card. Deposits for the segment amounted to EGP 35.7 billion, while the total asset portfolio came in at EGP 4.8 billion.
In line with our sub-segmentation strategy, the Prime segment continued with market research efforts in 2021 to identify new sub-segments to provide the most relevant products and services for customers.
The Prime segment pushed forward with its Prime Me bundle during the year, which was launched in 2020 targeting the Millennial sub-segment. The Prime Me bundle aims to reward customers with generous bonus points for completing various banking activities.
Agent banks, like Fawry Plus, were also introduced during the year as a new acquisition arm for the lower-income segment, offering prepaid cards and smart wallet bundles to reduce Payroll customers’ acquisitions cost.
The Prime segment’s assets ENR reached EGP 12.5 billion, while deposits ENR came in at EGP 22.7 billion with a favorable mix of 82% CASA and 18% deposits. The segment also added 284,000 NTB customers, 175,000 Payroll customers, and 109,000 non-Payroll customers.
Complementing our consumer segmentation strategy, the division set out to launch a new Overseas segment during 2021. We identified the Overseas customer base (100,000 customers), built a focused and centralized relationship team to serve the subsegment, and tweaked SOPs to offer seamless remote banking services.
Retail 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 deposits acquisition. The deposits acquisition mix has remarkably shifted from 53%/ 47% to 58%/ 42% for CASA and Term, respectively.
The Liabilities division launched a new Payroll CRM account-opening system, providing Payroll customers with an exceptional experience and a more efficient onboarding process. The project allowed Payroll customers to apply for CIB products from anywhere, with an immediate customer number and account creation.
In recognition of the importance of developing the insurance business, CIB obtained CBE and FRA approvals for the Non-Life Bancassurance agreement with AXA. During the year, we leveraged the existing outbound Tele-sales team for referrals to the Credit Shield and Family Protection Plan as part of the simple insurance products strategy that will increase the Bank’s revenues. In 2021, total insurance fees reached EGP 234.5 million, while volumes for the life and health insurance business hit 789.5 million.
2021 was a solid year for the Consumer Assets business, with the consumer loan portfolio growing by 14.7%. Credit cards grew by 17.4%, while personal loans were up 15.2%. The straight-throughprocessing was successfully introduced for secured assets, setting the stage for further process enhancement initiatives in 2022.
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 seamless 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 physical and digital cards at different price points.
The year also saw the successful launch of the Cashback Credit Card, which will complement our existing product suite of offering points, miles earnings, and cashback. A reloadable, rechargeable Charge & Go card was also added to CIB’s offering, positioned as a general-purpose, prepaid card targeting all segments to create a cost-effective financial solution that would address customers’ various needs, such as bill payments, e-commerce, and mobile payments.
The EGP-denominated card can be used for cash, purchases and internet transactions both locally and internationally, and it will accept remittances from customers working abroad. Card acquisition figures stood at 191,000 credit cards acquired in 2021, with a total ENR of 5.7 billion, bringing the total card portfolio to 840,000, with 716,000 primary cards and 124,000 supplementary cards.
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, shifting the reviewing 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.
CIB is now also among active participant banks in the Presidential Initiative for Car Replacement announced by the CBE. The initiative aims to replace 20+-year old passenger cars, taxis, and microbuses with others that run on clean fuel or natural gas through a subsidized interest rate car loan at a 3% flat annual rate. Furthermore, the Bank began to revamp the auto finance program at the end of 2021.
The Bank also introduced new credit programs to penetrate segments that are more likely to apply online—thus far, an untapped segment. It conducted a complete revamp of Secured Overdrafts and Revolving Overdrafts across all segments, and it is in the process of reopening surrogate programs, such as Card-to-Card and other PIL programs.
In terms of financial performance, personal loan ENR reached EGP 30.6 billion, interest income reached EGP 3.8 billion, and fees reached EGP 258.5 million in 2021.
CIB received CBE approval to establish a Commercial International Company for Finance to offer mortgage and factoring activities. The company will deliver an enhanced conventional mortgage suite of standard Mortgage, Ijara, and Murabha for individuals, as well as factoring services for corporate clients. Mortgage financing through the new company will align with competent real estate developers and will finance fully constructed units at the launching phase, while maintaining conservative LTVs and diligent property evaluations.
On the back of the current opportunity to expand within the real estate industry, grow CIB’s market share, and augment Mortgage sales volumes, the CIB Mortgage team successfully signed formal agreements with top developers in the Egyptian real estate market, such as El Batal, SODIC, Sabbour, and Cleopatra, to exclusively finance residential properties established by these developers.
Low-income Mortgage ENR reached EGP 2.34 billion as of December 2021 compared to EGP 1.88 billion in December 2020, up by 24.7%.
2022 Forward-Looking Strategy
In 2022, Consumer Banking will continue focusing on strategic priorities of acquisition digitalization efforts, marketing activities, and service models to support our premium pricing strategy. Upgrading our technologies and redesigning our customer experience through transformation projects are also key priorities. The “Temenos Infinity” used for both Consumer Banking and Business Banking will be launched next year and will be expanded to cover a broader scope of online services for Retail Banking segments.
Digital processes will be applied through Robotic Process Automation (RPA) and internal coding automation, along with segmented interest rates. To maintain two-way communication, surveys and automated SMSs based on transactional behavior will be implemented.
CIB Private aims to launch the Personal Trust Account, which will offer life insurance bundled on the Grant account for the beneficiary of the grant. It will also launch a consolidated statement covering Private customers’ positions under one unified bank statement.
The Wealth segment is set to shift from a liabilities to an Assets-, Insurance-, and CASA-mix-based revenue model covering all financial needs, with a focus on fee-income generating products mainly through assets and insurance. The plan covers conventional products bundled with non-conventional ones, such as Educational Financing, Trust and Escrow accounts, Global and Non-life Insurance for Home and Auto loans.
As for the Plus segment, a redesign of its value proposition is planned for the coming year to deliver an exceptional customer experience driven by data analytics, customer insights, and digital capabilities.
Capitalizing on the 2021 CASA/Term acquisitions mix success, the Liabilities division will maintain its competitive saving deposit pricing compared to CIB peers to protect our high saving deposit run rates. We will also focus on attracting large-tickets of lowcost, demand deposit products from the Business Banking and Private segment. Leveraging on the newly introduced Segment-Based Pricing, which entails changing the Retail Banking pricing mechanism from tier-based to segment-based on Saving accounts and Time Deposits. To complement CIB’s product offering, CIB will introduce monthly 7- and 10-year Certificates of Deposit priced at 10.5% and 11%, respectively.
As the Insurance business is a key element to complementing CIB offerings, a spotlight will be placed on digital insurance initiatives, in line with the digital transformation journey that CIB embarked on five years ago. CIB Insurance will embrace all customers’ protection and safety needs by offering non-life insurance products in 2022 through various channels to capture a wide insurance referral database thriving on the Bank’s wide reach. Adding insurance benefits to the Bank’s products and enhancing existing insurance features will supplement the whole insurance business strategy to truly be a one-stop-shop for insurance solutions.
CIB plans to increase unsecured lending by bundling longer-term liability products and offering overdrafts. We will also increase end-use loans through expanding current agreements with schools, universities, and clubs. The Consumer Assets division will continue leveraging the projects kicked off in 2021 to enhance the customers’ experience by reducing the turnaround time of the customer journey through the digital platform.
As for standard mortgages, 2022 plans include revamping existing products to acquire new customers and increase the Bank’s market share. Tie-ups with top developers will continue in 2022, adding to the standard mortgage offering.
2022 will also witness progress in the licensing of the new Mortgage Finance company under FRA regulations. The company will offer mortgage financing to individual customers and factoring for corporates.
Meanwhile, the payroll channel will emphasize its four main pillars:
Revenue generation: Increasing acquisitions for new Payroll customers and companies and focusing on boosting cross-selling for the existing Payroll base by segmenting customers into three sub-segments to achieve product fit with customer needs. Special focus will be given to Payroll clients in the Financial Inclusion segment (small business banking and lower-income consumers). As for lower-income consumers, 2022 is set to witness the launch of a new proposition to bridge the lending and savings gap for untargeted Payroll customers.
Cost Optimization: Non-asset Payroll customers will have access to a prepaid Payroll bundle with Smart Wallet, in addition to digital and/or more costfriendly acquisition and communication channels within the customer life cycle.
Customer Satisfaction: To enhance customer satisfaction, the Bank will launch an awareness campaign focusing on distinctive CIB Payroll benefits, in addition to carrying out roadshow activations within existing and new payroll companies.
Distribution Strategy: The division will kick off three new business hubs, and employees will be allocated in the El-Seid hub and head office locations under the flexible work strategy. Additionally, CIB will implement a semi-centralized experience at some branches and customize a welcome kit for new customers. There will also be a focus on women, capitalizing on the Bank’s agreements with Visa and the EBRD. Women-owned companies will have tailored support and financial tools to grow their businesses.
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 companies during the year, up 12.5% y-o-y.
Over the last five years the retail banking strategy for SMEs attracted a wide base of non-borrowing customers. This base is the heart of the SME lending strategy to cross-sell assets using different lending programs and leveraging strong referral mechanisms. CIB has gradually and consistently allocated unique strategic thinking and resources to grow the SME loan exposure and meet the CBE mandate of 25%. 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, Business Banking doubled the loan book to EGP 3.2 billion.
In line with CBE directives and the Bank’s strategy to acquire a bigger share in the SME credit market, Business Banking began working on an accelerated growth plan for SMEs, which includes amending our credit policies, establishing an alternative score-lending model, investing in people, adding premises, IT developments, and wider distribution through business hubs
Business Banking’s asset growth strategy capitalizes on augmenting the current SME lending model and building additional capacity across relevant chains. The strategy focuses on building an alternative, data-based lending model for very small tickets that is pre-underwritten and subject to document fulfillment, targeting companies with sales turnover (STO) up to EGP 20 million.
In accordance with Egypt’s strategy to support SMEs, Business Banking launched the new Growth Segment that targets small-sized companies with STO below EGP 50 million, offering them convenient products and services that support their business needs.
Business Banking also developed unique deposit bundles suitable for various customer needs and banking preferences. These include the Super Business Account, which gives customers exclusive benefits and services to manage their business efficiently and conveniently, and the Bedaya Business Account, an online account that allows customers to fulfill most of their banking needs without having to visit a branch. To support small businesses, the division launched the Merchant Bundle to enable merchants to run their business end-to-end through three bundles targeting medium, small and very small companies. Each bundle has a unique offering and discounts for payment acceptance solutions, accounts, and digital online banking.
CIB maintained its dominant position in Egypt’s payment acceptance sector in 2021, attaining a market-leading share volume of 28% for POS and 21% for e-commerce transactions. Following the country’s push for financial inclusion, the Bank enabled all POS and e-commerce platforms to accept the government-backed Meeza card and launched QR acceptance to reach untapped segments—a key enabler of payment business growth, especially with very small merchants.
To enhance our service model and ensure full coverage, a new service model was launched in 2021, aiming to expand the coverage of small businesses. Personal Bankers were divided into two units, one allocated to exclusively serve small Business Banking clients and the other to serve individuals in the Prime segment. The mapping process of branch segregation to encompass Household, Flagship, and Corporate was completed in 2021. Furthermore, CIB’s ATM network expansion continued to progress throughout the year, standing at 1,284 ATMs as of December 2021.
2022 Forward-Looking Strategy
In the year to come, CIB Business Banking’s SME client companies will enjoy a suite of products and services designed for each segment according to their business requirements. The Bank plans to launch a Small Business Initiative to support SMEs. The program will allocate funds for selected small companies to provide non-financial services through a group of partners under the Business Solution Program.
Business Banking will also continue growing its loan exposure, building on the enhanced onboarding process through loan origination, in addition to enlarging the customer base through partnerships and agent banks. A continuous enhancement will take place in our lending offerings and programs using the very small ticket behavior-based lending approach. This approach will be built to qualify customers on a pre-underwritten basis based on multiple parameters for small ticket loans, which are highly dependent on IT and data infrastructure.
Using state-of-the-art technology, Business Banking will build the infrastructure to automate processes to improve customer experience. Business Banking will invest in its online banking capabilities and remote services to provide clients with convenient and efficient ways to manage their finances around the clock, in addition to giving them access to online government payments and payroll services. The division will focus on growing its acquisition business through payment acceptance solutions for different merchant segments.