CIB Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Net Profit: EGP 62.1 billion for the first nine months of 2025, with adjusted profits (excluding a one-time provision reversal) at EGP 50.5 billion.

Return on Equity (ROE): 45.9%, adjusted to 37.7% excluding the one-off provision.

Loan Growth: Total loans increased by 30% year-over-year, with local currency loans up 38% and foreign currency loans up 17%.

Deposits: Total deposits reached EGP 1.04 trillion, an 8% increase year-to-date. CASA deposits grew from 55% to 60% of total deposits.

Loan-to-Deposit Ratio: Increased to 49.7% from 39.4% year-over-year.

Net Interest Margin (NIM): Local currency NIM at 13%, blended NIM expected to remain around 9% for 2025.

Cost-to-Income Ratio: Increased to 14.3% from 12.2% in 2024, attributed to higher administrative expenses.

2Strategic Updates and Business Highlights

The bank's growth was supported by a favorable macroeconomic environment, including a decrease in inflation to 12% and a policy rate cut to 21.5%.

CIB's recalibrated Expected Credit Loss (ECL) model led to a one-time provision release of EGP 13.1 billion, enhancing the bank's capital position.

Investment in technology and talent continues, with a focus on maintaining a strong balance sheet and supporting economic growth.

The bank has expanded its credit commitments significantly, with 99 new commitments year-to-date, indicating growing business confidence.

3Forward Guidance and Outlook

Loan Growth: Expected to be between 20% to 25% for 2025, with local currency loans growing faster than foreign currency loans.

NIM Guidance: Anticipated to remain flat at around 9% for the full year 2025, with gradual compression expected due to declining interest rates.

Cost of Risk: Projected to normalize around 0.5% to 0.7%, with a potential spike in Q4 2025, similar to historical trends.

Deposit Growth: Expected to be between 10% to 15% for the year, primarily driven by CASA accounts.

4Bad News, Challenges, or Points of Concern

Foreign Currency Loan Growth: Slower growth noted due to prepayments, particularly from the tourism sector, which could impact overall loan growth metrics.

Administrative Expenses: Increased by 35% year-over-year, driven by contract renewals and IT project capitalizations, raising concerns about cost control.

Interest Rate Sensitivity: Potential for NIM compression as interest rates decline, although management believes the impact will be gradual.

Regulatory Risks: Uncertainty around the future treatment of the ECL reserves and their potential inclusion in capital calculations.

5Notable Q&A Insights

Management clarified that the slowdown in foreign currency loan growth is primarily due to repayments rather than a lack of demand.

The bank remains focused on loans over sovereign investments, despite the current favorable yields on sovereigns.

Discussions with the Central Bank regarding the ECL model indicate that while reserves are currently not part of capital, there is potential for future inclusion depending on model stability.

The bank's strategy includes maintaining a balance between loan growth and sovereign investments, with a focus on client relationships and flow retention. Overall, CIB reported strong financial performance in Q3 2025, supported by a favorable macroeconomic environment, while also navigating challenges related to cost management and foreign currency loan growth. The outlook remains positive, with strategic initiatives aimed at sustaining growth and profitability.