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Monday, 6 May 2019

Earnings watch: CIB, Emaar Misr report 1Q2019 results

EARNINGS WATCH- Our friends at CIB delivered a 31% y-o-y increase in net income of EGP 2.64 bn in 1Q2019 on revenues of EGP 5.60 bn, which rose 35% y-o-y. CIB recorded a capital adequacy ratio of 21.5% by the end of the quarter, which is above the minimum regulatory requirement. Commenting on the bank’s earnings, management said CIB “commenced the year with sturdy performance in light of an overall eventful quarter,” and noted that the bank’s growth prospects were buoyed by the Central Bank of Egypt’s decision to cut corridor rates by 100 bps. The rate cut helped to see CIB’s “local currency loans growing by a decent 9% or EGP 6 bn” during the quarter.

Looking ahead, management is “cautiously optimistic on Egypt’s macroeconomic climate” on the back of “enhanced appetite for Egyptian sovereign securities, and the accompanying drop in local currency sovereign yields.” This, alongside expected rate cuts, should see improved appetite for borrowing by corporations and “a shift in the bank’s asset composition towards institutional lending.” You can read CIB’s full earnings release here (pdf).

Emaar Misr’s consolidated profit fell 16.8% y-o-y in 1Q2019, according to a company earnings release (pdf). The real estate company posted a profit of EGP 418.6 mn in the first three months of 2019, down from EGP 503.2 mn in the same period last year. Revenues declined by almost a third y-o-y, falling to EGP 566.6 mn from EGP 830.7 mn.

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