The Bank has reported a net income after taxation for 2010 of EGP444.9 million.
The 2010 net income after taxation compares with EGP394.2 million in 2009, and has therefore increased by 12.9%.
The 2009 net income reported last year was EGP378.5 million. For comparative purposes against our 2010 results, the prior year result has been restated upwards to EGP394.2 million as shown, a result of the implementation of new Central Bank of Egypt (“CBE”) accounting rules in 2010. The EGP15.7 million retrospective 2009 adjustment relates to a reduction in comparative loan loss provisions, without which our year over year net income increase would be 17.5%.
Pre-tax income of EGP552.0 million is 18.8% higher than 2009. The lower year over year increase in after tax income, compared with the pre-tax income increase, is largely attributable to lower tax exempt income in 2010, as 2009 still benefited from some tax exempt Government Bonds and Bills income following the removal of the exemptions on these in 2008.
The 2010 results were also impacted by the first time application of new local accounting rules, largely related to the calculation of loan loss provisions and the amortization of up-front corporate loan fees. On a ‘like by like’ basis, with no change in accounting rules, our year over year net income increase would have been closer to 25%.
The improved economic conditions saw strong loan growth in 2010, with total net loans increasing by 29.4%, a very satisfactory performance. This growth was seen in all client segments, including Corporate, Retail and Enterprise Banking. Client deposits increased 8.2% over 2009. Importantly, the Bank’s Retail deposit base, a critical element of our core resources, grew by 26% during the year. Our core revenues saw good growth, with Net Interest Income up 13.9% over 2009 and Net Fees & Commission Income up 22.2%.
The Bank’s (gross) Loans to Deposits ratio grew 8% in 2010, from 44% to 52%.
Total expenses grew just 5.3% over 2009, and were therefore very well contained, given prevailing inflation rates and the expansion of the Bank’s business. Management of the Bank continues to look for opportunities to contain expense growth through increased productivity and expense reduction initiatives.
The Bank’s (gross) Loans to Deposits ratio grew 8% in 2010, from 44% to 52%, with strong loan growth across all client segments. We are now much closer to the Egyptian market average of around 55%.
The Bank also still enjoys a high solvency ratio, 14.63% at the end of 2010 (against 10% requested by the Central Bank of Egypt), which gives us room to grow the business in the near term within our existing capital base.
The branch network has expanded to reach 73 branches, with the opening of 3 branches during 2010.
The recent events in Egypt will, no doubt, impact the Bank’s performance in 2011. Indeed, the impact of these events on the economy has already been seen, with tourism and other revenues, and foreign direct investment, adversely impacted and the timeframe for recovery not clear. Of course, we will continue to monitor the situation closely, and take steps to ensure that both our clients and the Bank are properly safeguarded against the fallout of these recent events.
Crédit Agricole Egypt is 60.46% owned by the Credit Agricole Group of France, along with the Mansour & Maghraby Group 19.94%, with the rest being retained by the public. Credit Agricole S.A. of France is rated AA- by Standard & Poors and Fitch, and Aa1 by Moody’s, which reflects the Group’s strong financial position. The Credit Agricole Group is the number one banking group in France, and the leading retail bank in Europe by revenues and number of branches, with a net income of €3.6 billion in 2010 (up 31.5% compared to 2009), and Tier 1 Capital of €83.4 billion as at 31st December 2010.
