Credit Agricole Egypt reports Q1 2017 Net Income of EGP 475.1 million
François Drion: “The bank’s strategy “Interconnect” of sustainable growth based on quality of service and innovation, delivers strong results
with a rise of +51.6% of net profit in Q1 2017”
Highlights on Q1 2017 results:
A sustainable commercial development:
The bank’s global performance is positive with strong contribution from all activities. A fair evolution has been recorded among different business lines in respect to the current market trends and customers’ needs. Number of customers registered a net growth of more than 3% over Q1-2016.
Customers’ deposits recorded a rise of +43.3% over March 2016 (+9.8% without devaluation effect), with strong contribution of current account deposits. While total loans are up by +24.7% (+4.2% without devaluation effect) thanks to sizeable growth of local currency Corporate loans (+26.9%) and Retail loans (+13.3%), reversing the decrease of foreign currency corporate loans, engaged beginning of 2016.
| Deposits – EGP Million | Mar-17 | Mar-16 | Δ Q1-17 Q1-16 |
| High Cost | 23,944.7 | 16,601.6 | 44.2% |
| Low Cost | 15,310 | 10,795 | 41.8% |
| Total | 39,254.7 | 27,396.6 | 43.3% |
| Loans – EGP Million | Mar-17 | Mar-16 | Δ Q1-17 Q1-16 |
| Corporate | 12,985.20 | 9,867.60 | 31.60% |
| Retail | 5,572.90 | 4,917.70 | 13.30% |
| Total | 18,786.30 | 15,059.30 | 24.70% |
A Strong profitability Maintained:
The Q1-2017 recorded a robust rise of results evidencing ongoing efficient and focused banking operations. The Net Banking Income reached EGP 957.1 million, increasing by +57.0% over Q1-2016. The Net interest income also increased by +47.8% year-on-year, driven by both volumes and higher margins. As for the net commissions and fees, an increase of +52.9% over Q12016 has been recorded driven by all activities, Trade Finance as well as Retail commissions. The Net Trading Income (mainly foreign exchange commissions) achieved a growth of +99.2% over Q1-2016 at EGP 98.0 million.
Steady efforts are deployed to keep expenses under control despite much higher inflation. Yet, an increase of +24.6% occurred, justified mainly by salary increase, as well as continuous investments to support the very active digital transformation of the bank. Credit Agricole is launching in May 2017 a version 2.0 of its state-of-the-art mobile application offering advanced features for customers’ convenience.
Credit Agricole Egypt continued improving its efficiency, with a Cost to Income Ratio of 26.7% in Q1-2017 Vs 33.7% in Q1-2016, positioning well Credit Agricole Egypt among its peer banks.
Q1-2017 Net income reached EGP 475.1 million, up by +51.6% compared to Q1-2016.
| EGP Million | Q1-2017 | Q4-16 | Δ Q1-17 Q1-16 |
Q1-16 | Δ Q1-17 Q1-16 |
| Net Interest Income | 654 | 638.1 | 2.50% | 442.4 | 47.80% |
| Net Fees & Commission Income | 176 | 106.2 | 65.80% | 115.1 | 52.90% |
| Net Trading Income | 98 | 120.2 | -18.50% | 49.2 | 99.20% |
| Other Operating Income | 29.1 | 17.3 | 67.70% | 2.9 | 891.10% |
| Net Banking Income | 957.1 | 881.9 | 8.50% | 609.6 | 57.00% |
| Total Expenses | -255.7 | -241.5 | 5.90% | -205.2 | 24.60% |
| Gross Operating Profit | 701.3 | 640.4 | 9.50% | 404.4 | 73.40% |
| Other Income (Expenses) | 6.6 | 30.4 | -78.10% | 8.5 | -22.20% |
| Income Before Impairment &Tax | 708 | 670.7 | 5.60% | 412.9 | 71.40% |
| Impairment | -88.2 | -149.2 | -40.90% | -5.8 | – |
| Net Income Before Tax | 619.8 | 521.5 | 18.80% | 407.2 | 52.20% |
| Tax | -144.7 | -130.4 | 11.00% | -93.8 | 54.40% |
| Net Income | 475.1 | 391.2 | 21.40% | 313.4 | 51.60% |
| Cost / Income Ratio | 26.70% | 27.40% | 33.70% |
Strong Quality of Assets and Solvency:
Non-Performing Loans remain almost flat at 4.20% of total exposure in Q1- 2017 compared to 4.16% end of 2016. The bank has pursued its risk conservative management by increasing provisions by EGP 88,2 million in the quarter allowing a coverage of NPL by provisions of 205% vs 198% in Q1 – 2016.
Capital Adequacy Ratio reached 15.14%, well above regulatory threshold (11.25% in 2017), increasing by +357 basis points over December 2016 as a result of 2016 and interim Q1 2017 profit retention.
It is worth to be mentioned that during April 2017, Credit Agricole Egypt issued USD 10 Million out of USD 30 Million related to the subordinated loan approved by the Ordinary General Assembly held on the 22nd of December 2016. This USD subordinated loan will contribute to reinforce again the Capital Adequacy Ratio (higher level and less volatile)
| Ratios | Q12017 | Q42016 | Δ Q1-17 Q1-16 |
Q12016 | Δ Q1-17 Q1-16 |
| Profitability | |||||
| Return on equity | 56.40% | 58.40% | -3.50% | 45.70% | 23.40% |
| Return on assets | 4.10% | 3.40% | 20.40% | 3.80% | 7.60% |
| Efficiency | |||||
| Cost – to – Income | 26.70% | 27.40% | -2.40% | 33.70% | -20.60% |
| Liquidity | |||||
| Loans – to – Deposits | 47.90% | 49.00% | -2.40% | 55.00% | -12.90% |
| Assets Quality | |||||
| Capital adequacy ratio | 15.14% | 11.57% | 30.86% | 14.39% | 5.21% |
| Non-performing loans ratio | 4.20% | 4.16% | 0.96% | 3.05% | 37.55% |
| Provision Coverage | 205% | 186% | 10.22% | 198% | 4% |
Conclusion:
Credit Agricole Egypt managed a solid and sustainable growth, based on quality of service provided to its clients. The Bank’s profitability has been still strengthened, with satisfactory, quality and robust solvency in a market that is showing signs of positive evolution.
