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Solid Growth driven by all activities in a challenging environment

The Bank has reported a net income after taxation for 2012 of EGP472.3 million.

The 2012 net income after taxation compares with EGP308.0 million in 2011, and has therefore increased by 53.3%. From a core business performance perspective, net operating income before provisions and taxation was up 30.5% over 2011. Pre-tax income of EGP638.2 million is 39.5% higher than 2011.

Resilience of our Business Model

Our business model is built around balanced growth, of both volumes and revenues, and across the Bank’s various business lines, through the continuing development of our client portfolio, with cross-selling of products between all business lines a key strategic focus. This ‘balanced’ model ensured the resilience of our business to the unforeseen challenges of 2011, and ensured that we were well prepared to reinvigorate our activities in 2012.

We achieved a very balanced growth in commercial volumes in 2012, with net loans and deposits increasing by 12.7% and 12.1% respectively. We managed to reduce further our reliance on investment income in 2012, with more resources devoted to client lending, and our average investment portfolio (Treasury Bills and Bonds) was reduced by 16% during the year.

The Bank’s business is structured into 3 distinct business lines: Retail & Commercial Banking (incorporating Retail, Private and Enterprise Banking), Corporate & Investment Banking, and Capital Markets. All performed well in 2012, increasing their client bases, growing revenues across the board, and significantly increasing returns on assets.

Bank-wide revenues increased by 20.7% over 2011. Net interest income was up 17.4%, while net commissions and fees increased by 14.7%, achieving our objective of balanced growth between interest and fee income. Other income (comprising FX, Option Premium, Trading and Investment Income) was up by 50.8%, although this included some exceptional revenues, in particular gains on the sale of some non-strategic equity stocks.

Our expenses increased by 11.4%, although expense growth was impacted by some specific one-offs that, without which our core expense growth was around 6.6%. Our operating profit before provisions and taxation increased by a very satisfactory 30.5%, while our Cost to Income Ratio was reduced from 51.5% to 47.5%.

High Quality of Assets & Risks

As we saw during the global financial crisis of 2008 and 2009, our customers again adopted similar cautious strategies with respect to borrowing during 2012 (as they had in 2011), and we are again very pleased that no major clients were reclassified into our non-performing loan portfolio during 2012.

The high quality of our assets is achieved through the ongoing assessment of the Bank’s credit portfolio quality, and our credit criteria and exposure is continually re-assessed to take account of changing market conditions and opportunities to explore lending to new economic sectors or clients. This is a key focus every year, whatever the economic climate may be.

Our loan loss provision expense in 2012 was again characterized by more ‘good’ cautionary provisions booked for non-classified names, with a more conservative approach taken by the Bank to our general provision coverage given the still uncertain business conditions, as well as a significantly reduced net provision cost for our Retail activities.

Our asset quality is demonstrated by a non-performing loan ratio of just 1.96% at the end of 2012, significantly lower than the Egyptian market average, and a loan loss provision coverage ratio of 228%.

The Egyptian Housing Finance Company is a 100% subsidiary of the Bank, offering mortgage products. The company had EGP301 million in mortgage loans at the end of 2012 (up 8.6% from 2011), and achieved a net income after tax of EGP8.7 million in 2012 (2010: EGP4.9 million).

A Cautious Approach for 2013

Although we have demonstrated, in 2012, our ability to deliver a strong performance in a challenging business context, the ongoing uncertainty in the local political and economic environment will still impact our performance going forward, and we will continue to exercise caution in our business approach, with again particular focus on the Credit Risk environment.


Established in 2006, Crédit Agricole Egypt is a subsidiary of the worldwide leading financial Crédit Agricole Group. Credit Agricole Egypt has a committed team of experts offers a wide range of products and services designed to meet the demands of leading national and regional Corporations, Enterprises, high net worth and retail customers. In addition to its branch network totaling 73 branches at the end of 2012, conveniently located throughout the country, Crédit Agricole Egypt offers online banking services for easy access and convenient transactions ( in addition to its call center (19191) available 24 hours, 7 days a week.

In December 2012, Fitch ratings affirmed Credit Agricole Egypt’s national long term rating at AA+ (egy), revising the outlook to Stable from Negative.

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