The year-to-date has been a challenging one for Egypt’s economy, and, by extension, the banking sector. Ongoing political uncertainty pending parliamentary and presidential elections are likely to mean a continued downturn in the economy, which will have an impact on CIB’s growth opportunities in the short term.

The degree to which CIB has weathered the political and economic uncertainty of the past few months has been impressive. Deposits increased from £E63bn in December 2010 to £E67bn in June 2011 and loans were up from £E35bn to £E37bn over the same period.

Although the proportion of non-performing loans (NPLs) in the bank’s portfolio has edged up slightly, from 2.7 per cent in December 2010 to 2.9 per cent in June 2011, it remains very low.

NPL coverage at the end of June was an impressive 147.2 per cent, up from 145.6 per cent in December. The bank is on target to meet its aim of matching its 2010 revenues of £E3.8bn in 2011. Revenue for the first half of the year amounted to £E1.9bn.

There are signs that CIB’s strategy of increasing its market share is bearing fruit. The bank’s market share in terms of loans increased from 8.01 per cent in December 2010 to 8.23 per cent in June 2011, while its share of deposits increased from 6.61 per cent to 6.94 per cent over the same period.

The number of employees at the bank increased from 4,327 in December 2010 to 4,476 in June 2011.

Profits have taken a hit, but there has been no dramatic downturn. Net profits for the first half of 2011 totalled £E751m, compared to £E2bn for full-year 2010, and greater profits can be expected in the third and fourth quarters. As is to be expected during an economic downturn, the average return on assets has fallen from 2.87 per cent in December to 1.96 per cent in June 2011, while average return on equity has fallen from 25.7 per cent to 17.89 per cent over the same period. This too can be expected to pick up in the second half of the year.

Having weathered the worst effects of the political and economic instability of 2011, CIB is well-positioned to take advantage of what can be expected to be a much more stable environment in 2012. A return to healthy growth in profits and revenues, the resumption of the bank’s retail growth strategy and a continued, if gradual, increase in market share, can all be expected.