Major Increase in CIB's Investments in subsidiaries and Affiliate Companies in the Last 3 Years

Commercial International Bank-Egypt has achieved record increases in its investments in subsidiary and affiliate companies over the past 3 years. Its investments in these companies jumped from EGP 63.95 mn at the end of 2019 to EGP 2.12 bn at the end of March 2023, representing a growth rate of 3209% and an increase of EGP 2.05 bn.

These significant increases in CIB's investments in subsidiary and affiliate companies can be attributed to its success in acquiring 3 new subsidiary companies during the past three years. These companies include Commercial International Leasing, Damietta Shipping Companies, and CIB Kenya Limited.

Furthermore, during the period from 2019 to March 2023, CIB successfully added 2 affiliate companies, Al Ahli for Computer Devices and T.C.E.A Real Estate, in addition to the International Company for Security and Services (Falcon). This brings the total number of CIB's investments in subsidiary and affiliate companies to 6 by the end of March 2023.

In light of this significant growth in CIB's investments in subsidiary and affiliate companies, First Bank is assessing the performance of its companies during the first quarter of 2023.

CIB Kenya Limited

CIB Kenya Limited is one of the subsidiary companies of CIB and represents one of its most important deals. It marks CIB's first acquisition outside of Egypt, starting with the announcement of its acquisition of a 51% stake in Mayfair Bank for a total deal value of $35.35 mn, which was utilized to increase its capital at the time.

However, due to Mayfair Bank's strong performance, CIB decided to fully acquire it at the beginning of this year by purchasing the remaining 49% stake, making it wholly owned by CIB. The total value of the deal amounted to $40 mn, and the bank changed its name to CIB Kenya Limited.

CIB's contribution to the Kenyan bank reached EGP 1.78 bn by the end of March 2023, compared to EGP 560.96 mn at the end of 2022, as a result of the full acquisition of the bank.

CIB Kenya Limited has achieved good performance in the Kenyan banking market, with its asset portfolio reaching EGP 3.918 bn by the end of March 2023. As for its profits, they amounted to EGP 11.25 mn during the first 3 months of this year.CIB Kenya Limited's strategy focuses on commercial financing and digital banking solutions, particularly the development of the trade corridor between Egypt and Kenya, enabling Egyptian companies to engage in business activities in the East African region.

Damietta Shipping Companies

A subsidiary of CIB, it is a joint-stock company founded in 1986 through a public offering with a paid-up capital of EGP 10 mn.

The company's services primarily focus on maritime services such as container repair, fuel tank leasing, and electrical works.

In May 2020, CIB gained control of the company after acquiring a majority of seats on the company's board of directors, in addition to 32% of the company's shares. The percentage later increased to 49.95% by the end of March 2023.

The value of CIB's investment in the company increased to EGP97.99 mn by the end of the first quarter of 2023, compared to EGP81.70 mn by the end of June 2020. The company's asset portfolio amounted to EGP16.94 mn by the end of March last year.

Commercial International Finance Company

Established in June 2022 and is one of the bank's subsidiaries. It has not started its operations yet.

Yesterday, the Egyptian Financial Regulatory Authority issued Decision No. 1473 of 2023, granting Commercial International Finance Company a license to engage in real estate financing and factoring activities.

Regarding Al Ahli for Computer Devices Company

Starting from the third quarter of 2020, CIB began consolidating the financial results of Al Ahli for Computer Devices Company as a sister company using the equity method.

The company was established in 1996 to provide computer maintenance services and accessories. Over time, its scope expanded to include various activities such as project implementation, computer hardware sales, software sales, and sales and maintenance of uninterrupted power supply devices for computers.

The main shareholders of this company, along with Commercial International Bank, are NBE and Faisal Islamic Bank.

During the period from the third quarter of 2020 until the first quarter of 2023, the company's asset portfolio increased from EGP55.46 mn to EGP78.28 mn by the end of March last year. The company's profits amounted to EGP19.12 mn during the first quarter of 2023.

International Security and Services Company (Falcon)

One of the sister companies of Commercial International Bank.

The company is keen on enhancing its security systems according to the latest technological advancements in the field and keeping up with the latest developments in the global security and guarding industry. This is part of its efforts to become one of the leading providers of security and guarding services worldwide.

The company's asset portfolio amounted to EGP695.217 mn by the end of March 2023. It is worth noting that the company has experienced a relative decline in performance, with losses amounting to EGP308.78 mn during the first quarter of the current year.

T.C.E. Real Estate Company

One of the sister companies of CIB, established in collaboration with Talaat Moustafa Group during the first quarter of 2021. From then until the end of March last year, the bank's contribution to the company remained at EGP158.36 mn, accounting for a 37% stake.

T.C.E. Real Estate Company owns a massive asset portfolio amounting to EGP 1.51 bn by the end of the first quarter of 2023. However, it incurred losses of EGP98.49 mn during the first 3 months of the current year.

It is worth mentioning that during the analyzed period, CIB divested from 2 companies. The first one is Fawry Plus, a former sister company of the bank. It was established in 2017 to provide banking services through a partnership between Commercial International Bank, Banque Misr, Fawry for Electronic Payments, and ACES Company. However, the bank's involvement in Fawry Plus was short-lived as the company acquired the bank's and Banque Misr's stakes in 2021.

Additionally, CIB decided to initiate the liquidation of C-Ventures, one of its subsidiary companies, in which it holds 99.99% of the capital. Despite generating revenues of EGP 8.6 mn, C-Ventures incurred losses of EGP4.5 mn. It is currently classified as a non-current asset held for sale.

It should be noted that the data regarding CIB's affiliated and sister companies are based on the bank's independently prepared financial statements for the period ending on March 31, 2023.