2016 In Review

Consumer And Business Banking

The Djoser Step Pyramid at Saqqara is the first pyramid built in Egypt and the first large-scale cut-stone structure in the world.

Cards

Payment Acceptance

CIB is the clear market leader in credit and debit card payment acceptance, processing over 30% of total market volume, valued at EGP 28 billion.

Wealth Segment

The Wealth segment focused in 2016 on customer centricity while also preserving our core brand values: personalised solutions, priority services, trust and recognition. Through this, the division has managed to rake in a total deposit portfolio of EGP 85.3 billion, representing 47,000 customers, in serving this crucial segment

2016 Financial Highlights

  • To better serve our customers and increase our geographic presence, the Wealth sales force was increased 45% y-o-y, leading to a significant 36% y-o-y increase in the number of customers.
  • Total deposits hit EGP 85.3 billion – a 72% y-o-y increase since December 2015.
  • Assets recorded EGP 8.9 billion, up 60% y-o-y.

Key 2016 Highlights

A new layer of management was added to the segment in 2016, under which Wealth Managers now report directly to a Wealth District Head. This opened up more avenues to lead, liaise with and coach Wealth Managers and helped recalibrate the strategy and pillars of the Wealth segment during the year.

In keeping with our efforts to not only gain but retain our Wealth customers and strengthen brand loyalty, the Wealth segment continued to provide key financial services, personal privilege packages and handpicked lifestyle offerings to our clients. Just some of the benefits offered in 2016 were tickets to the Majida El Roumi Sound and Light Concert (May 2016), El Classico match in Barcelona (April 2016) and the Dire Straits Experience Concert in Soma Bay (January 2016).

CIB Plus

CIB Plus continued to focus during the year on priority services and on providing exceptional-quality services and personalised facilities that meet the needs of medium-worth individuals through a qualified team of highly trained Plus Bankers.

2016 Financial Highlights

To better serve our customers and increase our geographic presence, Plus sales force was increased 20% compared to 2015, leading to:

  • Customer count growing 28% y-o-y since December 2015.
  • Total deposits increasing a significant 51% y-o-y since December 2015.
  • Total asset portfolio climbing 31% y-o-y since December 2015.

Key 2016 Highlights

During the year, training our Plus Bankers has been a key focus. The bankers were enrolled in the AUC Academy to help them fine-tune their skills, boost their market knowledge and hone their customer-management abilities.

We also focused more on our clients through offering tailored privileges and loyalty packages that meet this segment’s needs while simultaneously promoting CIB products to bolster penetration rates.

Liabilities

The success of CIB Consumer Banking is demonstrated by the exceptional growth in customer deposits, which reached EGP 99 billion in local currency and USD 4 billion in foreign currency by December 2016 – an impressive 26% y-o-y increase of EGP 20 billion and 11% y-o-y increase of USD 416 million compared to year-end 2015.

CIB’s deposit market share reached 8.1% as of October 2016 (latest published CBE data), maintaining CIB’s leading position among private sector banks in the country. The growth is an outstanding achievement in a highly competitive market of 39 banks and has helped CIB increase its market share of overall deposits in the Egyptian banking system.

Consumer Banking’s strategy has focused on the household segment, which was clearly reflected in the household market share increase of 48 basis points to 7.51% as of October 2016 up from 7.02% as of December 2015.

The success of CIB Consumer Banking is demonstrated by the exceptional growth in customer deposits, which reached EGP 99 billion and USD 4 billion by December 2016, an impressive 12% y-o-y increase.

Insurance Business

The CIB Insurance Business provides life and general insurance programs that generate non-interest revenues in the form of fees for CIB Consumer Banking. CIB now is considered the largest distributor of individual life insurance policies in Egypt, with around 56% of the new business market share in 2016.

In 2000, CIB began promoting life insurance programs such as protection and savings packages. These programs were introduced to address a variety of consumer needs through Commercial Insurance Life Company (CIL). The department began offering general insurance in 2011 and capitalised on its strong links to the Egyptian market and the top insurance providers to find the best solutions for our customers.

Key 2016 Highlights

In December 2015, CIB completed the sale of CIL to AXA. As part of the sale transaction, CIB signed a bancassurance agreement with AXA giving it the benefits of a 10-year, exclusive life, savings and health distribution.

Several new life insurance programs were also introduced in 201415, with upgraded benefits to better satisfy customer needs in a variety of segments.

In 2016, AXA introduced for the first time in the Egyptian market the Health Insurance Product, exclusively through CIB Distribution Channels, allowing CIB to be the first bank to market such a significant product to its customers. The launch capitalised on AXA’s vast medical network in Egypt, which includes more than 1,800 medical providers to suit all client segments, and caters to the increased demand for adequate health solutions in the Egyptian market.

Strategic Goals

  • Increase revenue contribution to Consumer Banking to 10% by 2017.
  • Increase market penetration by expanding CIB’s customer base.
  • Lead the market by introducing a wide range of products from the best insurance providers.

2016 Achievements: Life Insurance

  • Life insurance fee income increased 45% in 2016 compared to 2015. The life insurance business was worth EGP 427 million in 2016 compared to EGP 282 million in 2015, a significant growth of 51%.
  • Continued to provide a wide array of insurance plans to meet the needs of all consumers.

2016 Achievements: General Insurance & Bundled Products

  • Increased Credit Shield fee income by 42% compared to 2015.
  • Increased Family Protection Plan fee income by 27% compared to 2015.
  • Developed the Business Banking Master Policy, providing CIB Business Banking’s unsecured customers with property insurance coverage for approved assets.

Going forward, CIB will develop different bundled insurance services with consumer products and segments.

Marketing & Communication

The growth of the Consumer Banking portfolio can be directly attributed to the launch of several new successful marketing activities/campaigns that adopted a personalized targeting approach, leading to more effective customer engagement and enhanced loyalty.

The Consumer Assets Division recorded a total revenue of EGP 956 billion as of December 2016, contributing 19.4% to total Consumer Banking revenue.

Due to the shifting dynamics of the Egyptian market during the year, keeping up with key market research trends was more important than ever in 2016 in guiding future marketing activities. This was effected through measuring customers’ interests and behaviour by conducting both qualitative and quantitative research.

Marketing activities/campaigns launched during the year were designed to support our Consumer Banking strategy, which aims at a more personalised, targeted approach when it comes to customer interactions. The goal was to shift from a product-centric approach to a customer-centric one in terms of appealing to a target group’s age, demographics and interests.

In more specific terms, the team focused on digital marketing due to the undeniably pervasive nature of technology in everyday lives. Incorporating digital campaigns into our marketing strategy in 2016 was essential to ensuring maximum exposure and reach for CIB products and services.

Our digital marketing approach focused on two main channels:

  • Search Engine Marketing: users proactively searching for the product/service.
  • Digital Display Marketing: users visiting websites that relate to their needs and interests but not proactively looking for the product/service.

Various marketing initiatives also took place on CIB’s official Facebook page, which boosted the number of fans on the page to 490,000 (organic fans), up 30% in the third and fourth quarters of the year compared to the first and second. The CIB website also saw a tremendous 40% increase in the number of hits this year to the consumer banking pages.

Consumer Assets

The Consumer Asset Portfolio has exhibited significant growth of EGP 4.6 billion in 2016 despite the myriad of challenges posed due to changing market dynamics, currency devaluation and regulatory requirements. The portfolio hit EGP 14.8 billion as of December 2016. CIB has been more nimble in addressing the adverse impact experienced in the market due to the restrictions on lending and shortage of foreign currency.

The Consumer Assets Division recorded a total revenue of EGP 956 billion as of December 2016, contributing 19.4% to total Consumer Banking revenue.

Our key objective is to sustain this level of growth in 2017 and to outpace the market through a more segment-driven strategy that drives our product propositions, acquisitions and service models, and portfolio and life cycle management. This will translate into providing our clients with need-based propositions at the point of need.

Consumer Asset products are designed to be customer-centric to facilitate a demand-pull approach and gradually move away from a product-push approach. 2016 saw several new card product launches and re-launches to ensure effective product differentiation and that we successfully meet our clients’ varied needs.

Key 2016 Highlights

  • Ongoing card realignment and setting a clear product hierarchy with value differentiation.
  • Launching two new card products: White and Titanium Credit Cards.
  • The successful migration of Citibank’s card portfolio, including an effective product-mapping strategy that ensured a smooth migration to the equivalent product at CIB while providing more value at a lower price point than at Citibank.
  • Visa Business credit and debit cards were launched to serve our business banking customers. These cards will serve as a very convenient way for both the corporation and the employee to manage and calculate business-related expenses and digitise their payments. Special deals and offers targeting the segment facilitate their daily business such as courier, transportation and travel services. In addition, there will be extra value-added features such as EPP and cash on call, which will provide the card holders with more purchasing power to grow their business.
  • Improving customer convenience through IPP with the launch of merchant-initiated IPP, covering 150 merchants across a variety of sectors.

Loans

The Personal Loan product grew aggressively in 2016 through a range of initiatives throughout the year:

  • Migrating Citibank’s loan portfolio using multiple programs developed to cater to different customer segments at Citibank while at the same time providing additional benefits for migrated loans such as longer terms and competitive interest rates.
  • The Wedding Finance Loan, which offers flexible financing schemes paid directly to hotel wedding venues. The package includes additional benefits from Egypt’s most prestigious hotels as well as discounted offers from other wedding-related merchants that are already part of the suite of merchants in CIB’s arsenal.
  • The Mortgage product suite mainly focused on the affordable housing segment this year, which is slated for growth through our mounting relationship with the Mortgage Finance Fund.
  • Overdraft Proposition improved payment convenience through the availability of secured and unsecured programs to best meet the needs of every client segment.

Acquisitions

CIB’s acquisition strategy was designed to ensure clear alignment between sales channels and corresponding segments, which enhanced client interactions and ensured a smooth process by clearly allocating client segments to the correct channels.

During the year, total credit card acquisitions increased 45% y-o-y to 100,000 in 2016. Total Personal Loans acquisition volumes increased 41% y-o-y to EGP 5.5 billion in 2016 compared to EGP 3.9 billion in 2015.

Going forward, we expect CRM Phase I deployment will contribute to a higher number of acquisitions through lead generation and opportunity management. CIB will continue to leverage CRM capabilities in 2017 after the initial deployment.

Portfolio Management

Due to shifting market dynamics throughout the year, CIB adopted a rigorous portfolio management strategy built to tailor services to various sub-segments based on established criterions for each product. The card portfolio strategy is designed for the 17 sub-segments in the portfolio. The sub-segments have been planned based on the transactional behaviour of card customers, and there are specifically designed initiatives across each segment to maximise the opportunities available.

For the loan division, a similar segmented approach was adopted, with the criteria based on months on book and the balance of the loan.

Business Banking

Business Banking is one of the oldest and largest bank units dedicated to serving small- and medium-sized enterprises (SMEs) in Egypt. The unit has the only complete SME-focused bundle in the market, offering a broad range of financing, cash management, trade, payment acceptance and advisory services to nearly 40,000 SMEs throughout the country. Our credit and debit card payment acceptance business is the clear market leader, processing nearly a third of total market volume in 2016.

In addition to offering specialised products such as supply chain and fleet financing, Business Banking fully supports the Central Bank’s initiative to expand SME financing as a key pillar of Egypt’s economic growth strategy. Central to this is our more targeted offering to key client segments and industries.

Business Banking’s experienced team of specialised SME Relationship Managers provides tailored solutions and advice, partnering with business managers to take their enterprises to the next level. In 2016, a new team of expert Client Advisors was formed to cater specifically to the needs of large depositors.

Clients enjoy the convenience of our market-leading digital channels that automate their financial transactions and inquiries, providing convenient remote access to CIB’s services and products outside our branches. Our online platform now accounts for over 40% of trade business volumes.

Key Achievements in 2016

Business & Product Development
  • Products and Services Tailored to Small Businesses

    Our new loan programmes offer small business clients pre-approved credit lines with minimal documentation and rapid turnaround, while the “Super Business” account bundles a range of exclusive benefits and services offering easy, 247 account access and cash management. To further bolster our offering, a new sales team was formed in 2016 to address the specific needs of the small business market.

  • Business Debit & Credit Cards Business Banking launched Egypt’s first SME credit and debit cards offering a range of unique benefits, including easy account monitoring and control, instalment plan options and exclusive merchant discounts

Strategic Partnerships, Training & Events
  • SME Business Certificate Programme

    The SME Business Certificate is a specially developed in-house training programme providing a range of on-the-job, soft skills and training courses to prepare our officers to become successful Business Banking Relationship Managers. We are proud to have graduated over 40 Relationship Managers in 2016 from the programme.

  • IFC Corporate Governance Workshop

    Partnered with the IFC to deliver training on corporate governance to our Business Banking clients.

  • AUC & Goldman Sachs Women Entrepreneurs Programme

    Partnering with the American University in Cairo and Goldman Sachs to support the “10,000 Women Entrepreneurs” programme.

2016 Financial Highlights

  • Deposits grew a record EGP 17.5 billion (49%), generating nearly a quarter of CIB’s total deposit growth.
  • Business Banking’s loan portfolio reached EGP 2 billion, driven by 43% growth in unsecured loans.
  • Net profit grew 22% to over EGP 800 million, nearly 14% of CIB’s total profits.