saib Bank has seen its net profits rise by 84% to $20.4m in 2020, compared to $11.1m in 2019, reflecting a sturdy increase of $9.3m.
The notable figures come as the bank maintained its strong growth despite the challenges of the novel coronavirus (COVID-19) pandemic.
According to the bank’s business results, which were revealed on Sunday, the increase in profits was driven by the increase in net income from the return, and the increase in net trading income.
Moreover, the bank’s net income from revenues during 2020 increased by 33%, compared to 2019, as a direct result of the increase in net loans and facilities to customers by about $206m, reflecting an increase of 14%.
At the same time, retail banking loans to individuals increased by 60%, while loans to corporate clients increased by 12%, benefiting from the Central Bank of Egypt (CBE) initiatives presented to reduce the pandemic’s impacts.
At the same time, the decrease in the cost of deposits had an important role in the increase in net income from the return.
On the other hand, net income from fees and commissions decreased by 29%, due to the slowdown in corporate activities at the level of foreign trade operations. This was driven by the negative impact of the COVID-19 pandemic, and the decrease in individual commissions from credit cards and ATMs.
It was also affected by the exemption on local currency transfers from commissions, as part of the CBE initiative to facilitate the use of electronic payment methods.
The decrease in commissions was offset by the increase in commissions for consumer, car, and personal loans. This had a positive effect on alleviating the severity of the decline in net income from fees and commissions in general. It came as the net trading income increased during 2020 by 36% compared to 2019, affected by the increase in foreign exchange earnings.
According to a statement by saib Bank, it has taken proactive steps in managing credit risk as a result of the slowdown in most commercial activities and the uncertainty in the indicators of the economic environment.
The impairment burden for customer loans and facilities reached $9.5m, compared to $3.7m in 2019, which reflects the bank’s conservative policy. At the same time, the impairment response for financial investments, balances and loans with banks amounted to $1.2m compared to $4m in 2019.
The bank consolidated the balance of allocations for credit losses for all items during 2020, with a value of $8.2m compared to returning allocations of $305,000 during 2019.
It pointed out that the rate of return on equity reached 5.83% in 2020, compared to 3.42% in 2019, and the rate of return on assets was 13.63% in 2020 compared to 7.41% in 2019.
The ratio of total customer loans and facilities to customer deposits reached 46.69% in 2020, compared to 40.47% in 2019. Meanwhile, the capital adequacy ratio increased, taking into account the impact of the 50 largest clients, to reach 16.26% by the end of December 2020, compared to 14.99% at the end of December 2019.
This was higher than the CBE-set minimum of 12.50%, which will contribute to achieving the bank’s ambitious growth plan during 2021.