CIB to raise $1 billion to fund growth

folarin okunola

February 11, 2016 8:47 PM

CIB, which last year bought Citigroup's retail business in Egypt, did not give specific details on its growth plan.

People and vehicles are seen caught in a traffic jam in front of the Central Bank of Egypt's headquarters in downtown Cairo, Egypt, December 21, 2015. REUTERS/Amr Abdallah Dalsh

Commercial International Bank (CIB), Egypt's largest listed company, said its board had approved a plan to raise up to 8 billion Egyptian pounds ($1 billion) to fund expansion.

It said on Thursday that it would raise the money through the issue of financial instruments which could be denominated in Egyptian pounds or a foreign currency.

CIB said in a separate statement that it had proposed a dividend of 0.75 pounds per share for 2015, down from 1.20 pounds in 2014, to boost its capital adequacy ratio.

CIB announced late on Wednesday night a 26 percent jump in 2015 net profit to a record 4.7 billion Egyptian pounds. Its net profit for the fourth quarter was up 11 percent year-on-year to 1.15 billion pounds.

Naeem Brokerage upgraded its recommendation to "Buy" from "Accumulate" on the earnings.

However, CIB shares were down 5.2 percent at 1218 (1018 GMT) with some analysts expressing concern about rising provisions for non-performing loans in Q4.

Egypt, home to roughly 90 million people, has relatively few banks and offers opportunities for expansion.

The country has struggled to revive growth, however, since a 2011 uprising scared off foreign investors and tourists, key sources of foreign currency.

folarin okunola