Monday, November 17, 2014

EGX approved CIB capital increase as part of employee incentive system

The securities listing committee of the Egyptian Exchange (EGX) approved a request received from Egypt’s largest listed private bank Commercial International Bank (CIB) – Egypt to proceed with increasing issued capital as part of employee incentive system.
CIB’s board had endorsed an increase in issued and paid-in capital by EGP 94,747,940 (9474794 shares) as part of employee incentive system.
The bank posted 20.5% growth in consolidated net profit for the first nine months of FY14 to EGP 2.710 billion, compared with EGP 2.249 billion in the same period a year earlier.
Hisham Ezz Al-Arab, Chairman and Managing Director of CIB, commented: “CIB continued its strong performance in the third quarter, turning in record 9-month consolidated revenues of EGP 5.8 billion, with year-on-year growth of 17%. Consolidated bottom line came in at EGP 2.7 billion, an increase of 20% over last year” 

However, banks are still strongly criticized for very high interest rates which does not encourage economic growth, despite several interest rates reductions led by the Central Bank of Egypt, which is still required to reduce interest rates if it is serious about economic growth in Egypt.
Further, banks should reconsider their lending and crediting policies, which under the current system is hardly beneficial for entrepreneur who are establishing new businesses and ventures, but already rich companies which track records and a solid asset base. Banks should start considering moving its focus on the efficiency of the new projects and projected cash flow of new projects in order to help unemployment rates and more investment to be directed to Egypt. Further Banks should engage more and more in social responsibility projects that helps the community, in the field of education, health, social security, slums and informal settlements surrounding Cairo, or even in culture, music, theater and sports event, or athlete sponsoring, which may give a good push to such standing still sector, and in order to give to their clients and the communities where they operate and generate huge profits, that they also help such communities to develop and grow, healthy, educated and entertained. 
At least part of the millions of money paid in stupid TV and Bill board in the streets some of this money can be channeled to the community, which also will help marketing and advertizing the enterprise but in a way more beneficial to the country and those banks, further all such money is tax deducted, in an effort from the legislator to give the companies an incentive to invest in such projects.

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