Commercial International Bank – Egypt (CIB) [COMI]:
Short-term pain for longer-term gain
Read in PDF
Egypt/ Banking/ core coverage report
12MPT: EGP83 (+25%) as of 25 Oct 2020
Risk Rating: Medium
The CBE’s purported reprimand: Last Thursday, trading on CIB’s [COMI] stock was suspended at the request of the Financial Regulatory Authority (FRA) without revealing the reason behind the suspension. Later that day, a letter reportedly sent by the Central Bank of Egypt (CBE) to CIB’s CEO spread throughout the different social media channels, citing some “serious violations” to the country’s recently-enacted Banking Law and the CBE’s rules and regulations. The letter also referred to “severe deficiency” in the bank’s internal audit environment which have resulted in “huge financial losses”, all of which can be described as “financial crimes”. The letter revealed that the CBE’s board of directors had convened on 20 October and decided to discharge CIB’s chairman in accordance with Article 144 (i) of the Banking Law No. 194/2020. Later on Friday afternoon, CIB issued a press release referring to the letter and announced the resignation of Mr. Hisham Ezz Al-Arab, the bank’s chairman and managing director, and the appointment of Mr. Sherif Samy, the bank’s independent board member and chairman of the bank’s Governance & Nomination Committee, as the new non-executive chairman.
Shihab M. Helmy
Equity Analyst
SMohammed@egy.primegroup.org