The year saw the bank successfully access new foreign currency springs, adjust its pricing strategy, and introduce new products and services to its comprehensive offering.
The macroeconomic headwinds underpinned by currency devaluations, geopolitical tensions, interest rate hikes, inflationary pressures, and liquidity shortages significantly dampened market activity in 2022. Nonetheless, we continued to leverage our diversified business model and prudent risk management capacities to hedge against external shocks and effectively adapt to changing market conditions. As a result, the year saw the bank successfully access new foreign currency springs, adjust its pricing strategy, and introduce new products and services to its comprehensive offering. I am pleased that aiBANK witnessed solid growth across its core segments during the year.
Our Retail and Business Banking segment delivered outstanding results in 2022, with its deposit and lending portfolios increasing 23% and 69% Y-o-Y, respectively. During the year, our focus was on enhancing the efficiency of our processes while expanding our offerings to cater to our customers’ needs. Recognizing the importance of SMEs and their significant contribution to the growth and development of Egypt’s economy, aiBANK launched a fast-track, parameterized small business loan program in line with the Central Bank of Egypt’s mandate to allocate 25% of the bank’s total loan portfolio to SMEs, including 10% dedicated to small businesses. It gives me great pleasure to say that in 2022, and as a result of the immense success of our program, aiBANK surpassed the CBE’s mandate, recording an allocation of 27.8% of its total loan portfolio to SMEs, including 12.5% being injected into small businesses — a remarkable achievement for us and a testament to our unwavering commitment to supporting the nation’s directives to foster innovation in Egypt’s nascent entrepreneurial space.
Our Corporate Banking segment recorded strong growth across its loan portfolio during the year, which was primarily driven by the hike in the number of corporate clients operating in various key industries and the organic growth of its existing client base, coupled with an increase in syndication and group debt arrangements. In 2022, we successfully managed to grow our corporate portfolio by an outstanding 98% Y-o-Y. Another remarkable milestone aiBANK hit during the year was its participation in the landmark USD 700 million syndicated facility for Canal Sugar — Egypt’s largest agricultural project and a state-of-the-art sugar beet processing plant — winning the bank an award at the African Banker Awards 2022.
On the Islamic Banking side, we began taking the necessary steps to revitalize the segment to better serve our clients through a broader range of top-notch, valueaccretive Shariah-focused offerings.
Alongside the tremendous accomplishments across our core operations, it is equally important for us to continue enhancing our digital infrastructure to spur digital transformation across our branches. In alignment with this, I am happy to announce that we successfully reformed and upgraded our core banking system, which will enable us to grow our portfolio of premier online banking solutions across various channels and ensure the seamless integration of our expansive network of branches across the country.
Parallel to its digital transformation efforts, the microfinance leader acquired Fatura, a tech-enabled business-to-business (B2B) marketplace with a presence spanning 22 governorates in Egypt. Through this strategic acquisition, Fatura will grant Tanmeyah access to its fast-growing network of merchants, enabling the company to bridge the gap in the ever-growing B2B credit market.
At aiBANK, our commitment to integrating environmental and social frameworks into our policies, procedures, and management approach is unwavering. We are continually seeking solutions that effectively minimize the environmental impact of our operations, with a particular focus on key environmental concerns, such as climate change and greenhouse gas (GHG) emissions. In 2022, aiBANK’s head office was ranked one of the banks with the lowest carbon emissions.
In the insurance space, our tech-enabled microinsurance brand, Kaf, concluded the year with solid performance across its core operations and breaking ground in the market, having recorded the tremendous achievement of 2 million lives insured. Alongside its operational growth, Kaf focused on forging partnerships with other entities within the Firm’s NBFI platform. 2022 saw the company extend its insurance plans to Tanmeyah’s customers, mitigating the default risks of Tanmeyah’s borrowers and ensuring stability and progress of people’s small and micro businesses as part of its focus to drive financial inclusion across Egypt’s governorates.
In the future, I remain confident in the effectiveness of the strategy we have in place, which will enable us to withstand future macroeconomic challenges and achieve further growth in the year ahead while ensuring we consistently create value for our stakeholders. I look forward to reporting another successful year in 2023.
As part of its strategy to promote financial inclusion and spearhead digital transformation across the country, EFG Hermes Holding alongside The Sovereign Fund of Egypt (TSFE), concluded the acquisition of aiBANK in 2021. This acquisition marked EFG Hermes Holding’s strategic entry into Egypt’s ever-growing commercial banking sector and transformed the Group into a universal bank in Egypt, providing its clients with a holistic suite of financial services.
Founded in 1974, aiBANK has embarked on its transformation since its acquisition, setting out a strategy to become Egypt’s only boutique bank with a unique focus on people, entrepreneurs, and businesses, driving change across the market. Through a relentless commitment to customer-centricity, the bank aims to offer market-leading retail, institutional, and Islamic banking, as well as treasury and investment services tailored to consumers and businesses of all sizes. At the same time, aiBANK has set out a key objective to deliver the fastest turnaround times in the market, coupled with a commitment to ensuring clients receive solutions that are directly in line with their needs and exemplary service levels at every stage of their customer journey.
Operational Highlights of 2022
Despite the global headwinds witnessed in 2022 driven by foreign currency shortages, currency devaluations, and a series of interest rate hikes, aiBANK displayed resilience by leveraging its agility to hedge against macroeconomic risks, tapping new streams of foreign currency, making tactical changes in pricing, and launching new products. By the end of the year, aiBANK achieved growth across all its segments — Retail and Business Banking, SME and Midcap, Corporate Banking, and Islamic Banking — recording an increase in newly banked customers coupled with organic growth from its existing customer base. The bank registered total net loans of EGP 19.3 billion in 2022, reflecting a 102% Y-o-Y increase from the EGP 9.6 billion recorded in 2021.
On the Retail and Business Banking front, aiBANK achieved record growth across the segment, with the deposit portfolio up 23% Y-o-Y and the lending portfolio up 69% Y-o-Y. The bank continues its persistent efforts to enhance growth by optimizing its processes, services, and product ranges. 2022 saw aiBANK capitalize on the importance of SMEs to the national economy in an effort to further diversify its portfolio, growing its SME portfolio during the year to reach the Central Bank of Egypt’s (CBE) mandate of 25% of a bank’s total loan portfolio allocated to SMEs, which includes a dedicated 10% to small companies. The bank managed to successfully surpass the mandate in 2022, with 27.8% of its total loan portfolio dedicated to SMEs, which included 12.5% allocated to small companies. Additionally, during the year, the bank introduced a new, fast-track small business loan program, which resulted in higher realized gains across its portfolio amounting to EGP 700 million by year-end 2022.
The year also saw aiBANK take steps to revitalize its Islamic Banking segment and expand its roster of Shariah-focused offerings, with an eye for ensuring the best quality of service to its client base of individuals and businesses.
aiBANK’s Treasury division focused on diversifying the bank’s excess liquidity of short-, medium-, and long-term investment tools, enabling it to capitalize on the interest rates hikes witnessed during the year while maintaining a balanced maturity ladder to offset liquidity shortages.
Digital Transformation
In efforts to enhance its digital infrastructure and as part of its wider strategy to contribute to the nationwide directives of promoting digital transformation, aiBANK has successfully reengineered and upgraded its core banking system in 2022 to broaden its offered services and better serve its customers.
ESG
As aiBANK continues to witness remarkable growth across its core operations, it becomes more committed to integrating environmental and social frameworks into the fabric of its policies and procedures, as well as its management approach. On the environmental front, the bank aims to consistently minimize the adverse environmental impact of its operations by regulating its emissions to tackle key environmental issues, such as climate change and GHG emissions. Additionally, aiBANK measures the carbon footprint of its head office and has been ranked one of the banks with the lowest carbon emissions.
Financial Highlights of 2022*
In 2022, aiBANK recorded a net interest income of EGP 1.8 billion, reflecting an increase of 61% Y-o-Y from the EGP 1.1 billion recorded at year-end 2021. The bank’s net com- mission income grew a remarkable 162% Y-o-Y to EGP 316 million, up from the EGP 120.5 million recorded in the previous year, driven by the increase in volumes of trade finance transactions and the accelerated bookings of retail loans. By the end of 2022, the bank had recorded a net profit after tax (NPAT) of EGP 526 million.
*Figures in this section are based on aiBANK’s standalone financials
Forward-Looking Strategy
Looking ahead, aiBANK aims to continue expanding its offering of banking products and services across its core segments and refurbishing existing segments, with an eye to growing its customer base. The bank continues to focus on growing its retail and business banking capacities and corporate and investment portfolio, while simultaneously reengineering its Islamic Banking segment, strengthening its SME business model, and introducing new digital channels and segmental value propositions to boost its portfolio and profitability metrics.
