PHOTO
A woman walks past the Central Bank of Egypt's headquarters in downtown Cairo March 17, 2013. Image used for illustrative purpose
CAIRO- Commercial International Bank (CIB), Egypt's largest private bank, increased its loan loss provisions by 60% in the third quarter after a central bank review raised compliance concerns that led to the dismissal of its chairman.
CIB had already taken large provisions this year because of the coronavirus pandemic, which wiped out much of its tourism industry, battering Egyptian companies throughout the economy.
The bank increased provisions to 1.60 billion Egyptian pounds ($102.2 million) from 1.02 billion pounds in the second quarter. Provisions in the third quarter of 2019 were 412 million pounds.
CIB said it was "prioritising solvency over profitability in light of the macroeconomic challenges that followed the COVID-19 outbreak."
Former Chairman Hisham Ezz al-Arab stepped down in October after the central bank said a committee had found "gross violations" of central banking law within CIB after an inspection of the bank.
"CIB management reviewed the inspection findings and identified corrective actions to be taken. The Q3 financial statements take into account the impact of such findings and actions," it said in a statement accompanying the results.
Net profit rose to 2.35 billion pounds in the third quarter from 3.18 billion pounds a year earlier.
CIB has prepared a correction plan based on the central bank's remarks and has implemented parts of it already, current chairman Sherif Samy told Reuters on Wednesday.
Provisions now cover 11.5% of its total loan portfolio, CIB said.
($1 = 15.6600 Egyptian pounds)
(Reporting by Ehab Farouk Writing by Nadine Awadalla and Patrick Werr Editing by David Goodman and Louise Heavens) ((Nadine.Awadalla@thomsonreuters.com;))