CIB signed an agreement yesterday with the International Finance Corporation (IFC), which has provided CIB with a subordinated loan of USD100mn. This follows an agreement on 14 Nov with the EBRD, which granted CIB a subordinated loan of also USD100mn. Both loans qualify as Tier-2 capital and will drive CIB’s capital adequacy ratio up to 19.1%, from 16.95% in Sep 2017. 
 
The new USD Tier-2 capital will serve as a partial hedge to volatility in the EGP. CIB has 48% of its loan book denominated in USD, but its shareholders equity (Tier-1 capital) is all denominated in EGP. Most other banks in our coverage have also either increased (Baraka, ADIB-E) or booked (Credit Agricole Egypt) Tier-2 capital in USD after the floatation of the EGP in November last year.

(Company disclosure, Elena Sanchez-Cabezudo)
 
CIB: EGP74.43 as of 28 Nov. 2017, Rating: Buy, TP: EGP90.00/share, MCap: USD4,834mn, COMI EY/COMI.CA