May 12th, 2008
9M07/08 Result: Improved Performance
Net Interest Income Advanced by 26.2% YoYEDBE's net interest income increased by 26.2% YoY to reach EGP192.3 million in 9M07/08 (and by 11.9% QoQ). Interest from loans and due from banks substantially increased by 77.8% YoY to EGP536.9 million in 9M07/08 as gross loans increased by 24.0% YoY and due from banks increased by more than five times to EGP3.8 billion.  Interest from T-bills & bonds declined dramatically by 55.1% YoY to reach EGP59.2 million in 9M07/08 on the back of a plunge in T-bill and bond holdings by 53.1% YoY, as a result of decreasing yields in the local treasury market. We believe that banks will further reduce their T-bill and bond holdings due to the recently-announced removal of tax exemptions on treasuries. Interest expense increased by 43.4% YoY to register EGP403.9 million in 9M07/08 as deposits advanced by 52.9% YoY to EGP6.8 billion in 9M07/08. Interest spreads increased by 16 bps to 1.32% in 9M07/08, while NIM witnessed a decline by 2 bps to reach 2.36% YoY.