SECTOR NOTE. Cloudy, with an eye for future sunshine EGYPT BANKS. December 7, 2011 ALIA ABDOUN

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1 Cloudy, with an eye for future sunshine Though we remain positive on the sector s long-term potential, near-term risks exist with the low political and economic visibility, rising budget deficit and rising local banks sovereign exposure. We expect loan growth to finish 2011 weaker YoY and to continue weakening in We expect NPLs to slightly build up in 4Q11 and Loan growth is projected to start gaining momentum from We expect banks to increase their loan loss provision bookings over 4Q11 and keep them high in 2012, which will likely hinder their bottom-line growth during those years. Non-interest income will likely stay distressed over 2011 and Overall, NII is expected to remain resilient, despite some expected pressures from the cost of funding. Lower YoY estimated balance sheet growth in 2011 and 2012, slower revenues, higher provisions and taxes, and a higher cost of equity all drove valuations lower. Nevertheless, we still see upside. While CIB is not rated due to its c.100% ownership in CI Capital Holding (CICH), we decreased both LTFV and TP for NSGB by 24% and 28% to EGP30.21/share and EGP28.70/share, respectively, leaving a 22% upside potential; therefore we maintained our Buy recommendation. For CAE we have decreased our LTFV and TP by 20% and 19% to EGP10.39/share and EGP10.01/share, respectively, with 25% upside to TP we maintained our Buy recommendation. For HDB, we also reduced LTFV and TP by 25% and 17% to EGP18.88/share and EGP15.63/share, respectively, implying an upside potential of 15%; hence we upgrade our recommendation from Underweight to Hold. We maintained Moderate Risk ratings for all banks. Lower estimated balance sheet volume in 2012, higher loan loss charges to burden earnings: 9M11 revealed some resilience, as the three leading covered banks CIB, NSGB and CAE showed loan growth ranging from 5% to 9%, while HDB showed only 3%. NPLs ratio levels did not show significant movement for the 3 leading covered banks (ranging +/-20bps) and averaged 2.9%, meanwhile HDB added 92bps in 9M11 vs. December 2010 to reach 6.4%. Though we expect NPLs ratio to edge higher, we estimate it to add around 56-58bps cumulatively over 2011 and 2012 for the 3 leading coverage banks, while HDB is estimated to add around 146bps of which the bulk had been already registered in the 9M11 period vs. December Provisions charge formed 8% and 11% of banking income for CIB and CAE in 9M11, respectively, and was lower at 4% for NSGB. Meanwhile, HDB s net charge was almost nil. We expect provisions charges to remain high in NIMs to hold up fine due to the increase in T-Bills yields: As T-Bills yields peaked in 2011, NII revealed resilience showing an average YoY rise of 13% in the 9M11 for covered banks. Overall, NII is expected to remain healthy as we do not expect T-Bills yields to fall in 2012, despite some expected pressures from the cost of funding, especially after the two leading public banks had raised interest rates by bps on two types of saving certificates and the Central Bank of Egypt (CBE) raised corridor rates (+100bps for deposits rate, +50bps for lending). Non-interest income to stay distressed: Slow balance sheet in 2012 will likely affect fee income. A weaker markets backdrop is expected to weigh on trading income, dividend income and other income, including gains on investment sales. Lower estimates and higher cost of equity drove down valuations; upside remains: Higher provisions, taxes and slower income growth are all factors that pressured our valuations. TPs are set lower given the current uncertain political and economic backdrop. Those market uncertainties are the main risks that may lead to weakening asset quality, including building up of NPLs, which calls for higher provisions and leads to lower earnings. However, faster stability would be an upside to our estimates and hence valuation. Close LTFV TP Upside Rec. PER PBV RoAE Div. Yield 6-Dec-11 7-Dec-11 7-Dec NSGB % B 6.4x 1.1x 17.5% 6% CAE % B 7.2x 1.2x 17.3% 10% HDB % H 8.1x 0.8x 9.5% 6% CIB * N/R N/R N/R N/R 7.6x 1.3x 18.4% Source: Banks Financials & CI Capital Research Forecasts 4% *CIB Multiples & RoAE exclude goodwill & intangible assets, CIB is not rated due to its ownership of c. 100% of CICH 1 POTENTIALS A highly profitable sector Huge growth potential due to highly underpenetrated market, especially in retail, mortgage and SME lending High liquidity. A balanced total loans/deposits ratio at c.49% implies a funding surplus and readily available liquidity. A real/non-inflated balance sheet, primarily funded by core deposits. Improved asset quality through reforms and consolidations. No significant exposure to sub-prime mortgage securities places the sector at an advantage vs. Banking sectors in other countries. Political reforms and cleaning up corruption can create a better business environment supporting sector growth. RISKS Political risks including protracted political tensions that affect the economic and business environment, and the banking sector. A larger - or longer-than-expected GDP slowdown that can pressure deposits and loan growth or weaken asset quality. A large global recession and the risk of other exogenous factors that might impact the sector. Slower-than-expected rise in banking penetration, especially for retail, SMEs and mortgage lending. Liquidity risks for both local and foreign currency. Interest rate risks including increased pricing pressures of funds or mismatches. FX risks. Operational risks. Regularity risks including more stringent requirements. SYSTEM LOANS & DEPOSITS (EGP bn) 1,200 1, Loans Deposits Loans Growth Deposits Growth Sep-11* 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Source: Central Bank of Egypt (CBE) *September 2011 growth rate compared to December 2010 ALIA ABDOUN ALIA.ABDOUN@CICAPITAL.COM.EG

2 National Societe Generale Bank Moving forward with vigilance... NSGB is Egypt s second largest private-sector bank, considered highly liquid by regional standards. NSGB possesses high revenue generation ability and is currently the most cost-efficient in our Egypt coverage excluding amortization. NSGB was one of the first Egyptian banks to penetrate the high-growth retail lending segment (c.17% of loans) and had been branching out successively over the last few years in Egypt. However, the recent economic slowdown and political blur are expected to have their toll on balance sheet volumes and earnings growth as well as asset quality. This requires provisioning estimates to remain high in 2011 and Net Profit After Tax (NPAT) should be further affected by the higher imposed tax rate of 25%. Based on the above, in addition to an estimated 100bps higher cost of equity, drove lower our LTFV by 24% to EGP30.21/share and TP by 28% to EGP28.70/share, implying an upside potential of 22%. Thus, we maintain our Buy recommendation, with a Moderate Risk rating. Loans to increase by 8% in 2012; margin almost flat: Lending is expected to finish 2011 with a 12% growth (slowing from 18% in 2010) and slow its pace to grow by 8% in We expect the growth rate to accelerate starting 2013, to finally register a projected overall 5-year CAGR of 15.5% until Excluding quarterly fluctuations during the year, we expect NIM to finish 2011 broadly flat, as we think the effect of higher yields of T-Bills on NIM vs. the effect of lower YoY volumes and a probability of higher cost of funds would offset each other. On the longer term, the growing retail penetration is expected to support spreads and interest margin; so NII is projected to grow at a 5-year CAGR of 13.5% until NPLs/Loans ratio is expected to weaken gaining 56bps to reach 4% by year-end 2012, but to improve throughout projected period ending 2015, as it moves closer to CIB's and CAE's average. A hike in provisions, higher taxes: Though 2011 is supported by the end of amortization charges in 2010, the expected hike in provisions especially in 2011 and 2012 should impact earnings growth. Also, the higher imposed tax rate (25% up from 20%) will create another negative pressure. Non-interest income distressed, YoY NPAT seen 5.5% higher in 2011: We project non-interest income to remain mostly distressed in 2011 (-5%) but to slightly improve in 2012 (+4%) to record a 5-year CAGR of 9.7% until We expect NII to be more resilient and show a 5-year CAGR growth of 13.5%. Decreasing LTFV and TP; maintaining Buy recommendation: Lower earnings estimates have depressed LTFV and TP by 24% and 28% to EGP30.21/share and EGP28.70/share, respectively, which implies a 22% upside potential over market price. We maintain our Buy recommendation with a Moderate Risk rating. EGP mn 2009 A 2010 A 2011 F 2012 F 2013 F NII 1,652 1,896 2,111 2,312 2,647 Growth rate 16.0% 14.8% 11.3% 9.5% 14.5% Non interest Income ,055 Growth rate -2.7% 13.2% -4.8% 3.8% 17.8% NPAT 1,293 1,338 1,411 1,354 1,668 Growth rate 13.8% 3.5% 5.5% -4.1% 23.2% Loans 26,569 31,345 35,219 38,122 44,255 Deposits 43,715 50,084 53,569 56,945 64,564 NIM 3.76% 3.75% 3.78% 3.86% 4.02% RoAE * 36.5% 29.2% 20.9% 17.5% 19.5% RoAA * 3.3% 2.9% 2.2% 2.0% 2.3% PER * 5.4x 5.3x 6.1x 6.4x 5.2x PBV * 1.7x 1.4x 1.2x 1.1x Source: Bank Financials & CI Capital Research Forecasts 1.0x * 2009 & 2010 multiples & RoAE/RoAA exclude goodwill / amortization BANK SYNOPSIS BUY (MAINTAINED) LTFV EGP30.21 (DECREASED) TP EGP28.70 (DECREASED) National Société Générale Bank (NSGB) was established in April 1978, by the French Société Générale Bank (SGB); one of the largest financial services group in the Eurozone, and National Bank of Egypt (NBE); Egypt s largest public bank. In September 2005, NSGB acquired 90.7% of Egypt s second largest private bank at the time; Misr International Bank (MIBank). NSGB is currently one of the largest private sector banks in Egypt. The bank operates in key businesses including retail banking, corporate and investment banking, alongside other activities offered through its affiliates such as leasing via Sogelease, NSGB Life Insurance company and ALD Automotive specialized in car rentals and fleet management. Currently, Société Générale owns 77.2% of NSGB after acquiring NBE s 18% stake in addition to another 6% in August Currently, NSGB runs a network of 156 branches and 316 ATMs. SHARE DATA Reuters; Bloomberg [NSGB.CA; NSGB EY] Recent price as of 6-Dec-11 EGP No. of O/S shares mn Market cap EGP 8,621.5 mn 52-wk high / low EGP 52.5/ EGP Avg. daily volume / turnover 0.14mn / EGP 5.21mn SHAREHOLDER STRUCTURE Société Générale Bank (SGB) 77.2% Free Float 22.8% Total 100.0% 52 WEEK PERFORMANCE Dec-10 Dec-10 NSGB Volume NSGB EGX30 - rebased Jan-11 Feb-11 Mar-11 Apr-11 Source: Bloomberg May-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Oct-11 Nov Millions ALIA ABDOUN ALIA.ABDOUN@ CICAPITAL.COM.EG 2

3 NSGB Balance Sheet (In EGP mn) 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Assets Cash & Due from Banks 4, , , , , , ,080.4 Interbank Assets 5, , , , , , ,391.7 T-Bills & Government Securities 9, , , , , , ,444.8 Net Trading Investments Available for Sale Investments 5, , , , , , ,309.4 Net Loans & Advances 26, , , , , , ,358.8 Held-to-Maturity Investments Investments in Subsidiaries Accrued Income & Other Assets , , , , , ,073.8 Net Fixed Assets , , ,366.9 Goodwill Total Assets 53, , , , , , ,562.2 Liabilities and Shareholders' Equity Interbank Liabilities Customer Deposits 43, , , , , , ,208.1 Accrued Expenses & Other Liabilities 1, , , , , , ,345.6 Dividends Payable ,076.7 Provisions Medium-/Long-Term Loans Subordinated Debt Total Liabilities 47, , , , , , ,235.9 Paid-in Capital 3, , , , , , ,032.1 Reserves 1, , , , , , ,294.0 Retained Earnings Total Shareholders' Equity 5, , , , , , ,326.3 Total Liabilities & Shareholders' Equity 53, , , , , , ,562.2 Contingent Liabilities 12, , , , , , ,177.2 Total Footing 65, , , , , , ,739.3 Income Statement (In EGP mn) 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Total Interest Income 3, , , , , , ,206.5 Interest Paid to Clients & Banks 1, , , , , , ,638.7 Net Interest Income (NII) 1, , , , , , ,567.8 Provisions Net Interest Income AP 1, , , , , , ,504.6 Fees and Commissions Income ,088.2 Investment Income Trading Income Other Incomes Non-Interest Income , , ,441.5 Operating Income (BP) 2, , , , , , ,009.4 Operating Income (AP) 2, , , , , , ,946.2 G&A Expenses and Depreciation , , , , ,765.6 Amortization Other Expenses Non-Interest Expense 1, , , , , , ,836.7 Net Operating Income 1, , , , , , ,109.5 One-offs Unusual Items Net Income Before Tax 1, , , , , , ,109.5 Taxation NPAT 1, , , , , , ,332.1 Less: Non-Appropriation Items Net Attributable Income (NAI) 1, , , , , , ,142.5 Source: Bank Financials & CI Capital Research Forecasts 3

4 NSGB - Ratios Profitability & Efficiency Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Interest Margin (NIM) 3.76% 3.75% 3.78% 3.86% 4.02% 4.08% 4.08% RoAA 2.61% 2.34% 2.24% 2.01% 2.25% 2.32% 2.37% RoAA adjusted * 3.26% 2.89% 2.24% 2.01% 2.25% 2.32% 2.37% RoAE 27.03% 23.66% 21.08% 17.55% 19.51% 20.48% 21.80% RoAE adjusted * 36.46% 29.23% 20.85% 17.55% 19.51% 20.48% 21.80% Cost / Income 49.25% 45.78% 35.71% 37.85% 37.69% 37.39% 36.67% Cost / Income * 34.49% 32.87% 35.71% 37.85% 37.69% 37.39% 36.67% Earning Assets / Total Assets 88.91% 88.74% 88.87% 88.95% 89.03% 89.11% 89.19% Productivity & Asset Quality Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Loans / Customer Deposits 60.78% 62.59% 65.74% 66.94% 68.54% 70.14% 71.34% Interbank Ratio Liquid Assets / Total Deposits 56.13% 54.99% 51.82% 50.75% 48.45% 44.59% 42.38% Assets Utilization 8.38% 8.37% 8.38% 8.59% 8.74% 8.77% 8.80% Equity / Assets 9.88% 9.94% 11.25% 11.63% 11.48% 11.21% 10.63% NPLs / Total Loans 4.77% 3.42% 3.49% 3.97% 3.51% 3.01% 2.46% Provision Coverage Ratio 91.7% 93.8% 90.1% 80.3% 84.9% 87.1% 91.3% Growth & Market Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Loans Growth 6.2% 18.0% 12.4% 8.2% 16.1% 19.5% 21.7% Customer Deposits Growth 18.5% 14.6% 7.0% 6.3% 13.4% 16.8% 19.7% EPS (EGP) PER 6.7x 6.4x 6.11x 6.4x 5.2x 4.4x 3.7x EPS adjusted (EGP) * PER adjusted * 5.4x 5.3x 6.1x 6.4x 5.2x 4.4x 3.7x DPS (EGP) Dividend Yield 5% 5% 6% 6% 7% 9% 10% Retroactive BV/Share (EGP) PBV 1.6x 1.4x 1.2x 1.1x 1.0x 0.9x 0.8x BV/ Share adjusted (EGP) * PBV adjusted * 1.7x 1.4x 1.2x 1.1x 1.0x 0.9x Source: Bank Financials & CI Capital Research Forecasts 0.8x * Excluding goodwill / amortization for 2009 &

5 Credit Agricole Egypt Fast loans over forecast, but a blurred backdrop induces a TP trim CAE is one of the leading mid-sized Egyptian banks, and one of the most liquid in terms of loans-to-deposits ratio (LDR). Therefore, it is expected to be the fastest in our coverage in terms of the rate of loans growth. Though it holds one of the high cost/income ratios in our Egypt coverage, it also has one of the highest RoAEs, coupled with a high payout ratio. Margins are set to end 2011 with an improvement, due to the rise in T-Bills yields, but to stabilize in 2012 with the expected sluggish volumes and rise in cost of funds. Starting 2013, the projected rising volumes and higher contribution of retail lending to the overall mix (currently c.26%) should help maintain margins at a decent level thereafter. The bank currently has one of the lowest NPLs ratio in our Egypt coverage, with potential slight weakening in 2012 in line with the economic slowdown. Conclusively, we have lowered growth expectations for balance sheet and revenues, and raised the cost of equity in line with the increasing interest rate environment. We decreased our LTFV by 20% to EGP10.39/share and reduced our TP by 19% to EGP10.01/share, which implies 25% upside to market price. We therefore maintain our Buy recommendation, with a Moderate Risk rating. Loans to grow by 9% in 2012: We expect loan growth rate to finish 2011 at 9.5% (vs. 30.1% in 2010), and to continue its sluggish growth in 2012 (+9.3%). Nevertheless, we attach the fastest loan growth expectations amongst coverage banks to CAE; a 5-year CAGR of 16.7% until 2015, supported by the bank s high liquidity and lower loan base compared to CIB and NSGB. Total banking income to grow by 6% and 2.6% in 2011 and 2012: Banking income growth in 2011 and 2012 should be supported by NII (+11.5% and +4.6% in 2011 and 2012, respectively) but reined in by non-interest income (-6%, -2%, respectively) Higher provisions and taxes to pull back NPAT 27% YoY in 2011: Provisions charge is to rise to 8.5% of total banking income in 2011, compared to 3.4% in 2010, as the NPLs ratio is expected to edge up 56bps (vs. December 2010) to 3.14% in 2012 in line with the economic situation. Currently, CAE has the lowest NPLs/Gross loans ratio in our coverage and has lost 20bps from the ratio over 9M11. High dividend payout to gradually reduce: Though CAE shareholders currently benefit from a high dividend payout ratio (77% in 2010), we expect that to decrease throughout forecast to avoid a decline in its capital adequacy level to match the estimated growth in Risk-Weighted Assets (RWAs), currently Capital Adequacy Ratio (CAR) stands at 13.6% (vs. 10% required by CBE). Reducing LTFV & TP, Buy maintained: Lower estimates and 100bps higher cost of equity led to 20% and 19% cuts in LTFV and TP to EGP10.39/share and EGP10.01/share, respectively. Given an upside potential of 25% to TP, we maintain our Buy recommendation, with a Moderate Risk rating. EGP mn 2009 A 2010 A 2011F 2012F 2013F NII ,042 Growth rate 10.3% 16.2% 11.5% 4.6% 16.0% Non interest Income Growth rate -18.6% 12.7% -5.8% -2.4% 20.5% Net income Growth rate -17% 13% -27% -1% 34% Loans 8,290 10,788 11,814 12,913 15,399 Deposits 19,451 21,081 22,247 23,607 27,063 NIM 3.4% 3.7% 3.9% 3.9% 4.1% ROAE 22.8% 24.9% 17.8% 17.3% 22.2% ROAA 1.8% 1.9% 1.3% 1.2% 1.4% PER 5.8x 5.1x 7.1x 7.2x 5.4x PBV 1.3x 1.3x 1.3x 1.2x 1.2x Source: Bank Financials & CI Capital Research Forecasts 5 BANK SYNOPSIS BUY (MAINTAINED) LTFV EGP10.39 (DECREASED) TP EGP10.01 (DECREASED) Crédit Agricole Indosuez-Egypt started operations in 2001 when it acquired, along with El Mansour & El Maghraby for Investment & Development (MMID) 93.3% of Crédit International d Egypte (CIE), previously owned by Crédit Commercial de France (CCF) and the National Bank of Egypt (NBE). In 2005, Crédit Agricole Indosuez-Egypt merged with Crédit Lyonnais (Egypt Branch), thus jointly founding CALYON Bank-Egypt, this came after France s Crédit Agricole acquired France s Crédit Lyonnais. In February 2006, Crédit Agricole Group along with MMID acquired 74.6% of Egyptian American Bank (EAB). Based on the decision of the EGM held on June 2006, the merge of the operations of EAB and CALYON Bank-Egypt under the name of Crédit Agricole Egypt (CAE) took place in September CAE currently operates a network of 72 branches and 121 ATMs. SHARE DATA Reuters; Bloomberg [CIEB.CA; CIEB EY] Recent price as of 6-Dec-11 EGP 8.01 No. of O/S shares mn Market cap EGP 2,298.9 mn 52-wk high / low EGP 16.5/ EGP 7.71 Avg. daily volume / turnover 0.05mn / EGP 0.57mn SHAREHOLDER STRUCTURE Crédit Agricole S. A. 60.0% MMID 20.0% Free Float 20.0% Total 100.0% 52 WEEK PERFORMANCE Nov-10 Dec-10 Jan-11 Jan-11 Feb-11 Mar-11 Mar-11 Source: Bloomberg CIEB Volume CIEB EGX30 - rebased Apr-11 May-11 May-11 Jun-11 Jul-11 Jul ALIA ABDOUN ALIA.ABDOUN@ CICAPITAL.COM.EG Aug-11 Sep-11 Sep-11 Oct-11 Nov-11 Nov-11 Millions

6 CAE Balance Sheet (In EGP mn) 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Assets 19% Cash & Due from Banks 2, , , , , , ,265.3 Interbank Assets 5, , , , , , ,228.2 T-Bills & Government Securities 3, , , , , , ,254.5 Net Trading Investments Available for Sale Investments 1, , , , , , ,343.6 Net Loans & Advances 8, , , , , , ,321.1 Held-to-Maturity Investments Investments in Subsidiaries Accrued Income & Other Assets ,196.6 Net Fixed Assets Good Will Total Assets 22, , , , , , ,566.9 Liabilities and Shareholders' Equity Interbank Liabilities , ,779.5 Customer Deposits 19, , , , , , ,673.7 Accrued Expenses & Other Liabilities , , , , , ,091.3 Dividends Payable Provisions Medium-/Long-Term Loans Total Liabilities 21, , , , , , ,089.0 Paid-in Capital 1, , , , , , ,148.0 Reserves Retained Earnings Total Shareholders' Equity 1, , , , , , ,477.9 Total Liabilities & Shareholders' Equity 22, , , , , , ,566.9 Contingent Liabilities 7, , , , , , ,187.4 Total Footing 30, , , , , , ,754.3 Income Statement (In EGP mn) 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Total Interest Income 1, , , , , , ,058.0 Interest Paid to Clients & Banks , , , ,607.2 Net Interest Income (NII) , , ,450.9 Provisions Net Interest Income AP , ,412.4 Fees and Commissions Income Investment Income Trading Income Other Incomes Non-Interest Income Operating Income (BP) , , , , , ,004.8 Operating Income (AP) , , , , , ,966.4 G&A Expenses and Depreciation ,089.0 Other Expenses Non-Interest Expense ,090.2 Net Operating Income One-off Items Unusual Items Net Income Before Tax Taxation NPAT Less: Non-Appropriation Items Net Attributable Income (NAI) Source: Bank Consolidated Financials & CI Capital Research Forecasts 6

7 CAE Ratios Profitability & Efficiency Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Interest Margin (NIM) 3.40% 3.70% 3.86% 3.87% 4.05% 4.05% 4.05% RoAA 1.76% 1.85% 1.26% 1.19% 1.44% 1.49% 1.58% RoAE 22.79% 24.91% 17.80% 17.27% 22.19% 24.97% 28.27% Cost / Income 50.59% 47.99% 51.39% 57.06% 56.21% 55.90% 54.38% Earning Assets / Total Assets 86.25% 87.07% 86.00% 86.08% 86.16% 86.24% 86.32% Productivity & Asset Quality Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Loans / Customer Deposits 42.62% 51.17% 53.10% 54.70% 56.90% 58.90% 60.30% Interbank Ratio Liquid Assets / Total Deposits 69.97% 64.09% 58.78% 58.21% 55.64% 53.63% 52.14% Assets Utilization 7.50% 8.29% 8.53% 8.67% 8.88% 8.78% 8.68% Equity / Assets 7.74% 7.17% 7.00% 6.75% 6.23% 5.76% 5.44% NPLs / Loans 3.59% 2.58% 2.66% 3.14% 2.74% 2.29% 1.84% Provision Coverage Ratio 88.2% 107.6% 105.0% 94.4% 100.9% 105.5% 110.5% Growth & Market Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Loans Growth 18.8% 30.1% 9.5% 9.3% 19.3% 22.2% 23.9% Customer Deposits Growth 3.6% 8.4% 5.5% 6.1% 14.6% 18.1% 21.0% EPS (EGP) PER 5.8x 5.1x 7.1x 7.2x 5.4x 4.4x 3.5x DPS (EGP) Dividend Yield 14% 15% 11% 10% 12% 12% 12% Retroactive BV/Share (EGP) PBV 1.3x 1.3x 1.3x 1.2x 1.2x 1.1x 0.9x Source: Bank Financials & CI Capital Research Forecasts 7

8 Commercial International Bank The cautious builder CIB is Egypt s largest private-sector bank, capturing 8.3% of total loans and 7% of deposits making it highly liquid and one of Egypt s most profitable banks. Net loans growth had picked up markedly in 2010 (+28.6%), with retail lending s contribution rising swiftly. Net loans growth, however, slowed in 9M11 but did not dry out, recording 8%. We expect net loans growth to end 2011 with a growth rate of 11% and 8% in 2011 and 2012, respectively. This should improve thereafter to register an overall CAGR of 15.2% until 2015 with retail portfolio expected to build up rapidly. CIB generally maintains high levels of asset quality given its strict risk management policy. However, given the relatively vague market conditions and the bank adding c.20bps to its NPLs ratio in 9M11 to 2.94%, we have estimated a leap in provisions charges for 2011 and 2012, compared to Revenue generation is expected to be supported by an expected NII growth, against the more pressured non-interest income. Net loans to grow by 8% in 2012: CIB has been laying groundwork for expansion in retail and SME lending for years and is well-positioned to capitalize on these opportunities given its high liquidity and stringent risk measures. Lending expansion in those segments will certainly benefit from Actis expertise, and CIB is already a market leader in corporate banking. Gross retail loans expanded 39% in 2010 and by 17% in 9M11. Corporate loans on the other hand showed a 7% growth in 9M11 but remain the value driver. Overall, we expect net loans to grow by 11% and 8% in 2011 and 2012, respectively (vs. 28.6% in 2010), and an overall CAGR of 15.2% until Non-interest income hurt by weaker market: While NII is expected to show a healthy growth of 18.8% YoY in 2011, following the rise in margins in 9M11, noninterest income is expected to fall 24% YoY, impacted mainly by other income (- 77%) and trading income (-23%). We expect total banking income to end flat in 2011 and improve 8% in The following projected years are seen stronger, with total banking income expect to grow at an overall 5-year CAGR of 12% until 2015, driven by strong NII (5-year CAGR of 15.6%) and a revival in non-interest income (with an expected 5-year CAGR of 7%). Higher provisions and tax charges to pressure NPAT 20% lower YoY in 2011: Given the current economic uncertainty, we project NPLs ratio to add 58bps over 2011 and 2012, to reach 3.3% at year-end Provisions charges/total banking income is forecasted to increase to 8% and 6% in 2011 and 2012, respectively, compared to 0.2% in Further pressures on the bottom line would come from the recentlyimposed higher tax rate of 25% (up from 20%) that we incorporated in our projections. EGP mn 2009 A 2010 A 2011 F 2012 F 2013 F NII 2,030 2,258 2,682 3,015 3,474 Growth rate 12.9% 11.2% 18.8% 12.4% 15.2% Non interest Income 1,313 1,674 1,273 1,256 1,635 Growth rate -11.6% 27.5% -23.9% -1.3% 30.1% NPAT 1,745 2,007 1,591 1,713 2,222 Growth rate 27.8% 15.0% -20.7% 7.7% 29.7% Loans 27,242 35,046 39,028 42,245 49,042 Deposits 54,649 63,364 70,960 75,169 84,847 NIM 3.86% 3.72% 3.82% 3.86% 4.05% ROAE * 35.5% 34.0% 20.2% 18.4% 20.9% ROAA * 3.0% 3.2% 2.1% 2.1% 2.4% PER * 7.6x 6.2x 8.2x 7.6x 6.0x PBV * 2.4x 1.9x 1.5x 1.3x Source: Bank Financials and CI Capital Research Forecasts 1.2x *Excluding goodwill & intangible assets 8 BANK SYNOPSIS LTFV N/R* TP N/R* Commercial International Bank (CIB) [COMI] was founded by National Bank of Egypt (NBE) and Chase Manhattan Bank (CMB) in 1975 under the Open Door Policy. COMI has since become Egypt s leading private-sector bank, providing diversified services to multinationals along with private-sector industrial companies. Since its successful IPO in September 1993, the bank has been one of the Egyptian stock market s blue chips. CIB offers a high quality exposure to a full-fledged business varying among corporate and retail banking, investment banking, securities brokerage, mutual funds, asset management, research and insurance. CIB presence amounted to 154 branches and 488 ATMs. SHAREHOLDER STRUCTURE Actis 9.3% Free Float 90.7% Total 100.0% STOCK DATA Reuters; Bloomberg [COMI.CA; COMI EY] Recent price as of 6-Dec-11 EGP No. of O/S shares mn Market cap EGP 13,708.8 mn 52-wk high / low EGP 47.7/ EGP 19.9 Avg. daily volume / turnover 1.5mn / EGP 46.66mn STOCK PERFORMANCE 52 WEEKS Dec-10 Dec-10 COMI Volume COMI EGX30 - rebased 30.0 Jan-11 Feb-11 Feb-11 Mar-11 Apr-11 Source: Bloomberg Apr-11 May-11 Jun-11 Jun *CIB is not rated due to its c.100% ownership of CICH Jul-11 Aug-11 ALIA ABDOUN ALIA.ABDOUN@CICAPITAL.COM.EG Aug-11 Sep-11 Oct-11 Oct-11 Nov-11 Dec Millions

9 CIB Balance Sheet (In EGP mn) 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Assets Cash & Due from Banks 4, , , , , , ,960.3 Interbank Assets 7, , , , , , ,326.5 T-Bills & Government Securities 13, , , , , , ,875.9 Net Trading Investments , , , ,290.9 Available for Sale Investments 7, , , , , , ,028.4 Brokers-Debit Balances Reconcilation Accounts Net Loans & Advances 27, , , , , , ,086.4 Held-to-Maturity Investments Investments in Subsidiaries Accrued Income & Other Assets 1, , , , , , ,879.4 Deferred Tax Net Fixed Assets , ,192.9 Good Will Intangible Assets Total Assets 64, , , , , , ,456.7 Interbank Liabilities , , , , , ,040.8 Customer Deposits 54, , , , , , ,154.3 Accrued Expenses & Other Liabilities 1, , , , , , ,727.8 Brokers-Credit Balances Reconcilation Accounts Dividends Payable , ,321.2 Provisions Medium-/Long-Term Loans Debt Securities Total Liabilities 57, , , , , , ,995.5 Paid-in Capital 2, , , , , , ,934.6 Reserves 3, , , , , , ,675.8 Retained Earnings Shareholders' Equity 6, , , , , , ,406.7 Minority Interest Total Liabilities, Equity & Minority Interest 64, , , , , , ,456.7 Contingent Liabilities 12, , , , , , ,720.2 Total Footing 76, , , , , , ,177.0 Income Statement (In EGP mn) 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Total Interest Income 4, , , , , , ,091.3 Interest Paid to Clients & Banks 2, , , , , , ,428.3 Net Interest Income (NII) 2, , , , , , ,662.9 Provisions Net Interest Income AP 2, , , , , , ,583.6 Fees and Commissions Income , ,236.8 Investment Income Trading Income Other Incomes Ownership profits from subidiary company Non-Interest Income 1, , , , , , ,323.2 Operating Income (BP) 3, , , , , , ,986.1 Operating Income (AP) 3, , , , , , ,906.8 G&A Expenses and Depreciation 1, , , , , , ,545.0 Amortization Other Expenses Non-Interest Expense 1, , , , , , ,612.5 Net Operating Income 2, , , , , , ,294.3 One-offs Unusual Items Net Income Before Tax 2, , , , , , ,294.3 Taxation ,073.6 NPAT 1, , , , , , ,220.7 Minority Interest Net Profit After Minority Interest 1, , , , , , ,218.2 Less: Non-Appropriation Items Net Attributable Income (NAI) 1, , , , , , ,846.5 Source: Bank Consolidated Financials & CI Capital Research Forecasts 9

10 CIB - Ratios Profitability & Efficiency Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Interest Margin (NIM) 3.86% 3.72% 3.82% 3.86% 4.05% 4.08% 4.08% RoAA 2.87% 2.87% 1.99% 1.96% 2.32% 2.45% 2.53% RoAA adjusted* 3.00% 3.19% 2.11% 2.06% 2.41% 2.53% 2.57% RoAE 29.76% 28.36% 18.32% 16.92% 19.68% 21.02% 22.26% RoAE adjusted* 35.47% 34.04% 20.21% 18.42% 20.92% 21.87% 22.68% Cost/Income 37.04% 39.72% 38.91% 40.73% 39.22% 38.47% 37.40% Cost/Income adjusted * 35.02% 33.70% 36.19% 38.21% 37.11% 36.67% 36.43% Earning Assets / Total Assets 88.68% 88.19% 90.68% 90.76% 90.84% 90.92% 91.00% Productivity & Asset Quality Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Loans / Customer Deposits 49.85% 55.31% 55.00% 56.20% 57.80% 59.60% 61.20% Interbank Ratio Liquid Assets / Total Deposits 60.83% 58.00% 59.38% 59.05% 57.29% 55.11% 52.93% Assets Utilization 8.78% 8.88% 8.41% 8.51% 8.96% 9.05% 8.98% Equity / Assets 9.95% 10.28% 11.38% 11.79% 11.77% 11.57% 11.21% NPLs / Total Loans 3.00% 2.74% 3.02% 3.32% 2.92% 2.47% 2.02% Provision Coverage Ratio 151.3% 125.1% 117.1% 109.6% 114.4% 119.1% 123.3% Growth & Market Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Loans Growth 3.5% 28.6% 11.4% 8.2% 16.1% 19.3% 21.6% Customer Deposits Growth 12.0% 15.9% 12.0% 5.9% 12.9% 15.7% 18.4% EPS (EGP) PER 7.9x 6.8x 8.6x 8.0x 6.2x 5.1x 4.3x EPS adjusted (EGP) * PER adjusted * 7.6x 6.2x 8.2x 7.6x 6.0x 5.0x 4.2x DPS (EGP) Dividend Yield 3% 4% 3% 4% 5% 6% 7% BV/Share (EGP) PBV 2.1x 1.8x 1.4x 1.3x 1.1x 1.0x 0.9x BV/Share adjusted (EGP) * PBV adjusted * 2.4x 1.9x 1.5x 1.3x 1.2x 1.0x 0.9x Source: Bank Financials & CI Capital Research Forecasts *Excluding goodwill & intangible assets 10

11 Housing & Development Bank Gains delayed amidst a foggy backdrop Benefiting from being a player in two sectors, banking and real-estate, HDB s growth plans have been delayed due to a foggy market. Lending growth rate slowed over 9M11 (vs. 2010) and is projected to remain sluggish finishing 2011 and 2012, but should gain momentum throughout forecast period. The bank s NIM is usually assisted by its high retail exposure, which supports a reasonable NII performance. Slowing economy suggests NPLs levels might build up, so estimates for provisions charge have been increased. Comparatively, income from real-estate dropped by 45% in 9M11 as unit deliveries dampened, but we expect it to pick up in 4Q11 and 2012 on some expected deliveries. An expected rise in dividend income throughout the forecast period should boost non-interest income performance, especially with HDB s direct investment stake in Hyde Park Real-Estate Development expected to rise from 30% to 40% post the recent capital increase of the latter, according to management. Based on the above, we have reduced our LTFV by 25% to EGP18.88/share and TP by 17% to EGP15.63/share, offering upside of 15%. Thus, we upgrade our recommendation from Underweight to Hold, with a Moderate risk rating. Net loans to grow by 3% in 2012: Though HDB s 2010 capital increase had increased room to lend to single obligors as well as offered a strong position to participate in key corporate syndications, the current foggy environment tapered the growth pace coming at only 3% in 9M11 compared to year-end December However, we project it to finish the year +7%, but only to slow again to 3% in We expect a gradual pick-up in lending growth to register a 5-year CAGR of 13.6% until Non-interest income hurt by weaker market in 2011 and 2012; fees and dividend income to boost it throughout forecast period: NII is expected to show weak growth of 4.6% and 3% YoY in 2011 and 2012, respectively, due to low volumes. However, non-interest income is expected to slightly reduce by 1.4% in 2011 but to rebound in 2012 to grow by 25%, supported by the sale of a large administrative building in Kattameya. We expect total banking income to grow at a 5-year CAGR of 12.7% until 2015, driven by resilient NII (5-year CAGR of 13.4%) and revival in non-interest income (5-year CAGR of 11.8%). Non-interest income is projected to be largely boosted by fees and commissions as well as investment income from the bank s two largest projects Les Rois and Hyde Park, with the latter anticipated to start distributing dividends in High provisions and tax charges to further press NPAT 14% lower YoY in 2011: Additional pressures on earnings include provisions forecasted to remain high in 2011, similar to 2010 level, reaching 9% of total banking income, as we generally increased our estimates for provisions charges. Further pressure on bottom-line will come from the recently-imposed highertax rate of 25% (up from 20%) that we incorporated in our projections. Accordingly, we have reduced LTFV by 25% to EGP18.88/share and TP by 17% to EGP15.63/share, providing a 15% upside. We upgraded our recommendation from Underweight to Hold, with a Moderate Risk rating. EGP mn 2009 A 2010 A 2011 F 2012 F 2013 F NII Growth rate 1.5% 16.0% 4.6% 3.0% 14.7% Non interest Income Growth rate 69.9% 5.9% -1.4% 25.3% 31.4% NPAT Growth rate 21.5% -16.9% -13.9% 10.8% 38.7% Loans 5,792 6,563 7,051 7,265 8,337 Deposits 6,568 7,505 7,915 8,146 9,786 NIM 3.9% 4.0% 3.9% 3.9% 4.1% RoAE 28.6% 14.7% 9.0% 9.5% 12.5% RoAA 2.4% 1.7% 1.4% 1.4% 1.8% PER 6.4x 7.7x 9.0x 8.1x 5.8x PBV 1.8x 0.8x 0.8x 0.8x 0.7x Source: Bank Financials and CI Capital Research Forecasts 11 BANK SYNOPSIS HOLD (UPGRADED) LTFV EGP18.88 (DECREASED) TP EGP15.63 (DECREASED) Housing and Development Bank [HDBK] was established under Ministerial Decree No. 147/1979 as an Egyptian jointstock company operating under the investment law and registered as an investment and commercial bank. HDBK was originally envisioned as a specialized entity to finance real estate development, fund national housing projects and provide investment trustee services. HDBK s commercial banking operation includes syndications, structured lending, SME lending and trade finance whilst its retail business features personal loans, housing finance loans, mortgage loans, credit/debt cards and other retail services. The bank also operates in real estate development, and is well-known for its solid track record with projects along the North Coast, including Marina, Marakia and Marabella. HDBK conducts most real estate ventures through its subsidiaries. HDBK has grown rapidly in recent years through expansion into retail activities (c.50% of its lending portfolio), capitalizing on its network of 58 branches and collection offices and aims to expand its network to 100 branches over the next few years. HDBK s current management team took over in 2003 and laid the foundations for improved performance. SHAREHOLDER STRUCTURE New Urban Communities Authority 29.8% Misr Insurance 14.9% Egyptian for Endowment Authority 11.4% Housing Finance Fund 7.4% Employee Associated & Insurance 3.0% Free Float 33.5% STOCK DATA Reuters; Bloomberg [HDBK.CA; HDBK EY] Recent price as of 6-Dec-11 EGP No. of O/S shares mn Market cap EGP 1,562.9 mn 52-wk high / low EGP 27.3/ EGP 10.5 Avg. daily volume / turnover 0.08mn / EGP 1.46mn STOCK PERFORMANCE 52 WEEKS Dec-10 Dec-10 Jan-11 Feb-11 Feb-11 Mar-11 Apr-11 Source: Bloomberg HDBK Volume HDBK EGX30 - rebased Apr-11 May-11 Jun-11 Jun-11 Jul ALIA ABDOUN ALIA.ABDOUN@ CICAPITAL.COM.EG Aug-11 Aug-11 Sep-11 Oct-11 Oct-11 Nov-11 Nov-11 Millions

12 HDB Balance Sheet (In EGP mn) 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Assets Cash & Due from Banks , , , , ,648.4 Interbank Assets ,424.4 T-Bills & Government Securities , , , , , ,006.7 Net Trading Investments Available for Sale Investments Net Loans & Advances 5, , , , , , ,434.7 Held-to-Maturity Investments , , , ,643.3 Investments in Subsidiaries Net Housing Projects Accrued Income & Other Assets ,140.3 Deferred Tax Net Fixed Assets Goodwill Total Assets 10, , , , , , ,333.5 Liabilities and Shareholders' Equity Interbank Liabilities Customer Deposits 6, , , , , , ,623.3 Accrued Expenses & Other Liabilities 1, , , , , , ,227.5 Dividends Payable Provisions Medium-/Long-Term Loans 1, , , , , , Debt Securities Total Liabilities 9, , , , , , ,810.4 Paid-in Capital , , , , , ,150.0 Reserves , , ,319.4 Retained Earnings Shareholders' Equity , , , , , ,523.1 Total Liabilities, Shareholders' Equity 10, , , , , , ,333.5 Contingent Liabilities Total Footing 10, , , , , , ,801.1 Income Statement (In EGP mn) 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Total Interest Income , , , ,723.2 Interest Paid to Clients & Banks ,067.9 Net Interest Income (NII) Provisions Net Interest Income AP Fees and Commissions Income Investment Income Trading Income Other Income Income from Housing Projects Non-Interest Income Operating Income (BP) , ,170.6 Operating Income (AP) ,131.2 G&A Expenses and Depreciation Other Expenses Non-Interest Expense Net Operating Income One-offs Unusual Items Net Income Before Tax Taxation NPAT Less: Non-Appropriation Items Net Attributable Income (NAI) Source: Bank Standalone Financials & CI Capital Research Forecasts 12

13 HDB - Ratios Profitability & Efficiency Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Interest Margin (NIM) 3.86% 4.04% 3.88% 3.85% 4.05% 4.12% 4.15% RoAA 2.4% 1.7% 1.4% 1.4% 1.8% 1.8% 1.6% RoAE 28.6% 14.7% 9.0% 9.5% 12.5% 13.3% 13.7% Cost/Income 51.7% 54.9% 57.7% 59.2% 55.8% 56.8% 58.6% Earning Assets / Total Assets 88.8% 87.0% 86.2% 86.3% 86.4% 86.5% 86.6% Productivity & Asset Quality Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Loans / Customer Deposits 88.2% 87.5% 89.1% 89.2% 85.2% 82.0% 79.6% Adjusted Net Loans / Customer Deposits * 60.8% 65.2% 69.2% 71.7% 72.2% 72.8% 73.4% Interbank Ratio Liquid Assets / Total Deposits 39.3% 41.2% 37.3% 38.0% 34.9% 36.2% 36.3% Assets Utilization 11.3% 10.6% 10.0% 10.8% 11.4% 11.2% 11.0% Equity / Assets 8.2% 14.9% 15.1% 15.1% 14.3% 12.8% 11.3% NPLs / Total Loans 5.1% 5.5% 6.5% 6.9% 6.3% 5.3% 4.3% Provision Coverage Ratio 105.1% 97.0% 78.8% 77.9% 82.2% 87.4% 93.4% Growth & Market Ratios 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F 2015 F Net Loans Growth 11.8% 13.3% 7.4% 3.0% 14.8% 20.4% 23.9% Customer Deposits Growth 25.6% 14.3% 5.5% 2.9% 20.1% 25.1% 27.6% Retroactive EPS (EGP) PER 6.4x 7.7x 9.0x 8.1x 5.8x 5.1x 4.7x DPS (EGP) Retroactive Dividend Yield 11% 6% 6% 6% 6% 7% 8% Dividend Payout Ratio 69% 45% 49% 45% 36% 35% 35% Retroactive BV/Share (EGP) PBV 1.8x 0.8x 0.8x 0.8x 0.7x 0.7x 0.6x Source: Bank Financials & CI Capital Research Forecasts 13

14 Contacts and Disclaimer: Research Amr Hussein Elalfy, CFA Co-Head of Research Mona Mansour Co-Head of Research CI Capital Securities Brokerage (Egypt & UAE) Khaled Abd El Rahman MD & Global Head of Securities Brokerage Dynamic Securities Ahmed Roushdy MD CI Capital Holding 8 Nadi El-Seid Street, Third Floor Dokki Giza, Egypt Tel: +2(02) Research@cicapital.com.eg Disclaimer The information used to produce this market commentary is based on sources that CI Capital Research (CICR) believes to be reliable and accurate. This information has not been independently verified and may be condensed or incomplete. CICR does not make any guarantee, representation or warranty and accepts no responsibility or liability to the accuracy and completeness of such information. Expression of opinion contained herein is based on certain assumptions and with the use of specific financial techniques that reflect the personal opinions of the authors of the commentary and is subject to change without notice. It is acknowledged that different assumptions can always be made and that there is a wide choice of techniques that can be adopted each of which can lead to a different conclusion. Therefore, all that is stated herein is of an indicative and informative nature as forward-looking statements, projections and fair values quoted may not be realized. Accordingly, CICR does not take any responsibility for decisions made on the basis of the content of this commentary. This commentary is made for the sole use of CICR s customers and no part or excerpt of its content may be redistributed, reproduced or conveyed in any form, written or oral, to any third party without the prior written consent of CICR. This commentary does not constitute a solicitation or an offer to buy or sell securities. Rating System In February 2008, CI Capital Research (CICR) launched a new rating system to give analysts more freedom to be market responsive. This is to make one element of our research more dynamic, namely the advertising of target prices and recommendations. What we did not change is our assessment of the Long Term Fair Value (LTFV), nor have we stopped our detailed industry and company research. What we did is change the target price to trade in the balance of where a share should trade and where we think it will trade. LTFV: As before we continue to estimate a fundamental valuation, largely DCF and/or NAV based. Target Price: The price, which is not necessarily the LTFV, is where the analyst, given all (qualitative as well as financial) information available, thinks the share price can get to within the next 3-12 months. This can be changed at any time on changing facts and perceptions. Recommendations: Our new rating system falls out from the total return relating to the share price performance to the target price, and including any distributions may not be included in the target price calculation. This is shown in the table below, and to be BUY must return over 19%, an arbitrary hurdle rate we think reasonable given prevailing interest rates and risks (Please see table below.) Rating Potential Upside/Downside Strong Buy >30% Buy >20%<30% Hold >10%<20% Underweight >0% <10% Sell <0%