Egypt's CIB profit below forecast on investment income

CAIRO (Reuters) - Commercial International Bank (COMI.CA)(COMIq.L), Egypt's largest publicly traded lender, posted its smallest quarterly profit this year, missing an analyst's expectations, as investment income tumbled.

The company said its third quarter net profit was 351.1 million Egyptian pounds ($63.5 mln), up 25 percent from the same period last year. Investment bank CI Capital had forecast a net profit of 397 million in the quarter.

Egyptian banks have little direct exposure to the global financial crisis, with few investments in troubled global banks or in derivative products. But a 50 percent drop in Egypt's stock index this year has weighed on profit growth.

Commercial International Bank's profits from selling financial investments was 6.9 million pounds, about a quarter of the level from the same period last year.

The bank's income from deposits, however, grew strongly. Net interest income reached 450.7 million pounds, up 43 percent.

"CIB demonstrated strong growth in core-banking operations and balance sheet," investment bank Beltone Financial said in a note to clients. "The third quarter results were definitely affected by the drop in investment income and the higher booked provisions, which is a natural result of the current market conditions."

The economy of Egypt, the most populous Arab country, could slow to about 6 percent this year, government officials have said. The percent of Egyptians eligible for bank accounts could grow 25 percent per year through 2010, Credit Agricole Egypt said in January.

Commercial International said that its ratio of non-performing loans decreased to 2.49 percent from 3 percent in the 2007 fiscal year, and added that CIB had "no exposure to U.S. subprime mortgage related securities."

($1 = 5.5286 Egyptian pounds)

(Reporting by Cynthia Johnston and Will Rasmussen)