Banking – Daily News Egypt https://dailynewssegypt.com Egypt’s Only Daily Independent Newspaper In English Tue, 11 Dec 2018 18:36:44 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.1 HDB holds 34th raffle for children, youth savings account https://dailynewssegypt.com/2018/12/09/hdb-holds-34th-raffle-for-children-youth-savings-account/ https://dailynewssegypt.com/2018/12/09/hdb-holds-34th-raffle-for-children-youth-savings-account/#respond Sun, 09 Dec 2018 18:41:59 +0000 https://www.dailynewsegypt.com/?p=683294 175,000 participated in vessel with total balances of EGP 565m

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The Housing and Development Bank (HDB) conducted the second 2018 raffle for children and youth award saving accounts’ prizes.

This comes as part of the bank’s role to activate the national saving project in cooperation with the ministries of education and housing, which started 19 years ago.

Amany Badr won a housing unit worth EGP 200,000; Shady Adel won the second prize, which is a housing unit payment worth EGP 100,000, while Yossra Ahmed won a housing unit down payment woorth EGP 50,000.

For his part, Fathy Sebaey, chairperson and managing director of the bank, praised the continuous and fruitful cooperation between the bank and the ministries of education and housing.

He pointed out that this project is a development of the objectives of the bank, which was established to serve the community to achieve financial inclusion under the auspices of the Central Bank of Egypt.

He stressed that the HDB has played a leading role in spreading the financial culture among children and youth being an active member of the Child and Youth Finance International (CYFI).

Hisham Abdul Razeq, chairperson of the executive committee for prize winning savings accounts, said that the product was designed to save to buy for apartments.

He added that this product aims to instil a savings values ​​among students, and enable them to plan for their future by saving a sum of money to be able to join a housing project.

For his part, Hisham Al-Sangary, the undersecretary of the ministry of education, recommended that all employees of the ministry coordinate with the bank’s officials and branch managers to identify the advantages and importance of this project and the mechanisms to open a savings account.

The HDB has been developing and updating this savings vessel over the past two years to change the interest calculation method in order to follow an upward yield according to the account balance.

The number of participants in this vessel has so far reached 175,000 children and youth with a total balance of EGP 565m.

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AIIB to introduce $510m investments into Egypt https://dailynewssegypt.com/2018/12/09/aiib-to-introduce-510m-investments-into-egypt/ https://dailynewssegypt.com/2018/12/09/aiib-to-introduce-510m-investments-into-egypt/#respond Sun, 09 Dec 2018 17:49:15 +0000 https://www.dailynewsegypt.com/?p=683284 Egypt has potential to be area’s eco-energy hub, we support state efforts to export green energy: Jin Liqun

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The Asian Infrastructure Investment Bank’s (AIIB) board of directors has approved up to $510m in funding for two infrastructure projects in Egypt. Co-financed with the government and other lenders, the projects will help the country’s transition towards a greener and cleaner economy.

Egypt is currently the only AIIB member outside of Asia to receive funding from the bank. With its strategic location between Europe, Africa, and Asia and its abundant wind and solar resources, as well as the right investments in cross-border transmission connections, Egypt has the potential to become a regional green energy hub. To support this potential, the AIIB is investing in the Benban solar project to help meet domestic energy demands, stabilise the grid, and scale back the use of expensive and polluting hydrocarbons.

The AIIB President Jin Liqun said that during the board of directors’ recent visit to Egypt, government officials highlighted their efforts to revitalise the country’s aging energy infrastructure and transform its power generation and transmission capacity. “We see a lot of opportunity in Egypt’s renewable energy sector, and will support the government’s goals of exporting clean energy to its neighbours. This is aligned with our priorities to invest in sustainable infrastructure and enable cross-border connectivity,” he added.

According to the G20 initiative Global Infrastructure Hub, there is a $230bn infrastructure investment gap across all sectors in Egypt. Like much of Asia, the gap in Egypt cannot be filled through public sector money alone. Private sector investment is required to build critical infrastructure needed to support Egypt’s growth. Under its Strategy on Mobilising Private Capital for Infrastructure, the AIIB is examining opportunities to address Egypt’s infrastructure financing gap.

“To address Egypt’s infrastructure gap, the government is working on enhancing macroeconomic stability to accelerate a higher private investment path, modernising public-private partnership (PPP) legal and operational framework, and facilitating additional funding from international institutions at preferential rates, including from the AIIB,” said Minister of Finance Mohamed Moeit.

Strengthening implementation capacity for PPP projects has been identified as a way to attract private sector investors into Egypt. Lack of capital for smaller projects is also a challenge for the local market.

“The need to mobilise private capital is not unique to Egypt, but we must come up with an approach that is responsive to local market conditions,” said Jin. “With our peer multilateral development banks and Egypt, we are actively looking at ways to address private sector investment barriers.”

To date, the AIIB has approved two projects in Egypt: a $300m loan to improve rural sanitation services for 892,000 people in 178,000 households in Egypt. The project is co-financed with the World Bank.

The second project is $210m in financing for the Benban solar projects to tap the country’s renewable energy potential. This project will increase solar power generation capacity, reduce dependence on hydrocarbons, and help Egypt meet its commitments under the Paris Agreement. The project is co-financed with the International Financial Corporation and other lenders.

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NBE completed renovations of 178 branches, to re-open historic Mosky branch https://dailynewssegypt.com/2018/12/09/nbe-completed-renovations-of-178-branches-to-re-open-historic-mosky-branch/ https://dailynewssegypt.com/2018/12/09/nbe-completed-renovations-of-178-branches-to-re-open-historic-mosky-branch/#respond Sun, 09 Dec 2018 09:00:07 +0000 https://www.dailynewsegypt.com/?p=683197 Mosky branch represents important historical value for bank; its development comes within strategy followed by bank to modernise its branch network: Okasha

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Hisham Okasha, the chairperson of the National Bank of Egypt (NBE) and Ibrahim Abdel Hady, the deputy governor of Cairo, inaugurated the bank’s Mosky branch a few days ago following its renovation.

According to Okasha, the reopening of the Mosky branch after its development is part of the bank’s strategy to modernise its 443 branches, of which 178 have been renovated so far.

Okasha stressed that the NBE is committed to providing brand new banking services in its various branches, thus contributing to expanding its customer base with clients from various categories, in order to support the principle of financial inclusion adopted by the state and the Central Bank of Egypt (CBE).

He pointed out that the Mosky branch is one of the oldest branches of Egyptian banks, as it was established in 1909 during the reign of Khedive Abbas Helmi II. The branch is the NBE’s ninth branch which continued to provide banking services in one of the vital areas of wholesale trade at the heart of Old Cairo, for over 83 years, until it was evacuated in the wake of the 1992 earthquake.

According to the Vice Chairperson of the NBE, Dalia El-Baz, the bank’s management preferred to re-operate this branch despite their possession of a demolition permit in 2007, and a purchase offer for the building for over EGP 100m at the time. However, the NBE obtained a general restoration license in 2014 to maintain the building as a distinguished architectural landmark in the heart of Cairo.

She added that the branch has been provided with the latest means of communication, technical equipment, and effective surveillance systems in the world’s largest institutions. The bank is keen to implement the latest technologies that comply with international standards and provide better, faster and safer service to its customers.

According to Hossam Al-Haggar, head of the bank’s administrative support group, the branch includes four ATMs and six tellers, as well as five customer service agents and a credit department.

Ashraf Al-Bakry, General Manager of Projects at the NBE, said that the development stages continued for about three years and passed a major engineering challenge, which was how to rehabilitate the building with modern specifications without prejudice to the heritage facade of the original building.

He added that for the first time in Egypt, they adopted a sophisticated engineering method: the bank used a German expert specializing in these works, to prepare the branch to operate after a 26-year hiatus.

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30% of ABE loans allocated to farmers, crop production: bank chairperson https://dailynewssegypt.com/2018/12/09/30-of-abe-loans-allocated-to-farmers-crop-production-bank-chairperson/ https://dailynewssegypt.com/2018/12/09/30-of-abe-loans-allocated-to-farmers-crop-production-bank-chairperson/#respond Sun, 09 Dec 2018 08:30:32 +0000 https://www.dailynewsegypt.com/?p=683194 Animal production projects receive 25% of portfolio, 20% for mechanisation projects, 25% individual, consumption, workers' loans, says ElKosayer

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Chairperson of the Agricultural Bank of Egypt (ABE), El Sayed Elkosayer, said that his bank allocates about 30% of its total loan portfolio towards farmers and crop production, as well as agricultural development projects.

Elkosayer explained that the bank’s loan portfolio increased from EGP 22bn in March 2016 when he took office, to about a current EGP 26.6bn.

About 25% of the loan portfolio is directed to animal production projects, 20% to agricultural mechanisation projects, and 25% to individual, consumption, and workers’ loans, added the ABE’s chairperson.

Regarding the bank’s deposit portfolio, Elkosayer said that it increased from EGP 33bn in March 2016 to about EGP 50bn currently, noting that the bank aims to achieve growth rates of 15% in various activities, and business volume by the end of this year.

Elkosayer explained that the bank’s work strategy since he took office has been based directed towards several objectives, including developing loans and deposits, increasing the efficiency of assets, reducing expenses, activating affiliated companies, and creating an e-payment system.

The management of the ABE is working on enhancing the role of the bank in funding micro projects and small and medium-sized enterprises (SMEs), as well as utilising the bank’s 1,210 branches across the country to create sustainable development, according to Elkosayer.

“The volume of the non-performing loans in the bank declined from 20% of the total loans portfolio in March 2016 to 13% currently. The volume of this portfolio is currently EGP 3.4bn,” Elkosayer said.

He added that the number of beneficiaries of the initiative of the Central Bank of Egypt (CBE) is 4,500, with debts of EGP 330m. He expects the number of beneficiaries to double by 31 December.

Furthermore, Elkosayer stressed that the bank aims to reduce the portfolio of non-performing loans to 10% of the total loan portfolio by the end of this year.

Regarding the bank’s receivables at the ministry of finance, Elkosayer revealed that they obtained EGP 2bn of them since March 2016 until now, noting that there is coordination between the CBE and the bank regarding these debts.

The debts owed by the ministry to the bank are continuous, he added, explaining that they are the result of the state’s support of farmers in the form of funding agricultural production with a small interest rate.

The bank’s capital base is estimated to be EGP 4.5bn and was sustained by the supporting loan provided by the CBE to the ABE, worth EGP 10bn for 20 years, according to Elkosayer.

Moreover, he explained that this loan helped the ABE to convert its capital base from negative to positive, and contributed towards increasing the capital adequacy rate of the bank to 12.5%.

Regarding the bank’s plan to offer technological services, he said that a cooperation agreement was signed with an e-finance company for financial services stipulating that the bank will receive the smart wallet service for its clients.

He went on to explain that the bank wants to launch this wallet in 2019, noting that it is close to getting all the permits needed from CBE to launch the wallet.

Additionally, it will enable clients to pay bills and transfer cash, he noted, adding that the bank will offer the service without any costs.

Elkosayer revealed in an early statement to Daily News Egypt that the bank aims to launch an international tender in five months’ time to companies specialised in e-banking operations systems to develop the bank’s infrastructure.

The cost of developing the infrastructure is estimated to be over EGP 1bn, and its implementation period is approximately three years.

The ABE has 1,210 branches and banking units across the country, including 20 Islamic ones.

The process of technologically developing the bank is different from the process of restructuring the bank whose cost is much higher. The bank is looking for a source of funding for the latter, and one of the bodies it is seeking to get the funding from is the World Bank.

Seven months ago, Ernst & Young Consulting Company started to cooperate with a sovereign body in the state by assessing the bank’s current situation. The process is expected to take five more months, and then an international tender will be launched to choose the company which will carry out the bank’s e-development process.

The development process aims to offer modern services to clients, and expand the current e-services to serve farmers and their children, especially in the field of transferring salaries, payments and transfers, as well as electronic points of sale (POS).

The restructuring plan also includes developing the IT and bank operation systems, as well as applying the core banking system, which will qualify the bank to achieve the goals it targeted over the upcoming period.

In parallel with this plan, all of the bank’s branches were provided with e-services, as about 100 new ATMs were introduces as well as POS in coordination with an e-finance company and Fawry. Meanwhile, about 250 branches of the bank are being developed and upgraded.

All of the bank’s branches are expected to include ATMs. The process will take place in three phases, with 400 new ATMs being introduced in each phase, concluded Elkosayer.

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First Abu Dhabi Bank launches bancassurance products, services in collaboration with gig https://dailynewssegypt.com/2018/12/09/first-abu-dhabi-bank-launches-bancassurance-products-services-in-collaboration-with-gig/ https://dailynewssegypt.com/2018/12/09/first-abu-dhabi-bank-launches-bancassurance-products-services-in-collaboration-with-gig/#respond Sun, 09 Dec 2018 08:00:56 +0000 https://www.dailynewsegypt.com/?p=683131 Union with gig will advance bank's efforts to offer best merits to its customers: Hassan

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The First Abu Dhabi Bank-Egypt signed an agreement with Egyptian Life Takaful Insurance Company (gig) to launch banking insurance products and services. Under this agreement, various options will be offered from the company’s insurance products to the bank’s customers.

According to Ahmed Ismail Hassan, CEO of the bank, the partnership with gig will contribute towards the continued efforts of the bank to provide the best banking and insurance services to its customers, via a smooth and simple system. This will enable the bank’s clients to benefit from the insurance services and products provided by the company, which are commensurate with their future plans and financial needs, and support their aspirations to grow together.

According to Ramah Asaad, managing director of gig, the agreement is one of the company’s main tools of banking activity in Egypt, taking into account the strength of the geographical coverage of the bank and its ambitious expansion plans.

Asaad confirmed his confidence that the bank and the company are capable, through their joint cooperation, to provide a distinctive model for banking insurance, through a variety of insurance products that suit the needs of all bank customers.

The First Abu Dhabi Bank is the largest bank in the UAE, and one of the largest financial institutions in the world.

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Emirates NBD Egypt plans to expand digital services in Egyptian market: CEO https://dailynewssegypt.com/2018/12/09/emirates-nbd-egypt-plans-to-expand-digital-services-in-egyptian-market-ceo/ https://dailynewssegypt.com/2018/12/09/emirates-nbd-egypt-plans-to-expand-digital-services-in-egyptian-market-ceo/#respond Sun, 09 Dec 2018 07:30:17 +0000 https://www.dailynewsegypt.com/?p=683117 Bank attracted 3m smart wallets, plans to add services through Chatbot, Avatar, says Berro

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Emirates NBD Egypt plans to expand by offering digital and technological services in the Egyptian market, according to Mohamed Berro, the bank’s CEO.

Berro explained that the bank is one of the first banks to offer the smart wallet service and has managed to attract about three million smart wallets for its clients in a short time.

Furthermore, Berro stated that he participated last week in the ‘Third Annual Conference for the Egyptian Economy: From Recovery to Launching‘.

According to the bank’s CEO, 2018 has witnessed a major leap in the field of digital and electronic services. Banks have expanded by offering smart wallets and mobile applications, which led to an increase in the number of phone banking users.

He pointed out that the Central Bank of Egypt (CBE) played a major role in encouraging banks to spread banking services and achieve financial inclusion through the initiative of the ‘Arab Week for Financial Inclusion’ as well as offering clients a service which would enable them to open new accounts without expenses. Emirates NBD was eager to on participate in this initiative.

Financial inclusion and spreading e-services has both increased thee awareness of the role of banks and increased the number of bank clients Berro stressed.

Emirates NBD always wants to cooperate with the CBE to offer banking services to Egyptians abroad, and negotiations have taken place concerning means to allow clients to benefit from the branches of the bank, in order to offer clients easier services and transferring the funds of Egyptians who are working abroad,” he declared.

Emirates NBD is a pioneer in the field of digital banking services and its services were designed to include a new group of benefits through mobile phones, and they will soon be available in the local market explained the CEO. Moreover, he asserted that the bank wants to apply new products which better represent the digital revolution of digitised banking services.

According to Berro, the bank offers a smart solutions and package which meets the requirement of this period of time, such as new banking services through mobile phones and tablets.

Emirates NBD plans to add Chatbot services and Avatar services, providing clients with automatic support online, in addition to Whatsapp banking, which facilitates various services for clients.

Emirates NBD is one of the largest banks operating in Egypt, with an incorporated capital which reached EGP 1.7bn at the end of September 2018. It has about 69 branches across the country, with over 1,995 employees, in addition to 300 ATMs throughout the various governorates.

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EGP 2bn net profits of Banque du Caire in 9M18 https://dailynewssegypt.com/2018/12/09/egp-2bn-net-profits-of-banque-du-caire-in-9m18/ https://dailynewssegypt.com/2018/12/09/egp-2bn-net-profits-of-banque-du-caire-in-9m18/#respond Sun, 09 Dec 2018 07:00:05 +0000 https://www.dailynewsegypt.com/?p=683128 Bank injected EGP 1.6bn to fund micro projects, including 55% for Upper Egypt, 35% for women

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The business returns of Banque du Caire have shown an increase in the bank’s profits in the first nine months of 2018 (9M18) before tax deduction, reaching EGP 3.2bn compared to EGP 2.3bn last year. Net profits have increased to EGP 2bn after taxes, compared to the previous EGP 1.3bn.

The bank’s indicators have also demonstrated a growth in the capital adequacy ratio in the end of the third quarter (Q3) of 2018 to reach 15.1% compared to 12.4% in September 2017. The bank has also achieved a a return on property rights of 36.2% and a return on assets of 1.8% during the same period.

According to the bank’s Chairperson, Tarek Fayed, the net income by Q3 of the fiscal year of 2018 reached EGP 4.6bn compared to EGP 3.5bn with a 29% increase. The net return rate increased to 4.5% compared to 3.7% last year. The net income reached EGP 780m compared to EGP 630m, with a 24% increase.

Fayed stressed that the leaps achieved in 2018 represent a steady progress towards the bank’s strategic objectives.

According to Fayed, the bank managed to achieve an increase in the total loan portfolio by the end of Q3 of 2018, an increase of 24% through the infusion of the funding of various projects in order to contribute towards achieving economic growth, pointing out that the loan portfolio in the bank reached EGP 55.4bn by the end of September 2018, compared to EGP 44.5bn by the end of 2017, an increase of EGP 1.9bn.

Furthermore, the bank’s loans to deposits ratio in reached 45.2% in September 2018, compared to 36.5% in December 2017, supported by the expansion in diverse credit fields, such as funding major companies, small and medium sized enterprises (SMEs), as well as micro finance.

Moreover, the bank’s loan portfolio for major companies increased from EGP 19.9bn in September 2017 to EGP 27.8bn in September 2018, a growth of 40%, stated Fayed. He also noted that the increase was in the funding of manifold economic activities, including industry, contracting, construction, petroleum, and natural gas.

In order to support SMEs and micro enterprises, the bank increased the volume of the loans allocated for these projects by about EGP 1.1bn, taking the total loans portfolio to EGP 2.4bn in September 2018, with an increase of 80%, compared to the case in December 2017, declared Fayed. The bank has also managed to add new clients to these projects, reaching an increase of 30%.

Regarding funding microenterprises, Fayed explained that the funding portfolio of these projects increased from EGP 2.2bn by the end of December 2017 to EGP 3.8bn by the end of September 2018, with a growth of 80%. The number of clients also increased from 154,000 to 196,000, with a 28% growth.

“The bank’s microenterprises’ loan portfolio is characterised by a good geographic distribution, as the facilitations provided to Upper Egypt account for 55% of the total facilitations, and women get 35% of these facilitations,” Fayed said.

He added that as part of the bank’s efforts to support the initiatives launched by the Central Bank of Egypt (CBE), the bank managed to take the mortgage finance portfolio to EGP 1.5bn, and the number of beneficiaries reached 18,000.

According to Fayed, Banque du Caire aims to take the mortgage finance portfolio to EGP 1.7bn by the end of this year, with a growth of 90% compared to 2017.

Fayed pointed out that the bank’s current administration has been keen to carry out an internal restructure of the bank’s administration and increase the operational efficiency of all its employees as well as support it with some expertise in order to help the bank further improve its position the market.

The bank has established a management specialized in global transactions banking. It aims to provide banking solutions in managing liquidity and cash flows of financial companies and institutions as well as funding all foreign trade operations.

Over and above, the bank also designs banking products and services which suit different client segments, especially young individuals. What’s more, the bank is also about to introduce wealth management service in order to provide excellent benefits to this client segment.

“The bank plans to open 30 new branches in early 2019, and aims to add 20-25 branches annually during the three upcoming years. It also targets to take the number of its ATMs to 1,000 by the end of 2018,” Fayed announced.

In addition, Fayed stressed the importance of digital banking services, which come at the top of the bank’s priorities. The bank plans to launch mobile and internet banking in 2019, and it is currently considering expanding its digital banking services in line with the CBE’s strategy to improve digital banking services in the sector.

The bank has enacted e-collection of the loans and credit card debts instalments of available through a network of e-payment companies. It has also added more services to its Cairo Cash Wallet service.

Regarding the Cairo Leasing Company, which was launched by the bank in March 2018, Fayed explained that the company managed to achieve a remarkable operational achievement, as the total assets reached EGP 600m by the end of September, and the bank is targeting EGP 1bn in Q1 of 2019.

The bank’s expansion plan will not only be local, but might also expand to other countries, Fayed explained. Plus, he noted that the bank is about to launch a representative office in the UAE in order to expand the business scale in Gulf countries. The bank is also working on restructuring the International Banque du Caire in Uganda.

Over the past few years, the bank has managed to launch several comprehensive community campaigns targeting sustainable development, asserted Fayed.

He explained that the bank’s strategy is not only limited to offering banking services to its clients, but it also takes into consideration the community dimension in all its policies and measures through increasing the annual financial allocations for social responsibility initiatives in miscellaneous sectors, such as education, health, nutrition, medical and scientific research, development of villages, the empowerment of women and youth, as well as supporting handicrafts.

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5 major banks represent UAE in Egyptian market https://dailynewssegypt.com/2018/12/02/5-major-banks-represent-uae-in-egyptian-market/ https://dailynewssegypt.com/2018/12/02/5-major-banks-represent-uae-in-egyptian-market/#respond Sun, 02 Dec 2018 07:30:55 +0000 https://www.dailynewsegypt.com/?p=682575 List includes Emirates NBD, First Abu Dhabi Bank, Abu Dhabi Islamic Bank, UNB Egypt, Mashreq

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The UAE has always sought to strengthen its presence in the Egyptian market, and to expand it considerably. This was evident in recent years. UAE banks fought fierce competition with other foreign banks to acquire some of the Egyptian and European banks which were put up for sale.

The number of UAE banks operating in the Egyptian market are five banks, namely Emirates NBD, First Abu Dhabi Bank, Abu Dhabi Islamic Bank (ADIB), Union National Bank-Egypt, and Mashreq.

First Abu Dhabi Bank

Formerly known as the Abu Dhabi National Bank, First Abu Dhabi Bank was among the first of the Arab and UAE banks to enter the Egyptian market, where it has been operating since 1975.

According to previous statements by the bank CEO in Egypt, Ahmed Ismail Hassan, the board of directors of the parent bank and its executive management in Abu Dhabi provide full support to the bank’s unit in Egypt, believing in the importance of the Egyptian market as one of the most important foreign markets in the coming period.

Hassan added that Egypt’s renaissance, which connects both the west and east, prompted investors to expend capital in Egypt, especially with the gradual disappearance of the short-term challenges facing Egyptian economy, hence signalling further inflow of foreign direct investment.

“The recent steps taken by the Egyptian government to improve the ease of conducting business have had a major impact on the economy. I am confident that in the coming period we will see more reforms that will give Egyptian companies the flexibility they need to grow. Egypt is a huge market with immense potential for growth and assimilating investment. Today is the time to invest,” Hassan declared.

Mashreq Bank

Mashreq Bank has been operating in Egypt for 25 years with about 15 branches. Egypt is one of three markets—including New York and Qatar—where the bank is considering to expand in the coming period.

Mashreq competed against many Egyptian, Arab, and foreign banks operating in the Egyptian market to acquire Citibank’s retail portfolio. The deal was later concluded for CIB-Egypt.

According to an official at the bank, the Egyptian market is experiencing increased competition, and is attracting additional Arab and foreign banks, given the 10% annual growth rate it has achieved, This is on top of the growth achieved by the Egyptian economy in the past period.

He stressed that Egypt is gaining substantial attention from the parent bank, as it comes betwixt its priorities and expansion plans.

Mashreq is the fifth largest bank in the UAE, with a capital of about $5bn. It accounts for 8% of the market share in the UAE, and has branches in several countries, including New York, Hong Kong, India, Bahrain, Kuwait, and Qatar.

Union National Bank

Union National Bank (UNB) is one of the largest Emirati banks operating in the Egyptian market. It acquired the Alexandria Commercial and Maritime Bank in a deal worth EGP 244.5m in 2006. The bank’s current capital is EGP 1.27bn.

Since UNB purchased the Alexandria Commercial and Maritime Bank and relocated its headquarters in Cairo, the bank’s management focused on developing its capabilities, infrastructure, retail portfolios, and full operational capacity, before officially announcing its launch in order to ensure the best service standards and superior products which meet the needs of all its customers.

UNB-Egypt has built a strong infrastructure for all its branches, and introduced many products in retail and corporate banking.

According to the Vice Chairperson and CEO of Union National Bank Group, Mohamed Nasr Abdeen, they are determined to implement an ambitious strategy to competitively expand within the Egyptian market in all sectors of syndicated loans, small and medium projects, and personal financing.

Abdeen informed Daily News Egypt in previous remarks that there is a desire by the UAE group to continue and grow within the Egyptian market. He noted that it has been implementing an expansionary strategy since the acquisition of the Alexandria Commercial and Maritime Bank, and centred on training the employees.

“The UAE parent group supports Egypt’s current economic direction, and contributes towards building an integrated economy and national capitalist economy by financing the private sector, It is expanding its client base, as well as playing a vital role in supporting UAE companies which will participate in the implementation of national projects. The bank is also ready to secure funding and provide letters of guarantee to Emirati companies who wish to invest in Egypt,” Abdeen said.

Abu Dhabi Islamic Bank

Abu Dhabi Islamic Bank

The Abu Dhabi Islamic Bank (ADIB)was the outcome of an acquisition deal by the ADIB and the Emirates International Investment Company LLC (EIIC) over the National Development Bank (NDB) in 2007.

As a comprehensive bank, ABIB focuses on providing a range of modern financial solutions compatible with Islamic Shariah for its clients. The bank also aims to build a modern infrastructure, and renovate its branches across Egypt.

To achieve integration in banking services, the bank has established two further subsidiaries in order to function in financial leasing and investment banking.

ADIB’s paid-up resources increased by seven folds since the acquisition deal, rising from EGP 281m in 2007 to a current EGP 2bn. Its authorised capital stands at EGP 4bn.

The bank has successfully provided the ability to serve individuals and corporates, introduce solutions to short and long-term funding, manage syndicated financing, liquidity investment, and finance trade, thus enabling ADIB to build a portfolio of several major local and international companies in Egypt.

Abu Dhabi Islamic Bank-Egypt has 2,000 employees to serve its clients throughout 70 branches, and 40 micro-financing units across Egypt.

Emirates NBD

Although Emirati banks have been present in Egypt for years, Emirates NBD’s decision to enter the Egyptian market was a strong addition to the UAE’s presence in Egypt.

In June 2013, Emirates NBD acquired BNP Paribas in a deal worth about $500m.

According to a senior official at the bank, the unit in Egypt is supported by the parent group in the UAE, with significant confidence in the Egyptian economy and banking sector.

The source explained in previous comments to DNE that the parent group believes in the strong potential of the Egyptian market, which would reflect on the banks’ activities and increase its business volume.

Emirates NBD-Egypt finances 22 sectors in Egypt, with a focus on energy projects, as well as the major projects implemented by Emirati businessmen in Egypt.

The bank also pays particular attention to medium and small projects, especially the medium enterprises. These projects alone account for 30% of the bank’s corporate financing portfolio.

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Market welcomes CBE’s decision to end foreign investors funds repatriation mechanism https://dailynewssegypt.com/2018/12/01/market-welcomes-cbes-decision-to-end-foreign-investors-funds-repatriation-mechanism/ https://dailynewssegypt.com/2018/12/01/market-welcomes-cbes-decision-to-end-foreign-investors-funds-repatriation-mechanism/#respond Sat, 01 Dec 2018 18:43:41 +0000 https://www.dailynewsegypt.com/?p=682577 Decision planned since flotation in November 2016, we aim to direct investment funds money directly to market: Amer

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The decision taken by the Central Bank of Egypt (CBE) on Thursday to end the mechanism of transferring foreign investors’ funds was welcomed by a number of bank officials and analysts.

The CBE said in a statement that new foreign investments in Egyptian government debt instruments would have to enter and exit as of 4 December 2018 through the interbank market.

Commenting on the decision, CBE Governor Tarek Amer said the it was planned since the liberalisation of the local currency exchange rate in November 2016.

Amer explained that after the foreign reserves reached a record high, and the mechanism was cancelled so the investment funds can directly go to the market.

According to Ashraf El-Kady, chairperson of the United Bank, the decision aims to regulate and control the market, in order to complete the executive policy of the decision to liberalise the exchange rate in November 2016.

He added that the liberalisation of the exchange rate and leaving the market to the mechanism of supply and demand contributed to the stability of the market, and the establishment of the real price of the dollar against the Egyptian pound, which led to the issuance of this resolution as a second stage, so that funds held at the CBE when investors entered the market can now access the market through the Interbank mechanism.

According to El-Kady, this decision will lead to a surplus of foreign currencies in the market, thus may improve the exchange rate, which would also bring in more foreign investments, especially with the announcement of Egypt’s investment map.

“The step may be unpredictable, but it is certainly measured, and will have positive reactions,” according to Mohamed Abdel Aal, a well-known banking expert.

Abdel Aal explained that the cancellation of this mechanism simply means that investors can enter and exit the market through buying and selling, and that transfers will be through banks not through the CBE, which is the case around the world.

He added that the cancellation of the mechanism was due to the absence of the reasons for its presence, where there is a steady flow of foreign exchange through the interbank market, covering the regenerating demand of foreign investors.

“According to the CBE, the volume of the hard cash inflow since the flotation has reached $111bn, which means ensuring that the needs of foreign investors when they wish to terminate or transfer their investment transactions, are met through the banks that deal with them immediately, and according to the prices determined by the immediate supply and demand,” Abdel Aal said.

He added that the cancellation of the mechanism came after the CBE confirmed that most or all of the distortions in the exchange market had been eliminated and that the exchange rate was determined only according to the mechanisms of supply and demand.

He noted that the presence of foreign exchange reserves at the CBE was enough to satisfy the import needs of Egypt for over 8 months, improve trade deficit, and achieve a surplus in the balance of payments of $2.8bn in the fiscal year 2017/18 led to reassurance and confidence that the interbank market can meet the needs of foreign investors when executing purchase and sale transactions.

Abdel Aal expects more confidence and stability in the future of the Egyptian exchange market in the coming months, and that the exchange rate will move around an average of EGP 18.

He also expected the interest rate on the pound to remain unchanged until the end of the year, with the possibility of increasing if inflation surpassed CBE’s target.

Beltone Financial also issued a report noting that terminating repatriation mechanism was in line with their expectations as stated in the strategy note “Air of Confidence: Clear Skies & Higher Visibility” issued in February 2018.

Beltone had noted that the CBE would gradually encourage foreign currency inflows via the interbank market, particularly in the absence of repatriation concerns amidst stable reserves, despite growing imports. The move allows fresh portfolio inflows directly to the banking sector and comes at a critical time where the banking sector net foreign assets (NFAs) continue to weaken, registering a deficit of $3.95bn in September, up from a deficit of $2.3bn in August.

“The move further supports our view of a stable local currency with minimal fluctuations below EGP18/USD through 2019. We positively rate the gradual phasing out of the mechanism, which succeeded in mitigating strong exchange rate fluctuations at a time of high inflationary pressures. The move supports the CBE’s commitment to a free float regime and comes in line with the IMF directives that recommended phasing out the mechanism,” Beltone said in the recent report.

They added that the CBE revised the repatriation mechanism-pricing scheme by applying a 1% entrance fee in December 2017, aiming at channeling more inflows into the banking system, following the decision to remove limits on non-essential goods imports. “Thus, we see limited impact on the fixed income market, who was prepared for this gradual removal of the mechanism, after it became more expensive and with the growing consensus among investors’ that repatriations risks diminished. The squeeze in banks NFAs’ with the outflow of foreign investors from the fixed income market who entered through the interbank, representing 36% of total inflows since the float, reflects the increasing interbank volumes in 2018.”

Moreover, Beltone pointed out that despite the wave of foreign outflows of $9.8bn from the fixed income market, they still believe Egypt provides an attractive carry trade opportunity, where we expect yields to remain stable above the 19% mark, particularly with the solid macro fundamentals and growth outlook that advocated a credit rating upgrade by S&P and Moody’s in addition to a stable currency, which trades at about 9% discount to its five-year average.


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EGP liberalisation eliminated all FX shortage https://dailynewssegypt.com/2018/11/29/egp-liberalisation-eliminated-all-fx-shortage/ https://dailynewssegypt.com/2018/11/29/egp-liberalisation-eliminated-all-fx-shortage/#respond Thu, 29 Nov 2018 16:21:10 +0000 https://www.dailynewssegypt.com/?p=682501 Egypt's payments balance achieved overall surplus of $12.8bn, 5.1% of GDP for FY 2017/18

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The liberalisation of the foreign exchange (FX) rate regime on 3 November 2016 led to the successful elimination of all FX shortages which previously disturbed economic activity, thereby significantly improving Egypt’s external trade balances, according to the Central Bank of Egypt (CBE).

The CBE noted that the distortions in the domestic foreign currency market were eliminated, and the forces of supply and demand drove, and still continue to drive, the process of price findings in the FX market.

Moreover, foreign currency resources have reached $111bn since 3 November 2016, Egypt’s current account deficit decreased from $19.8bn, which is 5.9% of the GDPfor fiscal year (FY)

2015/16, down to $ 5.9bn or 2.4% of the GDP, for FY 2017/18.

Furthermore, Egypt’s balance of payments achieved an overall surplus of $12.8bn, or 5.1% of the GDP for FY 2017/18 compared to a deficit of $2.8bn, 0.8% of theGDP for FY 2015/16.

Stepping forward, Egypt’s current account deficit is projected to decrease to around 1%-2% of the GDP for FY 2018/19, the CBE noted.

“Egypt’s risk profile improved, and its financial stability regained strength. As a result, confidence increased as was reflected in 

the elevated interbank market volume,” stated the CBE, adding noted, “In light of the above, the CBE has decided to terminate the repatriation mechanism as of 4 December 2018, close of business day, for any fresh foreign currency portfolio investments wishing to enter the local currency Egyptian T-Bills, T-Bonds market and the stocks listed on the Egyptian Stock Exchange.

The CBE explained that this will not apply to balances held within the mechanism before the above mentioned date. Investors who initially entered through the repatriation mechanism before 4 December, close of business day, may exit through the mechanism at any time.

Fresh foreign currency portfolio investments, from this point forward, should be channelled through the interbank market.

In addition, repatriation mechanism pricing upon exit of the foreign investor through the mechanism, will not chance the process, the CBE pointed out.

 

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Credit facilities granted by banks to clients increase by EGP 28.2bn in Q3 2018 https://dailynewssegypt.com/2018/11/29/credit-facilities-granted-by-banks-to-clients-increase-by-egp-28-2bn-in-q3-2018/ https://dailynewssegypt.com/2018/11/29/credit-facilities-granted-by-banks-to-clients-increase-by-egp-28-2bn-in-q3-2018/#respond Thu, 29 Nov 2018 07:30:35 +0000 https://www.dailynewsegypt.com/?p=682445 Private business sector obtains 61.3% of these facilities, industry sector benefit most, says CBE

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The volume of credit facilities provided by banks operating in the local market to their clients during the period from July to September this year increased by EGP 28.2bn, reaching EGP 1.65tn, according to the Central Bank of Egypt (CBE).

Credit facilities are loans provided by banks to their clients alongside documentary credits and letter of guarantees that were opened to cover import operations.

The total facilities directed to the government reached EGP 457.89bn at the end of September, including about EGP 213.94bn in the local currency, and about EGP 243.94bn in foreign currency.

The total facilities directed to non-government bodies reached EGP 1.19tn, including about EGP 881.16bn in local currency and about EGP 318.78bn in foreign currency.

According to the CBE, the private business sector has obtained about 61.3% of the non-government credit facilities provided by banks to the various economic sectors until the end of September.

The CBE noted that the industry came at the top of the sectors most funded by banks, as it received alone about 34.3% of the total of these facilities, followed by the services sector which acquired about 28.8% of the facilities, then the trade sector by 10.5%.

As usual, the agricultural sector received the lowest share of credit facilities granted by banks, accounting for only 1.3% of such facilities until the end of September.

The CBE added that there are other sectors that were not mentioned in detail, topped by the household sector. They obtained about 25.1% of these facilities.

In the same context, the CBE revealed that the total loan portfolio of banks increased by EGP 25bn at the end of September to reach EGP 1.64tn, compared to EGP 1.621tn at the end of August.

The CBE pointed out that the loans provided to the public business sector in both local and foreign currencies, increased by over EGP 8bn at the end of September to EGP 457bn, compared to EGP 449bn in August.

Finally, the loans granted for the private sector increased by over EGP 16bn, recording a total of EGP 1.188tn at the end of September, compared to EGP 1.172tn in August.

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United Bank ends tax disputes of EGP 100m https://dailynewssegypt.com/2018/11/29/united-bank-ends-tax-disputes-of-egp-100m/ https://dailynewssegypt.com/2018/11/29/united-bank-ends-tax-disputes-of-egp-100m/#respond Thu, 29 Nov 2018 06:30:52 +0000 https://www.dailynewsegypt.com/?p=682404 Bank keen on solving all disputes of stamp duty, fulfill obligations towards state, citizens, says El-Kady

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The United Bank has managed to end all its tax disputes of EGP 100m with the Egyptian Tax Authority (ETA), closing about 43 files and 56 cases in courts.

Recently, the bank joined the protocol held between the ETA and the Federation of Egyptian Banks (FEB) in order to end all stamp duty disputes which go back to over 30 years.

According to Ashraf El-Kady, chairperson of the bank, the cooperation with the tax authority over the stamp duty issue was managed with care, and a clear objective, to end all disputes, and fulfill the bank’s obligations towards the state and citizens.

El Kady praised the efforts of the authority to facilitate all settlement procedures, in appreciation of the effective role that the bank plays in building the national economy, and supporting comprehensive development, noting that the bank is always keen on benefiting from the several initiatives which were launched by the state and the minister of finance to end all tax disputes.

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EU strengthens CBE’s efforts on financial inclusion, banking supervision https://dailynewssegypt.com/2018/11/25/eu-strengthens-cbes-efforts-on-financial-inclusion-banking-supervision/ https://dailynewssegypt.com/2018/11/25/eu-strengthens-cbes-efforts-on-financial-inclusion-banking-supervision/#respond Sun, 25 Nov 2018 09:00:46 +0000 https://www.dailynewsegypt.com/?p=681878 Egyptian women’s financial inclusion also high priority, number of initiatives being implemented in close coordination with relevant stakeholders

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During a panel discussion on 22 November 2018 in Cairo, the Central Bank of Egypt (CBE), the German embassy and the European Union (EU) launched a project on “Strengthening Financial Inclusion and Banking Supervision in Egypt”.

Through this project the EU will provide €3.2m in the form of technical assistance for three years, to assist the CBE in further strengthening its banking supervision and boosting financial inclusion.

The CBE has brought the promotion and coordination of financial inclusion among the various national stakeholders to the forefront of its development policy agenda, to create the conditions in which Egyptians, particularly those who are underserved by the financial system, are able to save safely and build up resilience against financial shocks, and Micro, Small and Medium Enterprises (MSMEs) are able to access finance, invest, grow, and generate more employment opportunities.

On the national level, financial inclusion has also become a priority with the launching of the Sustainable Development Strategy: Egypt’s Vision 2030. Egyptian women’s financial inclusion is also a high priority, and a number of initiatives are being implemented in close coordination with relevant stakeholders.

To institutionalise the process, the CBE established, in November 2016, a Financial Inclusion Department to spearhead and monitor the financial inclusion process, and to foster the coordination and collaboration with the national stakeholders.

Several policy reforms were initiated to advance financial inclusion in general, and women’s financial inclusion in particular.

These efforts led to substantial improvement in financial inclusion in the past two years, as demonstrated by the 2017 World Bank’s Global Findex Database, which revealed that the proportion of adults with a bank account in Egypt grew to 33% in 2017, from 14% in 2014, and 10% in 2011.

The project will support the CBE’s efforts to establish a comprehensive nationally-owned database to measure the levels and trends of financial inclusion, by conducting a fully-fledged demand and

supply side mapping exercise, which will cover both households and MSMEs. The mapping exercise will be conducted in 2019, in close coordination with the relevant stakeholders.

The CBE has undergone several reform phases n its banking supervision sector over the past decade.

It started by upgrading the supervisory methodology from compliance to a risk-based approach, and it also established new departments such as the regulations and macro-prudential departments.

Moreover, the CBE enhanced its supervisory regime as it has already implemented Basel II and Basel III, according to the timeline plan of the BCBS regulations.

This project will tackle the Basel III final revisions (known as Basel IV) implementation, the supervisory review process, and the banks’ governance; thus contributing to improved financial stability,

soundness and transparency of the banking sector.

In addition, a fully-fledged macroprudential risk framework will be implemented, with a set of policy and analytical tools, a clear coordination between macroprudential policy and monetary and fiscal policies, in addition to a comprehensive reporting framework.

Thus, a macroprudential risk framework that will help the CBE to make the Egyptian financial system more robust.

The launching event of the project brought together over 100 participants from government agencies, business support organisations, embassies and international development organisations.

Ambassador Ivan Surkoš, head of the EU delegation in Egypt, praised the hard work of the CBE in the economic stabilisation process, and underlined the peculiarity of the EU contribution, where inclusion and stability are under a unique programme.

The CBE Deputy Governors Gamal Negm and Lobna Helal highlighted in their opening remarks the recent developments in banking supervision and financial inclusion.

Negm said that the CBE works continuously on further strengthening the capacity of its banking supervision and aligning the banks’ governance with international standards and best practices. He highlighted the CBE’s efforts to establish evidence-based-policy-making through measuring the levels, trends and challenges of financial inclusion in the country.

“We have been able to gather a considerable amount of basic data to prepare the first financial inclusion report which enables the stakeholders to gain more insights on the way forward in this nationally important task,” said CBE Deputy Governor Lobna Helal.

German ambassador to Egypt, Julius Georg Luy, emphasised that Germany has been a long-time supporter of financial inclusion measures in Egypt, and that he was pleased to see that the situation for households and enterprises in accessing financial services has significantly improved, during the implementation organization.

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), represented by the Head of Project Hayder Al Bagdadi, stated that the CBE became a reference point for smart financial inclusion policies in the Arab world and beyond.

The panel discussion focused on the current and future reforms of the CBE.

Representatives from the Banking Supervision and Financial Inclusion departments shared the latest updates and milestones of the respective reform programmes, emphasising the importance of the collaboration with the EU, and of sharing best practices with other countries in the region.

This project is part of the Special Initiative for “Promotion of Access to Financial Services for Small and Medium Enterprises” (PAFSME) in Egypt which is funded by the German Federal Ministry for Economic Cooperation and Development.

The objective of PAFSME is to improve the access to non-bank financial services, such as factoring, leasing, equity finance or insurance for SMEs.

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IDB’s financial position up to EGP 21.849bn at end October 2018 https://dailynewssegypt.com/2018/11/25/idbs-financial-position-up-to-egp-21-849bn-at-end-october-2018/ https://dailynewssegypt.com/2018/11/25/idbs-financial-position-up-to-egp-21-849bn-at-end-october-2018/#respond Sun, 25 Nov 2018 08:30:39 +0000 https://www.dailynewsegypt.com/?p=681873 Deposits up by EGP 5bn in 1 year, loans grew by 21%

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Maged Fahmy, chairperson of the Industrial Development Bank (IDB), revealed the most prominent indicators of bank’s performance until the end of October 2018, compared to past years.

Financial Position

According to Fahmy, the total financial position of the bank by the end of October 2018 scored EGP 21.849bn, up from EGP 16.146bn in October 2017, up by EGP 5.703bn (35%).

The bank’s financial position was estimated at EGP 6.211bn in October 2013; EGP 6.194bn in October 2014; EGP 5.82bn in October 2015, and EGP 7.795bn in October 2016, which means that the figure jumped by EGP 15.638bn in the last five years, marking a 252% growth.

Deposits

Deposits reached EGP 16.194bn at the end of October 2018, up from EGP 11.193bn in October 2017, an increase of EGP 5.001bn, or 45%, indicated Fahmy.

The volume of deposits amounted to EGP 1.454bn in October 2013; EGP 1.515bn in October 2014; EGP 2.005bn in October 2015, and EGP 3.517bn in October 2016, which means that deposits jumped in the past five years by EGP 14.740bn, marking an increase of 1014%.

Loans

IDBH’s loan portfolio stood at about EGP 8.875bn at the end of October 2018, up from EGP 7.333bn in October 2017, with an increase of EGP 1.542bn (21%), stated the bank’s chairperson.

The total employment rate (loans to deposits) marked 55% in October 2018, down from 65% in October 2017.

This figure was at 273% at the end of October 2013; 292% at the end of October 2014; 238% at the end of October 2015, and about 150% at the end of October 2016.

The volume of loans amounted to EGP 3.972bn in October 2013; EGP 4.415bn in October 2014; EGP 4.415bn in October 2015, and EGP 5.289bn in October 2016, which means that loans jumped in the past five years by EGP 4.903bn, marking an increase of 123%, pointed out Fahmy.

Regular loans

On the level of the regular loan portfolio, Fahmy explained that it amounted to about EGP 7.543bn at the end of October 2018, up from EGP 6.128bn in October 2017, growing by EGP 1.415bn, or 23%.

The volume of these loans amounted to EGP 2.314bn in October 2013; EGP 2.791bn in October 2014; EGP 3.239bn in October 2015, and EGP 3.883bn in October 201, which means that they jumped in the past five years by EGP 5.229bn, marking an increase of 226%.

The ratio of regular loans to the bank’s total deposits stood at 47% at the end of October 2018, compared to 55% at the end of October 2017, and 110% at the end of October 2016, 162% at the end of October 2015, 184% at the end of October 2014, and 159% at the end of October 2013.

Non-performing loans

In contrast, Fahmy clarified that the volume of the bank’s non-performing loan (NPL) portfolio fell from EGP 1.658bn in October 2013 to EGP 1.332bn in October 2018, down by EGP 326m.

The total NPLs to total loans stood at 18% by the end of October 2018, compared to about 20% by the end of October 2017, and 27% by the end of October 2016, and 32% the end of October 2015 and 36% the end of October 2014, and 41% by the end of October 2013.

Net profit

According to Fahmy, the bank’s net profit by the end of October 2018 amounted to EGP 303m in October 2018, against EGP 250m in October 2017, up by EGP 53m or 21%.

These profits are compared to EGP 114m in October 2013; EGP 128m in October 2014; EGP 115m in October 2015, and EGP 148m in October 2016, which means that profits increased in the past five years by EGP 189m or 166%.

Net income of the bank

The bank’s net income from commissions rose to EGP 51m at the end of October 2018, against EGP 49m in October 2017, rising by EGP 2m, or 4%, mentioned Fahmy.

The bank’s figures indicate a commission revenue of EGP 40m in October 2013; EGP 45m in October 2014; EGP 39m in October 2015 and October 2016.

The bank’s net income from the revenues reached EGP 513m at the end of October 2018, compared to EGP 436m in October 2017, up by EGP 77m, or 18%.

This compares with about EGP 222m in October 2013; EGP 224m in October 2014; EGP 232m in October 2015, and EGP 258m in October 2016, which means that the figure increased by EGP 291m in the past five years, marking the growth of 131%.

The return on capital reached about 60% by the end of October 2018, compared to 50% at the end of October 2017, about 29% by the end of October 2016, and about 23% by the end of October 2015, and about 26% by the end of October 2014 and about 22% by the end of October 2013, concluded Fahmy.

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IDB aims to complete treatment plan, put bank on right track by mid-2019: chairperson https://dailynewssegypt.com/2018/11/25/idb-aims-to-complete-treatment-plan-put-bank-on-right-track-by-mid-2019-chairperson/ https://dailynewssegypt.com/2018/11/25/idb-aims-to-complete-treatment-plan-put-bank-on-right-track-by-mid-2019-chairperson/#respond Sun, 25 Nov 2018 07:30:54 +0000 https://www.dailynewsegypt.com/?p=681868 We are working on new beginning of bank to serve economy, especially industrial sector, retail development purposes, provision of modern technological services: Fahmy

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The management of the Industrial Development Bank (IDB) aims to complete its treatment plan and put the bank on the right track by mid-2019, according to the bank’s chairperson Maged Fahmy.

Fahmy assumed his position in April 2016. According to him, he has since been working on giving rise to a new bank that can better serve the economy, especially the industrial sector, retail services for development, and the provision of modern technology services.

He noted that floating the bank on the Egyptian Exchange (EGX) is likely unless the stakeholder (the ministry of finance) raises the bank’s capital when the new Banking Law passes.

The bank’s capital currently stands at EGP 500m. The new Law, which was lately discussed, stipulates a minimum capital of EGP 1.5bn.

In an interview with Daily News Egypt, Fahmy explained that the bank’s new management was dreaming at the beginning of assuming the responsibility of reviving the bank, before the limit for their expectations increased in the wake of the bank’s recent strong performance. the transcript for which is below, lightly edited for clarity:

You have been responsible for the bank since April 2016. What problems have you faced and how have you overcome them?

When I assumed responsibility of the bank, it was only natural to first diagnose the first, pen a prescription, then follow it. This is what happened.

There have been several problems and files that must be solved, such as the serious imbalance in the bank’s administrative structure.

To overcome this problem, PricewaterhouseCoopers was hired to work on an administrative restructuring of the bank. This has been already completed.

We also opened the door for early retirement options for those who wish to leave. They were granted decent compensations to guarantee a good life in addition to their monthly pensions.

Some 260 employees have so far retired, and there are still pending requests. We now have 757 employees including the support staff.

At the same time, a number of experts from other banks were recruited, along with fresh graduates.

This comes in tandem with the work of reassessing employees’ salaries to match the market.

What about the plan to train these employees?

We are already working on an intensive training plan for all employees, but we were waiting for PricewaterhouseCoopers to finish its restructuring plan, and also for the employees who sought retirement to finish their procedures.

We have allocated a large budget for training in 2019. The training will be conducted in cooperation with the Egyptian Banking Institute and other training organisations.

What is the second file on which the new bank management has worked?

The second file was the activity of the bank and the services it provides.

When I assumed responsibility for the bank, the size of the deposit portfolio was only EGP 2.1bn, which is very low. In October 2018, deposits hiked to EGP 14bn, with plans reaching EGP 20bn by the end of this year.

The loans portfolio was also about EGP 3bn, and now it is up to EGP 7.6bn, growing by over 100%. We plan to boost loans to EGP 8bn by the end of this year, even though we are taking a cautious less risky approach to accomplish this.

The bank’s financial position also rose by 252%, reaching EGP 21.8bn at the end of October 2018 against EGP 16.1bn in October 2017.

An index issued by Business News has ranked the bank as the fastest growing in 2017. Of course, repeating such jumps in the future will not be easy, given the limited size of the bank, which would impede such swift improvements in the short-term.

Despite the small size and circumstances of the bank, it is the fifth top bank, financing small and medium enterprises, and fourth top bank with regards to mortgage financing towards limited and medium income citizens across the banking market.

The bank is also active in retail banking for development purposes, such as the delivery of natural gas to homes. The bank has so far delivered gas to about 125,000 units.

IDB has also financed the establishment of the commodity exchange, the Rubikki Leather City, and Damietta Furniture City. It is keen to finance any project that serves the development process.

What about the third file?

The third file was related to the bank’s technology.

We were facing a real disaster regarding the bank’s technological infrastructure, both in terms of labour systems and security.

We have worked on this file with great effort, and we have come a long way in the process of development and modernisation, so we recently received a prize from the Central Bank of Egypt (CBE) for being the fastest bank in developing its technological infrastructure.

The technology development process included updating all the bank’s servers and transferring them to a safe place. The corpbanking systems have also been updated in cooperation with a European-Jordanian company. And since assuming office, we have bought all the applications and software needed for modern technological products.

We are already planning to launch mobile and internet services in the first half of 2019.

Can you elaborate on the bank’s crisis with the Egyptian Tax Authority (ETA)?

This was the fourth file we worked on and we achieved very good results after suffering for 22 years.

The ETA has been demanding taxes of EGP 750m, with interest. The bank lost all the cases it raised against the ETA except for a case in the Court of Cassation and the bank was not likely to win.

In order to resolve this dispute, we used an office specialising in tax settlements, and we worked hard with the ETA. We reached an agreement to pay EGP 120m only. However, we had allocated EGP 265m for this, we paid the amount we agreed upon, and kept EGP 145m in the bank’s profits.

Can you tell us about changing the bank’s name?

We were keen to change the name of the bank to the Industrial Development Bank (IDB), as the old name was too long and had a negative reputation and we had to change that. As of October, 2018, we changed the name and the logos in all of our branches and we are now working on the new website.

What is the role of IDB in serving the industrial sector?

The industry alone accounts for about 48% of the bank’s total loan portfolio.

Still, the bank chose to be a development bank, financing all activities that serve the national economy, including industry.

Naturally, we care about industry. The history of the bank and its name is a good positive proof of that, and this is consistent with my orientation and tendency, and I believe that the country’s future and economy is in the industry sector.

But I personally do not prefer specialised banks, aside from the banks concerned with agricultural development or real estate, because they need to finance certain sectors and allocate the larger long-term financing, but all banks can finance industry.

Is the bank considering establishing companies in certain sectors soon?

The bank owns Senaey Financial Leasing with a capital of EGP 175m, but it was not active.

When we took over the bank’s responsibility, we revived the company and changed the name to Egy Lease for financial leasing. We also changed the management and separated it from the bank. The company is now working well with a portfolio of some EGP 350m in financial leasing.

The bank also has stakes in a few companies, including the Medical Union Pharmaceuticals, which is one of the bank’s best contributors. We are still considering buying stakes in other companies in various sectors.

It is also not unlikely that the bank will set up new companies in the microfinance and real estate mortgage finance sectors.

What about investing in the EGX?

This is something that I do not like at all. The stock market is very risky, and we are working with depositors’ money and I cannot risk it.

What about the bank’s investments in government debt instruments?

I like to confirm that investment in government debt instruments is not a bad idea as some may think. It is a method to exploit the bank’s surplus funds. Yet, we cut these investments from EGP 2bn to EGP 1bn now.

What is the bank’s geographic expansion plan?

We currently have 18 branches in 16 locations. All these branches need to be restructured, developed and redistributed.

We aim to open 50 branches within five years. We are presently replacing branches as well. We received the CBE’s approval to open nine new branches in 2019 to cover many areas in Cairo, Upper, and Lower Egypt.

We also recently relocated the bank’s main departments to the new headquarters in downtown Cairo on Kasr Al Ainy Street instead of being scattered around Cairo.

Are you planning to be in the New Administrative Capital?

We have already purchased a plot of land of 5,350 sqm in the business district in the New Capital to build new headquarters there within three years.

What of the bank’s unused asset portfolio?

The bank already has many untapped assets, such as its headquarters on Teseen street in New Cairo, the bank building on Al-Galaa street and a number of other branches inside and outside Cairo.

The market value of these assets are currently around EGP 1.5bn. If sold, they can realise capital gains of some EGP 1bn.

The bank was already planning to sell these assets this year, to direct the value of those assets to close the deferred losses, but it seems that we will not be able to do so, and the sale will be carried out next year.

How will the deferred losses be handled?

Deferred losses amounted to EGP 1.65bn when I assumed office. Now, they are down to EGP 1bn. We plan to reach EGP 650m by the end of this year. We also expect to make profits of EGP 350m by the end of this year.

How much is the bank’s capital now, and will it be increased?

The bank’s capital is currently EGP 500m, excluding the losses it has achieved over the past years, and the bank has received a support loan of EGP 2.5bn from the CBE to strengthen its capital base and face losses.

If the new Banking Law comes into force, we will be required to increase the capital to EGP 1.5bn. We will have to talk to the stakeholder of the bank, i.e. the ministry of finance, to decide if they will raise the capital.

All we are currently working on is the completion of the bank’s restructuring plan, its development and modernisation and ending its problems. We hope to finish this task by the mid-2019. Then, we will use the help of a rating company to evaluate the bank. If the ministry of finance refuses to increase the capital, we will have to float the bank on the EGX or merge with another bank.

When we took over the responsibility of the bank it was our utmost ambition to revive the bank. But now, the limits were removed after achieving amazing results recently. We are now dreaming of a novel beginning for a new bank that can support the economy and serve all sectors by providing the latest series. Our team can do that.

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ABE, Misr El Kheir Foundation cooperate for rehabilitation, operation of suspended livestock production stations https://dailynewssegypt.com/2018/11/21/abe-misr-el-kheir-foundation-cooperate-for-rehabilitation-operation-of-suspended-livestock-production-stations/ https://dailynewssegypt.com/2018/11/21/abe-misr-el-kheir-foundation-cooperate-for-rehabilitation-operation-of-suspended-livestock-production-stations/#respond Wed, 21 Nov 2018 16:30:23 +0000 https://www.dailynewsegypt.com/?p=681724 Bank's cooperation with Misr El Kheir Foundation's Ard El Kheir amounted to EGP 310m injected to 740 beneficiaries to raise 14,740 cattle: Elkosayer

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Misr El Kheir Foundation signed a protocol of cooperation with the Agricultural Bank of Egypt (ABE) to re-activate the maximum capacities, financing, and exploitation of livestock production stations in Egypt.

The signing of this protocol comes as part of an effective contribution to the government’s efforts to develop livestock, to bridge the red meat food gap, reduce costs and achieve balance in prices within the Egyptian market.

The protocol was signed by Aly Gomaa, chairperson of Misr El Kheir Foundation and ABE’s chairperson Elsayed Elkosayer.

The cooperation protocol between the two sides includes the re-operation of the farms that need to be re-worked to maximise production and provide the financing required by ABE, in the framework of the initiative of the Central Bank of Egypt (CBE) to finance micro, small, and medium enterprises with a 5% declining interest rate, to boost investment in the livestock sector.

The protocol also includes Misr El Kheir Foundation’s supervision of all the farms that will join the initiative, provide technical support, and oversee the operation process in full to ensure continuity of the project.

According to Gomaa, this cooperation with the ABE achieves the most important goals of Misr El Kheir Foundation which are human development. They stressed that they have the largest farms in Egypt with a capacity of up to 100,000 cattle in the governorates of Upper Egypt and border provinces such as Assiut, the New Valley, Sinai, and the Bahariya Oasis.

He added that the volume of Misr El Kheir Foundation’s investments in these projects reached EGP 1.5bn in order to contribute to the development of the meat industry in Egypt, and employ about 3,000 youths so far.

This protocol comes as a confirmation of the great and continuous cooperation between Misr El Kheir Foundation and the ABE in various fields, especially the livestock production field, pointed out Gomaa.

According to Elkosayer, the size of deals with Misr El Kheir Foundation’s Ard El Kheir amounted to EGP 310m that was pumped to 740 beneficiaries to raise 14,740 cattle, Elkosayer remarked.

The ABE pumped EGP 500m to contribute to the National Project for Fattening Veal Revival, noting that this funded about 4,850 beneficiaries to raise 37,750 livestock in order to achieve a balance in meat prices in the Egyptian market.

He pointed out that the signing of this protocol comes to implement the Central Bank of Egypt’s (CBE) initiative to encourage micro, small, and medium enterprises, as a key factor to promote the national economy and reduce the unemployment rate. This initiative also contributes to bridging the food gap of red meat within the Egyptian market.

According to Elkosayer, the protocol provides the ABE financing to farm owners that are economically proven feasible to benefit young graduates, farmers, and livestock development employees.

Misr El Kheir Foundation has recently completed a year-long comprehensive geographical survey to study all farms of livestock that stopped working, including both private and public, to identify the problems of breeders and investors.

According to Misr El Kheir Foundation, this survey showed that the actual capacity of farms in all of Egypt’s governorates has put capacity at 3.2m livestock per year, while the current utilised capacity is 633,000 per year, putting the ratio at 20%.

Furthermore, Misr El Kheir Foundation’s activity in the livestock sector began through its subsidiary, Ard El Kheir, since 2011, beginning with one farm in Assiut with a capacity of 1,000 livestock.

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Right time to invest in Egypt: Asian Infrastructure Investment Bank https://dailynewssegypt.com/2018/11/20/right-time-to-invest-in-egypt-asian-infrastructure-investment-bank/ https://dailynewssegypt.com/2018/11/20/right-time-to-invest-in-egypt-asian-infrastructure-investment-bank/#respond Tue, 20 Nov 2018 19:42:03 +0000 https://www.dailynewsegypt.com/?p=681636 Egypt has come long way in developing SCZone, attracting many local, foreign investments, with contracts worth over billions of dollars, says Mamish

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Now is the right time to invest in Egypt, said Shixin Chen, head of the delegation of Asian Infrastructure Investment Bank (AIIB) members and board directors who are currently visiting Egypt.

Chen’s remarks came during a tour to the Suez Canal Special Economic Zone (SCZone), and the new tunnels of the Canal and East Port Said Port, in the presence of Sahar Nasr, minister of investment and international cooperation, and Mohab Mamish chairperson of the Suez Canal Authority (SCA), and the SCZone. The delegation marks the first visit of the AIIB’s officials to a non-Asian country.

Furthermore, the delegation visited the New Administrative Capital, and reviewed the investment opportunities, and is scheduled to visit the solar power projects in Aswan’s Benban on Wednesday, in which the bank invests $210m, praising the great investment opportunities in the SCZone.

He noted the bank’s aspiration to enhance cooperation with Egypt by investing in infrastructure projects, as Egypt enjoys an important strategic position to make it part of the Asian continent.

Moreover, Mamish said that the SCZone management is on track to complete the implementation of all the infrastructure needs of the zone, adding that it includes the power stations and the development of the logistics network in the ports of the economic zone.

He stressed the importance of implementing the intelligent transport system and increasing the capacity of the ports to transform Egypt into a global centre for the transport and logistics industry.

Mamish added that Egypt has come a long way in developing the SCZone, attracting many local and foreign investments, with contracts worth over billions of dollars, reflecting the confidence of local and foreign investors in the Egyptian economy.

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EGP 1.393bn net profits of HDB by end of September 2018: Chairperson https://dailynewssegypt.com/2018/11/20/egp-1-393bn-net-profits-of-hdb-by-end-of-september-2018-chairperson/ https://dailynewssegypt.com/2018/11/20/egp-1-393bn-net-profits-of-hdb-by-end-of-september-2018-chairperson/#respond Tue, 20 Nov 2018 19:37:55 +0000 https://www.dailynewsegypt.com/?p=681634 EGP 2.4bn net income from return with 64.9% increase rate compared to September 2017, says El Sebaey

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The Housing and Development Bank (HDB) has achieved net profits of EGP 1.393bn after taxes by the end of the third quarter (Q3) of this year, compared to EGP 887.6m by the end of Q3 of 2017, according to Fathy El Sebaey, the bank’s chairperson.

He explained that the profit increase during the first nine months of 2018 (9M18) reached 57%, noting that these profits have increased by 112% compared to the profits targeted by the bank during that period, thanks to the professional administration of the bank and its employees’ efforts.

According to El Sebaey, the loans portfolio in the bank increased by EGP 2bn by the end of September 2018 by 17.4%. The capital adequacy ratio reached 20.49% in light of optimal application of credit policies, with the investment portfolio of the bank being free of any risky assets.

HDB’s operating income has increased during 9M18 by EGP 909m, with 40.7% increase, compared to September 2017, which indicates the bank’s success in achieving actual returns from the activity, indicated El Sebaey.

The growth rates in the operating income items achieved reasonable increases by 9M18 compared to the same period in 2017, noting that similar loans and incomes reached EGP 4.6bn by 9M18, with an increase rate of 56.6%, compared to September 2018. The net income of the return reached EGP 2.4bn, with an increase of 64.9%, while the net income from fees and commissions amounted to EGP 28.6m, with 16.2% increase, declared the bank’s chairperson.

Within the same context, El Sebaey revealed that the distribution of the profits of the companies affiliated to the bank have increased by EGP 77.9m by 9M18 with an increase of 10.7% compared to 9M17, pointing out that the profits of the bank’s housing projects have increased by EGP 73.4m reaching EGP 370.3m by 9M18, with an increase rate of 24.7% compared to 9M17.

“The bank’s administrative expenses increased by 31.4% by 9M18, compared to 9M17 due to the increase of the number of branches of the bank, and opening new branches in order to reach all segments of the society, especially the one that do not deal with banks, in order to achieve the ambitious goals of the concept of financial inclusion in a way that enhances the position of the bank in the banking market and increase the spread across the country,” El Sebaey remarked.

According to El Sebaey, the HDB pays special attention to carrying out necessary developments for the technological infrastructure of banking work in order to offer the best and fastest service to clients, all of which had an impact on increasing depreciation expenses, which led to an increase in general and administrative expenses.

The bank continues to maintain communication with its clients through offering the most distinct services that meet the client needs, as well as their trust in the bank as a banking institution able to offer new vessels that encourage saving and enhances that culture for all segments of the society, El Sebaey stressed.

This comes in in line with the bank’s ambitious plan to increase the number of its branches by the end of 2018, as well as increase the bank’s investments in digital technology, in order to offer excellent service to clients with the aim of achieving the bank’s strategy, which is based on improving the standards and quality of the service and obtain sustainable development, El Sebaey concluded.

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Banks continue to shine with strong business results in 9M18 https://dailynewssegypt.com/2018/11/18/banks-continue-to-shine-with-strong-business-results-in-9m18/ https://dailynewssegypt.com/2018/11/18/banks-continue-to-shine-with-strong-business-results-in-9m18/#respond Sun, 18 Nov 2018 06:30:46 +0000 https://www.dailynewsegypt.com/?p=681315 Marked increase in deposits, loans portfolios, NPLs decline at most banks

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Banks operating in the Egyptian market continued to shine and achieved strong results during the first nine months of 2018 (9M18).

Daily News Egypt reported the growth of 11 banks which have revealed their results so far. These banks achieved remarkable increases in their deposits and loans portfolios by the end of September 2018, compared to September 2017.

CIB – Egypt

The financial results of the Commercial International Bank (CIB – Egypt) reflected profits of EGP 7.019bn between January and September 2018 against EGP 5.67bn of profits during the 9M17, marking a growth of 24%.

The bank’s management attributed these strong results to the bank’s resilience, at a time of macroeconomic uncertainty, especially in the wake of the sales surge in emerging markets (EM).

It explained that this upsurge was supported by a large growth in deposits in local currency, which increased by about EGP 29bn between January to the end of September 2018, and increased by EGP 14bn in the third quarter of 2018 alone.

The bank’s results also revealed a high capital adequacy ratio at 19.1% in 9M18.

Al Ahli Bank of Kuwait-Egypt

Al Ahli Bank of Kuwait-Egypt posted net operating profits after taxes during 9M18 exceeding EGP 1bn, up by 75% from the same period in 2017, during which the bank realised profits of EGP 419m.

According to the bank’s performance indicators released a few days ago, total assets increased to EGP 28bn, up by 34%.

Clients’ deposits also increased by 38% to EGP 24bn, while the loan portfolio grew by 35% to reach EGP 15bn.

Housing and Development Bank

The results of the Housing and Development Bank (HDB) showed a net profit increase for 9M18 by 56.9% over the same period of 2017.

According to the bank’s financial statements, the net profits of the bank reached EGP 1.3bn at the end of September 2018, compared to EGP 887.6m at the end of September 2018.

While the bank’s deposits declined during 9M18 to EGP 33.5bn from EGP 40.8bn in the same period of 2017, the bank’s loans portfolio increased during the same period from EGP 13.4bn to EGP 15.3bn.

QNB Alahli

The consolidated financial statements of QNB Alahli for 9M18 showed an increase in net profits by 26.7% on annual basis.

The bank explained in a statement to the Egyptian Exchange (EGX) that it achieved a net profit of EGP 5.38bn from the beginning of January until the end of September 2018, against EGP 4.24bn in the same period of 2017.

According to the bank’s independent lists, which do not include its subsidiaries, the bank’s profits at the end of September 2018 increased to EGP 5.16bn, compared to profits of EGP 4.06bn by the end of September 2017, marking an increase of 27%.

The statement said that the bank’s loans and advances portfolio, after deducting the provisions, grew to EGP 127bn at the end of September 2018.

The ratio of subprime loans at QNB Alahli reached 2.48% in September, while provisions for these loans reached 170%.

According to the bank, its deposits portfolio reached about EGP 198bn at the end of September 2018, up by 7% from the end of 2017. The bank’s market share of total deposits reached 5.64% in July 2018.

Furthermore, the bank stated that the proportion of facilities granted to SMEs reached 19.51% of the total credit granted by QNB Alahli by the end of September.

The bank’s capital adequacy ratio is at 17.95%, as it applies the best credit policies.

ADIB – Egypt

The consolidated financial statements of ADIB – Egypt showed an increase of 26% on an annualised basis during 9M18 as a result of increased income from the returns.

The bank said in a statement that its profits amounted to EGP 632.19m by the end of September 2018, compared to profits of EGP 500.6m by the end of September 2017.

On independent business, the bank made a profit of EGP 608.4m in that period compared to EGP 348.8m in the same period of 2017.

The net income from revenues in that period grew to EGP 1.8bn against EGP 1.48bn in the same period in 2017.

ADIB attributed the increase in the returns to the increase in the margin realised in the finance portfolio to EGP 668m, up by 37% from last year, in addition to increased revenues from treasury investments and deposits by EGP 520m, up by 44% from 2017.

Al Baraka Bank Egypt

The financial statements of Al Baraka Bank Egypt during 9M18 showed that profits increased by 18% on a year-over-year (y-o-y) basis, as a direct result of increased income from the returns.

According to a statement from the bank, it achieved profits worth EGP 632.4m between January to September 2018, compared to EGP 534.7m in the same period of 2017.

Net income from revenues during the period increased to EGP 1.3bn, against EGP 1.09bn in the same period of 2017.

The non-performing loans portfolio (NPLs) at Al Baraka Bank Egypt declined during that period by 14.8% to EGP 880m in September, thus accounting for 5.1% of total credit, against EGP 1.033bn in December 2017 marking 6.5% of total loans portfolio.

The net Murabaha portfolio, shares and speculations of customers increased by 9.4% to near EGP 15bn in September, up from EGP 13.7bn in December last year, while deposits increased by 19% to EGP 52.5bn, up from EGP 44.17bn.

Suez Canal Bank

Financial indicators for Suez Canal Bank showed a 9-month increase in profits by 9.7% spanning 9M18

The bank said in a statement that it had achieved profits that amounted to EGP 330.7m during the period from January to September 2018, compared to profits that amounted to EGP 301.3m by the end of September 2017.

The bank’s net profits were EGP 210.05m from the beginning of January until the end of June 2018, against EGP 206.79bn in profits during the same period of 2017.

Hussein El-Refaei, chairperson and managing director of the bank, said last week that the financial position of the bank reached EGP 45.3bn at the end of September 2018, up by EGP 5.3bn from December 2017, hence growing by 13.3%.

El-Refaei added that this increase was supported by deposits growing by 14% to EGP 35.7bn in September, up from 31.3% in December 2017, marking an increase of EGP 4.3bn.

The bank succeeded in boosting its loans portfolio by 21.1% to score EGP 12.4bn in September, against EGP 10.2bn in December, fuelled by the syndicated loans’ hike by EGP 1.7bn to EP 4.8bn, he highlighted.

El-Refaei noted that net income from fees and commissions rose by 42% to EGP 156.5m in September 2018, up from EGP 110.3m in the same period last year.

Crédit Agricole Egypt

Consolidated financial statements of Crédit Agricole Egypt showed profits increasing by 12% y-o-y during 9M18.

The bank said it made a profit of EGP 1.67bn during the period from January to September 2018 compared to EGP 1.49bn in the same period of 2017.

The return on the bank’s loans portfolio increased during that period to EGP 4.07bn against EGP 3.5bn in the same period in 2017.

At the level of independent business, the bank’s profits increased by the end of September 2018 to EGP 1.67bn, up from EGP 1.5bn by the end of September 2017.

EG Bank

The consolidated financial statements of the EG Bank showed an 11.9% y-o-y increase in profits at the end of September 2018.

The bank reported profits of EGP 416.4m during the period from January to September 2018, compared to profits of EGP 378.3m in the comparative period of 2017.

On the independent business level, the bank posted a net profit of EGP 427.22m at the end of September 2018, compared to a profit of EGP 381.7m at the end of September 2017.

Union National Bank – Egypt

Union National Bank – Egypt (UNB) reported a decline in profits by 22.4% on an annualised basis during 9M18.

The bank said in a statement to the EGX that it had achieved profits of EGP 213.17m during the period from January to September 2018, compared to profits that amounted to EGP 275m in the comparative period of 2017.

This is despite the increase in the bank’s interest income during that period to EGP 2.6bn against EGP 1.9bn in 2017.

The UNB achieved growth in retail financing worth EGP 1.026bn, to score EGP 5.056bn by the end of September 2018, up from EGP 4.030bn at the end of 2017.

The total assets of the bank reached EGP 34.370bn at the end of September 2018, against EGP 28.694bn in 2017.

SAIBank

The financial statements of Société Arabe Internationale de Banque (SAIBank) have shown their net loss for 9M18 due to tax burdens.

The bank said in a statement to the EGX that it had achieved losses worth $4.8m between January and September 2018, down from $28.7m of profits in the same period of 2017.

The bank attributed its conversion to losses to a tax burden on the portfolio of government bonds it holds worth $32.7m, which exceeds realised profits, before taxes, worth $27.8m.

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CBE floats €675m T-bonds on Monday https://dailynewssegypt.com/2018/11/11/cbe-floats-e675m-t-bonds-on-monday/ https://dailynewssegypt.com/2018/11/11/cbe-floats-e675m-t-bonds-on-monday/#respond Sun, 11 Nov 2018 17:48:00 +0000 https://www.dailynewsegypt.com/?p=680757 Bonds bear maturity of 364 days, due on 12 November 2019

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The Central Bank of Egypt (CBE), on behalf of the Ministry of Finance, will float €675m treasury bonds (T-bonds) on Monday.

According to a statement received by banks operating in the local market, the bonds will mature in 364 days with a due date on 12 November 2019.

According to the CBE, this auction is available for all Egyptian banks and global financial institutions with a minimum of €100,000.

The last euro-denominated T-bonds floated by the CBE were in 16 August 2018, worth €610m.

Banks, international and local financial institutions offered to invest €757.8m in this auction, of which CBE accepted €617m.

The interest rate obtained by international and local financial institutions in exchange for their investments in these bonds registered a maximum of 1.6% and a minimum of 1.58%, averaging 1.598%. Some institutions requested a return of 2%, which was rejected by the CBE.

The CBE started issuing euro-denominated T-bonds in 28 August 2018. The first interest to be offered on these bonds at the time was 3.25%.

Banks subscribe to euro-denominated bonds in the same way they subscribe in local currency T-bonds. Each bank makes its offer to the CBE, including the interest rate it seeks and the amount it aims to buy, and the CBE then reviews the proposals and accepts what it deems suitable.

Banks operating in the domestic market rely heavily on these bonds to invest their liquidity in euros in a government-guaranteed pot with an adequate return, with no other investment available for that liquidity, except rare syndicated loans offered on lengthy periods, and investing in global financial markets, with a low return and high risk.

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Banque du Caire aims to expand routes to support foreign trade, back Egyptian exporters  https://dailynewssegypt.com/2018/11/11/banque-du-caire-aims-to-expand-routes-to-support-foreign-trade-back-egyptian-exporters/ https://dailynewssegypt.com/2018/11/11/banque-du-caire-aims-to-expand-routes-to-support-foreign-trade-back-egyptian-exporters/#respond Sun, 11 Nov 2018 08:00:32 +0000 https://www.dailynewsegypt.com/?p=680633 Bank sponsored FEI visit to Tanzania to encourage Egyptian exports

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Banque du Caire aims to expand avenues to encourage foreign trade in general, increase Egyptian exports, and support Egyptian exporters to permeate foreign markets in particular.

Banque du Caire sponsored the visit organised by the African Cooperation Committee of the Federation of Egyptian Industries (FEI) of Tanzania from 4 to 11 November 2018, aiming to enhance Egyptian industrial and trade presence in these countries, as well as strengthen cooperation between Egyptian companies and their counterparts in Tanzania in various industrial fields.

The visit included a delegation of more than 30 Egyptian companies in several sectors, notably fertilisers, chemicals, construction, healthcare, pharmaceuticals, foodstuffs, clothing, engineering and mining.

Chairperson and CEO of Banque du Caire, Tarek Fayed, stressed the importance of the bank’s role in supporting Egyptian exports, which are witnessing a widespread spike in the coming period

The Banque du Caire CEO also welcomed the cooperation with various banking institutions worldwide in order to further cooperation and promote Egyptian exporters to expand in foreign markets.

Fayed affirmed the readiness of Banque du Caire to support all Egyptian companies who participated in the visit to encourage their activities both in Egypt and Tanzania, considering the relations between Banque du Caire and several Tanzanian banks.

He added that Banque du Caire aims to reinforce export operations, given its impact on intensifying the industry and increasing foreign exchange resources, by opening routes to finance foreign trade, by signing more agreements and protocols with the FEI in the coming period.

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NBE secure EGP 300m to Zewail City of Science, Technology: Okasha https://dailynewssegypt.com/2018/11/11/nbe-secure-egp-300m-to-zewail-city-of-science-technology-okasha/ https://dailynewssegypt.com/2018/11/11/nbe-secure-egp-300m-to-zewail-city-of-science-technology-okasha/#respond Sun, 11 Nov 2018 07:30:25 +0000 https://www.dailynewsegypt.com/?p=680635 Launch of NBE institute building city for science, engineering, nanotechnology

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Hesham Okasha, chairperson of the National Bank of Egypt (NBE) and Sherif Sedky, CEO of Zewail City of Science and Technology, inaugurated last week the NBE Institute of Nanoscience in Zewail City for Science and Technology’s building.

According to Okasha, the bank’s funds for the construction of this building is a extension of its support to Zewail City, which amounted to EGP 300m for this megaproject. The state adopted this endeavour as a national project for the scientific renaissance and research in Egypt, confirming the bank’s conviction in the importance of scientific research as one of the main pillars of progress.

The completion of the Institute’s new building will contribute towards developing generations of researchers and scientists with a capacity to expand technology for the manufacturing of high-precision devices in the areas of health, science and energy, the NBE’s chairperson noted.

According to Okasha, the NBE has provided 119 scholarships in Zewail City worth EGP 10m. These grants targeted talented students who are unable to afford tuition fees in the City from 20 governorates, of whom 40% were females and 60% were males.

The bank also aims to help Zewail City perform its mission, which will positively reflect the development process of education and scientific research in Egypt, which is mirorred in turn by increased national production levels, indicated Okasha.

The NBE is pursuing a carefully planned strategy to support the educational process in Egypt on all counts, which includes not just developing buildings, facilities and providing school equipment, but also includes consideration towards evolving the human condition, which is the cornerstone of that strategy and is in line with Egypt 2030 Vision and the sustainable development goals, Okasha stressed.

For his part, Sedky said that the NBE Institute building for nanoscience is the largest project to support scientific and technological research in Egypt, and the largest nanotechnology Institute in the region, wherein the Institute contributes towards establishing a knowledge pyramid to supply local industries, achieve significant economic returns from intellectual property gains, and improve medical services provided to citizens.

The inauguration ceremony was attended by Yehya Aboul Fotouh and Dalia Al-Baz, NBE vice chairpersons; Ali Al-Saidi and Adel Hosny, representatives of the current and former NBE board of directors; Nermin Shahabuddin, head of Strategic Marketing and Sustainability at the NBE, Zewail City officials and students who won the NBE’s scholarships.

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CBE reviews interest rates on Thursday https://dailynewssegypt.com/2018/11/11/cbe-reviews-interest-rates-on-thursday/ https://dailynewssegypt.com/2018/11/11/cbe-reviews-interest-rates-on-thursday/#respond Sun, 11 Nov 2018 07:00:43 +0000 https://www.dailynewsegypt.com/?p=680632 MPC cut interest rates twice this year, kept them unchanged during 4 consecutive meetings

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The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) will hold its seventh periodic meeting on Thursday 15 November 2018, to discuss the future of its basic interest rates, which is the main indicator of interest rates on the Egyptian pound.

Since the beginning of this year, the MPC held six meetings, during which the committee cut interest rates in the first two meetings on 15 February and 29 March by 1% in each meeting.

During the following four meetings held by the MPC on 17 May, 28 June, 16 August, and 27 September, the interest rates remained unchanged at 16.75% for deposits, 17.75% for loans and 17.25 for main operations, credits, and discounts.

In the MPC’s statement during the last meeting on 27 September 2018, it declared that “annual headline inflation rose to 14.2% in August 2018 from 11.4% in May 2018, while annual core inflation continued to decline for the 12th consecutive month to record 8.5% in July 2018, before increasing slightly to 8.8% in August 2018. As anticipated, upward adjustments of regulated prices as well as higher prices of fresh fruits and vegetables contributed to the widening spread between headline and core inflation since June 2018.”

Furthermore, the statement added, “annual real GDP growth stabilised in 2018 the second quarter (Q2) at the 5.4% rate registered in the previous quarter, which was mainly driven by net foreign demand, as well as by domestic investment. Meanwhile, job creation supported the decline of the unemployment rate to 9.9% in Q2 of 2018, the lowest rate since Q4 of 2010.”

The pass-through to domestic inflation from developments in emerging market (EM) economies remained contained due to stabilisation and structural policies which support improving macroeconomic fundamentals.

The MPC decided that keeping key policy rates unchanged remains consistent with achieving the target path for headline inflation which was announced in May 2017, namely 13% (±3 %) in Q4 of 2018, and single digits after the temporary effect of fiscal supply shocks dissipate.

“The MPC closely monitors all economic developments, and will not hesitate to adjust its stance to achieve its mandate of price stability over the medium term,” it concluded. On Saturday 10 November, the Central Agency for Public Mobilisation and Statistics announced an annual inflation rate of 17.5 % in October 2018, compared to 15.4 % in September 2018.

The monthly inflation rate rose to 2.8 % in October from 2.6 % in September.

Prominent banking expert and board member of the Suez Canal Bank and the Arab Sudanese Bank, Mohamed Abdul Aal

According to Mohamed Abdel Aal, a well-known banking expert, it is not necessary for every meeting of the CBE’s MPC to be accompanied by a new change in existing interest rates.

He pointed out that the CBE is the one with the tools, techniques, information and data, and most importantly the specialised expertise which has the vision and the analytical ability, to take such an important decision which is directly linked to the core of monetary policy, in order to ensure the success of the implementation of the economic reform programme so far.

“Although the MPC kept interest rates unchanged at four consecutive meetings, I think that the factors impacting the decision to raise, and fix interest rates may be conflicting,” Abdel Aal indicted.

There are factors that indicate the necessity of increasing the rates, while other factors push against that, to keep rates unchanged or even cut them, explained the banking expert, adding “All options are on the table.”

The next decision of the MPC will be one of two scenarios, the first is to raise interest rates by a full percentage point, according to Abdel Aal. He remarked that the CBE may resort to this scenario in order to evade some underlying and potential inflationary pressures, and to preserve the attractiveness of the Egyptian pound, in terms of the exchange rate and return prices to encourage foreign investors and expatriate remittances, as well as to protect the interests of depositors from the household sector, in addition to the competition faced from other countries that increase interest rates due to economic instability.

However, Abdel Aal believes that this scenario faces many resistance points to be considered, noting that the most important of these is the high cost of local government loans, thus increasing the debt burden.

He expressed that the local public debt is estimated at EGP 3.6tn, with interest of EGP 510bn, which means that any 1% increase in interest rates adds EGP 30-35bn to the debt. This means that the decision to raise the interest rate may contradict the Ministry of Finance’s strategic objective of reducing the deficit rate in the state budget.

According to Abdel Aal, the second thing that could prevent the CBE from raising interest rates. which is the high financing costs of various economic activities, which might hinder the success of targeted economic growth rates.

He pointed out that a third thing which may face an interest rate surge is the inflation. “Although the annual inflation rate in September 2018 fell to 16% from 14.2% in August, the annual rate of core inflation recorded 8.6% in September against 8.8% in August, suggesting that inflation figures may be moving in a downward trend until the end of the year.”

He added that this may mean that the current inflation rate, under the present level of interest rates, is already in a balanced course, with the achievement of the monetary policy objective of reaching an inflation rate of 13% (+/-) 3% at the end of this year.

However, Abdel Aal nothed that, on the other hand, there is still a difference between the interest rates at the CBE at 3%, which gives the CBE the chance to fix the rates for now.

As stated by the well-known banking expert, the second scenario before the MPC at its next meeting is to stabilise the interest rates, which is more likely in this current phase.

He explained that stabilising interest rates, with the relative balance of other domestic economic indicators, achieves a reasonable constancy point, which in turn brings the greatest value-added to all parties, while ignoring the factor of rising interest rates in some developing countries competing with us, given that these countries are fraught with political and economic risks, thus making their high interest rates less attractive.

“It can be said that according to the development of local and global events, the raising of interest rates is theoretically preferable, but on the other hand, there are things to take into account and can be weigh in favour of keeping rates unchanged to the end of this year,” he concluded.

Tarek Metwally, a banking expert, expected the MPC to keep rates unchanged on Thursday.

He explained that the current inflation rates, which are in line with the objectives of the CBE, favours this prospect.

The CBE is ardent to maintain foreign exchange inflows towards Egypt, and thus maintain its foreign exchange reserves, considering the recent strikes which hit EMs and led to countless investments shifting away to more developed countries, Metwally disclosed.

“The expected increases in oil prices globally and their impact on budget deficits, and the prospects of raising the price of gasoline and petroleum derivatives locally again, and the impact on inflation in the next period, are all factors driving in the direction of stabilisation of interest rates,” he concluded.

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Egypt repays $1.36bn worth of international bonds in December https://dailynewssegypt.com/2018/11/07/egypt-repays-1-36bn-worth-of-international-bonds-in-december/ https://dailynewssegypt.com/2018/11/07/egypt-repays-1-36bn-worth-of-international-bonds-in-december/#respond Wed, 07 Nov 2018 20:26:25 +0000 https://www.dailynewsegypt.com/?p=680560 Outstanding bonds worth $18bn and €2bn due within 30 years

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Egypt will repay $1.36bn worth of international bonds on 10 December out of the total issued bonds on international markets of $18bn and others worth €2bn, according to the ministry of finance.

These bonds were issued on 10 November 2016. The bonds’ coupon interest rate reached 4.62%, the ministry explained in a report.

Egypt’s balance of issued dollar-denominated bonds on international markets increased to $18bn at the end of February 2018, with maturities ranging from one year to 30 years, starting from 10 December 2018 to 21 February 2048.

According to the report, the bonds’ interest rates vary from 4.622% to 8.5%, with an average of 6.726%.

Other bonds worth €2bn were also issued by the ministry on 16 April 2018 over two tranches. The first was €1bn with a 4.75% yield and are due in April 2026. The second tranche had the same value with 5.625% yield and are due in April 2030.

On 21 February 2018, the ministry issued bonds worth $3bn, including bonds of $1.25bn with a maturity of five years and are due on 21 February 2023. Other bonds worth $1.25bn were issued with a maturity of 10 years and are due on 21 February 2028, in addition to $1.5bn worth bonds with a maturity of 30 years and due on 21 February 2048.

In January 2018, the ministry managed to attract $4bn in investments through three bond issuances on international markets.

The first tranche of these bonds was issued at a value of $1.750bn with a yield of 6.125% and are due on 31 January 2022. The second tranche was worth $1bn with a yield of 7.5% and are due on 31 January 2027. The third tranche was $1.25bn with a yield of 8.5% and are due on 31 January 2047.

On 29 May 2017, the government issued more bonds worth $1bn with a yield of 7.5% and mature on 31 January 2027. More bonds were issued on the same day worth $750m with an interest rate of 6.125% for a seven-year maturity and are due on 31 January 2022.

The third tranche was issued for $1.25bn with an interest rate of 8.5% for 30-year maturity and due on 31 January 2047.

On 10 November 2016, three issuances of bonds were made worth $4bn at London Stock Exchange.

The first tranche of these bonds was issued for $1.360bn with a yield of 4.62% and is due on 10 December 2018. The second tranche is worth $1.32bn was issued with a yield of 6.75% and is due on 10 November 2024, while the third was worth $1.32bn with a yield of 7% and is due on 10 November 2028.

The finance ministry made another issuance for $1.25bn on 11 June 2015 with a yield of 5.875% and is due on 11 June 2025.

Moreover, a bond issuance worth $1bn was launched on 29 April 2010 with a yield of 5.75% and is due on 29 April 2020, and another issuance worth $500m was launched on 29 April 2010 with a yield of 6.875% and is due on 29 April 2040.

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CBE to apply new obligatory entrepreneurship certification for bankers https://dailynewssegypt.com/2018/11/07/cbe-to-apply-new-obligatory-entrepreneurship-certification-for-bankers/ https://dailynewssegypt.com/2018/11/07/cbe-to-apply-new-obligatory-entrepreneurship-certification-for-bankers/#respond Wed, 07 Nov 2018 20:11:46 +0000 https://www.dailynewsegypt.com/?p=680557 Bank currently preparing another certification for business development services

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The Central Bank of Egypt (CBE) plans to apply an obligatory entrepreneurship certification for bankers, Nermine El-Tahri, assistant sub-governor of the CBE, said on Wednesday.

“We are discussing the application of entrepreneurship certification with the International Labour Organization (ILO), Frankfurt School of Finance and Management, and the Egyptian Banking Institute (EBI),” she added.

It comes during El-Tahri’s participation at a conference held by the Egyptian Centre for Economic Studies’ (ECES), titled “Entrepreneurship in Egypt: From Local Individual Success to Becoming an African Hub”.

“The entrepreneurial ecosystem is not just about finance, as bankers should also be aware of technical information and have an entrepreneurship culture,” she added.

El-Tahri indicated that the CBE is currently preparing another certification for business development services (BDS). She added, “13 banks have already participated in the initiative. Starting from 2019, there will be points awarded for BDS hubs, which will provide non-financial advice and help in developing business plans.”

“Egypt is doing well in developing the entrepreneurship sector, noting that there are many parallel efforts exerted by several entities, but they lack proper coordination,” remarked El-Tahri.

“We are not starting from scratch, we already have a good base,” El-Tahri noted. She added that Egyptian banks have injected more than EGP 110bn in investments to support small and medium-sized enterprises (SMEs) out of total EGP 200bn allocated for financing SMEs, over a four-year period ending in January 2020.

It is obligatory for banks to allocate 20% of their loan portfolios to SMEs, in accordance with the CBE’s initiative launched in 2016.

Many banks are willing to increase their SMEs’ funds, El-Tahri asserted. However, other banks need more incentives to take part in the initiative, so the CBE launched the Credit Guarantee Corporation (CGC) to support SMEs, particularly those with inadequate or no collateral to obtain financing from financial institutions.

The CBE’s role is to encourage banks to increase their financing for SMEs, and the CBE has collaborated with the Nile University to launch the Nile Pioneers initiative to support entrepreneurship, El-Tahri affirmed.

This initiative created awareness campaigns for youth to encourage start-ups in seven governorates, and  the bank will support 11 projects in industry, agriculture, and digitalisation after the initiative, El-Tahri said.

The co-founder and managing director of Qalaa Holdings, Hisham El-Khazindar, said that the Egyptian market is very large, asserting the importance of communicating with African countries in the field of entrepreneurship.

Egypt’s sustainable economic growth is very connected to boosting economic relations with Africa, noted El-Khazindar, adding that the past two years witnessed several improvements in the Egyptian business environment.

Dean of Business School at the American University in Cairo, Sherif Kamel, agreed with El-Khazindar that the Egyptian market enjoys many success elements that can help boost the entrepreneurship sector.

The proportion of young people in the Egyptian population is significantly larger compared to other age brackets, and they can use technology and present good ideas which make a difference in the society, Kamel said.

“Human capital is the petroleum of the 21st century, and Africa is the content of this age, having plenty of opportunities as well as challenges, but I believe that more challenges mean more opportunities,” Kamel added.

“I was honoured to be part of the African Women Entrepreneurship Cooperative programme that aims to train 200 African women in the entrepreneurship field,” Kamel said.

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Highest level of FX reserves in history reached by end of October https://dailynewssegypt.com/2018/11/05/highest-level-of-fx-reserves-in-history-reached-by-end-of-october/ https://dailynewssegypt.com/2018/11/05/highest-level-of-fx-reserves-in-history-reached-by-end-of-october/#respond Mon, 05 Nov 2018 18:48:42 +0000 https://www.dailynewsegypt.com/?p=680247 CBE: $86m increase in value of gold, foreign currencies balance down by $36m

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The net balance of foreign exchange (FX) reserves at the Central Bank of Egypt (CBE) increased by 42% at the end of October 2018, up from $44.459bn in September 2018, to reach $44.501bn, according to the CBE.

This is the highest level of FX reserves in history, covering 8.5 months of basic commodities imports.

According to the CBE, the value of gold listed on the FX exchange increased by $86m in October 2018, up from $2.545bn at the end of September, to reach $2.631bn, which had a great impact on increasing reserves in October.

In contrast, the volume of foreign currencies included in the reserves declined by $36m, from $41.253bn in September down to $41.217bn.

The value of special drawing rights declined by $8m, from $643m in September to $651m, while loans to IMF registered $14m.

The decision to liberalise the exchange rate, which was taken by the CBE on 3 November 2016, contributed to increasing FX reserves by $25bn in the first two years. Up from $19.5bn in October 2016, FX reserves hiked to $45.501bn at the end of October 2018. The increase was partially driven by hard cash inflows and loans from abroad.

One of the main factors contributing to the increase in reserves was the rising remittances of Egyptians working abroad from $17bn before the decision to liberalise the pound which increased the reserves to $26.5bn in the fiscal year 2017/18.

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UAB discusses partnership between private, public sectors to achieve sustainable development during annual conference https://dailynewssegypt.com/2018/11/04/uab-discusses-partnership-between-private-public-sectors-to-achieve-sustainable-development-during-annual-conference/ https://dailynewssegypt.com/2018/11/04/uab-discusses-partnership-between-private-public-sectors-to-achieve-sustainable-development-during-annual-conference/#respond Sun, 04 Nov 2018 17:06:11 +0000 https://www.dailynewsegypt.com/?p=680085 700 banking experts, leaders, officials, central banks' governors, economists, planning ministers to attend event

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The Union of Arab Banks (UAB) will hold its annual conference on 15 and 16 November in the Lebanese capital of Beirut under the slogan of partnership between the public and private sectors to achieve the goals of sustainable development.

The conference will be attended by more than 700 leading banking and financial experts, central banks’ governors, and Arab planning, finance, and economy ministers.

Wissam Fattouh, secretary general of the UAB, said that this year’s conference’s slogan comes in line with the challenges facing the Arab region, which hinder the achievement of comprehensive and sustainable development based on the Millennium Development Goals (MDGs).

He added that the conference aims to develop a road map to deal with economic and social challenges in the Arab region and highlight the contribution of the Arab private sector in financing various types of sustainable development, especially the banking sector. In addition, it will focus on clarifying the relationship between sustainable development and partnership between the private and public sectors.

According to Fattouh, the conference’s other topics include the role of governments, central banks, and financial institutions in achieving the goals of sustainable development, ways to boost cooperation between Arab countries, requirements for establishing a successful public-private partnership, and the challenges of sustainable development in the Arab region.

The conference will also address the relationship between public and private sectors and civil society organisations in the Arab countries, the partnership between these countries, international organisations, and development banks, development levels in the Arab region, and the achievements of sustainable development plans so far.

Fattouh pointed out that the conference will also discuss the creation of a suitable environment for innovation, entrepreneurship, investment in human capital, government initiatives that support innovation and technical progress, legislative and institutional frameworks of successful partnerships, economic empowerment and financial sustainability in the Middle East and North Africa (MENA).

He affirmed that the UAB is now represented in all financial, banking, and economic circles in both Arab and international levels, being one of the most influential Arab organisations.

The UAB has sounded alarm over repercussions of Arab crises, especially with regard to the economic fields, the importance of economic and political stability, the role of financial inclusion, financing of small and medium enterprises, (SMEs) and combating money laundering and terrorism financing.

Fattouh stressed that the UAB was also one of the first two to deal with international legislation and laws imposed on banks, through training and research procedures that have been credited in supporting the banking community to keep up with new legislation.

The UAB’s board of directors decided to award the Leadership Vision Award for 2018 to Abdul Rahman Al-Humaidi, chairperson and director general of the Arab Monetary Fund (AMF).

Mohamed Al-Jarrah Al-Sabah, chairperson of the UAB, said that this award comes in recognition of Al Humaidi’s outstanding role in enhancing coordination and cooperation between various economic, financial, and monetary authorities of the member countries of the AMF. Al Humaidi also played a great role in supporting the Arab countries to achieve economic stability, enhancing financial inclusion, along with his efforts in the project of the Arab clearing system.

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Household sector accounts for 78.8% of total bank deposits by end of August 2018: CBE https://dailynewssegypt.com/2018/11/04/household-sector-accounts-for-78-8-of-total-bank-deposits-by-end-of-august-2018-cbe/ https://dailynewssegypt.com/2018/11/04/household-sector-accounts-for-78-8-of-total-bank-deposits-by-end-of-august-2018-cbe/#respond Sun, 04 Nov 2018 09:00:56 +0000 https://www.dailynewsegypt.com/?p=679991 Deposits growth rate at 18.79%, local currency deposits at 22%, foreign currencies deposits at 9.7%

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The household sector accounted for 78.8% of the total deposits in banks operating in the Egyptian market by the end of August 2018, according to the Central Bank of Egypt (CBE).

In a recent report, the CBE revealed that the total volume of deposits in banks operating in the Egyptian market increased by EGP 20.7bn by the end of August 2018, reaching EGP 3.606tn up, from EGP 3.586tn at the end of July 2018.

Furthermore, the CBE stated that the growth rate of bank deposits stood at 18.79% by the end of August 2018.

It also declared that the deposits growth rate in the domestic currency amounted to about 22%, while the foreign currency deposits growth rate was at about 9.7%.

“The total deposits of the household sector in banks amounted to EGP 2.413tn, of which about EGP 1.9217tn was in local currency, and the equivalent was approximately EGP 491.223bn in foreign currencies,” according to the CBE.

The household sector accounts for 82.3% of the total deposits in local currency, and for around 67.4% of foreign currency deposits, announced the CBE.

According to the head of the treasury sector of a foreign bank operating in the domestic market, the household sector has the largest proportion of savings in banks, which only includes all-natural persons, and individuals who are not company owners.

He stressed that it is very natural that the household sector or these individuals occupy the largest proportion of the volume of deposits in banks, not the companies, both public and private, noting that individuals are saving, while companies assign some of their liquidity in banks not for saving purposes, but for other reasons related to management.

Savings in banks is still preferred by the household sector, because it is deemed a risk-free investment and grants a semi-stable return for long periods to help them organise their resources, he indicated.

He pointed out that the household sector’s savings in Egypt has one of the lowest saving rates in many countries, due of the small size of the middle class, which has the greatest savings capacity in Egypt, compared to other countries.

In conjunction to the household sector, there is also the private business sector, which is the second top saving sector in banks. This sector includes all the private companies operating in the domestic market, even if the company is owned by a single person, one family, or a non-profit organisation.

The private business sector deposits amount of EGP 550.597bn, including about EGP 353.788bn in local currency, and the equivalent of EGP 196.809bn in foreign currencies.

The public business sector’s deposits EGP 99.41bn amounts, of which EGP 58.447bn is in local currencies, and EGP 40.963bn in foreign currencies.

According to the CBE, this sector includes public sector companies subject to Law No 203 of 1991, and other public sector companies are not subject to this law.

Apart from these three sectors, there are also government deposits, which have reached EGP 523.307bn, including EGP 404.853bn in local currency, and the equivalent of EGP 118.454bn in foreign currencies.

The size of the external or non-resident savings is also at EGP 20.799bn, including EGP 12.593bn in local currency and EGP 8.206bn in foreign currencies.

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ABE to offer global tender in 6 months to develop its technological structure: Chairperson https://dailynewssegypt.com/2018/11/04/abe-to-offer-global-tender-in-6-months-to-develop-its-technological-structure-chairperson/ https://dailynewssegypt.com/2018/11/04/abe-to-offer-global-tender-in-6-months-to-develop-its-technological-structure-chairperson/#respond Sun, 04 Nov 2018 08:30:55 +0000 https://www.dailynewsegypt.com/?p=679988 We addressed 26,000 defaults in EGP 1.5bn debts, settled 2,700 worth EGP 175m, says Elkosayer

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The Agricultural Bank of Egypt (ABE) is set to offer a global tender within six months to companies specialised in electronic banking systems, in order to develop the bank’s technological infrastructure, according to Elsayed Elkosayer, chairperson of the ABE.

This comes under the umbrella of the plan’s restructuring of the bank, initiated by Elkosayer since he took charge in March 2016, along with the new board.

In a previous interview with Daily News Egypt, Elkosayer said that developing the bank’s technological infrastructure would cost over EGP 1bn, and could take up to three years.

The ABE has 1,210 units across Egypt, including 20 Islamic branches, and it aims to increase these Islamic branches to 30.

The development of the bank differs from its restructuring plan, which costs more than that. The bank is seeking funds from international financing institutions, including the World Bank. DNEW interviewed Elkosayer to discover the ban’s latest development, the transcript for which is below, lightly edited for clarity:

What is new about the bank’s development plan?

Ernst & Young has been our consultants for about six months, in cooperation with one of the country’s sovereigns entities, to assess the bank’s current state. This could take six more months, after which, we will offer a global tender to choose the company that will electronically develop the bank.

The development process aims to provide the best modern banking services, and expand the electronic services system to better satisfy its customers, farmers and their families, especially in the payroll, payments, and remittances, as well as developing the ATM network and electronic points of sale (POS).

You started the bank’s restructuring process since you assumed responsibility in March 2016, what has been achieved so far in that process?

The restructuring of the bank is carried out through several stages and consists of several axes starting by supporting the capital base of the bank, through the Central Bank of Egypt (CBE), which has injected a support deposit worth EGP 10bn for 20 years.

We have also established several new regulatory departments, and separated some existing departments from one another, such as the internal control from the inspection department.

Additionally, we surveyed the bank’s assets, and improved their efficiency, while eliminating other assets so as to use the proceeds in the development of the bank’s branches.

On the other hand, there is a plan to completely restructure the human resources department. and review of the bank’s organisational structure, in order to raise the employees’ efficiency through the human resources development programmes. Over 8,000 training opportunities were granted to the employees, in addition to the recruitment of experts  and specialists from other banks.

The bank has contracted with international banks to implement its development plan. Rabobank, one of the largest agricultural banks in the world, is supporting the ABE’s comprehensive reform and development plan, including the development of human resources management, as well as risk and product management. We also obtained training opportunities in cooperation with the USAID, Germany’s SANAD, and Ernst & Young.

The bank is also in the process of contracting with a specialised external offices to study its aptitude to implement the International Accounting Standard IFRS 9, which evaluates the bank’s  internal control, separates jurisdictions, and implements risk management.

ABE focused on achieving agricultural and rural development through small, medium and micro enterprises

What about the technological development plan within the bank?

The restructuring plan also includes the development of information technology and business systems within the bank, and the implementation of the core banking system, which qualifies the bank to achieve its objectives required during the coming period.

Consistent with this plan, we have provided our branches with electronic services. We added 100 new ATMs, and equipped all branches with POS, in cooperation with e-finance and Fawry.

All of the bank’s branches are expected to be equipped by ATMs through three phases, each by 400 ATMs.

Moreover, the bank will develop and modernise about 250 branches to befit the banking sector’s developments, so that the customers feel that there is a convenient place and that they provided with first-rate banking service, in addition to reviewing the bank’s geographical spread, given that some of the branches are in the same areas.

A strategic plan for the bank’s operations has been developed. What are the main features of this plan?

The bank’s strategy has been developed for the first time, in a long time. There is a strategic direction and objectives we are working to achieve, including attainig annual growth rates of at least 15% across all banking activities, such as deposits, loans, or the total return of the bank’s activity.

One of the first results of this plan was an increase in the volume of bank deposits to EGP 50bn, up from EGP 35bn in March 2016. Loans have also grown to EGP 26bn, despite real settlements with defaulting clients.

How did the bank increase its loan portfolio, while many reconciliations are occuring for insolvent customers?

During the past period, the bank participated in joint loans for the housing, oil and energy sectors.

At present, the bank is focused on achieving agricultural and rural development through small, medium and micro enterprises, by financing plant and animal production, as well as and funding the packaging and feed projects throughout all its branches within the country.

The volume of small finance has reached EGP 598m of 955 projects included in the CBE’s initiative.

The bank’s cooperation with the Micro, Small, and Medium Enterprises Development Agency (SMEDA) has reached EGP 3.037bn through funding 156,000 projects. We also signed a new agreement with SMEDA worth EGP 50m.

The amount of funding in the Ibdaa Masho3ak ( Start Your Project) initiative, has also reached EGP 1.257bn for 22,000 projects. The ABE is ranked third among the participating banks in this initiative.

I would like to emphasise that the ABE aims to achieve rural and agricultural development. Regarding this, our primary concern is farmers, fish farms, livestock and poultry production, exporting agricultural products, fertilisers, pesticides and all activities related to agriculture, such as feed production, livestock development, meat manufacturing, dairy products, and agricultural equipment and machinery.

The foundation is the agricultural and rural development, the farmer and the Egyptian farms, and to revive the agricultural field, provide funding for all stages from production to consumption, and assist in the marketing of agricultural commodities and all related activities. The bank has an effective role in this regard, especially that we have the bank’s commercial division, the Egyptian Company for Agricultural and Rural Development.

What has been done concerning the defaulting problem?

We have managed to reduce the proportion of non-performing loans (NPL) from 20% of the total loan portfolio in March 2016 to a current 12%. Plus, we aim to cut the ratio to 10% by the end of 2018, and then lower in the coming years.

Likewise, we have already treated 26,000 defaulting cases with debts amounting to EGP 1.5bn. Conjointly, we settled loans with 2,700 further customers with debts worth EGP 175mm during the CBE’s initiative to settle debts of defaulters and individuals whose debts are less than EGP 10m.

What about covering the provision gap for other NPLs?

Recently, we have obtained the CBE’s approval to compensate the provision gap within the bank over the coming five years.

What is new about the smart farmer card that the bank is issuing?

The Smart Farm Card is one of the projects of the Ministry of Agriculture, in coordination with the ministries of military production and planning, which is being implemented via e-finance. This the real alternative to agricultural tenure, and will contribute to the assembly of agricultural policies and benefit from in-kind support.

We have printed 2.2m cards to far, but distribution was delayed until the finalisation of the infrastructure of agricultural associations, so that farmers can use and benefit from the card. Fayoum and Gharbiya will witness the pilot programme before we apply it for all other governorates.

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Two years since currency floatation https://dailynewssegypt.com/2018/11/03/two-years-since-currency-floatation/ https://dailynewssegypt.com/2018/11/03/two-years-since-currency-floatation/#respond Sat, 03 Nov 2018 18:25:52 +0000 https://www.dailynewsegypt.com/?p=680016 Foreign exchange reserves up by $25bn, hard cash flow increased, inflation declined, external debt $92.6bn

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The Egyptian market has witnessed many important developments over the last two years since the Central Bank of Egypt (CBE) has decided to liberalise the local currency on 3 November 2016, notably the rise of foreign exchange reserves by $25bn and the decline of inflation.

Foreign exchange reserves

The decision to liberalise the local exchange rate contributed to increasing foreign exchange reserves up to $44.4bn at the end of September 2018, compared to $19.5bn in October 2016, marking an increase of about $25bn.

This increase was partially driven by a rise in hard cash flow and external loans. The increase of remittances from Egyptian expatriates from $17bn before the CBE’s decision to $26.5bn in the fiscal year (FY) 2017/18 also had an effect.

The remittances are among the most important sources of foreign currency in Egypt, which became even more important following the flotation, along with the Suez Canal and revenues from the tourism industry.

Foreign exchange resources 

According to the CBE’s governor, Tarek Amer, Egypt’s hard cash flow registered $150bn since the decision to float Egyptian pound until August 2018.

Amer pointed out that these funds contributed to financing national megaprojects which led to a significant increase in economic growth rates.

Dollar

Following the CBE’s decision, the foreign exchange rate increased by 48% reaching EGP 13.5 against the dollar in the wake of the flotation. The interest rate continued rising to EGP 18.6 at the end of November 2016, then to EGP 19.52 at the end of December 2016, marking the highest rate of the dollar to the Egyptian pound.

During the last few months, the dollar remained almost stable at EGP 17.5-18.5 with minor volatility.

Inflation

The CBE was prepared to curb any inflation hikes following its decision, relying on its monetary policy tools which managed to keep its rate at 8.6% at the end of September, down from 34.2% in July 2017 and 14.6% in September 2016.

Interest rates

To curb inflation, the CBE resorted to raising interest rates by 5%. The CBE increased interest rates on overnight deposits and lending by 300 basis points, to reach 14.75% and 15.75% respectively.

When inflation hit a record jump of 34.2% in July 2017, the CBE again increased interest rates by 200 basis points to reach 18.75% for overnight deposits and 19.97% for lending to ease the inflationary pressure caused by energy price hikes.

After the policy of raising interest rates gave positive results regarding inflation, the CBE cut interest rates by 1% to 17.75% for deposits and 18.75% for lending. In March, the CBE cut interest rates by another 1% to record 16.75% and 17.75% respectively. The rates have been unchanged since.

Prior to the flotation, interest rates were at 11.75% for deposits and 12.75% for lending.

Public debt

The size of the external debt amounted to $92.6bn at the end of June 2018, up from $67.3bn before the flotation. Internal debt recorded EGP 3.7tn at the end of June, up from EGP 2.5tn before the decision.

Growth rate

The economic growth rate reached 5.3-5.4% during the last two quarters of FY 2017/18, up from 4% before the flotation.

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