Banking – Daily News Egypt https://ww.dailynewssegypt.com Egypt’s Only Daily Independent Newspaper In English Fri, 23 Aug 2019 12:00:02 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.1 CBE slashes interest rates by 1.5% https://ww.dailynewssegypt.com/2019/08/22/cbe-slashes-interest-rates-by-1-5/ Thu, 22 Aug 2019 17:16:25 +0000 https://ww.dailynewssegypt.com/?p=705786 CBE slashed overnight deposit rate, lending rate, and the rate of main operation to 14.25%, 15.25%, and 14.75%, respectively.

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The Central Bank of Egypt (CBE) decided to cut interest rates by 1.5% on Thursday.

CBE slashed overnight deposit rate, lending rate, and the rate of main operation to 14.25%, 15.25%, and 14.75%, respectively.

According to the press statement issued by CBE’s Monetary Policy Committee, the cuts comes as Egypt’s annual headline and core inflation continued to decline to record 8.7% and 5.9% in July 2019, respectively, the lowest rates in almost four years, notwithstanding the recently
implemented fiscal consolidation measures that reached cost recovery for most fuel products.

Furthermore, the statement indicated that this decline was supported by the containment of inflationary pressures, as evident in the
relatively tame monthly inflation figures, and by favorable base effects, as the recently implemented measures were weaker compared to the previous year.

On the other hand, real GDP growth continued to increase slightly to record a preliminary estimate of 5.7:% in 2019 Q2 and 5.6% in fiscal year 2018/19, the highest in eleven years.
Meanwhile, the unemployment rate continued to decline to record 7.5% in 2019 Q2, thereby narrowing by almost 6 percentage points from its peak in 2013 Q4.

The statement cited that the global expansion of economic activity continued to weaken, financial conditions eased, and trade tensions continued to weigh on the outlook. International oil prices recently declined.
However, CBE believes that they yet remain subject to volatility due to geopolitical risks and potential supply-side factors.

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CBE to consider interest rates on Thursday amid expectations of cuts https://ww.dailynewssegypt.com/2019/08/22/cbe-to-consider-interest-rates-on-thursday-amid-expectations-of-cuts/ Thu, 22 Aug 2019 11:00:37 +0000 https://ww.dailynewssegypt.com/?p=705772 Falling inflation and US interest paves the way for CBE to cut its core interest rates, say analysts

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The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) will hold its fifth regular meeting this year on Thursday to discuss the fate of the basic interest rates, which is the main indicator of the pound’s interest rate direction in the local market.

The MPC decided during its meeting held on 11 July to fix the basic rate of return at the CBE at 15.75% for deposit, 16.75% for lending, 16.25% for credit and discount rates, and the price of the main open market operations.

The CBE announced earlier that its annual core inflation rate fell to 5.9% in July, from 6.4% in June.

The core consumer price index set by the CBE recorded a monthly average of 0.1% in July, compared to 0.3% in June and 0.6% in July 2018.

According to the Central Agency for Public Mobilization and Statistics (CAPMAS), the urban consumer price index recorded a monthly average of 1.8% in July 2019, compared to a negative rate of 0.8% in June 2019, and 2.4% in July 2018.

The annual inflation rate was 8.7% in July, compared to 9.4% in June 2019.

Mohamed Abdel Aal, a well-known banking expert and board member of Suez Canal Bank, said that cutting the interest rate on the pound at the next meeting on Thursday is no longer an expectation, it has become urgent and necessary.

Abdel Aal explained that the global trend of most countries joins forces in reducing interest rates with the successive inflation rate under the influence of restrictive monetary policy that targeted inflation in the past period.

He added that with the marked decline in food prices due to the dollar exchange rate decline on the one hand and the decrease in purchasing power on the other hand, the CBE is encouraged to take the first steps to return to a monetary easing policy, aimed at controlling the stability of the inflation rate, while giving the economy a stimulating boost for fear of slipping into a recession.

Bank expert Tarek Metwally predicted that the CBE will move to reduce interest rates on the pound at Thursday’s meeting, in light of the continued decline in inflation, the decline in US interest rates, and the direction of global central banks to cut interest rates.

He explained that the reduction of interest would stimulate foreign direct investment, especially with the continued cash flows from tourism and export revenues, in addition to increasing the movement of remittances of Egyptians working abroad.

He added that customers who want to invest their money in high-yield savings vessels can achieve this through saving in savings certificates.

Radwa al-Suweifi, head of research at investment bank Pharos Holding, said economic indicators point to the imperative of a 1% rate cut at the MPC meeting on Thursday.

She told Daily News Egypt that the inflation rate reached less than 9% on an annual basis, which is the target of the CBE in the end of 2020, and we have reached this target before the end of the third quarter of 2019, noting that inflation will not rise in the remainder of the current year from 9 to 10% supported by the base year.

She added that the real interest rates (the difference between the inflation rate and interest rates in banks), is higher than 5%, which is higher than the average of about 2%, which supports the reduction of interest rates by about 2-3% over the remainder of 2019.

She noted that if the CBE follows a very conservative policy, we may see a rate fix at the MPC meeting on Thursday, until the last fallout from subsidy cuts and price rises in August.

Beltone Investment Bank pointed to the possibility of a 100 basis point rate cut at the MPC meeting on Thursday, noting that the US Federal Reserve’s rate cut of 0.25% to 2% to 2.25% by the end of July 2019 will support the resumption of the easing policy by the CBE with regard to the second most important element of the interest rate decision.

Beltone expects treasury bills’ yield to remain attractive even after interest rate cuts, supported by a strong Egyptian pound and higher real interest rates due to slowing inflation.

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Industrial Development Bank offers funding to Shaq El-Teaban investors https://ww.dailynewssegypt.com/2019/08/21/industrial-development-bank-offers-funding-to-shaq-el-teaban-investors/ Wed, 21 Aug 2019 13:04:47 +0000 https://ww.dailynewssegypt.com/?p=705662 Bank's credit portfolio increased to EGP 11bn end-July, of which EGP 1.6bn were loans to individuals, and EGP 3.2bn to SMEs, says Azzam

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Maged Fahmy, chairperson and managing director of the Industrial Development Bank (IDB), and Khaled Abdel Aal, governor of Cairo, signed a cooperation protocol on Tuesday to offer funding to factories, workshops, and exhibitions in the industrial zone of Shaq El-Teaban.

The signing of this protocol is a continuation of the bank’s efforts in supporting the national economy and objectives of the state in economic development, Fahmy said.

He added that the IDB’s vital role was to support development, as it is one of the oldest qualified Egyptian banks in the field of supporting and financing small and medium enterprises (SMEs).

He added that the new protocol aims at providing the investment and financing needs for the implementation of these projects, and contributing to the provision of financing, technical, logistical, and rehabilitation services for factories and companies, expansions, and equipment, and the purchase of machinery and equipment and working capital financing.

The protocol also includes cooperation in the preparation of scientific and cultural training programmes for the successful management of projects, and ease of dealing with various funding institutions, and assistance in the achievement of the public interest, to achieve the objectives of projects and expansion of factories, workshops, and exhibitions in Shaq El-Teaban.

Hamdy Azzam, deputy chairperson of IDB, said the bank launched an initiative to finance 1,000 SMEs nationwide, with an initial funding of EGP 7.5bn.

He explained that this initiative contributes to the creation of more than 20,000 labour-intensive and export-oriented jobs, as well as helping to develop new products at certain levels of productivity that can act as feeders for large industrial projects and thus provide foreign exchange spent on the import of consumer goods or investment.

He added that since the launch of the initiative, the bank has succeeded in attracting about 167 factories as a new customer for the bank.

Azzam revealed that the bank’s credit portfolio reached EGP 11bn at the end of July 2019, including loans to individuals worth EGP 1.6bn and loans to SMEs by about EGP 3.2bn.

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37 local and foreign investors bid to invest €780.1m in Egyptian T-bills: CBE https://ww.dailynewssegypt.com/2019/08/20/37-local-and-foreign-investors-bid-to-invest-e780-1m-in-egyptian-t-bills-cbe/ Tue, 20 Aug 2019 21:55:06 +0000 https://ww.dailynewssegypt.com/?p=705599 CBE set accepted yield minimum at 1.4%, maximum at 1.5%, average at 1.49%

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The Central Bank of Egypt (CBE) said it had received 37 bids worth €780.1m from local and foreign financial institutions to invest in its Euro-denominated treasury bills (T-bills) auction on Monday.

The CBE accepted 23 of the bids, with a total of €610m.

The CBE has issued this auction, on behalf of the Ministry of Finance, the auction was issued for 364 days, as the maturity date is due on 18 August 2020.

The minimum yield accepted by the CBE in this auction dropped to 1.4%, while the maximum yield registered at 1.5%, and the weighted average yield was 1.49%. This is down from 1.725% as maximum, 1.75% as the minimum, and 1.75% as the average in the last similar auction by the CBE on 13 November 2018.

Some institutions demanded a yield of 2%, which was rejected by the CBE.

The auction proceeds went to pay an earlier auction issued by the CBE on 21 August 2018 worth €617.8m.

The CBE started offering euro-denominated T-bills in euros on 28 August 2012, with the first yield granted by the Ministry of Finance on the bills at 3.25%.

The central bank allows the subscription of euro-denominated T-bills to both local banks and foreign institutions with a minimum subscription of €100,000 and multiples.

Banks subscribe to euro-denominated T-bills in the same way they subscribe in local currency t-bills. Each bank submits an offer to the CBE with yield bid, and the amount the bank aims to buy, CBE then reviews the bids and accepts what it deems suitable.

Banks operating in the domestic market rely heavily on these bills 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, or investing in global financial markets, with a low return and high risk.

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Banque du Caire to offer 30-40% stake on EGX by end-2019 or early 2020: Chairperson and CEO https://ww.dailynewssegypt.com/2019/08/20/banque-du-caire-to-offer-30-40-stake-on-egx-by-end-2019-or-early-2020-chairperson-and-ceo/ Tue, 20 Aug 2019 21:32:26 +0000 https://ww.dailynewssegypt.com/?p=705596 Fayed statement came on the sidelines of the loan signing ceremony with real estate developer Inertia. He explained that the offering would be through a capital increase and the sale of a stake to a strategic investor, targeting around $300-400m.

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Tarek Fayed, chairperson and CEO of Banque du Caire, said the bank aims to offer between 30% to 40% stake on the Egyptian Exchange (EGX) by the end of 2019 or early 2020.

Fayed statement came on the sidelines of the loan signing ceremony with real estate developer Inertia. He explained that the offering would be through a capital increase and the sale of a stake to a strategic investor, targeting around $300-400m.

He added that the offering awaits the completion of the procedures and regulatory requirements, stressing that the management of the bank is not the only party involved in the process.

The offering is a part of Banque Misr’s plan, which holds 100% of Banque du Caire, to raise EGP 10bn in proceeds from selling stakes in several other companies.

Fayed had previously said he expected the IPO to be completed before the end of the year. The government started the IPO programme with the sale of an additional 4.5% stake in Eastern Company in March.

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Egyptians withdraw EGP 31.5bn from bank ATMs during Eid al-Adha https://ww.dailynewssegypt.com/2019/08/20/egyptians-withdraw-egp-31-5bn-from-bank-atms-during-eid-al-adha/ Tue, 20 Aug 2019 13:21:47 +0000 https://ww.dailynewssegypt.com/?p=705501 EGP 22.29bn were withdrawn within 5 days before Eid holiday, EGP 9.15bn in 4 days afterwards

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The Egyptians withdrew about EGP 31.5bn during the Eid al-Adha holiday – which fell on 11 August – from bank ATMs across the country through 17.6m transactions, banking statistics revealed.

Before Eid al-Adha, from 3 to 8 August, Egyptians withdrew about EGP 22.29bn through 12.2m transactions, including salaries of government employees. From 9 to 13 August, about EGP 9.15bn were withdrawn through 5.39m transactions, the Middle East News Agency (MENA) reported.

The statistics showed that the National Bank of Egypt (NBE) topped the list of banks that witnessed high cash withdrawals through ATMs during the period from 3 to 13 August, by EGP 12bn through 6.5m transactions, followed by Banque Misr by EGP 8bn through 4.7m transactions.

Commercial International Bank came third by EGP 2.2bn through 1.01m transactions, followed by Banque du Caire in fourth by EGP 1.47bn through 1.09m operations, then QNB Alahli in fifth place by EGP 1.69bn through 739,000 transactions.

AlexBank came in the sixth place by EGP 1.06bn, HSBC was seventh by EGP 720m, Arab African International Bank was ranked sixth by EGP 603m, while Housing and Development Bank was ninth by EGP 438m, and Faisal Islamic Bank by EGP 433.2m.

Emirates NBD ranked 11th by EGP 393.2m, Crédit Agricole in 12th by EGP 266.7m, the United Bank by EGP 216.3m, National Bank of Kuwait by EGP 190m, and Arab Bank in 15th place by EGP 178.3m.

Bank Audi came in 16th place by EGP 170.7m, then Abu Dhabi Islamic Bank ranked 17th by EGP 126m, Attijariwafa Bank ranked 18th by EGP 125.2m, and Al Ahli Bank of Kuwait ranked 19th by EGP 123.6m, and Union National Bank ranked 20th by EGP 117.5m.

EG Bank ranked 21st by EGP 103.8m, followed by BLOM Bank by EGP 88.1m, then Ahli United Bank by EGP 64.09m, SAIB Bank by EGP 52.2m, Suez Canal Bank by EGP 51.8m, and Arab International Bank by EGP 35.1m, then Arab Banking Corporation by EGP 33.2m.

The list also includes the Egyptian Export Development Bank by EGP 30.1m, the Egyptian Arab Real Estate Bank by EGP 29.7m, the Arab Investment Bank by EGP 22.8m, the Agricultural Bank of Egypt by EGP 14.05m, then the First Abu Dhabi Bank by EGP 13.7m, National Bank of Greece by EGP 8.4m, Mashreq Bank by EGP 4.9m, and finally Misr Iran Development Bank by EGP 3.4m. Al Baraka, Citibank, and Industrial Development banks did not record any withdrawals during Eid Al-Adha.

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Nine private banks in Egypt gain EGP 14.941bn net profits in 1H2019 https://ww.dailynewssegypt.com/2019/08/18/nine-private-banks-in-egypt-gain-egp-14-941bn-net-profits-in-1h2019/ Sun, 18 Aug 2019 07:00:38 +0000 https://www.dailynewsegypt.com/?p=705253 CIB – Egypt tops the list by EGP 5.355bn profits, QNB Alahli comes second by EGP 4.217bn

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Nine private banks operating in the Egyptian market gained about EGP 14.941bn net profits during the first half (H1) of 2019.

According to the performance indicators of banks in Egypt during the last period, the Commercial International Bank (CIB) – Egypt ranked first among the nine banks surveyed by Daily News Egypt recording EGP 5.355bn net profits.

QNB Alahli came in second place with net profits of EGP 4.217bn, followed by Faisal Islamic Bank of Egypt by EGP 1.376bn, Credit Agricole – Egypt by EGP 1.3bn, then the Housing and Development Bank (HDB) by EGP 1.07bn.

Other banks included in the survey were Abu Dhabi Islamic Bank (ADIB) – Egypt, Al Baraka – Egypt, Suez Canal Bank, and Union National Bank (UNB) – Egypt.

CIB – Egypt

CIB – Egypt gained EGP 5.355bn net profits in H1 of 2019, against EGP EGP 4.424bn in H1 of 2018, growing by 21%.

The bank’s profit before tax (PBT) was EGP 7.39bn in H1 of 2019, up from EGP 5.925bn in the same period last year, a growth of 40.4%.

The bank said in a statement that its net income from returns jumped by the end of H1 of 2019 by about 17% to around EGP 10bn, against EGP 7.853bn in H2 of 2018.

The bank’s revenues from fees and commissions fell 38% to EGP 805m, against EGP 1.296bn.

The bank’s capital adequacy rate stood at 25.82% at the end of H1 of 2019.

The bank said that this level of capital adequacy ratio supports the bank’s ability to cope with market volatility.

It pointed out that the ratio of non-performing loans reached 4.96% of the total loan portfolio at the end of June 2019, pointing out that the coverage rate of these loans amounted to about 200%, reflecting the bank’s ability to absorb any unexpected increase in the size of those loans.

In line with the bank’s risk management policy, CIB made provisions of EGP 795m at the end of June 2019, compared to EGP 1.291bn at the end of June 2018.

The total size of the loan portfolio at CIB – Egypt reached EGP 123.317bn at the end of June 2019, compared to EGP 119.503bn at the end of December 2018, up by 3%.

The bank’s deposit portfolio rose by 7% to reach EGP 305.563bn, compared to EGP 285.297bn in the comparison period.

According to the bank, its investments in government securities and treasury bills reached EGP 147.743bn at the end of June 2019, against EGP 157.744bn at the end of December 2018, down by 6%.

The total assets of the bank amounted to EGP 361.313bn at the end of H1 of 2019, compared to about EGP 342.461bn at the end of 2018, a growth of 6%.

QNB Alahli

The consolidated net profit of QNB Alahli reached EGP 4.217bn during H1 of 2019, an increase of 22% compared to H1 of 2018.

The bank said in a statement that the portfolio of loans and advances recorded EGP 142bn at the end of June 2019, after deducting the provisions.

The bank’s market share of total loans in the banking sector stood at 7.82% until the end of March 2019, according to the Central Bank of Egypt (CBE).

It added that the ratio of facilities granted to small and medium enterprises (SMEs) reached 22.3% of its total facilities at the end of June 2019.

According to the bank, the ratio of non-performing loans reached 2.76% of the total loan portfolio at the end of June 2019, which is one of the best ratios in the Egyptian banking sector.

The bank has shown good asset quality according to IFRS 9, the new accounting standard on loan loss provisioning, starting from 2019, while the coverage ratio for non-performing loans reached 171%.

The bank’s capital adequacy ratio stood at 19.5 %, with credit policies optimised and the bank’s investment portfolio free of any risk assets. The bank said its consolidated assets totalled EGP 253bn at the end of June 2019.

Customer deposits reached EGP 204bn at the end of June 2019, bringing the bank’s market share of total deposits in the Egyptian banking sector to 5.17% until the end of March 2019, according to the CBE.

The bank’s total loan to deposit ratio was 73%, compared to average 47% in the banking sector in March 2019.

Beltone Financial said QNB Alahli scored strong annual net income growth of EGP 2.2bn in H1 of 2019, an increase of 18.4% compared to the second quarter (Q2) of 2018, and 8.5% compared to Q1 of 2019.

In a research note, Beltone explained that this growth was the result of strong growth in net income from returns by 31.4% to reach EGP 3.5bn, which is mainly due to the increase in net interest margin (NIM) by 101 basis points in addition to the increase in average yielding assets.

Beltone said it continues to favourably view the bank’s planned growth in lending activities due to ample capital levels, with a capital adequacy ratio of 19.5% in H1 of 2019.

It added that QNB Alahli managed to reduce its investments in government treasury bills in light of the new tax amendments, which led to a decrease in treasury bills by 35.1% since the beginning of the year and used the excess liquidity in the interbank where it increased by 43.6% since the beginning of the year.

Moreover, QNB Alahli marked a decline in the cost of deposits by about 73 basis points on a quarterly basis, as a result of higher low-cost individuals deposits.

Beltone noted that interest margin on loans increased by about 40 basis points thanks to increased local currency lending.

Meanwhile, Beltone believes that the high cost of credit risk is not worrying due to the ample coverage of the provisions of non-performing loans at the bank by 170% until the end of H1 of 2019, in addition to containing the rate of non-performing loans at 2.76%.

Beltone stressed that the bank’s increased exposure to SME loans needs to be carefully monitored.

It pointed out that the return on average assets of QNB became stronger, recording 3.4% in H1 of 2019, its highest level since December 2009, resulting in a higher return on average equity.

Faisal Islamic Bank of Egypt

The net profits of Faisal Islamic Bank of Egypt in H1 of 2019 amounted to EGP 1.376bn, up by EGP 36.624m from EGP 1.340bn in H1 of 2018, marking a growth of 2.7%.

The bank explained in a disclosure to the Egyptian Exchange (EGX) that this increase in the net profits of the bank is mainly due to the increase of savings by EGP 2.9bn, where it reflected positively on the bank’s employment of deposits, thus it increased its profits. This also had a positive impact on the application of IFRS 9.

It pointed out that the bank has achieved revenues of EGP 4.575bn in H1 of 2019 against EGP 4.168bn in H1 of 2018, up by EGP 407.874m, rising by 9.8%.

The total equity of the bank was EGP 11.989bn at the end of June 2019, against EGP 11.743bn at the end of December 2018, increasing by EGP 245.567m (2.1%).

The bank’s paid-up capital settled by the end of June 2019 at EGP 1.775bn, unchanged from December 2018.

Crédit Agricole – Egypt

Credit Agricole – Egypt’s financial statements for H1 of 2019 showed a 19.5% year-over-year rise in net profits.

The bank said in a statement to the EGX that it achieved net profits of EGP 1.3bn during six months ending June 2019, compared to EGP 1.09bn in H1 of 2018.

Net income from returns during H1 of 2019 rose to EGP 1.5bn, compared to EGP 1.4bn in H1 of 2018.

On a quarterly basis, the bank made a profit of EGP 610.5m compared to EGP 489.5m in Q2 of 2018.

Housing and Development Bank

The Housing and Development Bank (HDB) announced that its total profits for H1 of 2019 increased by EGP 77.9m to EGP 1.07bn, against EGP 994.2m at the end of June 2018, up 7.8%.

The bank said in a statement to the EGX that customer deposits increased during the first six months of this year by EGP 3.1bn to EGP 37.2bn at the end of June 2019, compared to EGP 34.1bn at the end of December 2018, a growth of 9%.

The loans portfolio increased by EGP 1.2bn to reach EGP 14.8bn at the end of June 2019, compared to EGP 13.6bn at the end of December 2018, a growth of 9.1%.

Abu Dhabi Islamic Bank – Egypt

The consolidated financial indicators of the Abu Dhabi Islamic Bank (ADIB) – Egypt for H1 of 2019 showed an increase in net profits by 74.1% on an annual basis.

According to the bank, it recorded net profits of EGP 658.6m since the beginning of January until the end of June 2019, compared to EGP 378.2m during H1 of 2018.

As for the independent indices of the bank, the profits rose to EGP 601.2m during H1 of 2019, compared to EGP 368.46m in H1 of 2018.

Al Baraka Bank – Egypt

Al Baraka Bank Egypt’s independent financial statements for H1 of this year revealed a 30.8% y-o-y rise in net profits.

The bank said in a statement to the EGX that it recorded net profits of EGP 537.6m during H1 of 2019, compared to EGP 410.93m during H1 of 2018.

The bank’s net income from returns was EGP 986.27m compared to EGP 871.13m.

Beltone said that the financial statements of Al Baraka in Q2 of 2019 showed good growth in net income, recording EGP 271m, a growth of 27% y-o-y.

Return on average equity of the bank increased slightly by 1% y-o-y to 31.6% due to lower cost of risks.

According to Beltone, Al Baraka’s financial position continued to show good growth, with customer deposits up 8.9% YTD, up 5.2% q-o-q, to EGP 59.4bn in Q2 of 2019.

Net loans increased 1.5% YTD, down 0.5% q-o-q, to EGP 16.0bn until the end of June 2019, although it remained almost unchanged compared to Q1 of 2019.

It pointed out that Al Baraka has amended the employment of its assets after the implementation of the new income tax law, which led to the fall of treasury bill investments by 61.3% since the beginning of the year.

The bank’s asset quality remains a concern as non-performing loans (NPL) registered 7.7% until the end of June 2019, up from 7.3% and 4.3% in Q1 of 2019 and Q4 of 2018, respectively, while NPL coverage saw a decline, recording 96.3% compared to 162%.

Suez Canal Bank

Suez Canal Bank’s financial statements for H1 of 2019 showed a 12% y-o-y rise in profits.

According to the bank, it made net profits of EGP 235.4m in the six-month period ending in June 2019, compared to EGP 210.05m in the same period of 2018.

The bank’s net income from returns increased to EGP 620.8m during H1 of 2019, compared to EGP 415.5m in H1 of 2018.

On a quarterly basis, the bank’s profits rose to EGP 106.9m, compared to EGP 94.78m in Q2 of 2018.

Hussein Refaey, chairperson and managing director of Suez Canal Bank, said that the total budget reached EGP 51.6bn in June 2019, a growth of EGP 4bn (9%) from December 2018.

Refaey added that the growth was supported by an increase in customer deposits by 16% to EGP 44.9bn in June 2019, compared to EGP 38.6bn in December 2018.

He pointed out that the bank’s loans portfolio increased by 4% to about EGP 14.1bn in June 2019 against EGP 13.5bn in December 2018.

Union National Bank – Egypt

The financial statements of the Union National Bank (UNB) – Egypt during H1 of 2019 showed that its profits increased by 40.5 %, y-o-y.

The bank said in a statement to the EGX that it made net profits of EGP 191.4m during the six-month period ended June 2019, compared to EGP 136.2m in H1 of 2018.

The bank’s net income from returns rose to EGP 462.2m in H1 of 2019, compared to EGP 435.3m in H1 2018.

On a quarterly basis, the bank made net profits of EGP 81.7m, compared to EGP 76.16m in Q2 of 2018.

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Strong growth in Al Baraka Bank Egypt’s financial position supported by ample funding potential: Beltone https://ww.dailynewssegypt.com/2019/08/13/strong-growth-in-al-baraka-bank-egypts-financial-position-supported-by-ample-funding-potential-beltone/ Tue, 13 Aug 2019 20:41:55 +0000 https://www.dailynewsegypt.com/?p=705048 Beltone added that the bank's operating expenditure increased by 11.1%, maintaining the cost to income ratio at 23.1%, while credit impairment losses showed a healthy decline of 47%, which led to a decrease in the cost of risk by 173 basis points to 148 points.

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Beltone Financial said Al Baraka Bank Egypt’s financial statements for the second quarter (Q2) of 2019 showed good net income growth of EGP 271m, an increase of 27% year-over-year (y-o-y).

It added that compared to Q2 of 2018, the net income of the bank showed a strong increase of 10.9% to EGP 492m mainly due to the growth in the financial position which was partially offset by the negative interest rate impact on the net interest margin by 12 basis points, scoring 3.4%, while net fees and commissions increased by 10.9%.

Beltone added that the bank’s operating expenditure increased by 11.1%, maintaining the cost to income ratio at 23.1%, while credit impairment losses showed a healthy decline of 47%, which led to a decrease in the cost of risk by 173 basis points to 148 points.

The tax margin rose by 214 basis points to 31% in the first half (H1) of 2019 as government securities income increased its contribution to total income, however, it improved compared to Q1 of 2019.

On a quarterly basis, net income came almost unchanged despite a 51.7% decline in credit losses, offsetting foreign currency translation losses as a result of increased foreign currency assets over liabilities. The bank’s return on average equity increased slightly by 1% y-o-y to 31.6%, due to lower cost of risk despite lower income from core banking and lower leverage.

According to Beltone, Al Baraka’s financial position continued to show good growth, with customer deposits up 8.9% y-o-y, growing 5.2% quarter-over-quarter (q-o-q) to EGP 59.4bn in Q2 of 2019.

Net loans rose 1.5% YTD, down 0.5% q-o-q, to EGP 16.0bn as of the end of June 2019, although it remained almost unchanged from Q1 of 2019.

Like its counterparts, Al Baraka has adjusted its asset placement following the introduction of a new income tax law, which has led to a 61.3% fall in treasury bills since the beginning of the year.

Meanwhile, the bank’s receivables grew 60.9% YTD to EGP 24.0bn in Q2 of 2019, representing 36% of total assets.

It noted that the bank’s asset quality remains a concern as non-performing loans stood at 7.7% as of the end of June 2019, up from 7.3% and 4.3% in Q1 of 2019 and Q4 of 2018, respectively, while the NPL coverage ratio declined by 96.3% compared to 162%.

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CBE issues import, export standards on foreign banknotes surplus https://ww.dailynewssegypt.com/2019/08/07/cbe-issues-import-export-standards-on-foreign-banknotes-surplus/ Wed, 07 Aug 2019 21:52:33 +0000 https://www.dailynewsegypt.com/?p=704800 The CBE affirmed that these standards comes in the framework of the CBE's continuous endeavour to maintain the sound performance of the banking system.

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The Central Bank of Egypt (CBE) issued new standards for import and export of foreign currency surplus during its board of directors meeting on 5 August.

The CBE affirmed that these standards comes in the framework of the CBE’s continuous endeavour to maintain the sound performance of the banking system.

Gamal Negm, deputy governor of the CBE, said in a letter to the banks operating in Egypt that those banks wishing to engage in export and import of foreign currency surplus should apply for licenses to practice this activity from the banking affairs department of the CBE every January.

The CBE stipulated that banks engaged in this activity must have policies and procedures approved by the its Board of Directors covering all operations related to the export and import of foreign banknotes, as well as systems and procedures for anti-money laundering and terrorist financing operations.

The CBE also stipulated that there should be good internal control systems on the operations related to the export and import activities of banknotes. The legal, risk management, and commitment departments of each banks should also review such contracts before signing with the concerned parties, including all details and responsibilities of each party, and the anti-money laundering and terrorist financing activities.

According to the CBE, it is also required for workers involved in this activity to receive courses related to dealing with foreign exchange notes, including counterfeit, and introductory courses about combating money laundering and terrorist financing, especially in relation to operations related to the export and import of foreign currency notes.

The CBE confirmed that banks are not allowed to outsource the process of exporting foreign currency surplus to any company inside Egypt except with a prior approval of the CBE.

It added that banks are allowed to contract with financial institutions (banks / exchange companies) abroad to complete the process of exporting foreign exchange. They should carry out due diligence and credit study for these institutions before contracting with them to assess the contracts and set a credit limit for each institution subject to annual approval to cover risks of non-payment.

It stressed the necessity that these institutions have the minimum set of standards, namely that the institution should be subject to one of the regulatory authorities and have this authority’s approval to practice this activity.

The institution must also have at least five-year experience in this activity and has not been subjected to penalties or fines by the supervisory authority in the country in which it operates, or sanctions related to money laundering operations from third parties.

The standards also include measures to combat money laundering and terrorist financing approved and documented by the board of directors of the institution with regard to the activity of exporting and importing foreign currency notes, as well as the systems necessary to apply them. Moreover, banks should expand the network of financial institutions that can be contracted to ensure the continuity of export activity and not be concentrated with a limited number of institutions.

The CBE stressed that banks should continuously evaluate all their clients regarding bank export and import activities, such as insurance and transport companies, among others.

The CBE asserted that banks, when carrying out any operation to export surplus foreign currency notes, they should ensure that the exporting operation is done by a licensed bank by the CBE, and for exporting to not exceed $100m or its equivalent in all currencies traded, per transaction.

The exporting bank must submit a declaration stating that it has sufficient balance for local operations other than the amounts to be exported, and another declaration stating that the foreign currency notes to be exported are set aside in full in the bank’s treasury, as well as announcing the currencies to be exported on the bank’s page on Reuters screener including the components of this surplus, excluding the quantities, throughout the previous day to applying the request to CBE for approval. A photocopy of the announcement must be attached with the request.

The CBE called on banks to inform the banking operations sector at the CBE with the exportation request at least one day prior to the date of export for approval.

The CBE also obliged the exporting bank to declare its full responsibility for the whole export operation, starting from making the obligation to adding the exported money to the correspondents’ accounts abroad at the maturity date. In addition, the exporting bank should insure the banknotes to be exported with an insurance company.

The CBE also asked banks to inform the general directorate of foreign operations in the banking operations sector in the CBE with the export approval indicating the quantity to be exported, as well as a photocopy of the documents indicating that the other party has received the actual value of foreign currency notes, provided that the exchange rate and the maturity date shall be no later than 10 days from the date of export.

Negm pointed out that the CBE has the right to revoke the license to practice the activity of exporting and importing foreign currency notes at any time without giving any reasons.

For foreign exchange notes not listed in the CBE, banks are allowed to contract abroad companies which are concerned in the field of transfer, exporting, and importing of foreign currency notes. Each transaction is presented separately to the CBE, equivalent to $10m and higher than $2m.

The CBE said that in case the bank wants to import foreign currency notes, a request is made to clarify the bank’s justifications and submitted to the banking operations sector at the CBE for study and approval.

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Egypt’s net foreign reserves rose by $565m to $44.916bn end-July https://ww.dailynewssegypt.com/2019/08/06/egypts-net-foreign-reserves-rose-by-565m-to-44-916bn-end-july/ Tue, 06 Aug 2019 20:46:22 +0000 https://www.dailynewsegypt.com/?p=704674 According to the CBE, Egypt’s current net foreign reserves covers more than 8 months of commodity imports.

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The Central Bank of Egypt (CBE) revealed on Tuesday that Egypt’s net foreign reserves rose by $565m in the end of July 2019, to record $44.916bn, up from $44.352bn at the end of June 2019.

According to the CBE, Egypt’s current net foreign reserves covers more than 8 months of commodity imports.

Egypt’s Finance Minister, Mohamed Moeit, revealed on Monday that Egypt received the final $2bn tranche of the $12bn IMF loan last week.
Egypt’s foreign exchange reserves before the 2011 revolution amounted to around $36bn before the country entered a period of political and economic turmoil that negatively impacted tourism and foreign investments.

 

Afterwards, Egypt’s net foreign reserves hit a historic low in October 2016, with only $19bn.
Egypt has adopted an IMF-supported ambitious economic reform programme in November 2016, which included currency flotation, in addition to energy subsidy cuts, and introduction of VAT.

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Mashreq Bank – Egypt launches mortgage finance initiative to support low-income groups https://ww.dailynewssegypt.com/2019/08/06/mashreq-bank-egypt-launches-mortgage-finance-initiative-to-support-low-income-groups/ Tue, 06 Aug 2019 19:09:11 +0000 https://www.dailynewsegypt.com/?p=704657 Bank continue to participate in CBE initiatives, says El Bahey

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Mashreq Bank – Egypt launched a real estate mortgage finance programme, in cooperation with the Mortgage Finance Fund, in accordance with the Central Bank of Egypt’s (CBE) mortgage finance initiative for low-income individuals.

“This step is part of the bank’s integrated strategic plan to boost financial inclusion and to implement the government’s plan to facilitate access to properties, in accordance with the CBE plan,” said Sachin Das, head of retail banking.

Jinu Johnson, head of personal banking at Mashreq Bank, said that the financing will last for up to 20 years, with a financing value of up to 85% of the housing unit’s price, adding that the financing will have a subsidized interest of 7% per annum.

He added that the price of the property will be determined according to the price set by the board of directors of the Mortgage Finance Fund.

Amr El Bahey, CEO of the bank, said that the bank will continue to participate in the CBE’s various initiatives and will play an active role in the banking sector in the Egyptian market.

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CONIA interest rate benchmark comes into force https://ww.dailynewssegypt.com/2019/08/05/conia-interest-rate-benchmark-comes-into-force/ Mon, 05 Aug 2019 20:41:25 +0000 https://www.dailynewsegypt.com/?p=704514 New standard reinforces CBE's ability to improve monetary policy

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The Central Bank of Egypt (CBE) announced on Monday that its new risk-free interest rate benchmark CONIA became effective.

The new benchmark CONIA, standing for the Cairo Overnight Interbank Average, was developed by the Egyptian Money Market Contact Group (MMCG), which brings together the CBE, commercial banks, and the European Bank for Reconstruction and Development (EBRD).

It aims to support the development and availability of a wider range of financial products for participants in the financial sector and the improvement of the capital market and derivatives.

CONIA is a development of the overnight interest rate on interbank transactions.

According to the CBE, the new benchmark is a milestone and important tool to support the implementation of the money market reforms and derivatives.

Mohamed Abdel Aal, a member of the board of directors of the Suez Canal Bank and a banking expert

EBRD Treasurer Axel van Nederveen said, “the new benchmark is very important for the development of Egyptian capital markets.”

Similar risk-free rates had already been developed for major currencies in other monetary jurisdictions, he noted.

The CBE said that there will be no change in the framework of Egypt’s monetary policy after the launch of the new standard, noting that the launch of CONIA would strengthen the ability of the CBE to implement monetary policy more efficiently, in addition to support and implementation of monetary and derivatives market reforms, similar to the developments and variables in pricing structures in global markets such as Libor and Euribor as a prelude to exiting them.

The CBE noted that similar standard limits for risk-free interest rates are being developed and started to be used as alternatives as well as to major currencies in other capital markets without any change in the monetary policy framework.

He explained that CONIA is calculated by means of the average weighted average overnight interest rate due to the actual interbank transactions in the interbank market in Cairo, after excluding the largest and lowest 15% of the extreme values, and will be published daily as of October 2019.

Mohamed Abdel Aal, a banking expert and a member of the board of directors of the Suez Canal Bank, said that because of the confidence and transparency of this new standard, it will help deepen and widen the financial and money market in Egypt.

He explained that the launch of this standard paves the way for the creation and construction of a derivatives market in the Egyptian pound, which cannot be done without such an index, which transparently expresses the weighted averages of interbank rates for day-to-day transactions.

He added that based on this daily index, the current and expected short and medium-term interest rate curve can be derived with great accuracy and also stabilized, thus facilitating international trade finance operations.

Abdel Aal expected the new standard to support and complement the plans of economic, monetary, and financial reform, and to have a positive impact on the stability of the exchange rate and the activities of the stock exchange.

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Banks operating in Egypt celebrate International Youth Day https://ww.dailynewssegypt.com/2019/08/04/banks-operating-in-egypt-celebrate-international-youth-day/ Sun, 04 Aug 2019 09:30:29 +0000 https://www.dailynewsegypt.com/?p=704367 New accounts opened free of charge, special offers made on 1-15 August

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Banks operating in the Egyptian market are celebrating the International Youth Day as part of the Central Bank of Egypt (CBE) initiative “Youth Day”, one of CBE’s steps to achieve financial inclusion. The banks’ celebration lasts from 1 until 15 August.

Last Thursday, the International Commercial Bank (CIB) launched the Youth Offer to provide the best banking products and services designed to achieve financial independence for young people and help them have a better future.

As part of this offer, CIB will open accounts free of charge for youth and without annual administrative fees. Personal financing is also available with no administrative expenses for customers aged 31-52.

CIB also provides the option to obtain the CIB-ISIC prepaid card, an internationally recognised student identification card, in more than 130 countries, as well as a smart wallet application on mobile phones, which can be used to carry out daily financial transactions.

The Arab African International Bank (AAIB) has decided to open accounts for new customers without expenses or minimum deposit from 1 to 15 August in support of financial inclusion and the CBE initiative to open accounts for young people on the occasion of International Youth Day.

AAIB provides two different types of current accounts; interest-free and interest-bearing accounts to meet all of its customers’ needs.

Customers can open an account in Egyptian pound and foreign currencies. They can also apply for a debit card, whether Visa or MasterCard, as well as issue a check book for a balance of EGP 10,000 (or $3000) for issuing fees.

Customers can also access their accounts using direct banking (internet and phone banking) for free.

The minimum limit for opening a current account without interest in AAIB is EGP 5,000 (or $1000) or the equivalent in foreign currencies, and the minimum limit to open a current account is at an interest of EGP 10,000, or EGP 3,000 or equivalent in foreign currency.

AAIB also offers the Golden Saving Account through all the bank’s branches nationwide, up to more than 85 branches, with the possibility of withdrawing and depositing through the bank’s network of over 400 ATMs.

The minimum limit for opening a Golden Saving Account is EGP 5,000, £500, $500, or €500.

QNB Alahli has also announced offering new accounts with no expenses and minimum deposit for 15 days from 1 to 15 August.

The Housing and Development Bank (HDB) has decided to make all online banking transactions available through the “Floosy Mobile Wallet” application without any administrative fees.

Through this application, the bank allows money transfer, bills payment, and online shopping.

ElSayed ElKosayer, chairperson of the Agricultural Bank of Egypt (ABE), said his bank has started to open saving accounts and issue national e-payment card “Meeza” without administrative fees or minimum deposit, through the ABE branch network nationwide, up to 1,210 branches. It also comes in the framework of the bank’s participation in the Youth Day, sponsored by the CBE.

ElKosayer explained that the ABE is organising working groups for financial inclusion to visit weekly local markets in villages and youth centres, social clubs, universities, workshops, shops, coffeeshops, and agricultural cooperatives.

CBE has earlier set a list of activities to support financial inclusion, including outdoor activities, such as Women’s Day, Arab Day for Financial Inclusion from 10 March to 28 April, Saving Day from 15 to 31 October, and the Youth Day from 1 to 15 August.

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CBE reveals Egypt’s economy external position https://ww.dailynewssegypt.com/2019/08/04/cbe-reveals-egypts-economy-external-position/ Sun, 04 Aug 2019 07:00:47 +0000 https://www.dailynewsegypt.com/?p=704340 Foreign debt reached 35.1% of GDP at end December 2018, compared to 61.4% of GDP in European coutnries, EMs, and 41.9% in Commonwealth countries

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The Central Bank of Egypt (CBE) issued the External Position of the Egyptian Economy Report. The Report tracks, on a quarterly basis, the international transactions that the Egyptian economy conducts with the rest of the world. It highlighted that Egypt’s total external debt has reached 35.1% of GDP at the end of December 2018.

The report indicates that, Egypt’s external debt remains within safe limits, in line with international standards. CBE pointed out that the average external debt in the European countries, and emerging markets (EMs) stands at 61.4% of GDP, while the ratio drops to an average of 41.9% of GDP in the Commonwealth member countries.

Moreover, the CBE disclosed that the foreign debt is due to be paid in the second half (H2) of 2019 will reach about $14.5bn, $1.8bn of which are debt interest. The remaining balances include premiums to the Paris Club countries, a number of international institutions, and a number of countries, including Kuwait, Saudi Arabia, and the UAE.

However, the report did not disclose whether there were any agreements with these creditors to re-schedule or postpone the debt payment.

CBE’s report relies, for this purpose, on the national statistics that are regularly compiled in line with the IMF’s  Special Data Dissemination Standard (SDDS) prescriptions.

“Enthused by the CBE’s keenness to enhance its disclosure, transparency and communication policy, the report is meant to serve several functions. Generally, it spreads, to a broad array of readers, knowledge of Egypt’s external accounts including the balance of payments, external debt, international investment position and external liquidity,” the report noted.

It added that the report monitors key external sector performance indicators of the economy in order to identify areas of policy needs, pointing out that the information revealed in this report has also significant implications for decision-making, investment climate, doing-business environment and sovereign credit ratings.

Furthermore, the CBE noted that the liberalisation of the exchange rate regime by the CBE on November 2016 led to bolstering confidence in the Egyptian economy, achieving monetary stability, and the steady accumulation of foreign currency reserves.

Consequently, On December 2018, the CBE terminated the forex repatriation mechanism for any new foreign currency portfolio investments.

Daily News Egypt took a dive into the External Position of the Egyptian Economy Report, to analyse the country’s external debt, balance of payment, and external liquidity.

External Debt

Egypt’s external debt recorded $96.6bn at end of December 2018, marking an increase of 4.3% compared to June 2018.

According to the report, this increase came as a result of the rise in net disbursements of loans and facilities by $4.3bn, while most currencies of borrowing depreciated against the US dollar by $0.4bn.

On the other hand, long-term external debt accounted for $70.6bn or 73% of the country’s total external debt. Whereas medium-term external debt reached $15.7bn or 16.3%, while short-term external debt accounted for $10.3bn or 10.7%.

In terms of residual maturity, short-term debt accounted for 25.8% of the total external debt at end December 2018, compared to 10.7% classified by original maturity.

Meanwhile, medium and long-term external debt represented 74.2% of the total debt, in comparison to 89.3% by original maturity.

Breakdown by debt category

The report indicates that medium-and long-term external debt increased by about $6bn to reach $86.3bn (89.3 % of total debt) at end of December 2018, marking an increase of 7.4% compared to June 2018.

CBE attributes the increase to the re-purchase Agreements (Repo), which recorded $3.8bn (3.9 % of total debt) at end of December 2018, as well as other bilateral debt that amounted to about $9bn (9.3% of total debt), up by 17.6% compared to June 2018.

In the same time, buyers’ & suppliers’ credit reached about $9.2bn (9.6 % of total debt), increasing by 9.6%.

While, multilateral institutions’ debt reached about $29bn, accounting for 30% of total debt, and up by 2%.

Moreover, rescheduled bilateral debt reached about $3.4bn (3.6% of total debt), down by 8.4%.

In regards to bonds issued abroad (non-resident holdings), it reached about $14bn (14.4% of total debt), down by 2.1%, according to the report. These include about $0.9bn of sovereign bonds issued in April 2010 and due in 2020 and 2040; about $11bn of eurobonds issued in June 2015 (due in 2025), January and May 2017 (due in 2022/2027/ 2047), and February 2018  due in 2023/2028/2048) in addition to around $2.1bn of Eurobonds issued in April 2018 and are due in 2026 and 2030.

The report added that non-guaranteed debt of the private sector registered $0.5bn (about 0.5% of total debt), down by 3.1%.

While, the long-term deposits that have been placed at the CBE by some Arab countries remained at $17.4bn (18% of total debt).

On the other hand, the short-term external debt decreased by about $1.9bn to about $10.3bn or 10.7% of total debt. Its ratio to net international reserves decreased to 24.3% at end of December 2018 against 27.8% at end of June 2018.

The currency composition of external debt indicates that the US dollar is the main borrowing currency, accounting for $61.6bn of the total amount.

The US dollar-denominated debt includes outstanding obligations to creditors other than the USA, including the IMF, African Development Bank (AfDB), and the International Bank for Reconstruction and Development (IBRD).

Other foreign currencies debt accounted for $33bn, including the Euro as the runner-up ($14.2bn), followed by the Special Drawing Rights – supplementary foreign-exchange reserve assets defined and maintained by the IMF – ($10.4bn), the Chinese yuan ($3.6bn), the Kuwaiti dinar ($2.5bn), and the Japanese yen ($2.3bn), and other currencies ($2bn).

The CBE noted that breakdown by creditor indicates that $29bn was owed to multilateral institution, namely IBRD $9.3bn, IMF $9.2bn, ADF & AfDB $3bn, and EIB $2.7bn.

Another $23.1bn was owed to Arab countries, namely Saudi Arabia, UAE, and Kuwait. Meanwhile, $9.3bn came from five members of Paris Club countries; namely Germany ($3.2bn), Japan ($2.3bn), France ($1.5bn), USA ($1.3bn), and UK ($1bn). In addition, $6.5bn of the total debt was owed to China, the report indicated.

Moreover, in terms of Egypt’s external debt by debtor, the government accounts for 49.8% of the total foreign debt, as its debts rose by about $400m last year to reach $48.1bn. While the CBE’s debt rose to $28.2bn, accounting for 29.2% of the total external debt, and banks’ external debt increased by about $1.6bn to record $7.7bn. Other sectors’ debt increased by about $0.2bn to $12.6bn.

External debt service

CBE explained that debt service reached $7.3bn during the period from July 2018 to December 2018 down from $8.6bn during July 2017 to December 2017.

This reduction was mainly due to the decrease in installments repayment by about $1.6bn to record $5.9bn mainly attributed to the repayment of short-term debt in the form of repurchase agreements (Repo) and banks’ obligations.

On the other hand, paid interest inched up slightly by about $0.4bn to reach $1.4bn as a result of the increase in interest paid on multilateral loans and Euro-bond.

External debt indicators remain manageable

However, the CBE noted that Egypt’s debt remains within manageable limits.

“Based on IMF classification, comparing Egypt’s key debt indicators with those of other regional country groups shows that Egypt’s debt stock to GDP represented 35.1% at end of December 2018 (61.4 % for Emerging and Developing Europe and 41.9 % for the Commonwealth).” the report added.

Egypt’s short-term external debt ratio to total external debt at end of December 2018 represented 10.7% ( while the ratio stands at 20.5% for Emerging and Developing Europe, and 8.4% for the Commonwealth),” the CBE explained.

Egypt’s debt-service ratio registered 23.2 % during the year ended in December 2018 (44.4 % for Emerging and Developing Europe, and 29.0 % for the Commonwealth).

US dollar appreciated against EGP  from July to December 2018

As for the exchange rate, the CBE noted that during July to December 2018, the weighted average of the US dollar in the Egyptian inter-bank market appreciated by 0.1% to EGP 17.9136 at end of December 2018, (against EGP 17.8878 at end of June 2018).

On the market end, the buying price in the foreign exchange market, the Swiss franc rose by 1.6 %, Japanese yen by 0.5%, US dollar, Saudi riyal, and UAE dirham increased by 0.2% each. On the other hand, Chinese yuan decreased by 3.5 %, pound Sterling by 1.9 %, Euro by 0.9%, and Kuwaiti Dinar by 0.1%.

BOP deficit recorded $1.8bn  in end December

The CBE said that Egypt’s transactions with the external world recorded an overall BOP deficit of about $1.8bn during the period July to December 2018/2019 (against a surplus of about $5.6bn).

The report indicates that the current account deficit increased to about $3.9bn against about $3.5bn, adding that the capital and financial account recorded a net inflow of about $1.8bn against about $10.4bn).

Moreover, the CBE attributed the increase in the current account deficit to several factors, namely net unrequited current transfers which declined by 7.6% to about $12bn versus about $12.9bn; the income balance deficit surged by 25.6 %, recording about $3.8bn against about $3bn; the trade deficit increased by about $503.7m recording about $19.2bn; the service balance surplus scaled up to about $7.3bn against about $5.3bn.

Trade volume, deficit  increased

The CBE said that trade volume increased by 11.5%, to reach $47.8bn (17.3 % of GDP) during the period from July to December 2018.

The trade deficit increased by $503.7m to record $19.3bn (7.0 % of GDP) due to merchandise exports increasing by 18.4% to reach $14.3bn, reflecting mainly the increase in oil exports by 57.6%, to reach $6bn 42.1% of total exports; and also non-oil exports by 0.3% to reach $8.3bn (57.9% of total exports).

As a result, the exports to imports ratio mounted to 42.6%, from 39.1%, the report indicates.

Merchandise imports increased by 8.8% to reach $33.5bn due to the increase in non-oil imports by 11.5% to $27.7bn (82.5% of total imports), and the decrease in oil imports by 2.1% to reach $5.8bn (17.5% of total imports), according to the report.

The CBE noted that Egypt’s main trade partners in terms of exports were Italy, USA, UAE, UK, India, Germany, Switzerland, Saudi Arabia, and Malta. These countries combined, accounted for some 51.1% of total exports.

In regards to imports, Egypt’s main trading partners were China, Saudi Arabia, Russia, UAE, USA, Germany, Turkey, Switzerland, France, and Italy. These countries combined, accounted for some 50.1 % of total imports.

Services surplus surged to $7.3bn backed by tourism revenues

Services surplus surged by 36.7% to about $7.3bn, up from $5.3bn, as the increase in services receipts outpaced that in services payments.

The CBE explained that services receipts increased by 19.4% to some $12.8bn, driven by the increase in all of its items.

It noted that tourism revenues (representing 52.9% of services receipts) increased by 36.4% to about $6.8bn (against about $5bn), driven by the hike in the number of tourist nights to 71 million nights (up from 52.1million nights).

Moreover, transportation receipts (representing 35% of services receipts) increased by 3.1% to record $4.5bn (against some $4.4bn), due to the increase in Suez Canal dues by 5.8% to about $2.9bn (against some $2.8bn). This came as a result of the rise in net tonnage by 8.6 %, and SDR depreciation against the US dollar by 1.2 %. In addition, the receipts of Egyptian aviation companies increased.

In addition, other services receipts increased by 10.2% to about $1.3bn (against about $1.1bn), due to the increase in the receipts of communication services, advertising & market research services, other services, entertainment and cultural services and film rentals.

Government services receipts increased by 8.9% to $293.7m (against $269.7m), due to the increase in other governmental receipts.

The report added that services payments increased by 2.5%, to about $5.6bn (against about $5.4bn), driven by the increase in most of its items; where other services payments increased by 16.6% to about $3bn (against about $2.6bn), driven by the increase in amounts transferred abroad by foreign petroleum companies, legal and consulting fees, insurance fees, and the expenses of communication services.

While, travel payments increased by 18.5% to about $1.4bn (against about $1.2bn), due to the increase in e-card payments abroad, expenses of tourism & medical care, and expenses of travel agencies and hotels.

Moreover, transportation payments increased by 17.8%, to $864.6m (against $733.9m), due to the rise in the amounts transferred by foreign navigation companies.

On the other hand, CBE said, government services payments fell by 63.8% to $358.4m (against $989.1m), reflecting the decline in other governmental expenses, and the salaries of governmental employees seconded abroad.

Investment income balance deficit registered at $3.8bn

CBE’s report noted that investment income balance ran a deficit of about $3.8bn (against $3bn), due to the rise in investment income payments by $852.1m to register $4.3bn.

This was mainly driven by the increase in profit transfers by foreign petroleum companies, in addition to interest payments on external debt (representing 49.2% and 25.0%, respectively, of total investment income payments).

On the other hand, the report pointed out that investment income receipts went up to $486.9m (from $412.7m), as a result of the rise in interest on Egyptians’ deposits held abroad, and profits from branches abroad.

While, net unrequited current transfers declined by 7.6% to about $12bn, down from about $12.9bn, mainly due to the decline in net private transfers from about $12.9bn to about $11.8bn, driven by the  decline in workers’ remittances by 6.8%, according the report.

The CBE noted that this came despite the increase in net official transfers to $163.5m against $68.3m.

Capital and financial account recorded $1.8bn

The report added that the capital and financial account recorded a net inflow of about $1.8bn in the period from July to December 2018, as an outcome of total FDI inflows registering about $6.60bn (against $6.57bn), while total outflows posting $3.8bn (against $2.8bn). Accordingly, net FDI in Egypt amounted to $2.8bn due to the net inflows for oil sector by $1.5bn.

Moreover, the CBE said that the sectorial breakdown of total FDI inflows shows that the oil and gas sector has the biggest share (70.6%). As for the other sectors, the majority of FDI went to the services sectors, where the real estate sector’s share posted 8.8%, other services sectors 3.4%, the financial sector 1.9%, the communication and information technology 1.1%, and tourism sector 0.5%.

The share of the manufacturing sector reached 7.1%, the construction sector 2.3%, the agricultural sector 0.6%, and the remaining portion was acquired by undistributed sectors, according to the report.

On the other hand, portfolio investment in Egypt registered a net outflow of $5.9bn versus a net inflow of $8bn. According to the CBE, this was mainly due to the fact that foreigners’ investments in Egyptian T-Bills reversed to net sales of $5.5bn from net purchases of $8.1bn.

Medium- and long-term loans & facilities recorded net disbursements of $872.3m (against about $3.5bn).

“This was due to the retreat in disbursements of medium- and long-term loans and facilities to $2.2bn from $4.7bn, while total repayments increased to $1.3bn from $1.2bn,” the CBE said.

It added that short-term suppliers’ credit realized net disbursements of $199m against net disbursements of about $1.1bn.

Other assets and liabilities achieved a net inflow of about $4.1bn against a net outflow of about $5.7bn, on the back of the net change in the liabilities of the CBE to the external world, to post a net disbursement of about $1.8bn against a net repayment of about $3.1bn.

IIP recorded $155.6bn net external liabilities at end December 2018

Egypt’s International Investment Position (IIP) at end of December 2018 recorded net external liabilities (assets minus liabilities) of about $155.6bn up by 5.6%, compared to $147.3bn at end of June 2018.

The decrease in negative net IIP data came as a result of the decrease in Egypt’s total assets and the increase in Egypt’s total liabilities compared to the position at end of June 2018, according to the CBE.

Assets and Liabilities by Component:

Assets decreased by 9.2% to reach about $71.1bn at end of December 2018, from about $78.2bn at the end of June 2018, mainly due to portfolio investments abroad decreasing by 35% to about $0.9bn; other investment assets decreasing by about 20%, to reach about $20.6bn; and reserve assets decreasing by 3.9% to about $41.8bn.

“However, foreign direct investments increased by 2.4% to about $7.8bn,” the CBE stressed, adding that “Liabilities increased by 0.5% to about $226.7bn at end of December 2018, from about $225.5bn at end of June 2018.”

The report attributed the increase to the other investment liabilities, which increased by 5.5% to about $82.6bn; FDI in Egypt increased by 2.5% to about $116.4bn; while portfolio investment in Egypt decreased by 17.6% to about $27.7bn.

The report added that Egypt’s negative net IIP to GDP at end of December 2018 decreased to about 56.5%, from about 58.9% at end of June 2018, noting that assets to liabilities decreased to about 31.4% at end of December 2018, from about 34.7% at end of June 2018.

External liquidity improves

During July/December 2018/2019, Net International Reserves (NIR) decreased by $1.7bn against an increase by $5.7bn in the corresponding period a year earlier, to reach $42.6bn, thus covering 7.6 months of merchandise imports at end of December 2018.

The CBE explained that the decrease was an outcome of the decline in SDRs by about $2.1bn and the increase of foreign currencies by $0.3bn and of gold by about $0.1bn.

During the report’s preparation, NIR reached $44.1bn at end of March 2019, the CBE noted.

It added that Net Foreign Assets of Banks (NFA) decreased by $6.8bn during the period spanning from July to December 2018 (against a rise of around $0.03bn in the corresponding period a year earlier).

On the other hand, foreign currency deposits with banks increased by 3.5% during the period concerned, reaching $41.6bn at end of December 2018.

“Likewise, local currency deposits increased by 6.3 %. As such, the ratio of foreign currency deposits to total deposits made up 23.3 % at end of December 2018,” the report read.

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Egypt’s external debt reaches 35.1% of GDP at end-2018, but still within safe limits: CBE https://ww.dailynewssegypt.com/2019/08/01/egypts-external-debt-reaches-35-1-of-gdp-at-end-2018-but-still-within-safe-limits-cbe/ Thu, 01 Aug 2019 06:20:57 +0000 https://www.dailynewsegypt.com/?p=704144 Saudi Arabia is Egypt's top lender with total debt of $8.7bn

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The Central Bank of Egypt (CBE) said Egypt’s external debt remains within safe limits, in line with international standards.

In the external situation report of the Egyptian economy, the CBE pointed out that the foreign debt reached 35.1% of GDP at the end of December 2018, while the average foreign debt in the European emerging markets (EMs) stands at 61.4% of GDP, and 41.9% in the Commonwealth member countries.

Short-term foreign debt recorded about 10.7% of total external debt until the end of 2018, while it reached 20.5% in European EMs and 8.4% in Commonwealth member countries.

According to the CBE, the debt service ratio, a country’s debt service payments (principal + interest) to its export earnings, amounted to 23.2% at the end of last December, while it reached 44.4% in European EMs, and about 29% in the Commonwealth.

The government accounts for 49.8% of the total foreign debt, as its debts rose by about $400m last year to reach $48.1bn. While the CBE’s debt rose to $28.2bn, accounting for 29.2% of the total external debt.

According to the CBE, the banking sector’s debt amounted to about $7.7bn, representing 7.9% of the total external debt, while the other sectors’ debt recorded about $12.6bn, representing about 13.04%.

The CBE disclosed that the foreign debt is due to be paid in the second half (H2) of 2019 will reach about $14.5bn, including interest of approximately $1.8bn.

It pointed out that the external debt payments include $1.48bn for the Paris Club, $1.69bn for international institutions, and $387.36m of interest on the Europe-denominated bonds put forward by the Ministry of Finance in international markets during the last period.

The debt also includes $2.07bn in deposits payable to Kuwait, $5.25bn in deposits’ instalments to Saudi Arabia, $78.2m in interest on UAE deposits, and $28.1m in interest on government bonds issued in 2010.

According to the CBE, Saudi Arabia is Egypt’s top lending country, with debts amounting to $8.7bn, of which $7.5bn are deposits with the CBE and $1.187bn in other debt forms.

The UAE came second with $6.78bn debts, including $5.9bn in deposits with the CBE and $882m in other debt forms.

Egypt owes $4.998bn to Kuwait, including $4bn in deposits with the CBE and $999m in other debts.

Egypt’s external debt to China rose to $3.731bn at the end of December 2018, while Germany’s receivables amounted to $2.926bn, and Japan to $2.258bn.

Debts owed to France amounted to $1.326bn, the United States to about $1.045bn, Spain $261.7m, Denmark $77.9m, Austria $62.9m, Italy $58.4m, and the Netherlands to $50.6m.

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Nasser Social Bank achieves unprecedented profits of over EGP 1bn end-June https://ww.dailynewssegypt.com/2019/07/31/nasser-social-bank-achieves-unprecedented-profits-of-over-egp-1bn-end-june/ Wed, 31 Jul 2019 06:40:20 +0000 https://www.dailynewsegypt.com/?p=704041 Bank profits grow 47% year-over-year, says Farouk

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For the first time in its history, the Nasser Social Bank (NSB) achieves EGP 1.081bn profits in June 2019, compared to EGP 736m in June 2018, a growth of 47%.

Despite achieving these historical profits, the NSB’s main objective is not making profits as it’s more interested in social development, especially for those most in need, Senior Vice Chairperson and Managing Director of NSB, Sherif Farouk, told Daily News Egypt.

Farouk added that the last fiscal year (FY) 2018/19 witnessed the expansion of the network of social protection, noting that the total finances spent in the social solidarity activity of the bank reached about EGP 1.03bn for 1.8 million beneficiaries.

Additionally, cash and in-kind benefits were granted to needy families are worth EGP 55.4m provided to 57,794 beneficiaries. Loans were granted to low-income people with no return and facilitated conditions are worth EGP 393.3m to 43,680 beneficiaries. Zakat (Alms-giving) at the bank amounted to EGP 581m, provided to more than 1,722 million beneficiaries.

He pointed out that the bank played a big role in finishing and furnishing homes of Al-Asmarat housing project, as well as equipping hospitals and clinics that provide medical examination to citizens free of charge.

The board of directors of Nasser Social Bank held a meeting on Monday under the chairmanship of the Minister of Social Solidarity and Chairperson of the board of directors, Ghada Waly, to present the annual report and financial statements and the development of the bank’s performance indicators during FY 2018/19.

The bank’s financial statements showed remarkable growth in all sectors. The bank’s total budget reached EGP 17.87bn, an increase of EGP 1.93bn over FY 2017/18. The number of current account customers is 1,098 million.

In terms of the bank’s banking activity, Farouk said that the total amount of the diverse financing provided by the bank to its customers reached EGP 8.43bn, including housing finance for low-income groups, worth EGP 5bn provided to 91,288 beneficiaries.

Investment funds and income enhancement were also granted to new small business owners to create new jobs and improve the standard of living worth EGP 3.28bn for 7,172 beneficiaries, as well as financing the purchase of various means of transport worth EGP 197.6m, as the bank funds the purchase of private cars and small trucks for a small advance of 20% of the total value of funding, on long terms up to 90 months.

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Egypt Hosts Annual Workshop in field of money laundering, terrorism funding https://ww.dailynewssegypt.com/2019/07/28/egypt-hosts-annual-workshop-in-field-of-money-laundering-terrorism-funding/ Sun, 28 Jul 2019 12:31:20 +0000 https://www.dailynewsegypt.com/?p=703688 Hosting this workshop confirms state’s keenness on supporting efforts to face challenges in Middle East, Africa: CBE

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Under the auspices of President Abdel Fattah Al-Sisi, the Egyptian Money Laundering and Terrorist Financing Combating Unit (EMLCU) will host the “Middle East & Africa Joint Typologies & Capacity Building Workshop” organised by the MENA Financial Action Task Force (MENAFATF), Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), and Inter-Governmental Action Group against Money Laundering in West Africa (GIABA).

The four-day workshop will commence on the 30 of July, with the participation of a number of experts and delegates from international and national entities, including the Financial Action Task Force (FATF), the World Bank, the International Monetary Fund (IMF), the FATF Training and Research Institute (FATF-TREIN), the United Nations Counter-Terrorism Implementation Group, the Egmont Group (International Federation of Financial Intelligence Units) among other international bodies and representatives from several countries, concerned with ML and TF Combating.

In a statement, the Central Bank of Egypt (CBE), said that hosting this significant workshop affirms Egypt’s efforts in supporting and its contribution to overcoming the challenges facing African countries, as Egypt presides the African Union during 2019. It also reflects the outstanding contribution of the EMLCU to support the activities of the MENAFATF group, of which Egypt currently serves as its vice-president and will chair in 2020.

The workshop includes a number of sessions that address crucial topics and illegal schemes related to ML and TF, methods to combat and drain their sources of funding through enabling active cooperation and coordination between the MENAFATF Group, other regional groups, and relevant designated international entities.

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New role, form for ABE in coming period: ElKosayer https://ww.dailynewssegypt.com/2019/07/28/new-role-form-for-abe-in-coming-period-elkosayer/ Sun, 28 Jul 2019 12:11:37 +0000 https://www.dailynewsegypt.com/?p=703671 Bank embarked on comprehensive restructuring, development process based on extensive support received from CBE

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Chairperson of the board of directors of the Agricultural Bank of Egypt (ABE), ElSayed ElKosayer, promised that the bank will have a new role and form during the coming period.

In a special interview with Daily News Egypt, ElKosayer explained that since becoming the bank’s chairperson in March 2016, he has embarked on a comprehensive process of restructuring and development of the bank, based on the significant support received from the Central Bank of Egypt (CBE).

According to ElKosayer, the bank’s management, under his leadership, aims to play a key role in sustainable, balanced, and inclusive development in the less developed and low income areas, and be a major player in agricultural and rural development and financial inclusion.

And onto the interview, the transcript for which is below, lightly edited for clarity:

You have been in charge of the bank for almost three years. What have you achieved so far?

At first, we had a range of challenges when we took over the bank, and they had to be overcome to put the bank back on track. We embarked on a comprehensive process of restructuring and development of the bank, building upon the significant support we received from the Central Bank of Egypt.

The first step was to conduct a diagnostic study of the bank’s situation during the previous phase, and the reasons that led it to fail in fulfilling its desired role which is to contribute to achieving rural and agricultural development.

The study revealed the existence of a number of challenges, the most important of which is the form of the capital base of the bank, the accumulated losses, and poor efficiency of asset management.

Also, the technology and IT system file in the bank was not well developed to enable the bank to achieve its strategy, realise the required development in the field of modern banking products and services, and meet the needs of customers from these services.

Moreover, the mental image of the bank needed to change, and the regulatory environment within the bank needed to be reviewed, as there was no separation between the different specialties and sectors.

The human resources inside the bank needed rehabilitation and many training courses, so that they would gain knowledge of and can contribute to development projects. The human element is the most important element in the process of developing and restructuring the bank.

Chairperson of the board of directors of the Agricultural Bank of Egypt (ABE), ElSayed ElKosayer

What has been achieved in all these files?

Through the support of the CBE and its EGP 10bn for 20 years, we have been able to achieve substantial success in improving the capital base, which also helps us in developing the bank’s strategic and technological systems.

We are working on two axes in developing the bank’s technological system, the first is the introduction of new core banking, while working on the second aspect, namely updating the existing systems of the bank, so that it can help us to meet the needs and requirements of farmers and to achieve financial inclusion.

The bank, as you know, has a large network of branches which amount to 1,210 branches, which is equivalent to more than 25% of the number of branches in the Egyptian banking sector as a whole.

All these branches are located in places where the bank can raise the level of financial inclusion, especially as the bank’s customers are among the most targeted citizens in the financial inclusion initiative.

We have a large client base of farmers who trust the ABE of up to 3 million customers. We are working to deepen and develop this confidence and develop our relationship with them by offering many products and services.

With regard to the asset file, we conducted a comprehensive inventory of these assets and categorised them according to the needs of the bank, whether current or future, or assets used in strategic projects.

The bank plays a major role in marketing wheat, for example, in coordination with the ministry of supply and the General Authority for Supply Commodities. It is always necessary to ensure that the ABE should not be considered solely for profit, but it must be viewed from the perspective of its developmental role and its role in achieving balanced and sustainable development. This is the vision of the CBE and the vision of the state for the bank’s real role.

What about the bank’s troubled debt portfolio?

We managed to reduce the ratio of non-performing loans to the total loan portfolio from 20% when we took over the bank’s responsibility to a current12%, and we aim to reduce it to 10% by the end of this year, and then to the acceptable levels of 4 – 5% by the end of the strategy period in 2022/23.

The total settlement in the last fiscal year ended 30 June 2019 amounted to about EGP 1.3bn, which included about 16,000 customers, of which about 13,661 customers with total debts amounted to EGP 1.1bn were in the framework of the initiative launched by the CBE to settle troubled debt.

We collected about EGP 573m of these debts. I would like to point out that the success of the bank in this file is due to the adoption of a new policy to deal with troubled debt that depends on the study of each case individually, and to take the appropriate decision, starting from the scheduling of debts and even adjustments, to commensurate with the circumstances of defaulting customers and their ability to pay.

This new policy convinced the troubled client of the concept of the existing partnership with the bank, and established the bank’s keenness on its interests, and provided them with all forms of support in order to help them return to production and profitability, and enables the customer to meet their obligations and pay the debts owed to the bank.

What is the latest update?

We also provided a range of financial technology and mobile payment services, to achieve a breakthrough in this field, within the framework of the bank’s direction and role in the dissemination of financial technology, and compatibility with the state policy and its orientation toward digital economy and transformation into a society without cash.

In this regard, despite the lack of completion of technology development within the bank, and the introduction of new system, we are trying to participate strongly in this field.

The bank is one of the main banks participating in issuing of Meeza cards and we have issued so far more than 200,000 cards, with 720,000 cards already in branches and being delivered to customers.

We also contribute to the government payment system in cooperation with Fawry and e-Finance, as well as the deployment of a large number of ATMs at the bank’s branches, especially in the governorates of Upper and Lower Egypt.

As we said, we are now working on developing the digital infrastructure, the internal environment, and developing labour by providing them with the necessary training to become qualified to keep up with the latest developments in banking services.

We also raised the level of oversight-related departments such as information security, compliance, risk management, operational risk, the introduction of new organisational structures and a method of performance evaluation. All within the framework of the system, I think it will work to restore this bank to its natural situation.

What about branch development?

Among the projects we are working on now, is to create a new brand for the branches. We have awarded 243 branches to an agency for development, to create a unified brand and trade mark.

What are the developments in the bank’s loan portfolio?

When we took over the responsibility of the bank, the size of the loan portfolio was about EGP 22bn, and it has since increased to EGP 30.5bn.

This increase in the loan portfolio comes despite the repayments of loans and treatment of non-regular debt, which normally affects the growth of loans, and is an indication that the bank began to develop its services, and its role in the field of assistance to farmers.

Roughly 75% of these loans are channelled to farmers and micro enterprises, which confirms what I mentioned earlier regarding the role of the bank in the coming period, namely a development role that relies on achieving rural development and financial inclusion, in addition to providing effective services for the community in rural communities.

This is in line with the bank’s geographical penetration as well as the CBE’s and the state vision for the bank and its expected role. We also finance our farmers clients in the framework of the programme for financing plant production.

The loans granted to our customers to finance strategic crops and plant production are about 25% of the bank’s total loan portfolio, with a total value of EGP 8bn to 700,000 customers at a soft interest of 5% only subsidised by the state and the bank.

The bank has a wide range of financing programmes to suit the needs of all its clients, both in terms of plant production, livestock, fisheries, and poultry.

The bank has pumped about EGP 6bn for livestock development loans to 120,000 customers and injected EGP 4bn in loans to projects related to agricultural production and livestock to about 150,000 customers.

The bank is also the second largest bank in the size of dealing with the Micro, Small, and Medium Enterprises Development Agency (MSMEDA).

By the end of March 2019, the portfolio of small and medium-sized enterprises (SMEs) reached about EGP 18.5bn granted to 863,000 customers.

These projects account for 61% of the bank’s total loan portfolio. We are trying to offer our clients many low-interest programmes to help them develop and expand their activities, create added value, and maintain sustainable development.

What about the role of the bank in the national project to revive veal?

This project was approved by the government in 2012, but it was not activated until after we assumed office.

We started it in in coordination with the ministry of agriculture, with the support of the CBE. The total number of clients benefiting from this project has so far reached about 5,000 customers.

The purchase of 50,000 head of livestock was financed with a total funding of EGP 690m.

The bank also contributes to the financing of livestock within the framework of the Presidential Programme for the Development of Livestock through the “Finance of Spaces” programme for citizens who have livestock projects and have unexploited capacity, thus providing them with the necessary funding to upgrade the level of employment and utilisation of existing energy. In November 2018, the bank signed a cooperation protocol with ‘Ard El Kheir’ of ‘Misr El Kheir Foundation; to re-operate and finance animal production plants at maximum capacity.

What about the deposits portfolio?

Deposits have also witnessed remarkable growth, rising from about EGP 34bn when we assumed the bank’s responsibility to EGP 57.5bn currently, which also reflects the confidence of our farmers in the bank, its role, and its performance.

What is the aim in the coming period?

We aim to achieve our objectives and the objective of the CBE and the state: to be a major player in agricultural and rural development, and have an effective role in financial inclusion.

We aim to have a role for the bank in sustainable, balanced, and inclusive development in the less developed and low income-generating areas and to provide services in the field of financial technology.

One of the projects we are focusing on is the Agricultural Mechanisation Project. We have already signed a cooperation protocol with the ministry of irrigation to finance irrigation development projects.

We are also coordinating with the New Valley governorate with the support of the CBE for the development of irrigation methods. We also seek through the agricultural company to own a plot of land in the New Valley for palm growing, within the framework of the presidential project to increase date palm cultivation in Egypt. I believe that in the near future, everyone will see the effective role of this bank.

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NBE holds 29% of deposits, 21.2% of retail loans in Egyptian banking sector https://ww.dailynewssegypt.com/2019/07/25/nbe-holds-29-of-deposits-21-2-of-retail-loans-in-egyptian-banking-sector/ Thu, 25 Jul 2019 08:20:06 +0000 https://www.dailynewsegypt.com/?p=703494 Bank achieved 17% growth in deposits to EGP 1.186bn end-June 2019, retail loans to EGP 73bn, says Aboul Fotouh

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Vice Chairperson of the National Bank of Egypt (NBE), Yehia Aboul Fotouh, revealed an increase in total customer deposits to EGP 1,186bn at the end of June 2019, up by 17% from June 2018, and marking a market share worth 29%, which is the highest in the Egyptian banking sector.

Aboul Fotouh pointed to the bank’s success in attracting 1.3 million new customers from outside the banking market during the past fiscal year (FY), thus exceeding 12.3 million customers in total.

The NBE is, hence, the largest in terms of customer base in the Egyptian banking sector in general.

Aboul Fotouh added that the total volume of retail banking loans in the bank amounted to about EGP 73bn in June 2019, up by 59% from June 2018, with a market share of 21.2%, up by 4.1% compared to the previous year.

He pointed out that this development is what enabled the NBE to win the Best Egyptian bank in the field of retail banking by the Asia Banker in 2019, which the bank has retained for many years.

According to Aboul Fotouh, the personal loan portfolio holds the largest share of the retail banking loan portfolio, where the bank granted new finances worth EGP 39bn to 255,000 clients in the last FY alone, to bring total personal retail loans to EGP 52bn, accounting for 70% of total retail loans.

He pointed out that the bank’s credit card portfolio exceeded EGP 5bn to 1.085m, which represent 7% of the retail loans portfolio and a market share of 27%, which is the largest in the Egyptian banking sector.

The NBE is the pioneer of electronic payment card market in Egypt, as the first to issue credit cards in Egypt in 1994.

Chief Executive Officer of Retail Banking and Branches, Alaa Farouk, said that the bank is strongly involved in issuing the Aman Insurance Certificate, with sales worth EGP 183.2m to the end of June 2019 to 156,000 clients.

He added that the bank has put forward the future savings account with a total of EGP 205.9m at the end of June 2019 to support financial inclusion, where it opened accounts of a minimum balance of EGP 500 without annual fees and with a free insurance from the age of 16 until 50 years, with a minimum of EGP 5,000 and a total of EGP 100,000 according to the account balance.

According to Ayman Gamgoum, head of the bank’s branch group, the bank has 483 branches and units, adding that 38 branches were opened in the last FY, in addition to bringing up the number of ATMs to 4,097 machines with a market share of 33%, which is also the highest in the banking sector.

He noted that the bank also opened four electronic service branches, with plans to reach 25 branches by the end of 2020.

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NBE finances first phase of Roxy hydraulic parking garage by EGP 162m https://ww.dailynewssegypt.com/2019/07/23/nbe-finances-first-phase-of-roxy-hydraulic-parking-garage-by-egp-162m/ Tue, 23 Jul 2019 20:46:39 +0000 https://www.dailynewsegypt.com/?p=703363 Transportation projects among NBE’s top funded sectors, says NBE’s Sherif Riad

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The National Bank of Egypt (NBE) injected EGP 162m to finance the first phase of the Roxy Smart Parking is a multi-storey automated underground parking, in Heliopolis, which was opened on Sunday.

The total cost of the first phase of this project is about EGP 250m. The NBE contributed EGP 162m through a seven-year loan.

The Roxy Smart Parking is fully mechanised and automatically operated without human intervention and using the latest electronic systems. The process of cars entering and exiting the parking takes merely three minutes. The parking is supported by 12 electronic elevators to transport the cars in and out of it.

The first phase of the parking will accommodate about 900 vehicles. The second phase will bring the capacity to 1,700 cars. It will be implemented in cooperation between the state and the private sector under the BOT scheme. It will be built on four underground floors covering an area of 10,000 sqm and at 16m of depth.

“The bank has played a prominent role in providing the necessary financing for the implementation of several major projects” said Sherif Riad, Corporate and Syndication Group head at the NBE.

He added that transportation projects are among the bank’s top priorities, as they serve millions of citizens on a daily basis and contribute to the advancement of economic growth. He noted that multi-floors parking areas would help to signficantly improve traffic flows, and reducing congestions on main streets.

Riad elaborated that the NBE takes an interest in all megaprojects related to vital sectors, spanning the fields of energy, transport, construction materials, contracting, food, real estate development, and tourism. Such projects create added value to the Egyptian national economy and provide many job opportunities and economic development.

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Faisal Islamic Bank of Egypt registers EGP 1.376bn in profits in H1of 2019 https://ww.dailynewssegypt.com/2019/07/22/faisal-islamic-bank-of-egypt-registers-egp-1-376bn-in-profits-in-h1of-2019/ Mon, 22 Jul 2019 07:40:02 +0000 https://www.dailynewsegypt.com/?p=703203 Total assets of bank increased to EGP 97.289bn end-June, up from EGP 85.902bn in June 2018

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The net profit of the Faisal Islamic Bank of Egypt in the first half (H1) of 2019 amounted to EGP 1.376bn, up by EGP 36.624m from EGP 1.340bn in H1 of 2018, marking a growth of 2.7%.

The bank explained in a disclosure to the Egyptian Exchange (EGX) that this increase in the net profit of the bank during H1 of this year and is mainly due to the increase of savings by EGP 2.9bn, where it reflected positively on the bank’s employment of deposits, thus it increased its profits. This also had a positive impact on the application of the IFRS 9.

It pointed out that the bank has achieved revenues of EGP 4.575bn in H1 of 2019 against EGP 4.168bn in H1 of 2018, up by EGP 407.874m, rising by 9.8%.

The Faisal Islamic Bank of Egypt disclosed that it has managed 1.669m saving accounts for its customers until the end of June 2019.

The bank explained that the value of its current accounts and saving instruments has reached about EGP 81.982bn at the end of June 2019, up from EGP 73.579bn at the end of June 2018, up by 11.4%.

It added that the total employment and investment balance amounted to about EGP 89.788bn at the end of June 2019, against EGP 79.343bn at the end of June 2018, marking an increase of 13.1%.

The total assets of the Faisal Islamic Bank of Egypt rose to EGP 97.289bn by the end of June 2019, compared to EGP 85.902bn by the end of June 2018, growing by 13.3%.

The bank said its business volume had increased by 13.3% in one year to EGP 98.903bn at the end of June 2019, up from EGP 87.291bn at the end of June 2018.

The total equity of the bank was EGP 11.989bn at the end of June 2019, against EGP 9.823bn at the end of June 2018, increasing by 22.1%.

The bank’s paid up capital was settled by the end of June 2019 at EGP 1.775bn, unchanged from December 2018.

The bank’s extraordinary general assembly, held on Thursday, agreed to increase the authorised bank’s capital to $1bn, up from $500m, while the issued capital increased to about $440.12m, up from $66.83m.

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Bank deposit growth slows to 11.46% in April from 11.85% in March https://ww.dailynewssegypt.com/2019/07/21/bank-deposit-growth-slows-to-11-46-in-april-from-11-85-in-march/ Sun, 21 Jul 2019 15:39:33 +0000 https://www.dailynewsegypt.com/?p=703181 DNE sheds light on key performance indicators of banks operating in local market in April 2019

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The Central Bank of Egypt (CBE) revealed that the household sector accounts for 79.5% of total bank deposits until the end of April 2019.

The household sector scored 83.1% of total deposits in local currency, and 67.2% of foreign currency deposits, the CBE said in its monthly report last Tuesday.

Total bank deposits

The CBE pointed out that the total deposits of individuals in banks rose by about EGP 1bn in April, reaching about EGP 3.932tn, compared to EGP 3.931tn in March 2019.

While the government deposits in banks declined by about EGP 18.666bn to reach EGP 615.425bn in April, compared to EGP 634.091bn in March.

The non-government deposits rose by EGP 19.654bn to reach EGP 3.316tn, compared to EGP 3.296tn in March.

Government deposits in local currency amounted to about EGP 500.989bn, while deposits in foreign currency amounted to EGP 114.436bn.

The report pointed out that non-government deposits in local currency increased from EGP 2.547tn in March to EGP 2.566tn in April, of which the public sector accounted for EGP 57.764bn, the private sector (EGP 375.153bn), the household sector (EGP 2.124tn), and the non-residents (EGP 9.419bn).

Deposits in foreign currencies amounted from EGP 749.718bn in March to EGP 749.896bn in April, of which the public sector accounted for about EGP 40.567bn, the private sector (EGP 203.279bn), the household sector (EGP 498.105bn), and the non-residents (EGP 8.137bn).

According to the CBE, the total deposit growth rate declined to 11.46% in April from 11.85% in May. The growth rate of deposits in local currency was 13%, while the growth in foreign currency deposits reached 6.3%. Foreign currency deposits accounted for 22.48% of total deposits in banks in April.

Credit facilities

Total credit facilities granted by banks to their customers increased by EGP 242.6bn to reach EGP 1.872tn during the period from July 2018 to April 2019, according to the CBE.

Credit facilities are loans provided by banks to their clients alongside letters of credit provided to pay for imported shipments.

The CBE explained that the private sector has obtained about 60.6% of the total non-government facilities granted by banks to different economic bodies until the end of April 2019.

It added that the industry sector has denominated 33.6% of these facilities, followed by the service sector by 27.3%, the trade sector by 10.6%, the agriculture sector by 1.6%, and miscellaneous sectors–including household–by 26.9%.

Loan portfolios

Loan portfolios in banks, except the CBE, during April 2019 rose by EGP 15bn to about EGP 1.858tn, compared to about EGP 1.843tn in March 2019.

The CBE explained that the loans granted to the government amounted to about EGP 569bn, of which about EGP 231.8bn is in local currency, and about EGP 337.1bn in foreign currency.

Total non-government loans rose in April to reach EGP 1.289tn, of which about EGP 1.003tn worth loans are in local currency.

According to the CBE, the agricultural sector had EGP 18.1bn loans, the industrial sector (EGP 298.2bn), the commercial sector (EGP 121.3bn), and the service sector (EGP 243.1bn). Other sectors, including the household sector, local non-profit organisations, and foreign bodies operating in Egypt, received EGP 322.9bn loans.

The total foreign currency loans amounted to EGP 285.5bn, of which the agricultural sector accounted for EGP 2.3bn, the industrial sector (EGP 136.5bn), the commercial sector (EGP 16.3bn), and the service sector (EGP 110.8bn), while other sectors, including the household, local non-profit organisations, and foreign bodies operating in Egypt, accounted for EGP 193.2bn.

Government treasury bills

The CBE disclosed that the investments of banks operating in the local market in government treasury bills (T-Bills) increased to EGP 684.773bn in May 2019, compared to EGP 680.882bn at the end of April, an increase of EGP 3.891bn.

The total outstanding T-Bills amounted to about EGP 1.394tn at the end of May, compared to EGP 1.362tn at the end of April, an increase of EGP 32bn.

Banks accounted for 49.11% of the total T-Bills.

According to the CBE, public sector banks increased their investments in T-Bills to about EGP 361.461bn at the end of May, compared to EGP 353.397bn at the end of April, an increase of EGP 7.864bn.

Specialised banks’ investments in T-Bills rose to EGP 15.255bn, compared to EGP 15.067bn, marking an increase of EGP 188m.

In contrast, private banks’ investments in T-Bills fell by EGP 3.314bn in May 2019 to reach EGP 272.119bn, compared to EGP 275.433bn at the end of April.

Investments of foreign banks’ branches in T-Bills fell to EGP 36.138bn in May, against EGP 36.985bn in April, a decrease of EGP 847m.

Securities portfolio

According to the CBE, the total securities portfolio in banks, except the CBE, which includes bank investments in shares, bonds, and investment fund securities, fell to EGP 1.756tn at the end of April 2019, compared to EGP 1.767tn at the end of March 2019, a decline of EGP 11.2bn.

The CBE explained that the portfolio of local currency securities decreased by EGP 8.9bn during April to reach EGP 1.387bn, compared to EGP 1.396tn in March.

Moreover, the CBE pointed out that the foreign currency securities portfolio fell by EGP 2bn in April to reach EGP 368bn, compared to EGP 370bn at the end of March.

It added that the government sector accounted for the largest share of this portfolio by EGP 1.663tn, while the private sector had EGP 78.58bn, the public enterprise sector by EGP 561m, and the External sectorhas acquired EGP 14.03bn.

Net foreign assets

The CBE said that the net foreign assets of the banking sector decreased by EGP 33.2bn during the period from July 2018 to April 2019.

It pointed out that this decrease was the result of the decline in the net foreign assets of the CBE by EGP 47.1bn during that period, while net foreign assets of banks amounted by EGP 13.9bn.

Meanwhile, the net domestic assets of the banking sector increased by EGP 341.3bn (10.9%) during that period.

The increase in net domestic assets is due to the increase in domestic credit by EGP 307.6bn, an increase of 8.9%, and the negative equilibrium of net balancing items decreased by EGP 33.7bn, marking a rate of 10.7%.

The CBE pointed out that the increase in domestic credit was the result of a rise in net liabilities from the government by EGP 181.4bn from the household sector to EGP 62bn, from the private enterprise sector by EGP 60.4bn, and from the public sector by EGP 3.8bn.

Financial position of banks

The financial position of the banks operating in Egypt rose by EGP 71.5bn at the end of April 2019 to reach EGP 5.74tn, compared to EGP 5.668tn at the end of March 2019.

According to the CBE, this increase, at the asset level, was supported by the rise in Loan and discount balances  to reach EGP 1.872tn at the end of April, compared to EGP 1.856tn at the end of March, and the rise of other assets to record EGP 594.9bn against EGP 539.2bn.

The balance of overseas banks also rose to EGP 287.7bn at the end of April, compared to EGP 275.3bn at the end of March.

In contrast, banks’ investment in securities and T-Bills fell to about EGP 1.757tn at the end of April, compared to EGP 1.768tn at the end of March.

For liabilities, most of the increase came from the rise in banks’ commitments in Egypt to EGP 264.66bn at the end of April, compared to EGP 247.22bn at the end of March, and other liabilities, to record EGP 698.98bn at the end of April, compared to EGP 631.18bn at the end of March.

Deposits increased slightly to reach EGP 3.916tn against EGP 3.915tn while liabilities on Egyptian banks to overseas banks declined to record EGP 174.5bn, compared to EGP 190.7bn.

Local banks’ capital stabilised at EGP 152bn during April, reserves stood at EGP 237bn, and allocations increased from EGP 121.7bn to EGP 123.5bn.

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I-Score to sign cooperation protocol with Ministry of Justice to provide bankruptcy data https://ww.dailynewssegypt.com/2019/07/21/i-score-to-sign-cooperation-protocol-with-ministry-of-justice-to-provide-bankruptcy-data/ Sun, 21 Jul 2019 12:06:28 +0000 https://www.dailynewsegypt.com/?p=703152 Company signed cooperation protocol with ITDA to automate commercial register customers bank query

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Mohamed Kafafi, chairperson and managing director of I-Score, revealed that the company is in the final stages of signing a cooperation protocol with the ministry of justice and the economic courts sector, to allow bankruptcy and reconciliation data from the banking system through the linking network with the banking sector.

He explained that this protocol will be signed in cooperation with the Central Bank of Egypt (CBE).

He also pointed out that work is currently underway to finalise the linking of the commercial register database with the regulations applied in the company, and making them immediately available to the banking system. In turn, this reduces the burden on citizens when it comes to the ease of service and money collection in exchange for these services.

The company had earlier signed a cooperation protocol with the general administration of traffic information systems at the ministry of interior, under the sponsorship of the CBE, to automate the procedures of banning cars and renewing them electronically. This is to facilitate the procedures for citizens, which used to take over 10 days.

On Thursday, I-Score signed a cooperation protocol with the Internal Trade Development Authority (ITDA) to automate the queries of the commercial register for bank customers.

According to Kafafi, the implementation of these systems is expected to start in the fourth quarter of this year.

The protocol, which was signed with the ITDA, includes four main advantages. The first is the availability of a database of 4.5m companies, namely the commercial registration database, which would expand the database of the financing companies for small and medium-sized enterprises (SMEs) and those targeted for funding.

He added that one of the advantages is also the availability of commercial registration services for individuals and companies, through commercial registry offices in the branches of banks and credit-granting companies.

Among the advantages, is also making the data system of companies available electronically, including journals of companies and their main systems, as well as modifications, and automation of banking certificates of capital.

The advantages of this protocol also include providing corporate data electronically to the general authority for investment, through a link with the Egyptian company for credit information.

Gamal Negm, deputy governor of the CBE, said that the protocol comes within the framework of the CBE’s strategy to expand the application of financial inclusion and the transformation into a digital society.

He pointed out that the existence of an integrated database will help banks expand the financing of SMEs through knowing customers.

Furthermore, he added that customer data will be updated instantaneously, and will be linked to the industrial register, exporters, suppliers, and the tax file, so that the system is integrated.

Hisham Ezz Al-Arab, president of the CIB and the Federation of Egyptian Banks, said that the availability of commercial registration services to banks through the I-score portal will drive Egypt toward a digital transformation, which is happening to the entire world.

Moreover, this also raises the country’s economic growth rate.

The availability of the commercial registry service electronically will save the client’s time and effort and will support financial inclusion and reduce counterfeiting.

He stressed that the service will help banks reach individuals in villages and remote areas, and provide a database of their information which ensures that funding is provided to those who deserve it.

For his part, Ibrahim Ashmawy, head of ITDA, said that the unified registry will allow the banking sector to carry out studies and reports on the market economy, with the possibility of increasing the number of customers to be dealt with. The commercial registry provides information and data on the activity of companies, their capital, and shareholders.

He added that, according to the commercial registry, there are more than four million establishments, while the banking system deals with only 400,000 establishments.

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Banque Misr opens 2 BDS centres in Sadat, Damietta cities https://ww.dailynewssegypt.com/2019/07/21/banque-misr-opens-2-bds-centres-in-sadat-damietta-cities/ Sat, 20 Jul 2019 22:42:21 +0000 https://www.dailynewsegypt.com/?p=703147 New centres’ locations selected as per Egypt’s investment opportunities map

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Banque Misr has opened two business development services (BDS) centres in its branches in Sadat and New Damietta cities.

The centres aim to support entrepreneurs, unleash the potential of young people, increase the number of small and medium-sized enterprises (SMEs), encourage emerging and existing companies in the targeted economic sectors, in order to promote local products through a competitive national industry, and enter new international markets.

It comes as part of the bank’s plan to expand in providing BDS through its various branches. Another BDS centre will be opened in Luxor in the coming period in line with the Nile Pioneers initiative, sponsored by Central Bank of Egypt (CBE).

Deputy Governor of the CBE, Lobna Helal, said that the CBE pays special attention to supporting SMEs and consolidating the concept of entrepreneurship through several measures which include launching the Nile Pioneers.

She explained that this initiative emphasises the role of the banking sector in supporting innovation by young people and embracing start-ups through several programmes, primarily BDS centres which provide technical and managerial support to entrepreneurs, which eventually contributes to supporting the achievement of the Egypt’s Vision 2030 for sustainable development.

Chairperson of Banque Misr, Mohamed El-Etreby, said that the locations of the new BDS centres in the cities of Sadat and Damietta were selected according to the country’s investment opportunities map.

He pointed out that opening these two centres comes within the framework of contributing effectively to the Nile Pioneers initiative and providing non-financial services through distinguished and trained cadres that help entrepreneurs overcome the challenges facing their projects, such as preparing feasibility studies, designing and marketing products, and serving as a link between companies, entrepreneurs, supply chains, the local market, and export.

As part of the initiative, Banque Misr signed three cooperation protocols with three universities. The initiative brings together university students, entrepreneurs, and small industrial bodies to develop new products and build initial models of design houses using reverse engineering and training young cadres to reach them design basics

Banque Misr participates in several cooperation protocols and initiatives to support entrepreneurs and small and national projects of various sizes, mainly financing establishing Damietta Furniture City, the largest industrial area specialised in the furniture industry and complementary industries in the Middle East, as cooperation will take place with Damietta Furniture City to fund the purchase of small and medium workshops. This is in addition to providing the necessary funding for equipment and machines needed for production. Cooperation will also take place with the Industrial Development Authority and Robeky Leather City.

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NBE’s mortgage finance portfolio exceeds EGP 7bn end-June https://ww.dailynewssegypt.com/2019/07/18/nbes-mortgage-finance-portfolio-exceeds-egp-7bn-end-june/ Thu, 18 Jul 2019 06:00:49 +0000 https://www.dailynewsegypt.com/?p=703036 CBE’s initiative beneficiaries reach 68,000 this June, up from 38,000 in June 2018, says Okasha

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The total mortgage finance portfolio of the National Bank of Egypt (NBE), as part of the initiative of the Central Bank of Egypt (CBE), reached more than EGP 7bn from the launch of the initiative until the end of June 2019 against EGP 4.1bn in June 2018, up by 73%.

This comes within the NBE’s strategy to support the state plans, especially those related to the low-income category.

Hisham Okasha, the NBE chairperson, said that the bank aims to participate in the initiative to provide safe housing and good investment. This is in addition to providing all means of facilitating the citizens, especially the low-income segments, as well as expansion and investment in the mortgage finance for social housing.

Okasha explained that the number of beneficiaries of this initiative for low-income customers exceeded 68,000 clients against 38,000 in June 2018, up by 79%.

The bank’s participation in CBE’s initiative for real estate finance comes within the framework of the bank’s strategy to implement the state’s plans. This aims to develop the national economy, supports the Egyptian citizens especially the neediest citizens, according to Okasha.

He added that it is also the implementation of CBE’s policy to consolidate the principle of financial inclusion, which is always sought by the NBE.

According to Okasha, the NBE is setting its mortgage finance activity as one of its priorities by supporting the portfolio through an integrated system to study the neediest groups, to design their own financing programs to suit their abilities and meet their needs, thus leading the banking system in Egypt.

Yehya Aboul Fotouh, deputy chairperson of NBE, pointed out that one of the most important factors that helped the bank lead the initiative is its branch network covering all governorates and providing all banking services.

He added that these factors also include the continuous development of work procedures, which contributed to reducing the work cycle and the time and effort of customers. Inevitably, this helps them reach the largest segment of customers and to facilitate all forms of payment for their monthly instalments, through electronic payment channels.

Aboul Fotouh pointed out that the NBE has already established three independent units for mortgage finance in the Sixth of October, the 10th of Ramadan, and the industrial zone in Minya, in addition to allocating a number of branches distributed throughout the country to deal with the social housing programme.

The bank also established a special section to complete mortgage finance procedures, particularly for low-income citizens.

   

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NBE SME’s portfolio reaches EGP 65bn end-June https://ww.dailynewssegypt.com/2019/07/17/nbe-smes-portfolio-reaches-egp-65bn-end-june/ Wed, 17 Jul 2019 06:40:53 +0000 https://www.dailynewsegypt.com/?p=702883 Bank opens 1st specialised centres in business development services in Al-Yasmeen branch

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The total portfolio of small and medium-sized enterprises (SMEs) in the National Bank of Egypt (NBE) amounted to EGP 65bn by the end of June 2019, compared to EGP 49bn in June 2018, an increase of EGP 16bn, a growth rate of 32%, according to the bank’s Chairperson, Hisham Okasha.

Okasha explained that the portfolio of loans to these projects within the initiative of the Central Bank of Egypt (CBE) amounted to about EGP 37.5bn by the end of June 2019. The EGP 37.5bn was granted to 42,000 clients, up from EGP 25.2bn for 26,000 customers in June 2018, marking a 49% increase.

Okasha opened the bank’s first business development centre in El Yasmeen branch in the 10th of Ramadan City.

Furthermore, Okasha said that the business development centres launched by the bank are in line with the directives and supervision of the CBE. These centres’ primary objective is to consolidate the concept of entrepreneurship, by providing entrepreneurs with the financial and non-financial services needed for their projects, which exceed typical banking services.

He stressed that financing is no longer an obstacle to the owners of SMEs, which increases the need for the establishment of these centres. In turn, they will provide many services that will enable the financial education of customers in order to achieve the highest rates of quality and success for their projects.

For her part, the Deputy Governor of the CBE, Lobna Helal, pointed out that the opening of the NBE’s business development services in the 10th of Ramadan City supports the initiative of Nile Pioneers, which is integrated with the CBE’s initiatives and directions.

She added that these initiatives seek community development and support Egypt’s 2030 Sustainable Development Plan, which aims to promote innovation, stimulate the youth’s potential, foster entrepreneurship, embrace emerging companies, and provide technical, managerial, and financial support in areas suited to the Egyptian market needs.

Helal stressed the vital and effective role of the banking sector in supporting SMEs, entrepreneurship, and transition into the formal sector. This has a direct impact on supporting the country’s important economic sectors, such as industry, agriculture, information technology, and innovation. Inevitably, this helps in creating jobs and boosting the national economy.

Additionally, she pointed out that the CBE aims to open 30 business development service centres in a number of Egyptian governorates in the Delta and Upper Egypt through the 11 banks participating in the Nile Pioneers Initiative by the end of 2019.

According to Helal, the CBE is keen to achieve coordination and cooperation between the various bodies and entities that have relevance to the field of entrepreneurship and SMEs, to maximise the benefit for all parties of the economic system.

Deputy Chairperson of the NBE, Yehia Abou El-Fotouh, said that the bank is preparing a plan to expand the establishment of business development service centres in a number of places that focus on SMEs.

He pointed out that the bank started preparing a comprehensive study of the market and its needs, which led to the opening of the 10th of Ramadan centre. It is in the middle of one of the vital industrial areas, which includes a complex of factories and a variety of activities. In turn, it will serve a number of areas and neighbouring cities such as Shorouk, Badr, and Belbes, where 12 NBE branches are located.

Abou El-Fotouh revealed that preparations are being set up for the opening of two additional centres in Assiut and Tanta to serve clients in Upper and Lower Egypt.

According to Mamdouh Afia, head of the NBE’s SMEs sector, the business development service centres will provide a variety of services through well-trained teams, including some non-financial services, as well as access to finance services.

He explained that among the services that will be provided by these centres is the introduction of a new project idea; orientation toward licensing procedures; availability of feasibility study services; financial analysis and evaluation; effective communication with suppliers and target markets; knowledge dissemination services; training and capacity building, and workshops that fit the diversity and the needs of the Egyptian market.

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Banks’ credit facilities see EGP 242.6bn rise in 10 months: CBE https://ww.dailynewssegypt.com/2019/07/17/banks-credit-facilities-see-egp-242-6bn-rise-in-10-months-cbe/ Wed, 17 Jul 2019 06:20:26 +0000 https://www.dailynewsegypt.com/?p=702902 Deposits up by EGP 1bn only as non-governmental deposits drop

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The total credit facilities granted by banks to their customers increased by EGP 2424.6bn to reach EGP 1.8723tn during the period from July 2018 to April 2019, 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.

In its monthly report on the performance of banks and the economy, the CBE explained that the private enterprise sector has obtained about 60.6% of the total facilities granted by banks to all bodies excluding the government until April 2019.

It added that the industry sector has denominated 33.6% of these facilities, followed by the services sector by 27.3%, the trade sector by 10.6%, the agriculture sector by 1.6%, and miscellaneous sectors–including households–by 26.9%.

In another context, the CBE also noted that customer deposits at banks by the end of April 2019 increased by EGP 1bn to EGP 3.932tn up from EGP 3.931tn at the end of March.

The CBE added that government deposits have declined in value by EGP 18.666bn to EGP 615.425bn against EGP 634.091bn in March.

Non-government deposits in banks recorded a rise in value by EGP 19.654bn at the end of April 2019 to EGP 3.316tn against EGP 3.296tn in March.

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Banque Misr allocates EGP 13bn for MSMEs in FY 2018/19 https://ww.dailynewssegypt.com/2019/07/16/banque-misr-allocates-egp-13bn-for-msmes-in-fy-2018-19/ Tue, 16 Jul 2019 06:40:20 +0000 https://www.dailynewsegypt.com/?p=702810 Bank signs cooperation protocol with universities to provide workspaces for entrepreneurs

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Banque Misr allocated EGP 13bn to finance micro, small, and medium enterprises (MSMEs) during the fiscal year (FY) 2018/19, bringing its portfolio to EGP 24bn at the end of June 2019, up from EGP 11bn in June 2018, a 118% increase.

About 121,000 clients benefited from these projects in the last FY until June 2019, up from 86,000 clients in FY 2017/18, a 41% increase, according to the bank.

Moreover, the bank has participated with the Ministry of Local Development to launch the Mashrouk (Your Project) programme to finance micro and small projects at 308 administrative divisions nationwide.

The bank exits in 238 administrative divisions since 26 March 2015, accounting for 77% of total administrative divisions in the programme.

On Sunday, Banque Misr signed a cooperation protocol with Al-Azhar and Ain Shams universities as well as the Arab Academy for Science, Technology, and Maritime Transport (AASTMT) to provide “design houses” (workspaces) for entrepreneurs.

It comes in line with the Nile Pioneers initiative launched by the Central Bank of Egypt (CBE) to support entrepreneurship and innovation.

Chairperson of Banque Misr, Mohamed El-Etreby, said that the bank was keen to actively participate in the Nile Pioneers initiative by contributing to providing design houses for entrepreneurs, thus contributing to development and creating more job opportunities and community progress.

Deputy Governor of the CBE, Lobna Helal, praised the efforts of Banque Misr in supporting the Nile Pioneers, stressing that providing design houses was the main mechanisms of the initiative which contributes to increasing the competitiveness of the local product and augmenting the percentage of the local component in manufacturing, in order to promote sustainable growth of the Egyptian economy.

According to the Vice President of Banque Misr, Akef El-Maghraby, the bank is keen to diversify the objectives of the three design houses to maximise their benefits to the community as a whole.

He added that the design house of Ain Shams University will serve as a link between the university and the industrial sector to provide consultancy, design services, and prototypes, and will be specialised in robotics, industrial automation, and cars.

The design house of Al-Azhar University in Qena is based on the fields of agriculture, water, and energy in order to serve as the technical arm of the technological incubator to maximise the benefits of research centres, students, and young innovators and researchers from other institutes and universities so as to spread the concept of innovation.

Meanwhile, the design house of the AASTMT is based on marine science and underwater techniques, in cooperation with several universities and organisations related to underwater technology.

CBE Assistant Sub-Governor, Nermine El Tahri, emphasised that the new design houses are the first of its kind in Egyptian universities.

She added that it works with university students, entrepreneurs, start-ups and small industrial enterprises to develop new products and build prototypes using reverse engineering and design for manufacturing, training young cadres on design principles and the latest simulation programmes, as well as evaluating and reviewing engineering designs for innovative youth.

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Capital re-flows into EMs starting Q1 of 2019, 11 months after fleeing: CBE https://ww.dailynewssegypt.com/2019/07/15/capital-re-flows-into-ems-starting-q1-of-2019-11-months-after-fleeing-cbe/ Mon, 15 Jul 2019 08:30:20 +0000 https://www.dailynewsegypt.com/?p=702718 Direction of capital flows depends on outlook for economic activity rate of growth, development of global trade tensions

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Capital flows to emerging markets (EMs) has resumed since the first quarter (Q1) of 2019, 11 months after its outflow from these markets, the Central Bank of Egypt (CBE) announced in its Monetary Policy Report.

The direction of capital flows depends on the outlook for economic growth and the development of global trade tensions, the CBE said.

It added that the international bond yields have continued to decline since the beginning of the year, in line with the lower risk margin in EMs.

Meanwhile, the CBE referred to the ongoing recovery of the GDP growth supported by structural reforms, pointing out that the rise in net exports was supported by the growth of real GDP during Q4 of 2018.

According to the report, the contribution of local bank financing to the state’s fiscal deficit declined during Q1 of 2019.

On another note, the CBE said since May 2018, household savers have tended to invest more in conventional saving forms, such as deposits in banks operating in the Egyptian market for three years and more. It indicated a decrease in the rate of deposit interest to 12% and a stability on loans at 17.7% in March 2019.

The CBE expected the international food commodity prices to rise in 2020, and that the cost of most petroleum products will be covered, in addition to the fact that the automatic pricing mechanism will be applied locally according to cost developments.

The report highlighted that economic growth of Egypt’s external environment continued to soften during Q4 of 2018, registering 2.5%, down from 2.7% in Q3 and from 3.2% in Q4 of 2017, the highest pace since 2011. “Economic growth in advanced economies continued to ease for the fourth consecutive quarter to register 1.4% in Q4 of 2018, compared to 1.8% in Q3 of 2018, as slower growth in the euro area and the United Kingdom more than offset a stronger growth in Japan. Meanwhile, economic growth in the United States remained unchanged in Q4 of 2018, compared to the previous quarter. On the other hand, economic growth in emerging economies stabilised in Q4 of 2018 at 4.9%, after maintaining continuous improvement between Q4 of 2015 and Q2 of 2018. Higher growth in Russia offset slower growth in China, India, and Brazil, compared to the previous quarter,” the report read.

It noted that headline inflation of Egypt’s external environment continued to decline in January and February 2019, registering an average of 1.9%, compared to 2.3% in Q4 of 2018. Inflation in advanced economies declined in January and February 2019, registering an average of 1.5% down from 2.0% in Q4 of 2018. Meanwhile, the CBE added that inflation in emerging economies stabilised in January and February 2019, registering an average of 2.9%, after accelerating to 3.0% in Q3 of 2018. The deceleration of the inflation rate in China, Brazil, and India offset the acceleration of the inflation in Russia, compared to the previous quarter, it noted.

Global trade growth declines for 5th consecutive quarter

Moreover, the report stressed that annual global trade growth continued to decline for the fifth consecutive quarter (Q4 of 2018) to register 1.4%, compared to 3.6% in Q3 of 2018 and down from a peak of 5.3% in Q3 of 2017.

It explained that Brent crude oil prices increased for the third consecutive month in March 2019, registering an average of $66.1 per barrel, compared to an average of $57.4 per barrel in December 2018. OPEC and its partners continued production cuts until June 2019, while production from the US continued to increase.

International food prices, using the domestic consumer price index (CPI) basket weights of core food items, continued to decline on annual terms in March 2019 for the ninth consecutive month, however, by a weaker magnitude since December 2018. The decline was mainly due to red meat, dairy products, and oils, as supply conditions improved.

The report added that the Federal Reserve System kept its policy rate unchanged in January and March 2019 after raising it by 25 basis points (bps) in December 2018, marking the fourth policy rate hike in 2018.

“Moreover, the Federal Reserve decided to slow the pace of its balance sheet unwinding plan, which started in October 2017, by slowing down the reduction of its holding of government debt starting May 2019 before ending the programme in September 2019. Meanwhile, the European Central Bank also kept its policy rate unchanged in January and March 2019, while it decided to launch a new series of quarterly targeted longer-term refinancing operations with a maturity of two years between September 2019 and March 2021, each. Furthermore, the Bank of England kept its policy rate unchanged in February and March 2019, after raising it by 25 bps in August 2018 for the second time since November 2017,” the report read.

The CBE added that capital flows returned to EMs in Q1 of 2019, after 11 months of outflows that started in February 2018. The return of international capital to EMs was mainly supported by a monetary policy normalisation pause in advanced economies. However, the direction of capital flows remains subject to the economic activity growth outlook, as well as the prospects of further escalation of trade tensions.

Elsewhere, the CBE explained that the hydrocarbon trade balance registered a surplus for the first time since Q4 of 2013, while the current account deficit widened.

“After improving on annual terms for seven consecutive quarters between Q4 of 2016 and Q2 of 2018, the current account deficit widened in Q4 of 2018. A less favourable contribution from remittances, net service receipts and the non-hydrocarbon trade deficit has more than offset the more favourable contribution from the hydrocarbon surplus and net investment income,” the report read.

“Nevertheless, the deficit of net exports of goods and services continued to narrow in Q4 of 2018 on annual terms for the eighth consecutive quarter. This was due to a more favourable contribution from imports of goods and services, mainly those related to the hydrocarbon sector, which more than offset the less favourable contribution from exports.”

The CBE explained that the hydrocarbon trade balance continued to improve on annual terms for the fourth consecutive quarter to register a surplus in Q4 of 2018, for the first time since Q4 of 2013. The improvement was mainly driven by lower imports, which coincided with the accelerating annual pace of domestic natural gas production.

Furthermore, the non-hydrocarbon trade deficit continued to widen on annual terms in Q4 of 2018 for the fifth consecutive quarter. This was mainly due to a less favourable contribution from imports, which more than offset the more favourable contribution from exports.

The report noted that the service surplus continued to increase in Q4 of 2018 on annual terms for the eighth consecutive quarter, yet its pace of growth declined to the lowest level since Q1 of 2017.

“The slower annual pace was mainly due to a less favourable contribution from net receipts from tourism as well as other services, which more than offset a more favourable contribution from transportation, excluding government services and Suez Canal tolls. Meanwhile, remittances declined on annual terms in Q4 of 2018, for the first time since Q2 of 2016. Net Foreign Direct Investment (FDI) inflows resumed its annual decline in Q4 of 2018 for the second consecutive quarter due to higher gross outflows, after witnessing an annual increase in Q2 of 2018 for the first quarter since Q2 of 2017. Portfolio flows excluding Eurobonds continued to register a net outflow in Q4 of 2018 for the third consecutive quarter amid unfavourable global conditions for emerging markets, though at a slower pace compared with the previous two quarters. This, however, was mostly offset by net inflows from commercial banks’ net foreign assets. Meanwhile, gross international reserves stabilised in April 2019 for the second consecutive month at $44.2bn, after increasing in February 2019 supported by the issuance of Eurobonds by the Ministry of Finance,” the report read.

Real GDP growth rose to 5.5% in Q4 of 2018

The report highlights that real GDP growth rose to 5.5% in Q4 of 2018 from 5.3% in Q3, while unemployment rate dropped to its lowest rate since 2010.

It explained that higher net external demand for Egyptian goods and services reinforced a more balanced expenditure structure and supported the rebound of economic growth since the fiscal year (FY) 2017/18. Meanwhile, the contribution of domestic demand to GDP growth remained contained, and the unemployment rate dropped to 8.9% in December 2018, the lowest rate since December 2010.

The CBE added that the recent improvement in the contribution of net exports was mainly driven by the continued drop in real imports, while the growth of real exports was slightly strengthened after four feeble consecutive quarters. On the other hand, the contribution of private domestic demand to GDP growth weakened due to the drop in the contribution of private consumption and investments. Meanwhile, public domestic demand stabilised during the same period, as the slight rebound of public consumption contribution was offset by the slight drop in the contribution of public investments.

It explained that at the sectoral level, growth stabilised compared to the previous quarter, as the boost in the contribution of public sector to GDP growth was offset by the weakness in the private sector. The increased contribution of the public sector to the GDP was primarily due to the rising contribution of natural gas extractions, while that of other sectors remained stable. The contribution of the private sector to the GDP growth dropped due to weaker growth in the tourism sector, which more than offset the improvement in the construction sector.

In addition, available leading indicators for the non-hydrocarbon sector mostly point to weakening activity in Q1 of 2019. The Purchasing Managers Index (PMI) average level in Q1 of 2019 weakened compared to Q4 of 2018, despite improving in March 2019 and the manufacturing index continued to contract in January 2019, albeit by a slightly lesser degree compared to Q4 of 2018. Furthermore, the number of tourist nights contracted on annual terms in January 2019 for the first time since November 2016, and total car sales grew on average at a slower pace in January and February 2019, compared to the average pace registered in Q4 of 2018. On the other hand, Suez Canal net tonnage grew on annual terms at a slightly higher pace in January and February 2019 on average compared to Q4 of 2018.

In the hydrocarbon sector, natural gas production continued to increase strongly on annual terms, yet at slower pace during January 2019, compared to the average pace in Q4 of 2018.

Broad money growth continues to decline supported by fiscal consolidation

Following the fading of the exchange rate revaluation effect in Q4 of 2017, annual M2 growth continued to decline to an average of 11.6% in Q1 of 2019, supported by fiscal consolidation and the containment of other broad money counterpart assets’ growth. In Q1 of 2019, the negative annual contribution of foreign nonbank financing of the fiscal budget deficit eased, in line with the monetary policy normalisation pause in advanced economies. This was more than offset by the decreased contribution of bank financing of the fiscal deficit in addition to the expected drop in contribution of external financing compared to Q4 of 2018.

According to the CBE, other components of counterpart assets M2 claims on the private sector which slightly picked up. The decline in M2 growth favourably coincided with an annual increase in broad money velocity which suggests lower room for noninflationary money growth.

Meanwhile, following its decline between Q2 of 2017 and Q1 of 2018, the contribution of claims on the private sector to M2 growth continued to pick up in Q1 of 2019. Similarly, inflation adjusted L/C claims on the private sector continued to witness annual increases since Q1 of 2018, after recording annual contractions in 2017. The recovery was especially evident for claims on the private business sector, while claims on the household sector recovered by a relatively weaker magnitude.

Within the components of M2, CIC as a percent of L/C deposits in M2 continued to decline in Q1 of 2019 for the third consecutive quarter recording a ratio below its long-term historical average, which suggests lessening currency holding behaviour. Meanwhile, the annual growth of F/C deposits in US dollar as well as the dollarisation ratio defined as F/C deposits to total deposits in M2 broadly stabilised during Q1of 2019.

Moreover, the structure of household deposits in L/C continued to be dominated by deposits for more than three years since May 2018, following one and a half years of dominance by deposits less than three years amid the introduction of 1.5-year saving certificates at a higher rate compared to longer term saving certificate rates. The reversal of the structure of household deposits is consistent with redemptions of these certificates since May 2018, given their cancellation by public banks in late April 2018.

The report revealed that annual growth of M0, adjusted by total excess liquidity, continued to decline in Q1 of 2019 for the sixth consecutive quarter due to CBE balance sheet operations which lowered excess liquidity growth. The money multiplier, measured as the ratio between local currency components of broad money and M0 as defined above, increased slightly in Q1 of 2019, following its broad stability between Q4 of 2017 and Q4 of 2018. This was mainly due to lower excess liquidity as a ratio of L/C deposits in M2, the CBE said.

In another context, the CBE noted that real monetary conditions remained tight, backed by receding inflationary pressures as well as previous policy rate increases, notwithstanding the cumulative 300 bps policy rate cuts in Q1 of 2018 and Q1 of 2019.

After declining between December 2018 and mid-February 2019, excess liquidity rose between mid-February and mid-March 2019 before stabilising to record an average of EGP 734.5bn (13.8% of the GDP) during the maintenance period ending of 8 April 2019, compared to EGP 665.4bn (12.5% of the GDP) recorded on average during the maintenance period ending 11 February 2019.

Meanwhile, interbank activity remained relatively stable since April 2018, with interbank rates remaining below the policy rate by around 30 bps, as higher long-term absorption tenors offset the effect of higher short-term absorption of excess liquidity. Concurrently, the interbank yield curve shifted downward post the 100% transmission of the 100-bp policy rate cut on 14 February 2019.

Moreover, the CBE added that yields for L/C government securities declined to 14.0% net of tax in March 2019 and 13.8% during the first two issuances in April 2019, the lowest since May 2018. This compares to the 15.6% recorded on average during Q4 of 2018 and January 2019, prior to the 100-bp policy rate cut in February 2019. The 1.6p.p. decline in March 2019 was due to the increase in demand reflected by higher coverage ratio which recorded 2.3x in March 2019, compared to 2.0x recorded during Q4 of 2018 and January 2019 before declining to 1.6x during the first two issuances in April after being affected by EM developments. Nevertheless, treasury yields inched down further during the beginning of April 2019, supported by lower accepted-to-required ratio, which was more than enough to offset the decline in demand. The accepted-to-required ratio recorded 0.8x during the first two issuances in April 2019, compared to 1.1x recorded in March 2019 and 1.0x in Q4 of 2018 and January 2019.

Meanwhile, Egyptian Eurobond yields have been declining since the beginning of 2019 in line with the improvement in the risk premium for EMs, after increasing during most of 2018. Moreover, Egypt’s CDS spreads remained relatively low compared to the majority of peers with similar sovereign credit rating. Furthermore, Egypt’s credit rating was upgraded by Moody’s in April 2019 and by Fitch Ratings in March 2019, following the upgrade by S&P in May 2018.

“In the banking sector, March 2019 data reflected partial transmission of the 100-bp policy rate cut on 14 February 2019 to rates of new deposits, which declined to 12.0%. The limited transmission in the magnitude of 0.7x the policy rate cut was due to adjustment of flexible deposit rates, as fixed-rate saving certificates more than or equal to three years remained broadly unchanged,” the report added.

“Meanwhile, rates of new loans remained relatively stable to record 17.7% in March 2019 due to the weaker impact of loans at subsidised interest rates. As a result, interest rate margins widened to 5.7p.p. compared to 4.6p.p. recorded on average between April 2018 and January 2019.”

In equity markets, the CBE stated, real prices recovered since the beginning of the year after declining in 2018, supported by net buying mainly by Egyptian investors. Since the beginning of the year, the EGX 30: USD index recovered by a cumulative 20% outpacing the MSCI Emerging Markets index’s 11%. Meanwhile, real unit prices in Q1 of 2019 inched down in the secondary market as the demand continued to shift from the secondary market toward the primary market, given more flexible payment plans offered by numerous developers in the wake of tight liquidity conditions.

Annual core inflation records single digits for 9th consecutive month

The CBE said that annual headline inflation recorded 14.2% in March 2019, compared to 14.4% and 12.7% in February and January 2019, respectively. Meanwhile, annual core inflation continued to record single digits for the ninth consecutive month, averaging 8.6% between July 2018 and March 2019, the lowest rate in more than two years.

“During Q1 of 2019, annual headline inflation has been generally affected by unfavourable base effects given exceptionally low monthly inflation rates in January and February 2018. This comes after annual headline inflation was affected by fiscal consolidation measures as well as price volatility of fresh vegetables due to transitory supply shocks in the second half of 2018,” the report stated.

“Nevertheless, given the containment of underlying inflationary pressures, annual inflation of services and retail items continued to record single digits for the sixth and fifth consecutive month, respectively, while annual inflation of core food items continued to record single digits for the tenth consecutive month. In the meantime, annual inflation of volatile food and regulated items remained elevated, which contributed to widening of the spread between annual headline and core inflation rates.”

Consequently, the CBE explained, contribution of non-food items to annual headline inflation has been broadly stable since November 2018, while contribution of food items experienced volatility since August 2018. Recently, annual contribution of food items remained broadly stable in March 2019 after increasing in January and February 2019, mainly due to volatile food items, following its decline in November and December 2018.

Meanwhile, monthly headline inflation was mainly driven by food inflation since August 2018, while non-food inflation has been contained. Inflation of fresh vegetables was the main contributor to food inflation. Despite higher than expected price increases in February 2019, fresh vegetable inflation was broadly in line with seasonal patterns, except for higher potato prices. This comes after a supply shock specific to potatoes and tomatoes elevated inflation of fresh vegetables in September and October 2018. However, it was partially reversed in November 2018 and by a larger extent in December 2018.

In March 2019, potato prices increased for the second consecutive month, contributing on average by 30.1% to monthly headline inflation. Prices of tomatoes declined after increasing for two consecutive months.

In the meantime, according to the CBE, prices of core food items inched up slightly since January 2019, mainly due to higher prices of poultry which increased for the third consecutive month in March 2019, contributing on average by 15.8% to monthly headline inflation. In addition, prices of rice as well as fish and seafood increased for the sixth and third consecutive month, respectively.

Average monthly core food inflation witnessed domestically since January 2019 was largely consistent with monthly international core food inflation, after diverging between August and December 2018. International core food inflation continued to be mainly driven by prices of dairy products and red meat since December 2018, while contribution of poultry prices was negative since February 2019.

Finally, after the CBE’s Monetary Policy Committee decided to cut key policy rates by 100 bps in its meeting on 14 February 2019, it decided in its meeting on 28 March 2019 that current policy rates are appropriate to achieve the inflation target of 9% (±3p.p.) in Q4 of 2020 which was declared in December 2018.

Real GDP growth is expected to continue recovering, benefiting from continued structural reforms, despite being affected by potential fiscal consolidation measures. The primary fiscal balance is targeted to record a surplus of 2.0% of the GDP in FY 2018/19, compared to a surplus of 0.1% of the GDP in FY 2017/18 and a deficit of 1.8% of the GDP in FY 2016/17, and is targeted to maintain this surplus thereafter.

Meanwhile, the overall fiscal deficit is targeted to decline to 8.4% and 7.2% of the GDP in 2018/19 and 2019/20, respectively, compared to 9.7% in 2017/18 and 10.9% in 2016/17, and is targeted to continue declining thereafter.

The outlook for Brent crude oil price incorporated in the domestic inflation outlook remained unchanged compared to the previous Monetary Policy Report, while spot prices remain subject to volatility due to potential supply-side factors as well as geopolitical risks. Domestically, cost recovery for most fuel products is expected to be reached and automatic fuel price indexation to underlying costs is expected to be implemented. Meanwhile, international food price forecasts, relevant to Egypt’s consumption basket, are expected to decline slightly during 2019 before increasing in 2020, according to the CBE’s report.

In addition to international commodity price developments, risks surrounding the inflation outlook from the global economy continue to include trade tensions and economic growth developments.

In the interim, domestic risks continue to include the timing and magnitude of potential fiscal consolidation measures and the evolution of inflation expectations.

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Net consolidated profits of QNB end of June 2019 reach EGP 4.217bn https://ww.dailynewssegypt.com/2019/07/13/net-consolidated-profits-of-qnb-end-of-june-2019-reach-egp-4-217bn/ Sat, 13 Jul 2019 20:08:38 +0000 https://www.dailynewsegypt.com/?p=702598 Bank accounts for 7.82% of loans, 5.17% of deposits in Egyptian banks by end-March 2019

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QNB’s independent net profit was EGP 4.029bn in June 2019, an increase of 22% compared to the same period last year.

The consolidated net profit amounted to EGP 4.217bn, an increase of 22% compared to June 2018.

The bank said in a statement that the portfolio of loans and advances, after deducting the allocation, amounted to EGP 142bn by the end of June 2019.

The bank’s market share of total loans in the banking sector reached 7.82% in March 2019, according to data available from the Central Bank of Egypt (CBE).

He added that the rate of facilities granted to small and medium-sized enterprises (SMEs) amounted to 22.3% of the total facilities by the end of June 2019.

According to the bank, the ratio of non-performing loans (NPLs) reached 2.76% of the bank’s total loan portfolio at the end of June 2019. It is one of the best ratios in the Egyptian banking sector.

The bank has shown good indicators of asset quality during the implementation of the IFRS 9 standards as of 2019 based on instructions issued by the CBE, while the coverage ratio for loans went below 171%.

The bank’s capital adequacy ratio was 19.5%, with the optimal application of credit policies, with the bank’s investment portfolio free from any risk assets.

The statement noted that the bank’s total consolidated assets stood at EGP 253bn at the end of June 2019.

Customer deposits reached EGP 204bn at the end of June 2019.

The bank’s market share of total deposits in the Egyptian banking sector was 5.17% in March 2019, according to data available from CBE.

The bank has a high deposit-to-deposit ratio of 73%, compared to 47% for the banking sector in March 2019, according to the latest available data from the CBE, with a focus on the growth of core banking operations, while maintaining high liquidity rates in all currencies.

The bank’s positive results confirm the efficiency and flexibility of the operational policies and procedures that helped them develop its operations, overcome crises, address the strong competition in the markets, and take advantage of the opportunities available through its branch network. The branch network has grown to 220 branches, giving excellent geographic coverage to meet the needs of the largest number of customers of all levels.

The bank continues to support SMEs through an integrated programme that, not only provides its premium banking services, but also provides integrated solutions through subsidiaries such as QNB AA Life Insurance, QNB AA Leasing, QNB AA Discounting, and QNB AA Asset Management. This is through its branch network, which has a team of specialists to serve this important segment of customers.

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