Daily News Egypt

Tourism, industrial sectors account for 75% of NBE’s non-performing loans: Bank official - Daily News Egypt

Advertising Area

Advertising Area

Tourism, industrial sectors account for 75% of NBE’s non-performing loans: Bank official

The National Bank of Egypt’s non-performing loans total EGP 6bn, of which tourism accounts for 40%, industry 35% and other sectors 25%

A picture taken on May 21, 2014 shows a tourist sunbathing on a beach in Egypt's Red Sea resort of Sharm el-Sheikh. European tourists no longer jostle on the hotel dance floors and many sunbeds are empty along the pristine beaches of Sharm El-Sheikh.  (AFP PHOTO / KHALED DESOUKI)
Atourist sunbathing on a beach in Egypt’s Red Sea resort of Sharm el-Sheikh. 

By Abdel Razek Al-Shuwekhi

The National Bank of Egypt’s total non-performing loans amount to EGP 6bn, according to Yehya Abou El-Fotouh, head of the Non-Performing Loans Division at the bank. He said that the tourism and industrial sectors represent 75% of the total debt, while other sectors, led by transportation and oil, account for the remaining 25%.

Abou El-Fotouh said the tourism sector accounts for 40% of the total debt versus 35% for industrials, adding that, despite the debts, the bank did not stop supporting various economic sectors.

He said: “We have provided loans for hotels in operation ranging between EGP 3-5m in order to meet the burden of paying wages and suppliers’ dues.”

According to the Ministry of Tourism, tourism income dropped to $1.3 bn during the first quarter of the current fiscal year, a decrease of 43% compared to the same period in 2013.

The Central Bank of Egypt has launched several initiatives to postpone the tourism sector’s dues to the bank, the most recent of which began at the start of the year and will be postponed through its end.

He said that loans arranged by the bank during the first half of the current fiscal year amounted to EGP 3.5bn for 60 companies.

Aboul Fotouh feels that supporting industrial and tourist activities in the near future will positively influence economic growth, especially following presidential elections at the end of this May.

Ali Rada, President of the Red Sea Tourism Investment Association, said that the National Bank of Egypt has agreed to a debt schedule with 35 companies for the first quarter of this year, and schedules for 15 other companies are expected to be made at the end of the second quarter.

Rada called for other banks to follow the National Bank of Egypt’s lead in dealing with stalled debt repayment in light of the crises experienced over the course of the past three years.

Advertising Area

Breaking News

No current breaking news

Receive our daily newsletter