By Hossam Mounir
Misr Iran Development Bank (MIDB) plans to pump EGP 800m of new loans to several important sectors before the end of 2015, according to Amr Tantawy, Managing Director of MIDB and Board Member of Federation of Egyptian Banks (FEB). The loans portfolio, thus, will increase to EGP 4.8bn.
In an interview with the Daily News Egypt, Tantawy revealed the bank’s plan until the end of this year.
What are the bank’s performance indicators until the end of May?
MIDB’s net revenues until the end of May were at EGP 159m, compared to EGP 105m at the end of March and EGP 282m in 2014 in total. Our bank aims for the volume of revenues to reach EGP 350m by the end of this year.
What about the credit activity of the bank?
The bank’s loan portfolio by the end of May reached roughly EGP 4bn, and we target pumping new funds worth EGP 800m by the end of the year, so that our portfolio would be at EGP 4.8bn.
What are the most significant sectors the bank focuses on in the funding operations?
Since the bank’s operations started 40 years ago, it has been working as an investment bank and funds all developmental projects that have a positive impact on the national economy. The industrial sector, in particular, owns 40% of the loans portfolio in MIDB, while the financial services, construction, and real estate sectors own 15% each. Our bank always aims to fund projects of priority and importance to the state, like electricity and energy.
In this regard, MIDB took part in a loan organised by the Abu Dhabi Islamic Bank (ADIB) in favour of the Egyptian Electricity Holding Company (EEHC). The bank’s value of participation in the loan amounted to EGP 100m, of which EGP 61m were already used. MIDB also participated in another loan for the electricity sector worth $20m, a loan organised by Bank Audi with a total value of $520m. Our bank is also studying providing another two loans in favour of the General Petroleum Authority, with a value of $1.891bn and $130m respectively. The bank’s share in the two loans could reach $40m. MIDB also participates in funding several road projects within the state’s plan of expansion in some roads and constructing new ones, as well as taking part in funding a factory for energy-saving bulbs.
The bank is studying entering in the development projects for the Suez Canal Axis, as well as other projects that were proposed in the Economic Summit.
What about the bank’s participation in covering the government’s placements of debt tools issued weekly to cover the general budget deficit?
MIDB is one of the 15 banks that participate in the “major traders” system, which covers the government’s placements of the debt tools. The bank’s investments in government’s bonds and bills is worth EGP 1.5bn to EGP 2bn. This amount is outside the credit portfolio, which is only directed to projects.
What is the bank’s role in funding small and medium-sized projects, as well as the mortgage finance?
We allocated EGP 150m for the mortgage finance, and we are currently studying contracting with several companies that were determined to build housing units for the low- and middle-income individuals. We also signed an agreement with Social Fund for Development (SFD) to acquire EGP 25m to fund small and medium-sized projects, of which EGP 6m were granted until now.
What is the delinquency rate in the bank?
Despite the huge problems faced by the manufacturing sector in particular during the previous years, along with some other sectors, the delinquency rate did not exceed 10% of the loan portfolio in the bank. It is 100% covered by allocations. MIDB has the strongest financial position among the banks working in Egypt; it is always keen on supporting its allocations right away.
What is the position of the deposits portfolio in the bank?
Regarding deposits, the bank targets achieving a balanced growth plan in line with its investments. The volume of the deposits portfolio in the bank currently amounts to around EGP 7.5bn, while the loan-to-deposit ratio in the bank amounts to 55%.
What about the bank’s plan regarding geographical expansion?
The bank currently has 15 branches, and two more branches will be opened before the end of this year in Beni Suef and Tanta, within the bank’s plan to expand outside Cairo. We will decide in the December the number of new branches that will be opened in next year.