The National Bank of Egypt (NBE) aims to increase the volume of its banking retail loans to EGP 50bn by the end of 2017, compared to the approximately EGP 35.5bn recorded at the end of November 2015, according to Alaa Farouk, Head of Marketing, Consumer Products Sales and Alternative Channels.
In an interview with Daily News Egypt, Farouk explained that retail banking loans make up approximately 21% of the bank’s total loans portfolio of the bank, adding that the bank aims to increase this percentage to 40% over three years.
What is the volume of NBE’s retail banking loans portfolio? What are your plans for the upcoming period?
By the end of November 2015, the retail banking loans portfolio amounted to EGP 35.5bn, and the bank aims to increase it to EGP 38bn by June 2016, and to reach EGP 50bn by the end of 2017.
What is the ratio of retail banking loans to the total bank loans?
The retail banking loans represent about 21% of NBE’s total loans portfolio, and we aim to increase it to 40% over three years.
What are the most prominent retail loans products? What are the bank’s targets for them?
The retail loans portfolio includes a large number of products, the most prominent of which is the personal loans portfolio, which was recorded at EGP 21.7bn at the end of November 2015. We are aiming to increase this to EGP 26bn by June 2016.
The automotive loans portfolio recorded EGP 1.4bn through the end of November, and we aim to increase it to reach EGP 1.6bn by June 2016. Further, the bank’s total issued credit cards reached 720,000; the outstanding portfolio recorded EGP 1.7bn through the end of November 2015; and, the bank has funded natural gas linkage and taxi funding loans.
The bank offers products and services for all segments and ages at all prices, building on the bank’s social role in growing the economy and boosting production.
How many ATM’s and points of sale (POS) are currently operated by NBE?
The number of electronic POS increased from 11,000 to 14,000, while NEB now has 2,430 ATMs. We are aiming to add 1,000 new ATMs by the end of December 2016.
Can you tell us about the bank’s liabilities portfolio?
The volume of the liabilities portfolio recorded EGP 478bn through November 2015. Further, the new monthly platinum saving certificates, offered by the bank with 12.5% interest, surpassed EGP 58bn.
Recently, it has been rumoured that NBE may suspend the issuance of high interest certificates when the bank reaches a certain limit of liquidity. Is there any truth to this?
This is entirely untrue; the bank does not target attracting a certain volume of liquidity through these certificates, through which the bank has succeeded in attracting new customers. NBE has also attracted fresh funds from outside the banking sector, besides encouraging citizens to save money in banks, and some foreign currency owners have exchanged funds to buy these certificates.
What about the mortgage initiative offered by the Central Bank of Egypt (CBE)?
NBE is taking steps to widely expand in implementing this initiative. To date, the portfolio for this initiative amounted to EGP 230m, acquired by 3,037 customers of low and medium-incomes.
What are the most significant issues faced by NBE in implementing those initiatives?
At the beginning, we faced some issues, mostly concerning the required documents and coordination between all the stakeholders. However, currently, the initiative is moving successfully, as customers can obtain approval for funding within 10 days.
The bank has recently acquired the approval of the Ministry of Finance to finance 480 units in Beni Suef governorate, 640 units in Matruh and 96 units in the Kharga Oasis in the New Valley governorate. All of these units will be for low-income citizens.
There has been some criticism directed at banks for favouring expansion in retail banking loans over funding small and medium enterprises (SMEs).
NBE is expanding in both directions; retail banking, as well as loans for SMEs. In addition, NBE is seeking to spread the culture of financial inclusion, and attract new customer segments to deal with the bank.
The bank will soon be expanding in micro-finance to help the owners of these projects. We are also participating in the Gamei’ty Project in collaboration with the Ministry of Supply, the Social Fund for Development, and the Holding Company for Food Industries, which integrates the work of retail banking loans with the financing of SMEs, as well as the financing of major projects.
What are the new retail services offered by the bank?
NBE is always committed to the introduction of new products and the development of existing ones. This ensures diversity and integration to meet the customers’ demands.
The bank has launched a new service for credit card holders to provide instalments over the phone, aiming to solve the problem regarding the lack of POSs in the Delta and Upper Egypt, where the only option was to withdraw cash from ATMs to buy products.
All credit card holders, existing and new, can benefit from this service. They can set up instalments for the cash they withdraw from ATMs during the period from the first day of the month until the 20th, with a minimum of EGP 500, and a maximum of 50% of the credit card limit. All they need to do is call our call centres on 19623 and choose their desired period of instalment, which ranges between six months and 36 months.
The aim is to increase the usage of credit cards in areas without POSs. However, NBE has a plan to deploy POSs all over Egypt, especially in the Delta and Upper Egypt.
The bank will also expand its Interactive Teller Machine (ITM) network. We only have one ITM so far, which serves as a pilot, but we plan to install more than 10 by end of 2016.
ITMs will enable customers to conduct most banking transactions through audio-visual communication with the bank’s employees through video conference 24-7.
Moreover, within days, we will activate a service for payment of universities’ tuition fees through our electronic platform.
In addition to these services, the bank also seeks to activate an electronic railway booking service, where we have an agreement with the Railway Authority to activate this service. Phone Cash also enables users to pay for clubs’ annual subscription fees.
What about the bank’s role in the government’s payroll service?
The total number of employees of the state’s administrative sector is 6.5m. NBE was able to attract 2m customers from among government employees. We have issued salary cards for 1.6 employees so far. There are about 400,000 employees who are processing their data at their workplaces, and we will provide them with cards as soon as they finalise the process.
What are the retail banking initiatives aimed at achieving financial inclusion?
Achieving financial inclusion is a target of the Egyptian economy in general, and the banking sector in particular.
NBE is one of the first banks to work to realise this goal, by introducing products such as the Phone Cash service that was met with unprecedented demand among customers, especially youth.
This service allows customers to deposit, withdraw, or transfer funds from one phone to another using any mobile carrier. Customers can also use Phone Cash to pay bills and book airline tickets or make donations. The service is also available through merchants where you can purchase
So far, the number of Phone Cash clients amounted to approximately 501,000 through the end of November 2015. The bank is currently working to expand the service in Upper and Lower Egypt, to cut down on the number of cash transactions and attract new segments to the banking sector.
A new prepaid card service has also been launched to help customers without bank accounts. This service is a card to receive remittances from abroad. This card can be provided instantly and free of charge at the bank’s branches.
Customer’s data is recorded on the card to activate the service and enable them to withdraw the value of the remittances throughout the day, through ATMs. The cards can also be used to make purchases through POSs and the Internet.
What is the bank’s geographical expansion plan?
NBE currently has 350 branches and banking units, but we aim to increase them to 400 by the end of 2016.
Do you believe the bank’s technological infrastructure can accommodate this expansion?
The bank’s technological infrastructure has been upgraded over the past seven years, in terms of the technology used and the security measures institute. We invested a large amount of money in this to align with the latest technological innovations worldwide.