The United Bank aims to implement a strong expansion plan throughout 2017, despite the Central Bank of Egypt’s (CBE) announcement of selling the bank to a strategic investor.
Chairperson and managing director of the bank Ashraf Elkady said that the bank team is working in full swing for its advancement amongst banks working in Egypt, regardless of whether or not it will be sold, adding that only the CBE is in charge of the matter.
Elkady, who was appointed chairperson on 15 March 2016, named four main pillars he will be working on over the coming five years.
According to Elkady, the first pillar is boosting the bank’s market share through geographic expansion and increasing the banking services it offers to clients. The second pillar is supporting the state’s economic plans through activating the CBE’s initiatives, especially the ones concerning small- and medium-sized enterprises (SMEs) and mortgage finance.
He added that the third pillar revolves around developing a comprehensive plan for the development of human resources and employees’ technical and banking skills. The fourth pillar is continuing to count the defaults, which, he said, the team has made progress in.
In an interview with Daily News Egypt, Elkady revealed the bank’s business plan in 2017.
What are the main sectors that the bank will focus on financing during 2017?
On top of these sectors is, of course, the SME sector.
The bank allocated 12% of its overall loans portfolio at the end of 2016 to financing portfolio for SMEs. The bank will increase this percentage to over 20% by the end of 2019. This is because we believe in the importance of SMEs’ role in pushing forward the national economy towards comprehensive development.
The United Bank has signed two contracts with the Social Fund for Development totaling EGP 150m, of which EGP 100m will be directed to existing and new SMEs, and EGP 50m to financing SMEs according to the provisions of Sharia.
Moreover, the bank also signed five other contracts with the fund worth EGP 275m to finance SMEs, in accordance with both traditional schemes and Sharia.
The bank is keen to provide more diverse products to SMEs. We added financial leasing to serve them through one of the bank’s subsidiaries. We obtained a licence to provide this service in 2016 from the Egyptian Financial Supervisory Authority (EFSA).
The United Bank also provides a financing scheme to administrate SMEs, named the “Unified participation compliant with Sharia Law”. This scheme enables project owners to obtain the necessary funding, as well as assistance with administration and management for the success of the project. The bank then exits the project after it has proven successful and sustainable.
The bank is very interested in specialisation when introducing new products. This is done through offering specialized financing schemes, including financing for couriers, distributors, providers, environmental projects, and franchise.
Besides SMEs financing, the bank is currently giving direct and indirect financing to companies, associations, and bodies that finance a number of micro enterprises, to boost their social contribution in this important phase of building the country.
In addition, the bank has, in 2016, signed contracts and cooperation protocols, such as a cooperation protocol with the General Authority for the Suez Canal Economic Zone.
This protocol aims to provide financing products, smart technological solutions, and technical and consulting services to existing and prospective investors that will invest in this zone. This comes besides contributing in financing major projects, maritime, and ports projects, as well as providing credit facilities to investors and review feasibility studies for the projects there.
What about the expansion plan?
The expansion plan aims to acquire a larger share of the Egyptian market according to a thoroughly prepared timetable.
The United Bank has in 2016 opened branches in New Cairo and Alexandria Port, as well as a banking unit at Cairo International airport, boosting the number of branches to 51.
The branches expansion plan targets opening five new branches in 2017 in Suez, Port Said, Sheikh Zayed, 10th of Ramadan City, and East Port Said, to provide the best advanced banking service to customers in accordance with the standards of international banking quality, and also to support the state’s plans in the overall development of governorates towards financial inclusion.
What is the bank’s plan regarding modern technological services?
Rapid technological developments forced banks to cope through the reliance on the concept of digital banking. The United Bank was a pioneer in providing internet banking a few years ago.
The bank is also one of the first Egyptian banks that fully committed themselves to the rules of providing electronic services issued by the CBE in November 2014. The bank became one of the very few banks in Egypt to obtain the CBE’s approval to provide 24/7 electronic services, including call centres and internet banking.
Such services strengthen customer confidence and work for their comfort, saving them time and effort, as well as reducing the cost of hosting clients at the bank’s branches.
The bank also began offering cash management services in 2016, which enabled corporates, SMEs, and individuals to best benefit from their account balances to easily and automatically obtain the best interest rates without having to move to different branches.
This is done by investing those funds in investment or savings vessels in Egyptian pounds or foreign currency. These vessels are managed electronically under constant mandate by these companies to the bank to run and manage these vessels through distinct and easy digital solutions.
The bank is also preparing to introduce a number of electronic sophisticated services, which will be attractive to new clients.
What is the bank’s plan to attract new deposits?
To accomplish this, the bank has recently increased the return on its investments and savings vessels in Egyptian pounds and foreign currencies, especially US dollars. This would meet the demands of many clients, including corporates and individuals, who want safe vessels that offer a good return.
What about mortgage financing?
The bank relaunched new distinct programmes for mortgage financing that suit all segments of society, especially low- and middle-income classes.
This activates the CBE’s initiative of mortgage financing to these classes. The bank also signed an agreement with the Mortgage Finance Fund to finance a number of residential units in Suez.
The bank is considering a new programme within the framework of that initiative, under the rent-to-own scheme and with accordance to the provisions of Sharia or traditional banking schemes. This programme aims to overcome the length of registering units and high costs of funding.
In this system, the units are owned by the bank until the last instalment. This means that registration is only done by the end of the term, which bypasses the complicated procedures and reduces the cost of funding.
What about your role in social responsibility?
The United Bank has signed a cooperation protocol with the Egyptian Corporate Responsibility Center (ECRC) of the Industrial Modernisation Centre (IMC), as well as the United Nations Development Program (UNDP) in 2016. This protocol aims to pen regulatory controls to the sustainable development programme in the applications and practices of sustainable social community development.
The “ETHAR” programme for social responsibility has programmes focusing on the sectors of health, education, and community development.
This interest comes to push us to offer innovative programmes and solutions to social responsibility from our deep belief to plant humanitarian grounds for the economy. The role of economic institutions should not be confined to numbers, but rather go beyond to the social dimension.
The bank also participated in the initiative of the Federation of Egyptian Banks to eliminate slums, and the campaign to eradicate the Hepatitis C, which threatens the health of Egyptians, in cooperation with the Tahya Masr Fund. The United Bank, through this initiative, became the first economic institution in Egypt to be free of this virus.
There was also another aspect of cooperation with the Tahya Masr Fund through opening an account for the fund at the bank to make it easier for those who love Egypt to fulfill their national duty. The bank also took part in the Tahya Masr City (Al-Asmarat) which was built to give homes to those who lived in Al-Dweika. In addition, the bank has offered financial support to Zewail University of Science and Technology to support scientific research in Egypt.
A team of the bank’s employees has also led a campaign called “The Month of Good” in cooperation with the Ministry of Social Solidarity and the Egyptian Food Bank to feed 842 Egyptian families in South Sinai and Behnsa village in Upper Egypt.
Furthermore, the bank launched an initiative to promote financial literacy and raise awareness regarding creditworthiness of individuals and SMEs, in collaboration with the Egyptian Credit Bureau (i-Score), next to publishing a series of awareness articles on Islamic economies in daily Egyptian newspapers. This all aims to spread awareness regarding financial transactions that are compliant with Sharia, which the bank provides under the name “Rakhaa”.
In 2016, the bank received an award from a leading banking magazine as the best bank to provide innovative banking services that comply with the provisions of Sharia.