A report recently issued by the Central Bank of Egypt (CBE) has revealed that banks managed to achieve good performance indicators until the end of January.
According to the CBE, banks’ portfolios increased by EGP 67.2bn in January, recording EGP 2.828tn, compared to EGP 2.761tn by the end of December 2016.
The CBE noted that the growth rate in total deposits reached 44.87%. The percentage declined to 21.93% after the exclusion of the impact of the flotation.
It added that government deposits have increased by EGP 12.04bn, recording EGP 487.99bn by the end of January, compared to EGP 475.95bn by the end of December 2016, including EGP 291.65bn deposits in local currency, and EGP 196.33bn deposits in foreign currencies.
Non-governmental deposits have increased to EGP 2.340tn by the end of January compared to EGP 2.285tn by the end of December, an increase of EGP 55.16bn.
Deposits in local currency have recorded EGP 1.635tn by the end of January, compared to EGP 1.620tn by the end of December, an EGP 15bn increase. Foreign currency deposits recorded EGP 704.40bn, compared to EGP 664.236bn.
Foreign currency deposits reached 30% of total deposits in banks. This percentage drops to 16.83% after the exclusion of the impact of flotation.
The CBE revealed an increase in the volume of bank customers’ loans by the end of January 2017 to EGP 1.346tn, compared to EGP 1.293tn in December 2016, an increase of EGP 52.834bn, with a growth rate of 4%.
The share of government agencies in loans provided by banks reached EGP 299.571bn in January, compared to EGP 296.606bn by the end of December 2016.
The balance of government loans in local currency reached EGP 114.2bn and about EGP 185.4bn in foreign currencies.
The CBE noted that the volume of loans provided by banks to other economic sectors, including industry, commerce, services, agriculture, and the family sector, reached EGP 1.047tn by the end of January, compared to EGP 996.818bn by the end of December 2016, an EGP 49.869bn increase.
The volume of loans provided by banks to these sectors in the local currency is EGP 648.9bn, an increase of EGP 37.8bn. The volume of loans provided in foreign currencies is EGP 397.8bn, an increase of EGP 11.99bn.
Regarding the volume of the portfolio of banks’ investments in securities, including shares, bonds, and investment fund documents, the CBE said these investments have increased to EGP 1.6tn by the end of January, compared to EGP 1.59tn by the end of December, an increase of EGP 10bn.
Total investment of banks in securities in local currency is estimated at EGP 1.123tn, compared to EGP 477.012bn in foreign currencies.
According to the CBE, total investments of public, private, and specialised banks in treasury bonds amounted to EGP 517.242bn until January.
The volume of public banks in treasury bonds was EGP 252.04bn compared to EGP 233.603bn for private banks; EGP 8.732bn for specialised banks; and about EGP 23.227bn for the branches of public banks.
Banks of different forms accounted for about 71.79% of total existing accounts of treasury bonds until January, which is separate from the share of their investment funds.
Banks working in the Egyptian market are considered the largest investors in treasury bonds and bills launched regularly by the government to cover the deficit of the general budget of the state.
Treasury bonds and bills are launched through 15 banks taking part in the system of primary dealers in the primary market. These banks resell part of these bonds and bills in the secondary market to investors, whether individuals or local or foreign institutions.
The list of banks taking part in the system includes the NBE, Banque Misr, Banque du Caire, City Bank, HSBC-Egypt, Misr Iran Development Bank, QNB, Credit Agricole-Egypt, Bank of Alexandria, the Arab African International Bank, the Egyptian Export Development Bank, Suez Canal Bank, and the Arab Bank.
Several banking officials said that banks take the financial opportunities available for them, stating that if they had better options, they would certainly choose them.
The CBE revealed that there is a deficit in foreign assets in the Egyptian banking sector in January, reaching the lowest level since flotation of EGP 122.708bn, compared to EGP 196.86bn by the end of December.
The deficit of foreign assets is known as the difference between the volume of foreign currency banking assets, such as loans from banks and money deposited in foreign banks, against the commitments resulting from foreign loans signed by banks and other commitments such as customers’ deposits.
The deficit of foreign assets in banks and at the CBE decreased after the pound flotation in November 2016, especially after the CBE obtained the first portion of the IMF loan for $2.75bn, and after some banks working in the local market obtained dollar loans from foreign institutions.
The CBE attributed the decrease in the deficit of foreign assets in the Egyptian banking sector to the decline of the deficit of foreign assets in the CBE itself by 54.13%, to reach EGP 36.97bn by the end of January, compared to EGP 80.599bn by the end of December.
During the same period, the deficit in banks working in the banking sector has declined from EGP 116.231bn by the end of December 2016 to EGP 85.738bn by the end of January, with a decline of 30.5%.