Banking – Daily News Egypt https://wwww.dailynewssegypt.com Egypt’s Only Daily Independent Newspaper In English Tue, 18 Feb 2020 06:46:46 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.1 Expected change in banks map Egyptian market https://wwww.dailynewssegypt.com/2020/02/16/expected-change-in-banks-map-egyptian-market/ Sun, 16 Feb 2020 06:00:16 +0000 https://wwww.dailynewssegypt.com/?p=722132 Expected exits, acquisitions, mergers, against Lebanese crisis, implementation of new banking law

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It seems that the Egyptian market is on a date with strong changes in the map of the banks operating in it during the coming period. This may be the second wave of the re-arrangement of the Egyptian banking market, after the first wave that accompanied the first banking reform programme.

If the defaulting of some banks, the erosion of their capital, and their inconsistency with Banking Law No. 88 of 2003 were some of the reasons for the first wave of change, then the new banking law, which is currently being discussed in Parliament, along with special circumstances of some of the “parent” banks that own units in Egypt , may be the cause of the second wave of change.

The new banking law requires local banks to increase their paid-up capital to EGP 5bn, and increase foreign bank branches to $150m. It gave them a three-years deadline to settle their situation.

Enforcing current law No. 88 of 2003, which raises the minimum capital for banks to EGP 500m and $50m for foreign branches, has led to the disappearance of a large number of banks, from about 56 banks to 39 banks, which is the scenario analysts expected to see repeated especially for small banks, such as the Industrial Development Bank (IDB) and many others.

IDB

Maged Fahmy, the chairperson and managing director of the Industrial Development Bank (IDB), said in previous statements to Daily News Egypt, that the bank has a few options to comply with the new banking law and increase its capital to EGP 5bn, including offering it on the stock exchange, merging with one or more banks, offering it for acquisition, selling it to a foreign bank, or injecting a direct increase by the shareholders in the capital.

Bank Audi – Egypt

Bank Audi – Egypt is considered the most prominent candidate for exiting from the Egyptian market soon, due to the impact of the crisis experienced by the “parent” Bank in Lebanon, and its sudden decision to sell its unit in Egypt.

Audi group was targeting expansion in the Egyptian market through its acquisition of the National Bank of Greece – Egypt’s (NBG) assets, and was already close to ending this deal until the emergence of the Lebanese crisis.

First Abu Dhabi Bank

The first Abu Dhabi Bank has already started conducting a due diligence report of Bank Audi – Egypt after obtaining the approval of the CBE, which comes within the framework of the bank’s plan to expand in the Egyptian market significantly during the coming period.

It is expected that the deal will be concluded soon, as the group seems to need the money to help out in its current financial position to comply with the CBE’s requirements.

Blom Bank – Egypt

The bank’s management came out to confirm that it will be continuing its work in the Egyptian market.

Ahli United Bank

Ahli United Bank (AUB) may also join the banks’ exodus from the Egyptian market, after the parent bank converted into a fully Islamic bank after Kuwait Finance House’s acquisition of it.

Sources close to Al-Ahli United Bank – Egypt (AUB) said that the bank may look to sell its unit in Egypt to one of the other banks, pointing out that the KFH is an Islamic bank, which requires an Islamic licence for a UB. In case it does not obtain that license from CBE, it may be forced out of the Egyptian market.

United Bank

With regard to the United Bank, the CBE lost an alliance consisting of EFG Hermes, and Evercore to play the role of financial advisor in offering a stake in favour of a strategic investor of the bank’s capital, which is 99.9% owned by the CBE.

The CBE’s Board of Directors had agreed in principle to offer a share of the capital of the UB for the benefit of a strategic investor, stressing that it aims to develop the capabilities of the bank in the field of small, medium, and micro finance.

Banque du Caire

As for Banque du Caire, most of the statements indicate that it will soon be offered in EGX, within the framework of the government offerings programme announced by the Egyptian government in March 2019.

The government offering programme aims to expand the ownership base and increase the market capital of the Egyptian Stock Exchange, in addition to increasing the value and quantity of daily trading.

Mohamed El Etreby, chairperson of Banque Misr, said in statements a few days ago that Banque Misr sought to offer up to 45% of the bank’s shares in EGX during the first half of this year.

The bank was to be put up for sale to a strategic investor in 2008, but that deal was canceled last minute, and the public offering of the bank was repeatedly postponed in recent years.

Sources have said that the decision to raise the bank’s share offering to 45% came to satisfy the desire of global investment funds which showed great interest, especially after the high volume of the bank’s business and success of the economic reform programme.

The anticipated offering is managed by Hermes and HSBC. Banque du Caire has conducted a first promotional tour in Abu Dhabi, London, and Dubai during the past few days to hold meetings with managers of global investment funds promoting the bank’s offering.

The sources emphasised that global investment funds showed great desire in participating in the EGX offering which is subject to change according to the situation of global and domestic stock exchanges. The timing of the bank’s launch will be the end of next March or during the second quarter of this year.

Arab Investment Bank

The Egyptian Sovereign Fund seeks to attract an investor to acquire a majority stake in the Arab Investment Bank (AIB), by increasing the bank’s capital, which amounted to EGP 1.84bn in April 2019, to comply with the new banking law. This comes in light of the fund’s interest in the banking sector, and according to the protocol signed with the National Investment Bank (NIB) within assets targeted for investment offering.

It was also reported that Al Mashreq Bank and another Emirati company were competing to acquire the AIB, which was neither denied nor confirmed by officials of the bank, stressing that they are not aware of what is reported in this regard.

Five acquisitions in 9 years

It is worth noting that the Egyptian banking sector witnessed about five acquisition deals since 2011, the most prominent of which was in 2013, when Emirates NBD acquired BNP Paribas with a value of $ 500m. The same year also saw the selling of National Societe Generale Bank to Qatar National Bank (QNB) at a value of $2.55bn.

In 2015, Al Ahli Bank of Kuwait acquired Piraeus Bank in Egypt with a value of $70m, and in the same year, the Commercial International Bank (CIB) acquired the retail portfolio of Citibank in Egypt.

The Arab African International Bank (AAIB) also acquired the loan and deposit portfolios of the Canadian Bank of Nova Scotia, with a value of EGP 1bn.

Market on a date with strong changes within three years

According to well-known banker Mohamed Abdel-Aal, mergers and acquisitions in the Egyptian banking sector have become commonplace, whether among private, foreign or even government banks.

He pointed out that there are important indications that the Egyptian banking sector will witness a remarkable change in various deals this year, and the next two years.

Abdel-Aal explained that the first of these indications is the compulsory exit of some units or branches of foreign banks for reasons of their own, mainly due to the change in the strategy of their geographical expansion or specific activity. As they decided to reduce foreign investments or exit from the local market entirely and liquidate their assets.

He said that the success of the economic, monetary, and financial reform programme and governmental restructuring has paved the way for the Egyptian economy to be one of the most developed markets, especially in the retail services sector. It encourages acquisitions of some banks that wish for a compulsory exit or those that offer some of their shares on EGX.

New Banking Law

According to Abdel-Aal, the new banking law, which is expected to be approved by Parliament during its current session, obliges local banks to increase the minimum capital to EGP 5bn, and increase the capital of foreign branches to $150m. This is expected to lead to some Banks either merging with other banks to create a larger entity, or be subject to acquisition by other banks.

With regard to the benefits that can be achieved as a result of acquisitions and mergers, Abdel-Aal said that this is expected to create larger entities that achieve financial savings due to the expansion of business volume and quality of performance.

He added that the new entities will increase the rate of revenue and profitability, as a result of reducing costs, increasing the volume of liquidity, improving solvency and competition conditions, and encouraging direct and indirect foreign investment flow.

Banks needed in Egypt

According to Abdel-Aal, acquisitions help smaller banks access modern financial technologies and be able to digitally advance themselves. Access to these resources would allow banks to reach segments of society that are virtually unreachable without the use of those applications.

Abdel-Aal believes that in order for banks to obtain the greatest added value from any expected acquisition, they must be international banks with large capital, experience and a distinguished reputation.

“As for specialisation, and with regard to our circumstances and the requirements of our economic and social conditions, it is best for banks or financial institutions to be of the type specialised in small, medium, and micro finance activities. It is also preferred that they have cadres and applications of financial technology and communications to help them cope with the requirements of digital transformation and financial inclusion,” according to Abdel-Aal.

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Deutsche Bank expects US dollar to reach EGP 15.5 by June, EGP 15 by December https://wwww.dailynewssegypt.com/2020/02/13/deutsche-bank-expects-us-dollar-to-reach-egp-15-5-by-june-egp-15-by-december/ Thu, 13 Feb 2020 05:15:55 +0000 https://wwww.dailynewssegypt.com/?p=721976 Bank expects inflation to continue declining to single digits this year

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Deutsche Bank expected that the Egyptian pound will continue to strengthen against the US dollar to reach EGP 15.5 by the end of the first half of 2020 and EGP 15 by the end of the year.

According to a bank report, additional structural improvements have started in the balance of payments in Egypt, as the petroleum trade balance has improved due to the decrease in import volumes and Egypt’s realisation of self-sufficiency in natural gas.

It added that the improvement of security conditions in addition to investments in infrastructure contributed to increasing tourism flows and higher revenues of the Suez Canal, pointing out that the payment of previous dues to foreign companies would attract more foreign direct investment, especially in the energy sector.

“The growth rate in Egypt is expected to rise to about 5.8% and 5.9% in fiscal years (FY) 2020 and 2021, respectively, up from 5.6% recorded by the economy in the FY 2018/19, due largely to the gradual recovery in consumption rates in the private sector,” the bank said.

Deutsche Bank added that the inflation rate has decreased significantly, expecting that the main inflation will continue to decline to remain at single rates throughout 2020.

It explained that the rise in the exchange rate of the pound and the drop in international oil prices, along with the government’s intervention to control prices in the food market, helps to contain and curb inflation.

The bank emphasised that the moderate levels of inflation in the recent period came as a result of the stability of food prices.

“Our view of the drop in oil prices, along with the appreciation of the Egyptian pound, will act to curb any inflationary pressures,” according to Deutsche Bank.

The bank expected that the recovery in private consumption rates will start gradually, and that the improvement in net exports will continue, as Egypt’s dependence on imports of energy and fuel is expected to decrease due to the increase in domestic production, and non-oil exports will increase in the coming period, with an increase in gold production, electronics, and pharmaceuticals, thanks to the increased competitiveness of Egyptian goods since the liberalisation of the exchange rate in late 2016.

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Egyptian pound appreciates to its highest since flotation https://wwww.dailynewssegypt.com/2020/02/12/egyptian-pound-appreciates-to-its-highest-since-flotation/ Tue, 11 Feb 2020 22:26:35 +0000 https://wwww.dailynewssegypt.com/?p=721869 Banque Misr received $2bn in January, $15.6bn in 2019: El-Etreby

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The exchange rate of the dollar continued to decline against the Egyptian pound in the local market on Tuesday, bringing the average for banks’ transactions with their clients to EGP 15.6689  to buy and EGP 15.7689 to sell against EGP 15.6783 to buy and EGP 15.7783 to sell on Monday.

The official rate of the dollar exchange rate at the Central Bank of Egypt (CBE) on Tuesday hit EGP 15.6509 to buy and EGP 15.7755 to sell against EGP 15.6588 to buy and EGP 15.7846 to sell on Monday.

This level is the highest against the dollar since the second day of the decision to liberalise the exchange rate on 3 November 2016, when the average exchange rate was EGP 15.7297 to buy and EGP 16.3159 to sell.  At the CBE it recorded EGP 15.6643 to buy and EGP 16.2222 to sell.

The price of the dollar is witnessing significant declines against the pound during the recent period, amid strong foreign exchange flows in the Egyptian market.

A senior banking official said that this decline in the price of the dollar is mainly due to investment portfolio flows to Egypt, especially from Gulf Cooperation Council (GCC) countries, in addition to the stability and strength of remittances from abroad and tourism.

Mohamed El-Etreby, head of Banque Misr, said that Banque Misr received about $2bn in cash flows during January 2020 alone, while the volume of flows during 2019 reached about $15.6bn.

Yehya Aboul Fotouh, deputy head of the National Bank of Egypt (NBE) revealed that the total cash flows that the bank received since the decision to liberalise the exchange rate in November 2016 until now reached about $73bn.

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Local, international investors offer to invest $1.054bn in Egyptian T-Bills https://wwww.dailynewssegypt.com/2020/02/11/local-international-investors-offer-to-invest-1-054bn-in-egyptian-t-bills/ Mon, 10 Feb 2020 22:37:59 +0000 https://wwww.dailynewssegypt.com/?p=721754 The CBE rejected other offers from investors who requested an interest of 4.10%.

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The Central Bank of Egypt (CBE) received 32 offers from local and foreign investors to invest $1.0548bn in the treasury bills (T-Bills) auction launched on Monday.

The CBE launched an auction of $900m T-Bills a maturity of 364 days, due on 9 February 2021. The proceeds of this issuance will be directed to repay the earlier T-Bills issuance of $1.0141bn launched by the CBE on 12 February 2019.

The CBE accepted 27 of those offers, at a value of $984.8m at an interest that ranged between 3.44% as the lowest price, 3.5% as the highest price, and 3.491% on average, compared to 3.52%, 3.55%, and 3.54%, respectively, in a similar auction in January 2020.

The CBE rejected other offers from investors who requested an interest of 4.10%.

This is the second batch of T-Bills offered by the CBE this year. In 2019, the CBE offered six batches to collect $6.1432bn.

The CBE allows subscribing to these bills for both local banks and foreign institutions, with a minimum subscription of $100,000 and its multiples.

The yields of these issuances are controlled by several indicators, the most important of which are the US dollar liquidity in the market, alternative investment opportunities available to banks and domestic and foreign financial institutions, and credit rating of the state.

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Egypt’s awaited banking law to revolutionise sector: Khodeir Partners co-founder https://wwww.dailynewssegypt.com/2020/02/10/egypts-awaited-banking-law-to-revolutionise-sector-khodeir-partners-co-founder/ Mon, 10 Feb 2020 07:10:35 +0000 https://wwww.dailynewssegypt.com/?p=721641 Khodeir’s comments came during a roundtable discussion held to tackle the banking draft law and its role in enhancing Egypt’s economic development.

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When passed, the long-awaited banking law will boost development in Egypt, revolutionising how fiscal and banking systems deal with the problems they currently face, said Co-founder and Manager Partner of Khodeir Partners for Consultations Mohamed Khodeir.

Khodeir’s comments came during a roundtable discussion held to tackle the banking draft law and its role in enhancing Egypt’s economic development.

The draft law was prepared by the Central Bank of Egypt (CBE) to maintain, according to experts, the banking sector’s safety and supervise banks more closely. The draft law was sent to parliament late 2019 for discussion after it was accepted by the parliamentary economic committee.

Khodeir said the banking system is Egypt’s economic backbone, with more than EGP 4trn in deposits and approximately EGP 2trn in granted loans. Banks also introduced about EGP 9bn over five years for 18,000 private sector enterprises that have ventured into the banking sector recently. Loans that have been granted to small projects accounted for 14% of the whole sum, which is suitable if compared to the labour force in the domestic market, estimated at 28 million workers, according to Khodeir.

“The CBE has already moved forward to cope with the challenges that the Egyptian economy witnesses on the ground. It launched a package of initiatives that aims to counter the industrial sector’s pitfalls and released the new banking law that includes key paths towards economic prosperity,” he added.

The new draft law will strengthen the governance of the CBE and maintain its independence. Moreover, it will enhance the investment sector, including investment banks, and boost supervision over the banking system to upgrade the banking sector and cope with likely risks.

Meanwhile, Ahmed Kotb, head of the disputes settlement department at Khodeir Partners, said the law would allow banks to buy real estate units with mortgages and to collect later the remaining debts on the units from their previous owners, which alleviates the burden on debtors.

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NBE, QNB syndicated loan of EGP 1.8bn to Concrete Plus Engineering, Construction https://wwww.dailynewssegypt.com/2020/02/10/nbe-qnb-syndicated-loan-of-egp-1-8bn-to-concrete-plus-engineering-construction/ Mon, 10 Feb 2020 06:15:36 +0000 https://wwww.dailynewssegypt.com/?p=721631 20% of the total cost of implementing a housing compound project in the beach area of New Alamein City

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The National Bank of Egypt (NBE) and QNB Al Ahly arranged a medium-term syndicated loan worth EGP 1.8bn for Concrete Plus Engineering and Construction, to implement a contract assigned to the company by the New Alamein City Development Authority of the New Urban Communities Authority, for the first phase of the residential compound project in the beach area of the new city of El Alamein.

According to a statement issued by the two banks, this loan is an affirmation of the banks’ ability to participate in arranging this special type of financing, and to meet the financing needs of various sectors of the Egyptian economy, including the construction sector, which is one of the most important economic sectors. Under its umbrella, it provides a large number of job opportunities and supports many industries and other related activities.

The two banks stressed that the project is in line with the state’s strategy to create new cities and urban communities, to be in accordance with the highest standards of quality and efficiency, in order to overcome Egypt’s overpopulation problem, by taking advantage of the North Coast region as a new destination for residential communities as well as being an attractive area for tourism all year round.

This loan is an affirmation of the banks’ ability to arrange joint financing whose positive results will be reflected in the national economy and on the country’s development plans in general.

According to the statement, this loan represents 20% of the initial investment cost of the project, pointing out that the loan is meant to finance the first phase of a residential compound in the beach area of New Alamein, which includes drilling, backfilling, replacement, foundations of all kinds, concrete structures, buildings, and insulation for the project.

The residential area has a total area of 700 feddan, where the total estimated investment cost of the project is EGP 5.9bn.

It is noteworthy that Concrete Plus Engineering and Construction is a solidarity company that was established in March 1998, with the aim of establishing an engineering office, general contracting, and supplies. The paid-up capital of the company is EGP 200m.

The financing contract was signed at the headquarters of the National Bank of Egypt in the presence of Yehya Aboul Fotouh, Vice Chairperson of the bank, Sherif Riad, head of bank credit and syndicated loans, Bahaa Al Shafei, head of Corporate and Investment Bankng Division at QNB AL AHLY, alongside Hossam Fekry and Tarek Youssef, the executive partners of Concrete Plus Engineering and Construction.

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CBE offers $900m in T-bills on Monday https://wwww.dailynewssegypt.com/2020/02/10/cbe-offers-900m-in-t-bills-on-monday/ Sun, 09 Feb 2020 22:51:37 +0000 https://wwww.dailynewssegypt.com/?p=721604 Proceeds to cover a previous bid floated on 12 February 2019 worth $1.0141bn

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The Central Bank of Egypt (CBE) offers on Monday $900m of treasury bills for a year, due on 9 February 2021. The proceeds of this bid shall be directed to pay the value of a previous bid submitted by the CBE on 12 February 2019, through which it had obtained about $1.0141bn and will be due on Tuesday.

This tender is the second to be launched in 2020, where the CBE offered a tender worth $800m in January. In this tender, the CBE received 38 offers from local and foreign investors, at a value of $966.9m.

The CBE accepted 34 of these offers, valued at $864.9m, at an interest rate ranging between 3.52% as the lowest price and 3. 55% as the highest price and 3.54% on average. The CBE rejected other offers from investors who requested a return of 3.57%.

The CBE allows subscribing to these bills for both local banks and foreign institutions, with a minimum subscription of $100,000 and its multiples.

The return on these dollar bills is determined according to several indicators, the most important of which are the amount of dollar liquidity in the market, alternative investment opportunities available to local and foreign banks and financial institutions, and the country’s credit rating.

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Household sector’s trend towards deposits of three-year term or more ongoing since 2018 https://wwww.dailynewssegypt.com/2020/02/09/household-sectors-trend-towards-deposits-of-three-year-term-or-more-ongoing-since-2018/ Sun, 09 Feb 2020 17:07:03 +0000 https://wwww.dailynewssegypt.com/?p=721595 Weighted return on new deposits declines in September 2019 to 11.5%, 16% on loans

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The Central Bank of Egypt (CBE) has revealed the continuation of the household sector’s trend towards deposits for terms of three years or more since May 2018. Previously, the trend was towards terms of less than three years. This comes as a result of the high returns of saving certificates for a year and half compared to the returns of savings certificates for three years or more.

In a recent report, the CBE explained that this shift in the structure of deposits came in line with the redemptions for these certificates since May 2018, following the cancellation of new subscriptions in public sector banks since late April 2018.

According to the CBE, the household sector accounts for about 81.6% of total deposits in banks. The share of this sector is 84.4% of the total deposits in local currency, and 69.5% of the total deposits in foreign currencies.

The bank also revealed that the dollarisation rate continued to decline as a percentage of total deposits during the third quarter (Q3) of 2019, while the annual growth rate of deposits in foreign currency decreased during the same period for the second consecutive quarter, after witnessing an increase in mid-2018.

The growth rate in total bank deposits reached 13.01% in November 2019, compared to 12.8% in October, according to the CBE.

It explained that the rate of growth in deposits in local currency rose to 20.1%, compared to 19.5% in May, while the rate of growth in deposits in foreign currencies continued to reach -10.1%, compared to – 8.9%.

The share of foreign currencies in total deposits in banks declined to 18.62% at the end of November 2019, compared to 19% at the end of October.

In a related context, the CBE said that September 2019 witnessed a partial transition to reduce the CBE’s basic interest ratio by 150 basis points on 22 August 2019, to the new deposits’ weighted interest rate, which fell to 11.5%, by 0.4 times.

While interest rates on deposits with variable returns decreased, interest rates generally settled on savings certificates with fixed returns for periods of three years or more.

At the same time, the weighted interest rate on new loans decreased to 16% in September 2019, by 0.8 times the reduction in the CBE’s basic interest rates on 22 August 2019. This shows that there is a slight contraction in the difference between loan interest rates and deposits to 4.5 percentage points, which is slightly lower than the long term average.

The CBE pointed to the continued restriction in real monetary conditions as a result of the easing inflationary pressures and previous increases in its basic rates of return, despite the cumulative decrease of 550 basis points during Q1 2018 and 2019, as well as Q3 2019.

According to the CBE, liquidity surplus increased in October 2019, following its decrease during the Q3 2019.

It explained that liquidity surplus recorded an average of EGP 749.5bn, equivalent to 13.2% of GDP, at the end of October 2019, compared to EGP 701.7bn, equivalent to 12.7% of GDP at the end of September 2019.

At the same time, the activity in the inter-bank cash market has remained relatively stable since April 2018, and the returns of inter-bank cash transactions below the base rate of the bank have remained at about 40 basis points since July 2019, compared to 30 basis points on average in the long term, supported by a decrease in the accommodation of excess liquidity in the long term.

The CBE said the yield curve’s level in the inter-bank cash market decreased due to the total reduction of the CBE’s basic rates of return by 250 basis points on 22 August and 26 September 2019.

It pointed out that the returns on government securities in local currency decreased to record a weighted return rate after tax deduction of 12.3% in October 2019, the lowest level since July 2016.

This comes compared to an average of 13.9% in Q2 2019, before the CBE lowered basic rates of return in August and September.

The CBE attributed the decrease in the weighted return of government securities by 1.5 percentage points to the decrease in demand on those securities, which appeared in the decrease in the coverage rate of bidding for these securities to record 1.7 times during October 2019 compared to 1.8 and 1.9 times in Q2 and Q3 2019, respectively.

In a related context, the CBE pointed out that after the rise in the yield on Egyptian international bonds during 2018, the return on them decreased since the beginning of 2019, before its recent stabilisation. This came in line with recent developments in emerging markets.

The CBE said that the sovereign credit swap margin for Egypt remained relatively low compared to the majority of countries with similar sovereign credit ratings to Egypt. It noted that Moody’s and Fitch raised the sovereign credit rating for Egypt in both March and April 2019, after S&P raised Egypt’s sovereign credit rating in May 2018.

Recently, Moody’s and Fitch have maintained Egypt’s sovereign credit rating while keeping a stable outlook.

In a related context, the bank said that the Monetary Policy Committee (MPC)’s decision to reduce its basic rates of return by 250 basis points in its meetings in August and September 2019 provides appropriate support for economic activity, and remains consistent with achieving the target inflation rate of 9 ± 3% during Q3 2020 and price stability in the medium term.

The bank expected that structural reforms in the Egyptian economy will continue to support a real GDP growth rate.

At the same time, it is intended to continue achieving the surpluses of the state’s general budget, which amounted to 2.0% of GDP during the fiscal year (FY) 2018/2019, in the coming years to reduce debt levels.

According to the CBE, it is also targeted to continue decreasing the total deficit of the state’s general budget to 7.2% and 6.2% of the GDP during the fiscal FY2019/2020 and FY 2020/2021, respectively, and to continue decreasing the total deficit after that.

On a global level, the CBE said that the slowdown in the global economy’s growth rate will continue, alongside with the facilitation of global financial conditions, as well as the impact of risks associated with global trade policies on growth prospects.

At the same time, expectations for Brent crude prices included in the outlook for domestic inflation remained stable, and despite this, global oil prices are still subject to fluctuations due to potential supply factors that include regional risks.

On the other hand, the CBE expected the international prices of basic food commodities to rise by the same weights of the domestic consumption basket during 2020 and 2021.

It pointed out that, since prices of some oil products can cover costs, the international prices of oil may be reflected in local inflation, through the application of an automatic pricing mechanism in the prices of oil products.

At the same time, the purchase of hedging contracts against oil price fluctuations is expected to limit the impact of international oil prices on the state budget, while the impact of high oil product prices will be positive on the oil trade balance that achieved a surplus during FY 2018/2019 for the first time since FY 2012/2013.

The CBE pointed out that, in addition to the development of international commodity prices, the development in economic activity and trade policy tensions constitute the most important risks surrounding domestic inflation on the part of the global economy.

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CIB launches new personal loan product for low-income payroll customers https://wwww.dailynewssegypt.com/2020/02/08/cib-launches-new-personal-loan-product-for-low-income-payroll-customers/ Sat, 08 Feb 2020 13:24:21 +0000 https://wwww.dailynewssegypt.com/?p=721484 The new personal loan is dedicated to customers with a monthly salary starting from EGP 2,600. The personal loan ranges between EGP 10,000 - 30,000. The loan offers customers repayment in fixed instalments over 12-36 months, and a full waiver of all administrative and assessment fees.

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The Commercial International Bank (CIB) launched a new personal loan programme, named “Solfa we Aman”, targeting low-income payroll customers. The programme offers flexible repayment plan along with micro-insurance benefits during the period of the loan.

The new personal loan is dedicated to customers with a monthly salary starting from EGP 2,600. The personal loan ranges between EGP 10,000 – 30,000. The loan offers customers repayment in fixed instalments over 12-36 months, and a full waiver of all administrative and assessment fees.

In addition, the bundle provides customers with automatic micro-insurance benefits, provided by AXA Life Insurance, for the duration of the loan tenor, which includes insurance on the outstanding dues of the loan as well as life and disability insurance.

“The new loan programme is the CIB’s latest offering, which targets segments of society that are often overlooked by the traditional banking sector, under our financial inclusion efforts,” said Ahmed Issa, CEO, Retail Banking at CIB.

“CIB is committed to government policies, in line with Egypt Vision 2030, to promote financial inclusion across the country and further integrate all segments of society within Egypt’s financial sector,” he added.

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BLOM BANK has no intention in exiting Egyptian Market: statement https://wwww.dailynewssegypt.com/2020/02/05/blom-bank-has-no-intention-in-exiting-egyptian-market-statement/ Wed, 05 Feb 2020 21:52:47 +0000 https://wwww.dailynewssegypt.com/?p=721296 It is noteworthy that recently, there was some news circulating about a Saudi Arabian bank offering to buy BLOM Bank Egypt.

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With regards to recent rumours circulating in the media about the possibility of BLOM BANK exiting the Egyptian market, the Bank’s General Management assures that these rumours have absolutely no basis, a statement by the bank said on Wednesday.

“In fact, the Bank has no intentions of selling its investments in Egypt and there are no negotiations taking place in this regard,” it added.

“In light of the above, BLOM BANK Egypt denies this fake news and reiterates that its strategy will continue to focus on expanding and growing its business in Egypt”.

It is noteworthy that recently, there was some news circulating about a Saudi Arabian bank offering to buy BLOM Bank Egypt.

BLOM Bank Egypt is one of the largest units of BLOM Bank Group outside Lebanon.

The capital of BLOM Bank Egypt reaches about EGP 2bn and the bank has 42 branches that include Greater Cairo, Alexandria, Hurghada, Sharm El Sheikh, Damietta, Port Said, Mansoura, Ismailia, Tanta, Suez, Dakahlia, and Minya.

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Attijariwafa Bank launches initiative to limit single-use plastic bag consumption  https://wwww.dailynewssegypt.com/2020/02/05/attijariwafa-bank-launches-initiative-to-limit-single-use-plastic-bag-consumption/ Tue, 04 Feb 2020 22:30:01 +0000 https://wwww.dailynewssegypt.com/?p=721216 The bank aims to expand its participation in environment conservation and to apply these mechanisms on a larger scale.

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Attijariwafa Bank launched an initiative to reduce the consumption of plastic bags in cooperation with Verynile foundation and spread the use of environmentally friendly cotton tote bags.

The bank’s Director of Marketing and Corporate Relations Sarah Ibrahim said it’s part of their social responsibility role to participate in the Verynile initiative towards a green economy.

The bank aims to expand its participation in environment conservation and to apply these mechanisms on a larger scale.

She explained that the initiative would start by producing 4,500 cotton bags in Zamalek, and then expand to other areas.

She stated that the initiative aspires to offer alternatives to shops of Zamalek: paper, cotton, biodegradable, and reusable bags.

Moreover, Environment Minister Yasmine Fouad said the Nile River is Egypt’s lifeline, so it must be preserved.

She noted that single-use plastic bags are a major part of waste, noting that the initiative supports cleaning the Nile River.

“2.5 tonnes of waste were extracted during the first clean-up of the river, which has now reached over 50 tonnes,” she said.

Fouad noted that the state and its political leadership greatly support young people and future generations, which encouraged the Verynile initiative.

She explained that plastic causes great damage to rivers and seas, specifically for marine life, and one of the most negative aspects of it is the reproduction of jellyfish. She urged not to use plastic cups and reduce the use of straws and turn to cotton bags instead of plastic.

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CIB aims to raise EGP 15bn to finance expansion https://wwww.dailynewssegypt.com/2020/02/04/cib-aims-to-raise-egp-15bn-to-finance-expansion/ Tue, 04 Feb 2020 21:56:04 +0000 https://wwww.dailynewssegypt.com/?p=721195 CIB’s consolidated net income grows by 23% to EGP 11.8bn in 2019, proposes EGP 1.25 dividends per share

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Egypt’s Commercial International Bank (CIB) aims to issue EGP 15bn worth of financial instruments to finance its expansion after rapid growth in 2019, the bank said in a Tuesday statement to the Egyptian Exchange.

However, the issuance is still subject to approval from the general assembly meeting scheduled in 15 March. The statement explained that the financial instruments would be issued in Egyptian or foreign currency.

The CIB reported 23% increase in consolidated net income to record EGP 11.8bn, or EGP 7.33 per share in 2019.

CIB’s management said: “The banking sector faced vigorous competition over market funds, which, alongside the new tax law’s enactment at the onset of the year, came in challenging the Sector’s growth prospects, confronted with an eventful outlook. However, CIB managed to deliver a new set of record results, posting top and bottom lines of EGP 23.bn and EGP 11.8bn over 2019, growing from last year by 24% and 23%, respectively. This is after normalising the EGP 1.82bn recycled in 2018 from unearned interest to interest income.”

Moreover, the statement indicated that the board aims to increase the bank’s paid-in capital by EGP 4.925bn to EGP 19.702bn through distributing one free share for every three existing shares.

Also, the board proposed a cash dividend of EGP 1.25 per share for 2019.

In quarter terms, the bank’s standalone revenues recorded EGP 6.15bn in the fourth-quarter (4Q) of 2019, up 18% from 4Q2018.

Accordingly, the statement added: “Moving into 2020, we remain positive about the economic outlook and we are confident about CIB’s ability to ride out market variations in light of the expected continuation of the monetary easing cycle, drawing on its proven record of resilient balance sheet fundamentals and effective management, besides its affluent capital buffer.”

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Technology main player in financial inclusion: Hisham Tawfik https://wwww.dailynewssegypt.com/2020/02/02/technology-main-player-in-financial-inclusion-hisham-tawfik/ Sun, 02 Feb 2020 21:58:35 +0000 https://wwww.dailynewssegypt.com/?p=720986 NBE, Misr Life Insurance jointly launch ‘Tomorrow Pension’ bank insurance product

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Minister of Public Enterprise Sector Hisham Tawfik stressed the importance of technology in achieving financial inclusion in Egypt.

At the Financial Inclusion Conference organised by the National Bank of Egypt (NBE) and Misr Insurance Holding Company on Sunday, Tawfik said financial inclusion is one of the elements required to achieve economic development.

He noted that financial banking services realised great success and had customers everywhere, but such achievement would be difficult for non-banking financial services, especially in the insurance sector, due of the difficulty in convincing citizens of its importance.

Therefore, the insurance sector needs to exert more efforts to raise insurance awareness.

On the sidelines of the conference, Tawfik witnessed the launch of a new bank insurance product for customers after retirement, named “Tomorrow Pension.” The new insurance product provided jointly by the NBE and Misr Life Insurance.

He said the new product would develop the performance of insurance companies affiliated to the ministry, besides modernising and improving insurance services and providing new insurance products.

It also sets a framework for cooperation and integration between banking and non-banking financial services to boost financial inclusion.

Moreover, Chairperson and Managing Director of Misr Life Insurance Ahmed Abdel Aziz said the new product was a result of a major cooperation agreement between a life insurance company and an Egyptian bank, to provide innovative insurance products and solutions through the NBE branches so as to reach the largest segment of customers.

Chairperson of the NBE Hisham Okasha said the new service is one of the most important agreements that were signed in the bank insurance sector.

The insurance programme targets clients aged 18-59, and the minimum payment period is five years, whereby the pension is disbursed upon the customer’s choice, so that it can be made one time or through a fixed monthly pension for 10 years if the insured reaches the age of eligibility, dies, or suffers disability before reaching the age of eligibility.

So far, there are six agreements concluded by Misr Life Insurance with the banking sector.

Misr Life Insurance has five contracts with five banks operating in the Egyptian market: SAIB, EG Bank, Misr Iran Bank, Housing and Development Bank, and Nasser Social Bank. Those contracts aim to market life insurance products through those banks’ various branches.

Bank insurance is a marketing tool for insurance services, by providing insurance services to bank customers, based on mutual trust between the bank and its clients. Insurance coverage is marketed to them in the form of packages and insurance programmes for the education of children and marriage, retirement programmes that provide a monthly pension, and other benefits to the customer upon retirement.

During the conference, Okasha revealed that the bank’s funding to small and medium enterprises reached EGP 55bn.

He stressed that the inclusion of the informal sector in the formal sector will boost the Egyptian economy.

The bank pumped EGP 20bn to individuals within just seven months, to increase its portfolio from EGP 72bn to EGP 92bn at the end of January, he added.

Abdel Aziz said that the total compensation paid to holders of the Aman Certificate amounted to about EGP 90m for 2,600 families.

He added that the certificate holders reached 900,000 individuals since its launch in March 2018 in cooperation with the NBE, Banque Misr, Banque du Caire, and the Agricultural Bank of Egypt.

Misr Life Insurance, in cooperation with the four banks, spent EGP 14m on prizes for certificate holders, within the framework of the social responsibility of the company and its partners.

Chairperson and Managing Director of Misr Insurance Holding Basel El Hini said the insurance activities’ contribution to the GDP is 0.8%.

Misr Life Insurance was established in 1900 under the name of Ahlia Insurance Company, before rebranding to Misr Life Insurance after mergers between government companies in 2007. The authorised capital of the company is EGP 3bn and its paid-up capital is EGP 1.5bn. It is one of the subsidiaries of Misr Insurance Holding Company, affiliated to the Ministry of Public Enterprise Sector.

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CIB deploys digital solutions to revolutionise banking sector https://wwww.dailynewssegypt.com/2020/02/02/cib-deploys-digital-solutions-to-revolutionise-banking-sector/ Sun, 02 Feb 2020 08:00:26 +0000 https://wwww.dailynewssegypt.com/?p=720873 Bank aims to teach younger generation how to manage their money, grow their assets: deputy chief operation officer

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The Commercial International Bank (CIB) has been a pioneer in digital banking solutions in Egypt which can contribute to achieving the financial inclusion, the government’s highest priority and the most important passage into a sustainable economy.

Daily News Egypt interviewed Mohamed Farag,deputy chief operation officer to showcase the bank’s journey with digital banking and future products to individuals and companies.

The bank wants to be a key change agent that revolutionises the inclusive financial services landscape and introduces an innovative banking experience, he says.

What is your role in spreading financial technology (FinTech) and electronic payments in Egypt?

CIB is the largest private sector bank in Egypt and the world’s best bank in the Emerging Markets. It has been leading the digital transformation of the banking sector, being a key change agent that revolutionises the inclusive financial services landscape and introduces an innovative banking experience. Since 2010 Global transaction and Digital Banking group was formed to ensure that the ever-changing technological demands of our clients are addressed efficiently.

We believe in the transformative power of technology and how it can make us more efficient and better able to serve our clients. For this reason, we are continuously upgrading our platforms, distribution channels and offerings to make transactions more accessible and convenient to fit our clients’ busy lifestyles and change their traditional banking experience towards digital channels. We spread this digital culture among our customers which make CIB’s digital solutions the customer’s first choice and that is evidenced by percentage of automation that increases annually reaching 87% for external transfers through internet banking for companies, with more than 13,000 subscribers.

CIB is ranked first in Egypt for both digital domestic transfers and electronic governmental payments, and holds almost 25% market share for both internet and mobile banking service in the banking sector.

CIB’s Innovation Lab is positioned as the FinTech and Entrepreneurship Hub within the Banking Sector given its strong presence in the ecosystem via its contribution to all the sound incubators and accelerators in the market, which allowed us to always scout for potential startups enriching our startup portfolio and exploring different collaboration models.

Most of the accelerators and the incubators in the market approach CIB’s Innovation Lab given its pioneering position in the market and its rich value proposition and the viral positive impact it had created in the ecosystem.

CIB’s Innovation Lab has become known for its strong mentorship community inclusive of subject matter experts in different fields from and internal and external network. Our mentors are known for their willingness to support all the startups by giving back to the community and sharing their talent, network and knowhow.

How would the bank support financial inclusion in the Egyptian market?

Financial inclusion to a sustainable Egyptian economy is clearly the government’s highest priority. CIB has been supporting and contributing to such drives and spreading plans to accelerate financial inclusion in a country where only about 33% of Egypt’s population have bank accounts, as per the Central Bank of Egypt’s (CBE) declaration. The bank introduces market leading innovative digital solutions and products, supports entrepreneurship, and provides tailor customer-centric banking services that are conveniently accessible for all Egyptians, which directly align with the CBE’s efforts to promote financial inclusion throughout the nation and transform the financial landscape in the MENA region.

CIB launched Mobile Payment Service “Smart Wallet” in 2016 that targeted both banked and un-banked clients, revolutionises traditional payment methods by allowing users to pay for goods and bills using their mobile phones. It also facilitates P2P transfers across the nation without the necessity of having banking accounts. CIB Smart Wallet has the highest wallet activity rate in the Egyptian market.

In 2019, CIB obtained the license from the regulator to introduce the Mobile Acceptance via QR Code as a new payment method which will allow the bank to expand its merchant network rapidly and in a cheaper channel compared to the traditional terminals (POS) that used to be provided to the merchants.

The new payment method will encourage a large portion of the mobile wallet users who currently reached 13.5 million users to activate their wallets and follow the new market trend as it is one of the key use cases in CIB mobile wallet that will drive the activity rate aggressively. Also mega plans to distribute Meeza card to our customers and non CIB customers.

What are the services the bank provides currently?

As an industry pioneer in leveraging digital technology to streamline banking, CIB introduces new innovative bouquet of e-solutions that revolutionise the daily banking pattern. Our range of products is designed to be cost effectively, consistently implemented to fulfil our client expectations thus creating superior customer experience. Focusing on digitising customer journeys is what matters and availing an outstanding, simple, trusted, enjoyable and advisory digital financial experience.

The new Cash & GO ATM with a seamless and frictionless customer experience, the new Smart Wallet QR Code feature, Zaki The Bot.

Cash & GO ATM; provides a simple transaction flow with personalised customer experience and a higher transaction limit. It provides a simple flow and fewer clicks to reduce the waiting time.

Introducing the new mobile banking app with a new layout with enhanced user experience and added features such as fingerprint login, In app registration, managing beneficiaries, and viewing investment funds which have a considerable impact; fulfilling the customers’ needs, and easing their move to digital platforms, which ensure lower costs, maximise the yield from the existing assets, and improve the overall customer experience. The new application is ranked in the 1st place in terms of No. of downloads on the app store in Egypt.

The CIB Smart Wallet allows users to easily pay and buy directly over the mobile phones. Through few, simple steps in hand, customers can pay their bills (Mobile, DSL, Car License Renewal, electricity, etc.), recharge their mobiles, Send Money to any Smart Wallet holder instantly, cash-in/cash-out from CIB’s ATMs network, deposit/withdraw money from your Wallet from any Fawry Retailers, issue a secured card for online purchases with specified amount and simply perform normal purchases from a large list of registered merchants as a scanner is added to capture the merchant’s number automatically instead of writing it. Customers can also feed the wallet with money by choosing their linked CIB Debit, Credit or Prepaid card anytime and anywhere. CIB launched the QR payment over CIB POS terminals. Accordingly, this will allow the customers to pay using any wallet by scanning the QR code generated by POS. Also the static QR is under development and it will be launched to the market soon.

CIB provides a dual lingual chatbot for the banking services which is the first chatbot in Egypt introduced on social media platforms and bank’s website to help answering customers’ general nonfinancial questions such as branch working hours and product features.

CIB Business Online/Supply Chain: Scalable platform to introduce best in class technology for the online channels including cash management/trade management products. Also, we will introduce new chain that aims for increasing the working capital in order for supporting the small & medium enterprises.(i.e SMEs)

What about your new services in 2020?

Going forward, we will continue our efforts to enhance the customer experience. We will continue adding new functionalities at competitive prices. We also plan to focus on various in-branch digital tactics to further optimise average waiting and service times. We will work on improving the user experience and customer journey. We will upgrade digital user interfaces and platforms and adopt a multi-vendor strategy to derive the most value from existing assets. In doing so, we will build the capacity to service every kind of customer in the best possible manner.

Throughout 2020, CIB will work on further extending ATM network and adding new functionalities to enhance customer experience and grow our agent network. In addition, expanding in Smart Wallet acquisition is one of the year’s essential targets.

Does the bank target specific segments with its services or products?

We aim to ensure the financial inclusion of the younger generation by teaching them to manage

their money and grow their assets for the future for consumer clients , CIB launched Prime me bundle tailor-made to Millennia’s lifestyle with exclusive financial benefits

In 2019, CIB announced the signing of a partnership protocol with Business Women of Egypt 21 (BWE21), an independent non-profit organization enacting positive change for business women and the Egyptian economy. The protocol is part of CIB’s continued commitment to support women entrepreneurs running small and medium-sized businesses achieve sustainable development.

The protocol establishes CIB as BWE21’s exclusive bank sponsor and will see the bank help the organization set up voluntary workshops on financial awareness and attain financing for business development. Under the agreement, the bank will also develop a suite of banking services especially targeted at business women who are members of the BWE21, this initiative will continue in 2020 and ongoing.

Does the bank intend to open electronic branches in the coming period?

We believe that reverting to digital solutions will eventually decrease the reliance on physical branches in the digital age enabling customers to bank where they want, how they want and when they want. Self-service channels have become the basis through which customers get access to their bank; customers can now do nearly most of the financial transactions through our digital online channels such as ATM wide network as we provide the highest limit in the market of withdrawal and deposit along with other functionalities through a large network of up to 1,000 ATMs across the county. CIB Smart Wallet offers an innovative payment experience serving the banked and un-banked by providing a convenient, secure, and cost-effective way to make purchases using mobile devices , send money to any other wallet holder in Egypt, and deposit and withdraw cash from CIB’s ATM network or any of our authorised banking agents.

CIB new mobile banking makes banking easy as it offers an enjoyable banking experience allowing customers to conduct transactions on the go. So save you time, energy and money and go about doing what matters most.

What is the share of automation in the bank’s operations, and how does the bank work to increase it?

CIB is a pioneer in the digital solutions and that is evidenced by percentage of automation that increases annually reaching an average percentage ranging between 40% and 88% for external transfers transactions for companies and individuals, respectively. Cash deposit on ATM reached 95% of total bank transactions and 98% for cash withdrawal. CIB strives to develop digital channels to analyse customers’ behaviours. We, at CIB, pride ourselves in being able to anticipate customers’ needs and provide accordingly a personalised offering that meets their demand.

CIB continued to improve the quality of its customer experience by developing and growing our banking network and improve digital solutions in mobile wallets with the highest activity rate in the market. We currently have more than 625,000 smart wallet users.

CIB FinTech Engagement was initiated to cater to FinTech startup needs, providing them with the tools they need to survive in today’s competitive market, and formulated a pipeline of fintechs to nurture and introduce to the market.

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CIB named constituent of 2020 Bloomberg Gender Equality Index https://wwww.dailynewssegypt.com/2020/01/30/cib-named-constituent-of-2020-bloomberg-gender-equality-index/ Thu, 30 Jan 2020 16:55:44 +0000 https://wwww.dailynewssegypt.com/?p=720650 The bank is the only Egyptian institution to be included among the 325 companies in Bloomberg’s Gender Equality Index

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Commercial International Bank (CIB), Egypt’s leading private sector bank, has been included in the 2020 Bloomberg Gender Equality Index (GEI), the only company in Egypt and one of just a handful from Africa to be included.

The 2020 GEI features 325 companies representing 42 countries across 50 industries with a demonstrable commitment to the global advancement of women in the workplace. CIB was also named among 230 companies in the 2019 GEI.

The GEI aims to offer investors a glimpse into public companies committed to advancing gender equality through the measurement of five pillars: female leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, sexual harassment policies, and pro-women brand.

“We are extremely pleased to have been included in the 2020 Bloomberg GEI, marking our second year of on the index and underscoring our commitment to gender equality,” said CIB Chairman Hisham Ezz Al-Arab.

“Gender is a critical component of a robust environmental, social, and governance framework that is centered on global standards for equality, transparency, and sustainability. Doing well on gender and governance and curbing our environmental footprint isn’t just good policy, it’s good for business and good for all stakeholders, including our shareholders.”

A meta-study co-led by researchers at Oxford University found that “companies with robust sustainability practices demonstrate better operational performance,” while 80% of reviewed studies found that “sustainability practices have a positive influence on investment performance.”

CIB has prioritized the integration of gender equality into its operations. Today, women hold 23% of executive positions at the bank and comprise a total of 29% of the workforce. The bank has implemented market-leading policies for its staff including targeted medical benefits, and extended maternity leave along with a paid-leave programme for fathers. Additionally, the bank offers its customers gender-conscious services that promote financial inclusion and support women-owned enterprises.

“We note with approval the recent move in the investing community toward sustainability in finance, including most recently BlackRock Chairman and CEO Larry Fink’s annual letter to CEOs highlighting the challenges climate change will present to businesses and finance. Businesses worldwide, including financial institutions, must commit to operating in a way that leaves the communities in which we do business better than we found them.”

CIB’s sustainability drive aims to create partnerships and promote sustainable development in Egypt and across Africa. The bank prides itself on its culture of inclusion, partnership, and commitment to sustainability across its operations. CIB also supports sustainable development in Egypt and Africa in line with Egypt’s 2030 Vision and Africa’s 2063 Vision. To this end, it has undertaken a number of commitments to help it achieve its sustainability strategy, including joining the EU-AU Digital Economy Task Force, an initiative to promote Africa’s digital transformation, as well as becoming the first Egyptian financial institution to join the United Nations Environment Programme Finance Initiative (UNEP-FI).

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Renewing SME initiative for another 4 years: CBE’s Amer https://wwww.dailynewssegypt.com/2020/01/30/renewing-sme-initiative-for-another-4-years-cbes-amer/ Thu, 30 Jan 2020 08:00:36 +0000 https://wwww.dailynewssegypt.com/?p=720613 Banks pumped EGP 160bn to finance 86,000 small, medium enterprises

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Governor of the Central Bank of Egypt (CBE) Tarek Amer said the bank intends to renew the initiative for small and medium projects for another 4 years.

The CBE launched this initiative in December 2015, and was scheduled to end on 1 January 2020.

The initiative obliges banks operating in the Egyptian market to direct at least 20% of their loan portfolios to SMEs, and the micro-projects were also included in the initiative at a later time.

According to Amer, the banks have so far pumped EGP 160bn to finance 86,000 small- and medium-sized projects, pointing out that there are many banks that have already reached the percentage set in the initiative, and there are other banks that could not meet that ratio.

Amer was speaking on Tuesday evening to DMC news channel, on the occasion of renewing his post for another four years.

During the interview, Amer stressed the importance of the decision to liberalise foreign exchange and its role in providing the foreign exchange needed to move the economy.

Amer said that while the banks operating in the Egyptian market were suffering from the scarcity of foreign exchange before the floating decision, during the three years following the flotation they exported foreign exchange in excess worth $36bn, and the balances of Egyptian banks abroad are currently reaching about $17bn.

He added that $6.5bn was paid to foreign oil companies, and about $4bn to foreign companies operating in Egypt.

He pointed out that the flotation decision also led to a decrease in Egyptian imports from $76bn to $59bn annually, and provided foreign cash for the establishment of about 77 huge projects during the past four years, along with its role in stimulating tourism and increasing its resources to the highest level in the history of Egypt, and increasing remittances of Egyptians working abroad.

According to Amer, there would have been a further improvement in the indicators of the Egyptian economy starting in 2018, had it not been for some international events, such as the trade war between America and China that led to the delay of this improvement.

He added that the CBE managed to absorb liquidity estimated at about EGP 800bn of excess liquidity with banks during the past four years, through its various tools, and at a high cost, in order to maintain high interest rates in the market to protect depositors, and to contain inflation, pointing out that the CBE now aims to gradually return this liquidity to banks to stimulate investment.

Amer stressed that Egypt’s external debt is still within the safe limits according to international standards, and that most of it is long-term, and therefore there is absolutely no concern about its rise, especially as external debt is directed to establish projects that generate a return and are not consumed without benefit.

“We do not need new money from the International Monetary Fund and we have cooperated with them only technically. The fund previously offered new financing to Egypt and it was rejected, and the confidence of international investors in the US made us promote the international bond offering by phone, instead of the tours that we were conducting abroad,” he said.

“We could not open the industry file before the availability of the infrastructure and the fuel needed to operate it, and we are seeking to finish settling the debts of 3,500 factories during the current year, and we are working with the open market system, and the era of customer imprisonment is gone forever.”

Amer indicated that the CBE receives full support from the political leadership and cabinet, and there is complete harmony between the economic group, stressing that the banking sector is solid and ready for any shocks.

According to Amer, the new banking law, which is currently being discussed by Parliament, supports corporate governance in the CBE and banks, and opens the door for the existence of specialised banks in specific sectors.

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Capital flows return to emerging markets in September after August exit: CBE https://wwww.dailynewssegypt.com/2020/01/29/capital-flows-return-to-emerging-markets-in-september-after-august-exit-cbe/ Wed, 29 Jan 2020 14:13:31 +0000 https://wwww.dailynewssegypt.com/?p=720483 Direction of capital movement remains dependent on future outlook of economic activity growth rates, development of global trade tensions

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The Central Bank of Egypt (CBE) said that emerging markets witnessed a continuous return of capital flows in September 2019, following a temporary exit in August.

The CBE, in its monetary policy report issued on Tuesday, stated that the return of capital flows to emerging markets during 2019 came after it witnessed an eleven-months exit between February 2018 and December 2018, supported by the impact of the monetary policy direction on the economies of developed countries.

It pointed out, however, that the direction of capital movement remains dependent on the future outlook for the rate of growth of economic activity in addition to the development of global trade tensions.

The CBE said that net foreign assets of commercial banks continued to improve during the second quarter (Q2) of 2019, second in a row.

The decrease in net foreign direct investment continued on an annual basis during the Q2 of 2019, for the fourth consecutive quarter.

The CBE indicated that these developments came mainly as a result of higher outflows, despite the improvement in inflows on an annual basis, which recorded the highest rate since the Q4 2016. At the same time, the net foreign exchange reserves of the CBE rose slightly to record $45.1bn in September 2019, after having generally stabilised at $44.9bn in July and August 2019.

It said the decline in the financial account surplus continued during the Q2 2019, after surplus increased in the Q1 2019.

The CBE report pointed to the continued positive shift in investor perception of emerging markets since the beginning of 2019 to support the continuation of net investment flows in the foreign securities portfolio in Egypt during the Q2 2019 for the second quarter in a row, but at a lower rate compared to the previous quarter. The success of the Ministry of Finance in issuing international bonds during the Q2 2019 also supported the continuation of net investment flows in Egypt’s foreign securities portfolio despite the decrease in the size of issuance and surplus services settling on an annual basis during Q2 2019, after it recorded an improvement for the eighth consecutive quarter in Q1 2017 and Q2 2018.

This comes as remittances from workers abroad continued to decline on an annual basis during the Q2 2019, for the third consecutive quarter. Despite this, the annual decline rate decreased during the Q2 2019, for the second consecutive quarter.

The petroleum trade balance continued to improve on an annual basis during Q2 2019, for the sixth consecutive quarter, to record a surplus for the second time since Q3 2013.

This was mainly supported by the decrease in the volume of imports and the increase in the volume of exports, despite the decrease in world oil prices on an annual basis during Q2 2019, for the second consecutive quarter.

The improvement came mainly supported by a surplus in net natural gas exports since Q4 2018, while net imports of oil products continued to decline, mainly supported by the state’s fiscal reforms and improved domestic refining activity, which in turn mainly supported the stability of net oil exports.

The non-oil trade balance deficit improved on an annual basis during Q2 2019, for the first time since Q3 2017.

While the contribution of exports improved, the non-oil trade balance deficit betterment was mainly supported by a decrease in imports, especially imports of intermediate goods, for the first time since Q2 2017, after imposing custom duties on iron imports in April 2019.

At the same time, the net deficit in exports of goods and services continued to improve on an annual basis during Q2 2019, after rising during Q1 2019, for the first time since Q4 2016. This was mainly driven by an improved non-oil trade balance deficit.

The current account deficit continued to increase on an annual basis during Q2 2019 for the third quarter in a row, but at a lower rate compared to the previous quarter, after it recorded an annual improvement for the seventh quarter in a row during the period between Q4 2016 and Q2 2018.

The decrease in the pace was mainly driven by an improvement in the contribution of the non-oil trade balance deficit, the oil trade balance surplus, and the remittances of workers abroad. This was partly limited by the decrease in the contribution of both the net investment income deficit, while the contribution of the net services surplus stabilised.

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Foreign investments in Egypt’s T-Bills rise to EGP 254.30bn December 2019 https://wwww.dailynewssegypt.com/2020/01/28/foreign-investments-in-egypts-t-bills-rise-to-egp-254-30bn-december-2019/ Tue, 28 Jan 2020 09:20:55 +0000 https://wwww.dailynewssegypt.com/?p=720388 Increase of total outstanding balances of T-Bills to EGP 1.512trn 2019-end

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The Central Bank of Egypt (CBE) said foreign investments in treasury bills (T-Bills) increased by about EGP 5.03bn at the end of December, to about EGP 254.30bn, from EGP 249.26bn in November 2019.

Two days ago, Minister of Finance Mohamed Moeit revealed that foreigners’ contribution to government debt instruments increased to $22bn in December.

Before its recovery in 2019, Egypt lost about $10.8bn of foreign investments in T-Bills from April 2018 to December 2019, according to the CBE.

Emerging markets (EM) were exposed to a wave of foreign exit from investments in government debt instruments starting from April 2018 with the rise of the US dollar price, and the growing fears of the economies of these markets, especially after the crises of Turkey and Argentina, but the crisis slowed down in December, and then reflected positive flows since the beginning of this year.

Mohamed Abdel Aal, a banking expert and a board member of the Suez Canal Bank, expected indicators of foreign investments in government debt instruments to be more positive in the coming period, in light of the continued strong real return on them compared to other markets.

The CBE said that the total outstanding balances of T-Bills reached EGP 1.512trn in December against EGP 1.47trn in November 2019.

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Banks’ credit facilities reach EGP 1.84trn November 2019 https://wwww.dailynewssegypt.com/2020/01/28/banks-credit-facilities-reach-egp-1-84trn-november-2019/ Tue, 28 Jan 2020 08:40:40 +0000 https://wwww.dailynewssegypt.com/?p=720385 Private business sector accounted for 59.2% of the total facilities, and the industrial sector is at the forefront of the sectors that benefit from it: CBE

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The Central Bank of Egypt (CBE) said that the volume of credit facilities granted by banks operating in the domestic market to their customers reached about EGP 1.84tn by the end of November 2019, a decrease of EGP 13.3bn (0.7%), between July 2019 and November 2019.

The CBE attributed this decline to the decrease in government credit facilities by EGP 56.1bn. In contrast, the balance granted to non-government credit facilities increased by EGP 42.8bn, growing at a rate of 3.3%.

The CBE explained that the increase in balances granted to non-government facilities came as a result of the increase in the volume of facilities in local currency by EGP 51bn, while facilities in foreign currencies decreased by EGP 8.2bn.

Credit facilities refer to loans granted by banks to their customers, in addition to letters of credit and guarantee to cover imports.

The CBE indicated in its monthly report issued on Sunday that the private business sector obtained about 59.2% of total non-governmental credit facilities granted by banks to various economic sectors.

It said that the industrial sector came in the forefront of the sectors funded by banks, as it  got about 32% of these facilities, followed by the services sector which accounted for 26.2% of them, then the trade sector with 10.8%.

As usual, the agriculture sector received the lowest percentage of the credit facilities granted by banks to various economic sectors, as it acquired only 1.8% of the size of these facilities until the end of November 2019.

According to the CBE, there are other sectors that were not mentioned in detail, especially the household sector, which received about 29.2% of the size of these facilities.

The household sector holds a large share of the volume of loans with banks, and this stake is expected to increase during the coming period, after the CBE raised the maximum loan instalments percentage to 50% of the total borrower’s income instead of 30%.

This comes while the agricultural sector still suffers weak financing, due to the banks avoiding its finance, except the Agriculture Bank of Egypt (ABE) that specialises in financing and servicing this sector.

Earlier this month, the government and the CBE launched an initiative to finance the industrial sector with EGP 100bn, which would raise the volume of financing directed to this sector.

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Egypt’s domestic debt falls to EGP 4.186tn; external debt up to $109.3bn Sept. 2019: CBE https://wwww.dailynewssegypt.com/2020/01/28/egypts-domestic-debt-falls-to-egp-4-186tn-external-debt-up-to-109-3bn-sept-2019-cbe/ Tue, 28 Jan 2020 06:00:22 +0000 https://wwww.dailynewssegypt.com/?p=720368 External debt service reaches $2.9bn, including $1.7bn in instalments, $1.2bn in interest

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The Central Bank of Egypt (CBE) revealed that Egypt’s external debt increased to $109.3bn at the end of September, a growth of $600m (0.6%) compared to June 2019.

The CBE stated in its monthly report on Sunday that this increase came as a result of increasing net loans and facilities by about $1.7bn and a decrease in the exchange rates of most of the currencies against the US dollar by about $1.1bn.

Regarding the external debt service, the CBE stated that it amounted to about $2.9bn from July to September 2019, of which about $1.7bn was paid in instalments, and $1.2bn was paid in interest.

According to the CBE, the external debt ratio to the gross domestic product (GDP) decreased to 34.4%, which is still within safe limits according to international standards.

The CBE indicated that about 89.9% of the total external debt due on Egypt is long-term, which is after 12 months, which amounted to $98.33bn, while the remainder of $11.034bn is in short-term debt, that is expiring in less than 12 months.

The external debt is distributed at $58.863bn due on the government, $27.68bn from the Central Bank of Egypt, $9.2bn owed by banks other than the CBE, and $13.61bn from the remaining sectors.

The foreign debt owed by the government includes $18.89bn in international bonds and $39.96bn in loans.

In a related context, the CBE revealed that the total domestic public debt reached EGP 4.18trn by the end of September 2019, which is equivalent to about 66.8% of the gross domestic product, compared to EGP 4.28trn at the end of June 2019, a decrease of EGP 102.8bn.

The CBE indicated that 87.4% of the total domestic debt is due by the government, equivalent to EGP 3.65trn, a decrease of EGP 72.7bn during the period from July to September 2019.

It added that 6% of the total debt is due on economic public bodies, equivalent to EGP 251.3bn, a decrease of EGP 31.6bn, and 6.6% due on the National Investment Bank, equivalent to EGP 276.5bn, an increase of EGP 1.4bn.

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CIB launches Prime Me bundle targeting Millennials https://wwww.dailynewssegypt.com/2020/01/27/cib-launches-prime-me-bundle-targeting-millennials/ Mon, 27 Jan 2020 14:17:29 +0000 https://wwww.dailynewssegypt.com/?p=720473 The bundle features a range of banking and non-banking benefits, based on the Bank’s BONUS Points reward scheme

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Commercial International Bank (CIB), Egypt’s leading private sector bank, has announced the launch of its latest bundle, Prime Me, offering millennials a range of banking and non-banking benefits to meet their lifestyle needs.

The bundle targets CIB customers between the ages of 21 and 30, offering them a range of benefits through the bank’s BONUS points reward scheme. Customers can benefit from this bundle by opening an Easy current account, gaining access to a rewards scheme through the bank’s BONUS Points programme.

CIB Prime Me is part of CIB’s efforts to grow its millennial customer base through offering a range of products across its segments. It is centred on the bank’s BONUS points scheme, allowing customers to gain more points through their banking activities. Through this bundle, CIB offers millennials a unique value proposition through its targeted bundle.

“The Prime Me bundle is part and parcel of CIB’s ongoing efforts to expand its product offering for a large demographic within Egyptian society,” said Ahmed Issa, CIB’s Chief Executive Officer Retail Banking. “The bundle is designed to reward Millennials for using the banking system, while catering to their diverse needs and lifestyles.”

Not only do customers receive monthly BONUS points added to their accounts, they can also receive additional BONUS points on their debit and credit card transactions, referrals, loans, as well as by making at least ten transactions using their debit card each month. In addition to the BONUS points, the bundle offers customers a number of exclusive discounts at select merchants.

In order to benefit from the CIB Prime Me bundle, customers are required to have a monthly minimum balance of EGP10,000 in their account.

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Misr Insurance Holding eyes 10% growth in consolidated net profits: chairperson https://wwww.dailynewssegypt.com/2020/01/26/misr-insurance-holding-eyes-10-growth-in-consolidated-net-profits-chairperson/ Sun, 26 Jan 2020 16:40:46 +0000 https://wwww.dailynewssegypt.com/?p=720237 Company’s plan relies on achieving ambitious growth rates in various activities that lead to achieving the target profits

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Misr Insurance Holding Company (MIHC) aims to achieve 10% growth in consolidated net profits by the end of the current fiscal year in June 2020, MIHC Chairperson and Managing Director Basel El Hini.

He told Daily News Egypt that the company’s plan depends on achieving ambitious growth rates in various activities, which would lead to achieving the target profits.

The MIHC ordinary general assembly recently approved the financial statements of the company and its subsidiaries for the fiscal year (FY) 2018/19.

According to El Hini, the group achieved the largest profits in its history, with net profits reaching EGP 4bn with a growth rate of 22.5% compared to FY 2017/18.

El Hini said the state’s share in the company’s profits in FY 2018/19 increased to EGP 1.5bn, with a growth rate of 98.1% compared to 2017/18. He added that the group achieved effective and influential results in developing insurance services for subsidiaries, through fast and interactive means with both the customers and the marketing sector through modern communication channels, such as mobile applications and electronic collection, and keenness to provide high-quality insurance service through creating a highly qualified actuarial team in the fields of life and property insurance.

MIHC is adopting a completely new way to manage the huge financial investment portfolio, which achieved the expected returns for years.

This is done through Misr Asset Management, which is wholly owned by the group and supported by specialists in this field in managing that portfolio, with the assistance of major asset management companies in the Egyptian market, with the aim of devoting rational management to state-owned assets, by maximising the value of that financial portfolio and improve the return on it.

With regard to real estate activity, he said that the Group seeks to benefit of its real estate assets, managed by Misr Real Estate Management, through the establishment of projects in partnership with real estate investors and developers.

El Hini said there is a plot of land in the Rod Al-Farag district that is strongly recommended for development, and there is contact with real estate developers to make a proposal to develop this land.

He stressed the company’s keenness to preserve Egypt’s historical properties and maximise their value, in coordination with the relevant authorities and international institutions. He ruled out selling these buildings, saying there is a plan to develop many of them, either by the company itself or in partnership with others, under usufruct. The company is now in talks with developers to define the usufruct period.

He pointed out that the European Bank for Reconstruction and Development tasked a specialised company to study the MIHC’s real estate portfolio and how it can be used, which is expected to be ready within six months.

The MIHC also aims to switch all its properties leased under old rent contracts to new contracts, which would generate continuous liquidity.

The company owns 7,916 units leased under old rent contracts, representing about 88% of its real estate assets. They generate only EGP 30m, equivalent to 29% of the company’s total revenues from rentals. Other 1,126 units are leased under new contracts, representing only 12% of its real estate assets. They generate EGP 72m, equivalent to 71% of the company’s total revenues from rentals.

The MIHC established new companies to enhance its position as non-bank financial entity, including the Misr Takaful Insurance Company – Hayat, which was launched jointly by MIHC, Misr Life Insurance, Misr Insurance, the National Bank of Egypt (NBE), Banque Misr, and Misr Financial Investment Company. The company also considers the establishment of medical insurance, financial leasing, factoring, and consumer financing companies.

The proposed financial leasing company is a top priority for the MIHC. A financial advisor will be contracted to do the necessary study for it.

El Hini pointed out that a company specializing in microfinance would also be established, but not at the present time.

On a different note, he said his company contracted with an international reinsurance company to prepare a technical and logistical study for a new medical insurance company, pointing out that this study is currently underway, and its results are expected to appear within the next three months.

“The MIHC is the largest non-bank financial group in Egypt, but its main activity is insurance, and we want to cover other activities, but it is important for studies to prove the feasibility of establishing these companies,” El Hini said. “We are a profit-oriented company, we have the state’s contribution, and we aim to generate profits for the state.”

He added that the company owns stakes in some investment arms, but the new trend is to have ruling stakes in the companies that they establish.

Regarding the “fragmented” contributions owned by the group, the National Bank of Egypt, Banque Misr, and the National Investment Bank in many companies, El Hini said that a four-way group comprising representatives of these four entities had been formed, whose task is to find a way to deal with these contributions.

All options regarding these contributions are on the table, whether exiting from companies, increasing stakes, or combining them under the management of one of the four parties. After consultations among the four sides, they agreed to exit from two companies.

Regarding the company’s external expansion, El Hini said that the MIHC has a presence in Dubai, Kuwait, and Qatar.

Dubai’s and Qatar’s branches achieved good results, but there is no thought of expansion there, while the Kuwait’s branch incurred losses, and there is a study underway to improve its conditions.

As for Africa, El Hini said some studies were conducted over the African markets in this regard and they proved the futility of expansion there. “However, we seek to increase reinsurance activity with African countries, and to make strategic partnerships with international insurance companies operating in Africa,” he concluded.

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NBE targets 15-20% growth in all sectors: vice chairperson https://wwww.dailynewssegypt.com/2020/01/26/nbe-targets-15-20-growth-in-all-sectors-vice-chairperson/ Sun, 26 Jan 2020 16:32:50 +0000 https://wwww.dailynewssegypt.com/?p=720215 We aim to channel more financing to SMEs and retail loans: Aboul Fotouh

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The National Bank of Egypt (NBE) aims to achieve 15-20% growth in its various sectors this year, Vice Chairperson of the NBE Yehia Aboul Fotouh said.

He told Daily News Egypt that the bank aims to channel more financing to small and medium-sized enterprises (SMEs) and retail loans.

The bank’s loan portfolio reached about EGP 570bn at the end of December 2019, EGP 90bn of which were in retail loans, which represents about 12%. The bank aims to increase this figure to EGP 100bn by the end of this year, through expanding the bank’s contribution to the Central Bank of Egypt’s (CBE) initiative to finance low-income housing, credit cards, personal loans, and other retail products.

The CBE’s decision to increase the debt-to-income ratio for personal loans to 50% from 35% would surge the demand for such loans.

The bank pumped about EGP 62.3bn to finance SMEs, of which EGP 55.2bn are direct facilities for 72,000 customers, and EGP 7bn were indirect facilities. Moreover, funds worth EGP 36.8bn were granted to about 45,200 customers under the CBE’s initiative to support such projects.

The bank aims to increase the portfolio of this sector to EGP 100bn by the end of the current fiscal year in June 2020.

With regard to mortgage financing, Aboul Fotouh said the NBE ranked first among banks participating in the CBE’s mortgage finance initiative which was launched in 2014.

He pointed out that the bank pumped EGP 8bn worth funds for this sector, including EGP 7.7bn under the CBE’s initiative to 80,000 customers, of which 96% were allocated for low-income citizens.

“The NBE aims to expand in financing the industrial sector, in light of the CBE’s initiative launched in 2019 to support the sector,” Aboul Fotouh said.

The CBE, in cooperation with the government, decided to allocate EGP 100bn for medium and large industrial projects whose sales amounted to EGP 1bn annually, at a decreasing interest rate of 10%, through long or short-term loans according to their needs. The priority will be given to industries that provide alternatives for imported products.

The NBE aims to acquire the largest possible share of that initiative. “We hope to grant EGP 150bn in financing this important sector, not just EGP 100bn,” Aboul Fotouh said.

On a different note, he said the NBE would expand in the non-bank financial services significantly in the coming period.

Al Ahly Capital Holding, the investment arm of the NBE, recently announced its acquisition of Pharos Securities Brokerage. The company also approached acquiring Pharos Promoting and Underwriting, Pharos Asset Management, and Pharos One Fund, which are all expected to be completed this month.

Aboul Fotouh said the acquisition of Pharos is part of the NBE’s plan to establish an integrated investment bank, through the National Capital Holding, denying any negotiations to acquire other companies at the present time.

Regarding the bank’s geographic expansion, he said that the predetermined plan was to open 50 branches annually, pointing out that the bank’s branch network reached 500 branches last year.

In 2019, the bank opened six electronic branches, and there was a plan to bring this number to 25 branches by the end of 2020, in line with the state’s financial inclusion strategy.

The bank’s electronic branches are in City Stars, Point 90 Mall, Mall of Arabia, City Center Alexandria, City Center Almaza, New Giza, and two branches are being prepared in City Center Hurghada and City Center Ismailia.

The selection of the branches’ locations followed certain criteria, including the appropriate geographical location, the target segment of customers, the age group, and other factors. He pointed out that the services offered in those branches are currently at their first stage, and more services to follow according to the bank’s study of the market, local, international changes, and the needs of customers.

Electronic branches provide many services, such as issuing prepaid payment cards and bank statements, updating thedata, subscribing to Al Ahly Net service, iPhone Cash wallet, and opening new accounts for new and existing customers.

Customers can also benefit from a package of services through the ITM machines, located in these branches, where the customer can withdraw cash with a maximum of EGP 30,000, make cash deposit with a maximum of EGP 50,000, and deposit checks for collection.

These branches would also provide the service of collecting checks issued by other banks, issuance of checkbook, and printing account statements in the coming period.

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“We aspire to put HDB among Egypt’s top 10 banks”: Ghanem https://wwww.dailynewssegypt.com/2020/01/25/we-aspire-to-put-hdb-among-egypts-top-10-banks-ghanem/ Sat, 25 Jan 2020 09:30:06 +0000 https://wwww.dailynewssegypt.com/?p=720099 We aim to focus on industry in our next plan, in implementation of the initiative launched by the CBE to support this sector

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Hassan Ghanem, vice chairperson and managing director of the Housing and Development Bank (HDB), said that the bank aims to be among the 10 largest commercial entities in the Egyptian market.

Ghanem explained, in his interview with Daily News Egypt, that the market share of the bank is currently about 0.93% in the total deposits and 1.13% of the total loans in the Egyptian banking sector.

According to Ghanem, the HDB aims to focus on financing the industry in its next plan, in implementation of the initiative launched by the Central Bank of Egypt (CBE) to support this sector, pointing out that plans, and strategies have been identified to put the bank on the right track in relation to the digital transformation.

The HDB will soon launch two services, Mobile Banking and Internet banking, to support the state’s transformation into a cashless society and activate the concept of financial inclusion. The bank is also in the process of launching two electronic branches in major commercial malls in Cairo as a first stage and they are scheduled to open this year.

First of all, what are the most important economic sectors that the bank will focus on financing in 2020?

Certainly, the focus will be on the industrial sector, in implementation of the initiative launched by the CBE to support this sector with EGP 100bn, in addition to the strategic sectors that contribute to economic development, such as renewable energy, petrochemicals, electricity, telecommunications, services, construction, and building.

What about SMEs?

The volume of financing directed to small and medium-sized enterprises (SMEs) in the bank, up to the end of August 2019, amounted to EGP 3bn, provided to about 1,100 customers, mostly in the industrial, commercial, and agricultural sectors.

How much is the amount of financing that the bank has pumped into the real estate mortgage initiative?

The bank’s real estate finance portfolio recorded EGP 6.7bn at the end of September 2019, compared to EGP 6.38bn at the end of 2018, an increase of EGP 361m. The volume of loans granted under the initiative of the Central Bank of Egypt (CBE) for real estate mortgage financing amounted to about EGP 5.3bn.

What about retail bank loans?

The size of the retail bank loan portfolio reaches more than EGP 2.2bn by the end of September 2019, with a growth rate of 29.5%, which is higher than the 25% targeted in the bank’s plan.

What is the bank’s plan to develop those banking services?

The HDB is keen to provide banking products that cover the needs of all customer segments, and are in line with the requirements of the banking market and competition principles. With this in mind, the bank has paid special attention to achieving diversification of its products that serve individuals and the household sector, by providing retail banking services and products, which include retail bank loan products and customer deposit products. At the level of loans, the bank offers a package of personal loan products to all segments of society to include the government and private sector. The bank has restructured the durable goods product and pensioner loans, as well as the business owners and self-employed loans, which the customer obtains in order to develop their business up to EGP 1m. The auto loan programmes have been prepared, to suit all customer segments, and new credit programmes will be prepared for credit cards.

The bank also paid great attention to deposit and savings certificates, which provides distinct and consistent regular returns, either monthly or quarterly, annually or semi-annually extending over three, five, or seven years. These certificates meet a remarkable demand from the bank’s customers.

Children and youth have had a large share of the bank’s interests, especially in the area of developing savings awareness for them, and working to spread the banking culture among them, as the bank presented them with a savings account for children and youth with prizes, which has a minimum balance of EGP 100. This allows for a large segment of children to enjoy the opening of bank accounts at a young age and increase their savings and banking awareness. The bank also provides upward savings account with similar benefits.

In the coming period, the bank is considering launching some new savings products, with the aim of encouraging savings in the short term, as it will launch a saving programme with a distinct return that allows obtaining large amounts at the end of the savings period, in exchange for the customer’s commitment to deposit fixed payments periodically and determine the period and the value of the installment according to their needs for cash, including school and university tuition expenses and seasonal holidays.

What about electronic services?

The bank is keen to keep pace with the technological development in the technology banking services business and to develop and facilitate communication with the bank’s customers, by creating and offering a comprehensive package of modern and safe electronic solutions.

In this regard, the bank recently launched the mobile payment service, Felosy Phone App, to help the bank’s customers pay the due installments and payments, including all bills at any time, from anywhere, to save time and effort.

The bank also begins an electronic collection initiative for real estate mortgage financing installments through various electronic payment methods starting 1 December 2019. The bank aims during the next stage, to continue to develop plans and strategies that put the bank on the right track of the digital transformation plan, where two services -Mobile Banking and Internet banking services- will be launched, to support the state’s trend to convert into a cashless community, activate the concept of financial inclusion, and attract new segments to deal with the banking services and keep pace with the latest developments in banking technology in the world.

What about the geographic expansion plan?

The bank’s network currently reaches 95 branches, in order to achieve an orientation towards expansion in the targeted areas. Proliferation areas are chosen according to the banking vision, target customers, and saving products.

In order to achieve the required geographical spread and according to the results of feasibility studies, due consideration was given to the selection of branches to be completed in Greater Cairo, and Upper and Lower Egypt, and will continue this trend in 2020/2021 plan.

The bank has recently signed an agreement with Orascom to build the bank’s administrative building at the New Administrative Capital. The bank lies on 9843 sqm and will cost EGP 636m. The new headquarters will be equipped with the latest technology, and it will include, alongside the bank’s departments, an electronic archive centre for all the bank’s documents. It will also include a branch of the bank and not only an administrative headquarters. The bank aims, at the present time, to cover all regions and governorates of the republic with its branch network, to cover all banking and housing services in all regions. The bank, however, does not intend to open branches abroad for now.

What about electronic branches?

The bank is in the process of launching two electronic branches in the major commercial malls in Cairo as a first stage, one of them in the 6th of October City, and the other in the 5th Settlement. Both are scheduled to open this year.

What about the bank’s efforts to help the country achieve financial inclusion?

The bank carried out many activities in the field of financial inclusion during 2019, including holding educational seminars on the concept of financial inclusion and its importance, in coordination with various groups of society, such as the Faculty of Commerce Damanhur University, and the Chinese University, and published definitions of financial inclusion on the bank’s official page on social media platforms.

The bank also held training programmes in coordination with the Egyptian Banking Institute to spread the culture of financial inclusion for bank employees, and designed educational programmes on financial inclusion for external parties for students and women.

In addition, the bank held 245 exhibitions throughout Egypt during the activities of financial inclusion in March, April, August, and October, to consolidate and enhance financial inclusion, and attract and motivate the largest number of groups of society to deal through the formal financial system.

How much is the bank’s market share currently?

The bank’s market share for deposits is 0.93% and for loans 1.13%.

What are the most prominent details of the bank’s business strategy during the coming period?

An ambitious strategic expansion plan has already been developed for the bank’s work from 2018 to 2022. In addition to strengthening the bank’s reputation, we are also working to consolidate a mental image of an integrated bank that offers banking and housing services, through a strategy aimed at geographical expansion during the next five years.

We aspire to be among the 10 largest commercial banks in the Egyptian market, while working to maintain high operating efficiency through the development of new banking products that are compatible with the geographical location of the branches, according to each geographical region, including Upper Egypt, Marsa Matrouh, and Sinai. We will also be introducing a new element bearing the bank’s logo, represented in cars to reach remote areas that lack banking representation, such as villages and hamlets, after obtaining the approval of the CBE.

We are also interested in being present on social media since 50% of the total dealers with banking services are youth. A new system was created for VIP customers, by providing services to them through large branches and allocating places for them at the hands of competent employees. The bank is also adopting a sustainable development policy as one of the most important principles to support the bank’s continuity during the next stage, by strongly entering in the field of mobile wallets and Internet Banking to serve individuals and institutions.

Furthermore, the bank is also taking interest in people with special needs and is seeking to reach this marginalised group, by preparing the new branches with accessible entrances.

The bank is further enhancing its social responsibility service through its contributions that serve the environment, social justice, and social integration, as the goal and interest of the bank is not limited to merely achieve economic returns for its activities and services, but rather taking into account the interests of customers, in order to obtain an appropriate economic return.

In the housing field, the bank seeks to continue to solve housing problems, by participating in the financing of social housing projects, providing appropriate facilities for housing customers, maximising the benefit of the initiative of the real estate mortgage financing initiative of the CBE and the financing of low and middle-income groups, in coordination with the Mortgage Finance Fund, to include housing units in various social housing projects, in Sakan Misr, Dar Misr, and the 1m housing units project.

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Credit Agricole Egypt embarks on digital transformation plan for three years https://wwww.dailynewssegypt.com/2020/01/25/credit-agricole-egypt-embarks-on-digital-transformation-plan-for-three-years/ Sat, 25 Jan 2020 09:00:09 +0000 https://wwww.dailynewssegypt.com/?p=720100 Bank will be part of the CBE’s initiative to support industrial sector

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Credit Agricole Egypt has an ambitious plan to become a leading innovation-driven sustainable bank, to re-affirm its position throughout the different sectors of its operations while serving the national goals and supporting the local economy, the bank’s Managing Director Pierre Finas said.

In an interview with Daily News Egypt, Finas stressed that the bank’s strategy stems from its raison d’être “working every day in the interest of our customers and community”.

What are the main features of Credit Agricole Egypt’s strategy in the coming years?

Credit Agricole Egypt’s strategy stems from our Group’s raison d’être “working every day in the interest of our customers and community. In this sense, we have an ambitious plan to achieve our objective, which is to become a leading innovation-driven sustainable bank, to re-affirm our prominent position throughout the different sectors of our operations while serving the national goals and supporting the local economy. Definitely, our clients’ satisfaction is on top of our priorities and drives our attention towards the quality of services and the customer experience. Thus, we are pursuing our fast steps to offer value-added innovative products to satisfy their needs and ambitions in addition to a convenient multichannel access that is both fully human and digital. Finally, we are proud to say that our plans and efforts are in line with the dissemination of the digital culture which is aligned with the Central Bank of Egypt’s (CBE) initiatives to move towards a cashless society.

What are the main indicators of the bank’s performance to date?

Credit Agricole Egypt registered a net profit of EGP 1.868bn in the third quarter of 2019, representing an increase of 11.5% compared to the same period a year earlier, which reflects the continued commercial growth and operational efficiency.

Furthermore, the business results showed continued improvement in cost-to-income ratio that recorded 27.6%, while the return-on-assets ratio amounted to 4.4%, and the return-on-equity ratio reached 46.9%.

The bank’s capital adequacy achieved a strong rate of 19.36%, and the loan portfolio recorded EGP 23.4bn.

Moreover, the assets quality continued with an improvement in non-performing loans (NPL) compared to December 2018, registering a ratio of 3.11%. The deposit portfolio reached EGP 41.1bn, while the loan-to-deposit ratio reached 57.1%, and the total shareholders’ equity reached EGP 6.6bn.

What is the size of the bank’s financial contributions to SMEs?

We believe the SMEs constitute the backbone of any economy. We give importance to this sector. In fact, Credit Agricole Egypt has developed since years the concept of business hubs that are disseminated across Egypt to provide expertise and advice to SMEs, in addition to the investment and credit services.

Regarding our future plans, the bank announced, during the recently held ‘RiseUp Summit’, the results of its competition for startups to provide innovative solutions for digitalising the SMEs supply chain, to offer a speedy, efficient, and convenient solution, which will cover both the needs of our customers and their suppliers and would support the growth of their businesses.

What about the bank’s mortgage finance activities, whether independently or under the CBE’s initiative?

With regard to the CBE’s mortgage finance initiative, the bank is taking steps to roll out the new initiative to our individual clients so as to leverage the attractive interest rate, which on one hand will lead to a rebound in the real estate market, and on the other hand will meet the needs of the largest segment of society for securing housing at appropriate terms.

It is also worth noting that the bank has been providing mortgage finance activities for several years. In addition, the bank owns the Egyptian Housing Finance Company that is specialised in this field.

What are the bank’s objectives in regard to deposit and loan portfolios, and profits?

As I mentioned, the bank has a medium-term plan to grow the business and continuously boost our portfolios, in the light of our aim to be the financial partner to our customers and to the economy. This is evidenced in the fact that the ratio of loan-to-deposits in Egyptian pound has exceeded 65% at the end of September 2019, which is an indication that the bank is constantly seeking to finance both projects and individuals.

We see that there are great opportunities in this fast-growing market following the courageous and pertinent initiatives taken by the CBE since 2016 and to date. These are giving means to many major infrastructure projects in different sectors with a lot of financing opportunities. In addition, and with this favourable economic growth, the bank will be also accompanying its individual, SMEs, and corporate customers to cover their projects and ambitions.

What is the size of the bank’s branch network and expansion plan?

The bank currently has a network of about 80 branches and 200 ATMs nationwide. It opened in early 2019 its cashless branch at Dandy Mall, to become the first in the series of its innovative branch model “Banki Store”. This new model or concept is based on the balance between digital services and banking advice via the relationship managers present across our network. During the course of the year, we also opened several Banki Store branches in El Mesaha Square in Dokki, Tanta, Shebine El Koum, Sheikh Zayed, and Gleem in Alexandria.

As for our geographical expansion throughout Egypt, so as to be closer to our clients, wherever they are, we are planning to inaugurate five new branches during 2020 and raise the number of its ATMs by 50% in touristic areas. The new branches will also continue to follow the new innovative model Banki Store, in an initiative from our side to support the dissemination of the digital culture.

What are the main areas/locations where the bank intends to expand in the coming period, and do you intend to have a presence in the New Administrative Capital?

As you know, the bank is widely spread across the nation. We generally seek to be present in all regions across Egypt, including the New Administrative Capital, but not necessarily by having an administrative office. It is possible to open a branch there to serve both corporate and retail clients.

What is the situation of the bank’s non-performing loan (NPL) portfolio?

The bank’s NPL loans decreased to 3.11% of total outstanding loans in the market at the end of September 2019, compared to 3.27% at the end of December 2018, with a coverage ratio of 140% in September 2019.

How much is the bank’s capital currently, and is there an intention to increase it over the coming period?

The bank’s paid-up capital currently stands at EGP 1.243bn, and we at Credit Agricole Egypt are prepared to comply with the criteria and requirements of the new Banking Law that will be executed in the coming period. The bank has no problem with complying with this limit in light of the group’s keenness to operate in the Egyptian market to leverage the strong investment opportunities that exist in it.

What is the bank plan for disseminating financial technology and electronic payments in the Egyptian market?

Credit Agricole Egypt has embarked on a digital transformation plan for three years, with the aim to offer our customers the convenience of a multichannel experience. Our transformation has given place to “Banki by Crédit Agricole”, a unique fully-fledged platform of state-of-the-art digital services for both corporate and individuals. We are proud that our efforts have been acknowledged and we have received many prestigious awards. This is due to our focus to provide easy tools such as Banki Mobile and Banki Wallet, as well as other services, with the objective to help our customers shift to digital services from one side and to support the dissemination of the digital culture from the other.

Not only that, but as explained earlier, we have launched the innovative branch concept “Banki Store” in addition to “Banki Corners” in our branches. Those are animated by digital greeters that introduce the digital services to our customers.

As a result of these continuous efforts, Credit Agricole Egypt has recorded that 1 out of 3 customers are now registered in the digital services. We have witnessed an increase by 25% in the total digital transaction banking, while its conventional transactions in branches fell by 10%. The bank also increased the number of its e-wallet clients over 100,000 people. These figures indicate the gradual reliance of our customers on the digital services, which paves the way to the dissemination of the digital culture and the usage of e-services in alignment with the CBE’s directions.

What is the bank’s position from the CBE’s initiatives to support the industrial sector?

We believe the CBE, via its numerous and continuous initiatives, aims to achieve an economic and social development. The initiative to revitalise the industrial sector will, certainly, support booming the industrial sector in Egypt, push the development process forward, enhancing the competitiveness of the local products to target exports and finally will create new job opportunities. With our ultimate objective to support the local economy and community, Credit Agricole Egypt will be part of this initiative.

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Geopolitical events cast shadow over expectations of pound’s interest, reserve, inflation https://wwww.dailynewssegypt.com/2020/01/25/geopolitical-events-cast-shadow-over-expectations-of-pounds-interest-reserve-inflation/ Sat, 25 Jan 2020 08:10:48 +0000 https://wwww.dailynewssegypt.com/?p=720085 I expect a rate cut from 2% to 3%, exchange rate to EGP 14-15: Abdel Aal

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The geopolitical events in the region surrounding Egypt cast a shadow over the experts’ expectations regarding the future of the pound against the dollar, interest rates, foreign exchange reserves and inflation in 2020.

According to a number of experts who have been polled by Daily News Egypt, these events make the prospect of the future extremely difficult, especially as they are closely related to foreign investments in government debt instruments, and oil prices, which are two major determinants in forecasting the future of the pound’s exchange rate, interest, reserve, and inflation.

This is confirmed by Mohamed Abdel Aal, a banking expert and member of the Board of Directors of the Suez Canal Bank, who pointed out that these events turn expectations into mere wishes and dreams.

Regarding the future of the pound’s interest rates, Abdel Aal said that annual inflation decreased to single digits by the end of December 2019, to reach 6.8% compared to 11.1% at the end of December 2018. This was the biggest evidence of the success of the Central Bank of Egypt (CBE)’s monetary policy in controlling inflation, and bringing it to its lowest level in nine years. The bank achieved its target of 9%(+/-3%), which paves the way for the possibility of further rate cuts -up to 200, or 300 basis points gradually- until the end of 2020.

Abdel Aal stressed that the timing of the rate cuts will not only be linked to the rate of inflation, but there is another set of interconnected factors that may advance, or delay this measure.

He explained that one of these factors is the effect of geopolitical developments on the cash flows of the Middle East region, including Egypt, and reviewing the feasibility of any interest cuts, and its relationship to the development of public debt on the one hand, and the cost of debt on the other, as any interest reduction of 1% equals EGP 10bn reduction in the cost of public debt.

He said that among the factors is the impact of any reduction on the employment ratio for deposits in banks, and the extent of its incentive for investors to borrow. Currently, the ratio of loans to deposits in banks ranges between 42 to 44%, which is a very low rate.

Also among the factors is the evolution of the yield curve on 10-year treasury bonds, the 3-month bills, and the degree of change between them, as this indicator is one of the most important determinants that members of the Monetary Policy Committee (MPC) consider when making an interest rate decision, as the committee considers the effect of any interest reduction on this curve.

According to Abdel Aal, these factors also include the evolution of the Liquidity Coverage Ratio (LCI), which means good assets that are rapidly converting to liquidity, and the extent of the impact of any interest reduction on the numerator and denominator of that ratio.

Also among the factors is the measurement of the results of the process of automatic pricing of gasoline at its next session, in light of the rise in oil prices globally, and the impact of this on inflation in the future.

“The committee may see in the next stage the possibility of reducing the compulsory reserve ratio at the CBE, as an alternative to reduced interest, or use the two together gradually, and thus return liquidity to the banks and, in turn, re-employ them, although I do not see a need for that in light of the initiatives launched by the CBE to encourage industry and tourism,” he said.

Abdel Aal stressed, “We must look at the package of cuts that occurred throughout 2019, amounting to 4.5%, and we measure and evaluate their effects on macroeconomic indicators accurately, so that the future interest rate is dealt with in a balanced manner, after having played its role in targeting inflation efficiently.”

With regard to the exchange rate, he expects the Egyptian pound to remain stable, and to continue its strong performance against other currencies, supported by the continued improvement of macroeconomic indicators, specifically the recovery of tourism, where its revenues are expected to reach $15bn this year, and the stability of the Suez Canal revenues despite the slowdown in world trade, with more growth expected in remittances from Egyptians working abroad to reach $28bn, along with improved export indicators.

“It is true that there are fears of high oil prices and its impact on the oil import bill, but it will be lessened by the increase in Egypt’s exports of natural gas, which will rise in price with higher oil rates,” he explained, noting that the prime minister took over the investment portfolio and the formation of an investment committee that he chairs to help solve the problems that face the growth of direct investment during the recent period. And if these efforts succeed, this will help the flow of more foreign exchange.

“I confirm my expectations for the stability of the price of the pound with its tendency to rise up to a balanced rate, achieving the interests of all dealers of all kinds, according to the conditions of supply and demand, where the dollar can reach a price level between EGP 14-15 in stages,” according to Abdel Aal.

Regarding the future of foreign exchange reserves in 2020, Abdel Aal believes that it is expected to grow to reach $50bn by the end of 2020.

He said it depended on several factors, including the payment of loan installments and their interest, the offering of long-term bonds to pay due debt, and the movements of gold prices included in the reserve, taking into account the provision of payments for foreign investments in government debt instruments through banks, not the CBE. Thus, the CBE would receive foreign exchange surplus and channel it to support the reserve.

As for the direction of inflation in the new year, Abdel Aal sees that inflation will be within CBE’s target of 9% (+/-3%), ranging from 7 to 9%, pointing out that some estimates raise it to 10%, but the CBE will be keen to keep it below the target level.

Tarek Metwally, a banking expert, also stressed that the expectations seem very difficult, in light of the current tensions and turmoil in the Middle East, and their repercussions during the coming period, and the extent of their exaggeration or curtailment.

He said he will assume that the impact of this crisis is short-term and limited-impact, and reason and interests will be prevalent to avoid the devastating effects on the region and the world. Based on the best scenario, which is the calm of the situation in the region, Metwally expects the CBE to continue the policy of monetary easing, and to reduce the interest rate on the pound to levels less than 10% during 2020, to encourage investment, production, and employment, and in line with the initiatives launched to revitalise the markets. This comes in light of the decline of inflation rates, as well as facing any possible contraction or slowdown during the coming period.

Regarding the exchange rate, Metwally explained that the coming period is expected to be characterised by fluctuation in the movement of the dollar, as it will remain within EGP 15.5-16.5, due to internal challenges to the success of the second stage of the economic reform programme, which requires attracting more direct investments, increasing production and export, reducing the trade balance deficit, ensuring the sustainability of growth and foreign exchange sources, and reducing dependence on investment in domestic debt instruments.

As for the direction of inflation, Metwally expects a further decline in it, in light of the appearance of signs of a slowdown in the movement of the market, which helps the monetary policymaker to have more flexibility in reducing interest rates.

He said that all the above have a direct impact on the cash reserve in light of the growing rates of tourism and investment in domestic debt instruments with a slight growth in Egyptians’ remittances and the Suez Canal revenues.

Metwally believes that the export rates still need more work to make leaps during the coming period, noting that in light of these factors, the foreign exchange reserve is expected to move between $45-$47bn by the end of 2020, which is an acceptable rate in light of the challenges and conditions in the region.

He noted that if the conflict develops in the Middle East region, regarding the Libyan-Turkish and the American-Iranian crises, it will have an impact on the economies of the region, including Egypt.

Monette Doss, vice president of research at HC Securities, expects general stability in foreign reserves over 2020 supported by sustainable foreign currency inflows from tourism, oil import savings, and potential expansion in oil exports.

Doss believes that Egypt’s sovereign debt will continue to attract carry trade due to the positive real interest rate offered.

During 2020, the Egyptian government is due to repay some $11bn in foreign currency debt, the bulk of which is maturing gulf deposits, the terms of which are like to be extended over another period.

In the budget, the government expects total foreign debt repayment of $3bn over fiscal year 2019-2020 which will be largely offset by planned international bond issuances of $4.5bn.

Looking at inflation differential between Egypt and its trading partners, Doss would expect 5% depreciation in the EGP over 2020.

“We ,however, believe that this could be largely mitigated by continued foreign currency inflows into the economy through its different channels,” she said.

Doss also expected interest rate cuts of 1.5-2% in 1Q 2020 and inflation to average 7.5% during the year.

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IDB profits reach EGP 512m in 2019 https://wwww.dailynewssegypt.com/2020/01/19/idb-profits-reach-egp-512m-in-2019/ Sun, 19 Jan 2020 17:51:12 +0000 https://wwww.dailynewssegypt.com/?p=719627 We continue to support and develop Egyptian industries to achieve sustainable development: Fahmy

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The business results of the Industrial Development Bank (IDB) revealed that the bank achieved profits of EGP 512m, before taxes, at the end of 2019, compared to EGP 379m at the end of 2018, representing an increase of 35%.

Maged Fahmy, chairperson of the bank stressed the bank’s keenness to strongly contribute to the progress and growth of all sectors in the country, especially the industrial sector.

Fahmy said that the bank aims to expand the spread of new branches nationwide, as it aims to bring the number of branches to 50 by the end of 2023, as well as completing the main headquarters in the new administrative capital.

He pointed out that the bank ranked fifth in financing small and medium projects, and the sixth in real estate financing for low-income people at the level of the banking sector, as it is the top participant in financing the commodity exchange project, as well as support for both the furniture city in Damietta and Rubiky city for leather.

According to Fahmy, the bank will launch new electronic products, such as internet banking, mobile banking, and electronic wallet, pointing out that during the coming period, about 42 ATMs will be deployed to cover different parts of Egypt.

He said that the Meeza direct debit card was issued as part of the bank’s expansion plan in the field of retail banking.

Fahmy stressed the bank’s focus on subsidiaries after the restructuring of Tanmia Financial Leasing Company, which was reflected in its performance significantly.

He said that the bank participates heavily in the reemployment initiative for defaulters, in addition to a number of joint financing projects, which reflects positively on the local industry.

In mid-2019, the bank launched an initiative to finance 1,000 small and medium-sized factories and initially allocated EGP 7.5bn to help provide 20,000 jobs.

For his part, Vice-Chairperson of the Bank Hamdy Azzam said that the bank achieved its highest growth rate in its history during 2019, as the bank’s financial position increased to EGP 31bn at the end of 2019, compared to EGP 24bn at the end of 2018, with a growth rate of 27%.

He added that the bank’s loan portfolio increased to EGP 13bn at the end of 2019, compared to EGP 10bn at the end of 2018, with a growth rate of 32%, while the regular loan portfolio increased to EGP 12bn against EGP 8.7bn with a growth rate of 38%.

Customer deposits increased to EGP 25bn at the end of 2019, compared to EGP 19bn at the end of 2018, with a growth rate of 32%. Azzam said that the non-performing loans portfolio had decreased to EGP 1bn by the end of 2019, pointing out that these debts correspond to provisions and credit risk insurance policies.

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Egypt’s external debt up 17.3% YoY to $108.7bn in FY19 https://wwww.dailynewssegypt.com/2020/01/19/egypts-external-debt-up-17-3-yoy-to-108-7bn-in-fy19/ Sun, 19 Jan 2020 16:42:59 +0000 https://wwww.dailynewssegypt.com/?p=719594 External debt-to-GDP ratio 36% in Egypt, 48.5% in Latin America, 47.5% in Middle East

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Egypt’s external debt increased by $16bn to $108.7bn in fiscal year (FY) 2018/19, from $92.6bn in FY 2017/18, up 17.3%, the Central Bank of Egypt (CBE) said.

The government’s share of external debt reached $57.3bn, while the CBE owed $27.98bn, banks operating in Egypt were $9.5bn in debt, and other sectors owed $13.92bn.

In general, the country’s external debt-to-GDP ratio was 36% in FY 2018/19, while it was 48.7% in Latin America, and 47.5% in the Middle East.

The short-term debt reached 10.2% in Egypt, 14.2% in Latin America, and 21.3% in the Middle East and Central Asia.

The external position report of the Egyptian economy was produced by the economic research sector in the CBE. The report tracked on a quarterly basis the international transactions that the Egyptian economy conducted. It relied, for this purpose, on the national statistics that are regularly compiled in line with the International Monetary Fund’s (IMF) Special Data Dissemination Standard (SDDS) prescriptions.

External debt

The CBE report said the external debt increased to $108.7bn in FY 2018/19 – of which $12bn recorded in the first half – up 17.3% compared to FY 2017/18. This increase came as a result of the rise in net disbursements of loans and facilities by $16.5bn, while most currencies of borrowing depreciated against the US dollar by $0.4bn.

Breakdown by Maturity

The CBE noted that according to original maturity, external debt reaffirmed its usual pattern of long-term external debt predominance at the end of June 2019.

It explained that the long-term external debt accounted for $82.4bn or 75.8% of the total external debt, whereas medium-term external debt reached $15.2bn or 14%, and short-term external debt accounted for $11.1bn or 10.2%.

Moreover, by residual maturity, short-term debt accounted for 21.2% of the total external debt in FY 2018/19, compared to 10.2% classified by original maturity.

Meanwhile, medium and long-term external debt represented 78% of the total debt, in comparison to 89.8% by original maturity.

Breakdown by Type

The CBE said the medium and long-term external debt increased by about $17.3bn to about $97.6bn (89.8% of total debt) at end of June 2019, up by 21.5% compared to June 2018. This change was driven by several developments, including bonds issued abroad (non-resident holdings) reaching about $19.4bn, up by 35.7%. These holdings include about $0.9bn of sovereign notes issued in April 2010 and falling due in 2020 and 2040, as well as about $14.1bn of Eurobonds issued in USD, in June 2015 (falling due in 2025), January and May 2017 (falling due in 2022, 2027, and 2047), February 2018 (falling due in 2023, 2028, and 2048), and February 2019 (falling due in 2024, 2029, and 2049).

The bonds also include about $4.4bn of Eurobonds denominated in euros, issued in April 2018 and falling due in 2026 and 2030, and April 2019 falling due in 2025 and 2031.

Furthermore, multilateral institutions’ debt reached about $32.8bn, up by 15.5%, while re-purchase agreements (Repo) recorded $3.8bn at the end of June 2019 and buyers’ and suppliers’ credit reached about $11.3bn, increasing by 33.8%.

The report noted that other bilateral debt amounted to about $9.6bn, up by 26% compared to June 2018 and rescheduled bilateral debt reached about $3.1bn, down by 16.1%.

The long-term deposits that had been placed at the CBE by some Arab countries fell slightly to $17.2bn, down by 1.1%, non-guaranteed debt of the private sector registered $0.4bn, down by 11.2%, and short-term external debt decreased by about $1.2bn to about $11.1bn or 10.2% of total debt. Its ratio to net international reserves decreased to 24.9% at end of June 2019 against 27.8% at end of June 2018.

Breakdown by Currency

Measuring the currency composition of external debt was an important indicator that sheds light on its exposure to currency markets’ volatility, the CBE said.

The currency composition of Egypt’s external debt indicated that the US dollar is the main borrowing currency, with a value of $69.4bn, including other outstanding obligations in US dollar to creditors other than the USA such as international institutions.

Other important currencies recorded $39.3bn, including the euro by $16.3bn as the runner-up, followed by Special Drawing Rights ($12.2bn), Chinese yuan ($3.6bn), Kuwaiti dinar ($2.6bn), Japanese yen ($2.5bn), and other currencies ($2.1bn).

Breakdown by Creditor

Debt distribution by creditor country showed that $32.8bn was owed to multilateral institutions, mainly the IMF ($11.2bn), the European Bank of Reconstruction and Development ($10.6bn), the European Investment Bank ($3.2bn), and African Development Fund and African Development Bank ($3bn).

Moreover, $23.5bn was owed to Arab countries, mainly Saudi Arabia (8.3%) of total external debt, the UAE (8.1%), and Kuwait (5%).

Besides, $9.4bn came from five members of the Paris Club, namely Germany ($3bn), Japan ($2.5bn), France ($1.5bn), USA ($1.3bn), and UK ($1.1bn). In addition, $6.5bn of the total debt was owed to China.

Breakdown by Debtor

The structure of Egypt’s external debt by debtor revealed the government was still the main debtor, with a share of 52.7% of external debt in FY 2018/19, up $9.6bn compared to FY 2017/18, reaching $57.3bn.

The CBE’s share of external debt increased by about $1.4bn to $28bn, while banks operating in Egypt owed $9.5bn ($3.5bn rise), and other sectors’ debt surged by about $1.6bn to $13.9bn.

External Debt Service

The CBE said the debt service was $13.4bn in FY 2018/19, compared to $13.3bn in FY 2017/18. This increase was mainly due to the rise in paid interest by about $1.1bn to $3.2bn.

However, repayment of instalments slightly decreased by about $0.9bn to $10.2bn.

External Debt Indicators

As for the external debt in terms of international comparison, the report said that Egypt’s debt remained within manageable limits. Based on IMF classification, Egypt’s key debt indicators compared to those of other regions showed that Egypt’s debt stock to GDP represented 36% in FY 2018/19 against 48.7% in Latin America and the Caribbean, and 47.5% in the Middle East and Central Asia.

Moreover, Egypt’s short-term external debt to total external debt represented 10.2% against 14.2% for Latin America and the Caribbean, and 21.3% for the Middle East and Central Asia.

Egypt’s debt service ratio registered 25.3% compared to 46.4% for Latin America and the Caribbean, and 23.1% for the Middle East and Central Asia.

Exchange Rate Developments

On 3 November 2016, the CBE decided to liberalise the Egyptian pound’s exchange rate, to be quoted according to the dynamics of supply and demand. This decision came as part of the economic reform programme.

Inter-bank Rate

The CBE said the weighted average of the US dollar in the Egyptian inter-bank market depreciated by 6.6% to EGP 16.7057 in FY 2018/19, against EGP 17.8878 in FY 2017/18.

Market Rate

According to the foreign exchange market (buying price), all currencies depreciated versus the Egyptian pound, including Chinese yuan by 10.0%; pound sterling by 9.3%; euro by 8.3%; Kuwaiti dinar by 6.8%; US dollar, Saudi riyal, and UAE dirham by 6.6% each; Swiss franc by 4.7%; and Japanese yen by 4.6%.

External Liquidity

Net International Reserves

“As the gains of the reform programme became clear and the foreign exchange resources increased, the CBE decided on 4 December, 2018 to terminate the Repatriation Mechanism for any new foreign currency portfolio investments,” the CBE said.

In FY 2018/19, the net international reserves (NIR) increased by $0.2bn, against an increase of $13bn a year earlier, to reach $44.5bn, thus covering eight months of merchandise imports.

The increase was a result of the rise in foreign currencies by $2.3bn and of gold by about $0.2bn, and the decrease of SDRs by $2.3bn.

During the preparation of the report, the NIR reached $45.4bn at end of November 2019, according to the CBE.

Net Foreign Assets of Banks

The CBE said the banks’ net foreign assets increased by $1.7bn in FY 2018/19, against a decline of around $2.7bn a year earlier.

Meanwhile, foreign currency deposits with banks increased by 6.8% during the period concerned, reaching $42.9bn at end of June 2019.

Likewise, local currency deposits increased by 15.8%. As such, the ratio of foreign currency deposits to total deposits made up 21.2%.

International Investment Position

The report noted that Egypt’s International Investment Position (IIP) at end of June 2019 recorded net external liabilities (assets minus liabilities) of about $166.3bn, up by 12.9%, compared to $147.3bn at the end of June 2018.

The increase in negative net IIP came as a result of the slight increase in Egypt’s total assets versus the increase in Egypt’s total liabilities compared to the end of June 2018.

Assets and Liabilities by Component

“Assets increased by 3.8% to reach about $81.2bn at end of June 2019, from about $78.2bn at end of June 2018, driven by other investment assets increasing by about 10.5%, to reach about $28.4bn,” the CBE said.

It noted that foreign direct investments (FDI) increased by 4.9% to about $7.9bn, while reserve assets increased by 0.8% to about $43.9bn.

However, portfolio investments abroad decreased by 32.4% to about $1bn.

Liabilities increased by 9.8% to about $247.5bn at end of June 2019, from about $225.5bn at the end of June 2018.

The CBE attributed the increase due to portfolio investments in Egypt increasing by 15.6% to about $38.8bn and other investment liabilities increasing by 14% to about $89.3bn, in addition to FDI in Egypt increasing by 5.1% to about $119.4bn.

Indicators

Finally, the CBE said that Egypt’s negative net IIP to GDP decreased to about 55% at end of June 2019, from about 58.9% at end of June 2018. While, Assets to liabilities decreased to about 32.8% from about 34.7%.

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SAIB launches new brand identity https://wwww.dailynewssegypt.com/2020/01/19/saib-launches-new-brand-identity/ Sun, 19 Jan 2020 15:33:42 +0000 https://wwww.dailynewssegypt.com/?p=719555 Identity and branding reflect the bank's core values of unity, trustworthiness, strength, and stability: El-Kholy

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Societe Arabe Internationale de Banque (SAIB) launched its new brand, enhancing the bank’s identity and mental image among customers, and supporting expansion plans for the current board of directors.

Tarek El-Kholy, chairperson and managing director of SAIB, said that the identity and the new brand reflects the bank’s core values of unity, trustworthiness, strength, and stability.

He stressed that the bank is taking multiple steps that would enhance its position in the local market, achieve the targeted expansion, expand strongly in the service of citizens, and consolidate the idea of financial inclusion in the Egyptian community.

It is noteworthy that the development of the bank’s brand has become necessary to reflect the new strategy adopted by the bank, with the appointment of the current leadership, especially that SAIB is currently one of the most important banks operating in the Egyptian market, and that its brand is the main sponsor of the Egyptian Football League.

SAIB is the first Arab joint bank operating in Egypt in accordance with the provisions of the Investment Law No. 43 of 1974, where the bank was established on 21 March 1976, before being amended under the Investment Law No. 1989/230 and 1997/8.

The issued and paid-up capital of the bank has evolved from $4m in 1978, to $150m, distributed over 15 million shares, with a nominal value of $10 each. The bank’s authorized capital is $200m.

The bank manages a deposit portfolio estimated at $4.261bn, while the volume of loans and credit facilities amounted to $1.471bn.

Since its establishment in 1976, SAIB Bank has made remarkable progress in building its services for individuals and companies, diversifying its portfolio by responding to the requirements of companies in Egypt.

The bank is currently operating according to a long-term strategy that aims to diversif all banking services, increasing its market share, maintaining a balanced growth in terms of loans and deposits and achieving high efficiency, in addition to maintaining excellent asset quality and a capital adequacy ratio.

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WB delegation, Trade, Industry min. discuss economic reforms’ priorities https://wwww.dailynewssegypt.com/2020/01/16/wb-delegation-trade-industry-min-discuss-economic-reforms-priorities/ Wed, 15 Jan 2020 23:50:28 +0000 https://wwww.dailynewssegypt.com/?p=719454 Another WB mission to visit Egypt next week

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Minister of Trade and Industry Nevine Gamea met with a World Bank (WB) delegation headed by Sameh Wahba, Global Director for the World Bank (WB)’s Urban, Disaster Risk Management, Resilience and Land Global Practice, to discuss priorities of the next stage of Egypt’s economic reforms, according to a ministerial statement on Wednesday.

Gamea asserted the importance of maximising benefits from financial programmes offered by the WB to implement development projects that serve the national economy and create job opportunities for youth.

The Egyptian government is keen on improving the business environment to attract more local and foreign investments to the local market, reassuring that the ministry prioritises facilitating investment procedures, particularly for small and medium enterprises in addition to development of the industrial zones’ infrastructure and boosting the competitiveness of the Egyptian economy, the statement said.

The meeting highlighted the current projects that the WB supported in the Egyptian market and explored new opportunities of cooperation, the statement said. It also asserted that the Ministry of Trade and Industry was keen on providing investors with fully prepared and licenced industrial units as part of its efforts to ease businesses.

For his part, Wahba explained that the WB wanted to develop cooperation programmes with the Egyptian government to boost the country’s economic reform and attract investments, adding, “WB’s projects in Egypt are diversified and focus on developing competitiveness and infrastructure in the lower growth areas, as Upper Egypt.  Another WB delegation will visit Egypt next week.”

Additionally, the Ministry of International Cooperation (MIC) is for the WB’s board of directors’ visit to Egypt this month in coordination with the WB’s office in Cairo, a statement of the MIC revealed on 6 January, saying that this high-level visit is the first since 2014.

The visit includes meetings with senior Egyptian officials topped by Prime Minister Mostafa Madbouly as well as economic ministers to closely identify the updates of the economic reform programme in addition to government efforts to empower women, youth, and the private sector.

Minister of International Cooperation Rania Al-Mashat will hold a meeting with the WB’s delegation to discuss the future partnership strategy.

Ahead of the visit, Al-Mashat asserted the importance of talks, noting that MIC aims to deepen its partnership with the WB in the next few years and achieve new successful stories like the Benban Solar Park in Aswan.

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