Banking – Daily News Egypt https://wwww.dailynewssegypt.com Egypt’s Only Daily Independent Newspaper In English Mon, 14 Oct 2019 20:06:20 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.1 ABE signs cooperation protocol with World Food Programme https://wwww.dailynewssegypt.com/2019/10/14/abe-signs-cooperation-protocol-with-world-food-programme/ Mon, 14 Oct 2019 18:38:46 +0000 https://wwww.dailynewssegypt.com/?p=710912 It’s part of bank's efforts to support, finance development projects, especially in rural areas, ElKosayer

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The Agricultural Bank of Egypt (ABE) has signed a cooperation protocol with the World Food Programme (WFP) – the food-assistance branch of the United Nations – with the aim to support and develop agricultural development projects and provide the necessary financing for the owners of these projects in the rural areas. The protocol aligns with the Egyptian government’s strategy to assist vulnerable citizens.

The ABE’s Chairperson ElSayed ElKosayer said it comes as part of the bank’s efforts, as one of the qualified financial institutions in the agricultural field, to support and finance development projects. The bank looks forward to support projects affecting Egyptian farms and farmers in villages and rural areas, through the largest bank branch network in the country with several financing plans that meet all the projects’ funding needs.

He explained that the expected areas of cooperation with the WFP include the expansion of its expertise in managing the efforts exerted throughout the governorates of Upper Egypt. It also aims to enhance them through ABE’s financial umbrella that take the form of credit facilities to small and medium enterprises and adopt new technological means in field tasks related to irrigation and other phases of agriculture.

ABE shall also assist in introducing various forms and methods of modern technology, such as the construction of solar panels at different locations to improve water resources practices.

ElKosayer pointed out that the WFP will also nominate eligible projects that need funding to implement their development, while providing training opportunities for entrepreneurs, in order to increase awareness and training in managing their projects.

He added that the ABE will provide financing services to the owners of the projects, in order to contribute to the financing of their projects, within the framework of multiple financing programmes in the bank, and the conditions and controls specified in each financing programme.

The ABE will also raise bank awareness by participating in the WFP’s training seminars for beneficiaries, as well as providing small farmers with electronic solutions that will facilitate their integration into markets and achieve greater financial inclusion.

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Egypt’s new banking draft law: opportunities and challenges https://wwww.dailynewssegypt.com/2019/10/13/egypts-new-banking-draft-law-opportunities-and-challenges/ Sun, 13 Oct 2019 18:54:09 +0000 https://wwww.dailynewssegypt.com/?p=710822 New law reinforces the independence of the CBE and banks’ boards of directors, prepares Egyptian market for a new era in financial technology

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Egypt’s cabinet has recently approved the new banking draft law and referred it to the Legislative Committee of the State Council for review, before it was passed to the parliament for discussion and approval.

The cabinet approved the draft law, which includes 242 articles, in a session that witnessed the participation of Tarek Amer, the governor of the Central Bank of Egypt (CBE).

The cabinet said the preparation of this law came within the framework of modernising the legislative environment in the country, to keep up with the global changes witnessed in the banking arena and the accompanying developments in the field of banking services, payment systems, and financial technology, and increase the dependence of economic activities.

The cabinet also stated that the law contributes to supporting the national economy and promoting economic development, in light of the economic reform adopted by the state, through keeping up with the best practices and international norms, as well as legal systems of the corresponding regulatory authorities in the world.

The new draft law also contributes to raising the level of performance of the banking system, besides modernising, developing, and supporting its competitive abilities, all of which qualify it for both global competition and achieving the aspirations of the state towards the development and economic progress.

According to the cabinet, the draft law also aims to strengthen the governance and independence of the CBE to ensure the activation of its role and achieving its objectives, in light of the constitutional controls of independent body corporates and supervisory parties.

It also regulates the coordination and cooperation between the CBE, the government, and regulators of the financial sector, works on establishing the principles of governance, transparency, disclosure, equality, non-conflict of interest, fair competition, and the prevention of monopoly in the banking system.

The cabinet stated that during the preparation of the draft law, consultation with banks and concerned authorities, as well as a group of legal experts specialised in the field of financial and banking legislation were taken into consideration.

Moreover, the CBE governor said that the preparation of the new banking draft law was commissioned by President Abdel Fattah Al-Sisi, who highlighted the importance of enhancing monetary stability, banking, and the contribution to a greater role in supporting and achieving economic growth.

Amer pointed out that the draft law was discussed with all government bodies, ministries, banks, experts, and international bodies, noting they all appreciated and praised the step. It is a new stage of further development and reform in the banking system, he added.

The new banking draft law also focuses on the governance of banks, the CBE’s governance, strengthening the board of directors and executive departments, and the supervision of banks.

Amer highlighted that the CBE should enjoy full independence, which was taken into account in the new law, as it’s part of the national security of Egypt. Therefore, the supervisory role of banks was strengthened, especially that 89% of the society’s savings are in banks, he revealed.

Furthermore, the Deputy Governor of the CBE, Gamal Negm, said that according to the new draft law, 28 banks will not need to increase their capital to comply with the law, as their paid-up capital and reserves already exceed EGP 5bn.

Additionally, Ayman Hussein, the sub governor payment systems and information technology at the CBE, said the new draft law includes a full chapter on technological services and how to regulate their work. He added that it gives the CBE the authority to issue codified and digital coins. However, the decision has not been implemented yet.

He pointed out that the new draft law also regulates the work of companies operating in payment systems and services without a license from the CBE.

Tamer El Dakkak, legal advisor to the CBE, said that the CBE is keen to regulate the institutional relationship between the banking sector and the rest of the state.

He added that hedging financial crises has been addressed by the draft law, leaving room for an early intervention to prevent Egypt from going through any financial or banking crises.

El Dakkak pointed to specific articles in the draft law about digital currencies and the protection of the banking system’s customers in an interpreted and organised manner within a legislative framework, clarifying the rights of customers, and protecting the confidentiality of accounts and examination of complaints.

The membership criteria of the CBE’s board of directors have been further identified so as to prevent conflict of interest, El Dakkak said.

He noted that the draft law suggested creating a financial stability committee to be chaired by the prime minister with the membership of the CBE governor and the head of Financial Regulatory Authority (FRA), and shall meet every three months to avoid any banking crises.

El Dakkak pointed out that the draft law aims to protect the rights of customers of the banking system and monitors exchange companies, credit rating companies, inquiry companies, and payment service providers.

For his part, Mohamed Abdel Aal, a banking expert and board member of the Suez Canal Bank, said that nothing provides economic security for the citizen more than the ability of his banking system to achieve integration between the economic and social functions.

“But as the world evolved physically and technologically in all fields, the legislative environment needed to support and strengthen the banking system, its institutional structures, and providing laws to meet global challenges,” he added.

According to Abdel Aal, the new banking draft law added new elements, objectives, mechanisms, and means, ultimately aimed directly or indirectly at achieving the economic and banking security for the citizen.

He pointed out that there are eight important points that the new banking draft law has focused on, namely achieving the independence of the CBE administratively and technically, as the CBE’s governors are affiliated to the presidency of the country. In addition, the CBE’s capital increased to EGP 20bn, which gives confidence to the business community, investors, and depositors.

According to Abdel Aal, the second point is to increase the minimum capital to EGP 5bn for banks that have stakes owned by Egyptians, and $150m for branches of foreign banks, which improves the solvency of banks, and gives them more ability to grant credit and finance the process of economic development.

In accordance with the conduct of regulatory instructions, Abdel Aal added that the cancellation of the mechanism for determining the renewal periods for the banks’ CEOs gives more stability to their management.

The new draft law also includes the creation of central units in the CBE to protect customer rights, resolve disputes, and protect competition. It also includes an independent centre for crisis management and resolution, in addition to the establishment of a fund to develop the banking system.

Abdel Aal pointed out that the new banking law also allows the development of payment systems and services and financial technology, with the introduction of rules, policies and mechanisms to transform into a society less dependent on banknotes. Accordingly, this would make it easier for the citizen to meet his financial obligations, save time, effort and money. It would also reduce corruption rates, reduce inflation, and achieve financial inclusion, targeting marginalised and low-income groups, youth, and women in small and medium enterprises. It would also work to integrate the informal economy into the formal economy.

The law also includes rules for the use of financial technology, which increases job opportunities for the youth, besides regulating the CBE’s relationship with the government, reorganizing the coordination between fiscal and monetary policy, and creating a committee to monitor financial stability.

Commenting on the new banking law, Egyptian investment bank Prime Holding said that the law will have a negative impact on small banks, especially those with low equity rates.

The bank added that the law will push banks to pump more capital through issuing new shares, obtaining support loans, or stop banks from resorting to stop profit distribution to ease the pressure on retained earnings, such as Al Baraka Bank Egypt, Abu Dhabi Islamic Bank (ADIB), and Egyptian Gulf Bank (EG Bank).

Prime Holding said that the CBE denied the exclusion of reconstruction and housing banks and export development banks from being subject to the minimum capital increase as banks provide integrated banking and financial services.

He explained that there are some banks that are compliant with the law of banks in terms of capital, such as Commercial International Bank (CIB) and QNB Alahli, and therefore will not need to increase capital.

He pointed out that the law will have a negative impact on Al Baraka Bank as it needs to raise its capital base by about EGP 1.4bn, as well as the ADIB and the EG Bank.

Prime Holding predicted that small banks that are unable to increase their capital will see mergers and acquisitions in the next three years, which is the period set by the CBE to comply with the law.

He noted that banks, with support from “parent” banks, are expected to suffer less than the rest of the banks in terms of capital increases.

In another regard, Prime Holding expected that the profits of banks will see a limited effect by the new banking law to allocate 1% of their net profits for the banking sector support fund.

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Subscription in ATAA charitable fund to start on 5 November: NSB https://wwww.dailynewssegypt.com/2019/10/11/subscription-in-ataa-charitable-fund-to-start-on-5-november-nsb/ Fri, 11 Oct 2019 05:40:29 +0000 https://wwww.dailynewssegypt.com/?p=710528 Subscription ends on 4 January 2020, and can be suspended after 10 days if the subscription was not fully covered, says Farouk

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The subscription to the ATAA charitable investment fund, set up by Nasser Social Bank (NSB) to support people with disabilities, is scheduled to start on 5 November, according to Sherif Farouk, first deputy chairperson and managing director of the NSB.

Farouk had indicated in previous statements to Daily News Egypt that the subscription’s prospectus has been formulated with the Financial Regulatory Authority (FRA).

According to Farouk, the subscription to the Fund’s securities will last for two months, ending on 4 January 2020, and can be suspended after 10 days if the subscription was not fully covered.

The initial capital of the fund is EGP 200m, and the price of securities is EGP 10m, set to expand the base of subscribers.

The fund was scheduled to open for subscription during the first week of October, but the board preferred to take more time to promote it, to ensure the largest coverage.

The fund is the first of its kind in Egypt, operating in accordance with the capital market legislation and under the supervision of the FRA.

The fund was established in the form of a joint stock company in accordance with the provisions of the Capital Market Law No. 95 of 1992 and its executive regulations, aiming to achieve the highest possible returns on the funds invested in it, by investing in various investment instruments.

All profits and returns resulting from the investment of the fund’s portfolio shall be directed to social and charitable purposes, such as education and training for persons with disabilities.

In a previous statement to Daily News Egypt, Farouk said Rasmala Egypt Asset Management has been selected by the NSB to act as the fund manager, while the Egyptian Company for Funds Administration Services will be responsible for the fund’s administrative services.

The NSB’s board of directors agreed to allow Banque Misr, the National Bank of Egypt (NBE), and the Suez Canal Bank to receive subscription, purchasing, and underwriting offers for the fund.

Farouk said that the fund will be promoted to ordinary and legal persons through the NSB, Banque Misr, the NBE, and the Suez Canal Bank.

Farouk pointed out that the board of directors for the fund is headed by Emad Ragheb, one of the most famous Egyptian accountants and former executive partner of Ernst & Young Egypt.

According to Farouk, the fund allows Egyptians and foreigners, whether natural or legal, to support people with disabilities by purchasing the fund’s securities, and the proceeds will be directed towards charitable purposes.

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Al Baraka Bank, ADIB, and EG Bank most negatively affected by New Banking Act: Prime Holding https://wwww.dailynewssegypt.com/2019/10/09/al-baraka-bank-adib-and-eg-bank-most-negatively-affected-by-new-banking-act-prime-holding/ Wed, 09 Oct 2019 14:45:37 +0000 https://wwww.dailynewssegypt.com/?p=710404 Banking act may spur a wave of consolidation amongst smaller or undercapitalised banks

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Under the New Banking Act, which raises the minimum capital requirements for lenders tenfold, Al Baraka bank would be the most negatively affected, since it is required to raise up to EGP 1.4bn, followed by Abu Dhabi Islamic Bank (ADIB), and EG Bank, Prime Holding said in a Tuesday research note.

The forthcoming New Banking Act, which was approved by the cabinet last Wednesday, raised capital to EGP 5bn ($294m) from EGP 500m ($30.6m), while branches of foreign banks will need at least $150m of capital, up from $50m.

According to Prime Holding, the new banking act is likely to be unwanted news for small listed banks, more so for those undercapitalised.

As a result, undercapitalised banks would be forced to raise their paid-in capitals through either capital increases in the form of secondary stock issues, or securing new subordinated debt, the research note stipulates.

The note adds that banks might also cut their dividend policies to mitigate the pressure on retained earnings such as EG Bank, Al Baraka Bank, and ADIB.

While for the rest of the listed banks, the note indicates that they are in conformity with the new banking act, thus, they will need no new capital requirements, particularly Commercial International Bank (CIB) and Qatar National Bank Al Ahli (QNBA).

Furthermore, Prime Holding believes that banks with parent support are expected to suffer less when it comes to conforming to the new banking act.

The research note explains that this banking act may spur a wave of consolidation amongst smaller and/or undercapitalised banks looking to both comply within the 3-year exemption period and compete thereafter.

The act also assigns 1% of banks’ contributable net profits to a fund that supports and develops the banking system, which Prime Holding believes would have a minimal effect on the banks profitability levels, as well as their valuations.

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Settlement on workers’ rights to delay approval of NBG-Egypt sale to Bank Audi https://wwww.dailynewssegypt.com/2019/10/09/settlement-on-workers-rights-to-delay-approval-of-nbg-egypt-sale-to-bank-audi/ Wed, 09 Oct 2019 14:43:16 +0000 https://wwww.dailynewssegypt.com/?p=710445 Tripartite meeting of CBE's Legal Advisor, Regional Director, and Legal Affairs Director at NBG Bank to discuss employees' demands

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The approval of the sale of branches and portfolios of the National Bank of Greece – Egypt (NBG) to Bank Audi will not be issued before settling the rights of employees at the Greek bank, sources told Daily News Egypt.

The sources pointed out that, according to the provisions of Article 42 of the Central Bank of Egypt (CBE) and the Banking System Law and the criticism issued by Law No. 88 of 2003, no bank may suspend its operations in Egypt except with the prior approval of the CBE’s Board of Directors.

The sources added that the approval is issued after verifying the bank has provided adequate guarantees and finally discharged its liabilities from deposit holders and other creditors and workers’ rights.

On Monday, Counsellor Tamer El-Daqaq, the legal advisor of the CBE, held a meeting with the regional director and the director of legal affairs of the NBG to discuss the fate of the employees and settle all the rights on the Greek side before granting the bank approval for the sale to Bank Audi.

Daily News Egypt learned that during the meeting, it was agreed to discuss the demands of the employees of the NBG and to report to the Board of Directors of the CBE for consideration and decision.

The board of directors of the CBE is scheduled to hold its meeting on Wednesday or Thursday, but it was not confirmed whether the file of the staff of the NBG – Egypt will be discussed at this meeting.

The most important demand of employees of the NBG is to receive compensation of two months for each year of service, before moving to Bank Audi.

For his part, Mohamed Bedeir, managing director of Bank Audi – Egypt, told Daily News Egypt that the bank is not a party to the problem of employees in the NBG – Egypt with the management of their financial rights in bank.

Bedeir explained that the CBE did not invite Bank Audi’s officials to attend the meeting held with the Greek bank representatives.

He stressed that the management of Bank Audi is committed to any decision taken by the CBE on the staff of the NBG, pointing out that when the bank signed the acquisition of the NBG-Egypt, the bank pledged to maintain all the bank’s staff.

Tarek Amer, the governor of the CBE, has confirmed earlier that the deal to sell the NBG to Bank Audi will not be approved until the settlement of the staff of the Greek bank.

The NBG Group announced in May that the bank’s assets in the Egyptian market were sold to Bank Audi for €110m, including loans, deposits, and securities, in addition to 17 branches and about 250 employees.

According to the group, the deal comes in the context of the restructuring plan taken by the parent group in Greece in agreement with the European Commission.

Bedeir said earlier that the completion of the deal depends on obtaining the final approval from the Central Bank of Egypt.

On 2 May 2019, the NBG concluded an agreement to transfer the banking operations portfolio of its services of individuals and companies in Egypt to Bank Audi.

Bank Audi is not a party to this file and is committed to any CBE decision: Bedeir

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NBE arranged syndicated loans worth EGP 28bn during Q3 2019: Bloomberg https://wwww.dailynewssegypt.com/2019/10/07/nbe-arranged-syndicated-loans-worth-egp-28bn-during-q3-2019-bloomberg/ Sun, 06 Oct 2019 23:06:29 +0000 https://ww.dailynewssegypt.com/?p=710123 Bank arranged a syndicated loan of EGP 1.7bn for Redcon Construction in cooperation with QNB Al Ahli

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National Bank of Egypt (NBE) has secured EGP 28bn in syndicated loans during the first quarter (Q1) of 2019, Bloomberg said.

The NBE arranged these loans in various roles, namely the agent, bookrunner, and marketer of syndicated loans.

The bank also ranked seventh in the Middle East, and the same position on the African continent for syndicated loans in which the bank acted as the agent bank.

Hisham Okasha, the chairperson of the NBE, said that this success is due to the bank’s interest in supporting the national economy by providing the necessary financing needs for economic growth in various sectors of the country.

Okasha stressed the importance of credit-worthy syndicated loan transactions and economic feasibility, which contributes to creating value for the Egyptian economy and to promote development and employment.

Yehia Aboul Fotouh, Deputy Chairperson of NBE, said that the bank’s access to this privileged position among banks in Egypt, the Middle East and Africa is the culmination of all its efforts. This position is also meant to complement the bank’s plans to maintain its leading position as the largest bank operating in Egypt.

He stressed that this success comes as a result of a strong network of ties between NBE, local, and foreign banks, which have confidence in the NBE’s ability to complete and manage major deals professionally.

Sherif Riad, head of the bank’s credit group for corporate and syndicated loans, said that this success demonstrates the bank’s professionalism and ability to arrange and manage syndicated loans in various sectors, and to meet the financing needs of many customers in various vital sectors of the Egyptian economy.

He stressed that effective and fruitful cooperation with other Egyptian banks also reflects the strong relationship and stable cooperation between all banks operating in the banking sector.

In a related context, NBE and QNB Al Ahli last weekend signed a medium-term joint financing contract worth EGP 1.7bn for Redcon Construction.

The loan is intended to finance the company’s contracting operations, for the construction of multi-purpose towers in the New Alamein City.

According to a statement by the two banks, this loan is an affirmation of the banks’ ability to participate in arranging this type of financing of a special nature, 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.

The initial investment cost of the project is EGP 3.4bn, 50% financed by shareholders and 50% by co-financing.

The project includes the implementation of buildings, finishes, electromechanical works, site coordination works for multi-purpose towers in the beach area of New Alamein.

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Egypt’s net foreign reserves break $45bn, the highest level ever  https://wwww.dailynewssegypt.com/2019/10/03/egypts-net-foreign-reserves-break-45bn-the-highest-level-ever/ Thu, 03 Oct 2019 20:07:24 +0000 https://ww.dailynewssegypt.com/?p=710028 We need to study the reasons for the high BOP deficit, especially in exports and FDI, says Abdel Aal

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Egypt’s net foreign reserves broke the $45bn mark level at the end of September, reaching $45.118bn up from $44.969bn at the end of August, with a net increase $148.9m.

This is the highest ever level of foreign reserves, having increased by $2.567bn since the beginning of 2019, where it closed at $41.551bn at the end of 2018.

The current level of reserves covers more than eight months of Egypt’s commodities imports, exceeding the globally established minimum of three months.

According to the CBE, the balance of foreign currencies listed in the reserve has increased by $267m in September to $41.545bn up from $41.278bn at the end of August.

While gold reserves fell by about $115m in September to $3.209bn.

The CBE said that the value of the SDRs has declined by about $2m in September to $365m down from $367m in August, while loans to IMF stood at $4m.

Earlier, Deputy Finance Minister Ahmed Kouchouk revealed that total foreign investment in treasury bills jumped to $18.3bn at the end of August 2019.

The CBE had also noted in a recent report that the overall deficit in balance of payments (BOP) was at $100m only in the fiscal year (FY) 2018/19.

Mohamed Abdel Aal, a banking expert and a member of the board of directors of the Suez Canal Bank, said that BOP figures during the last fiscal year reflect the Egyptian economy impacted by local, regional, and global economic conditions, especially with regard to the geopolitical conditions in the Gulf and the trade war between the US and China.

According to Abdel Aal, however, there is some good news in terms of deficit. The current account balance pertaining to the petroleum trade balance recorded a surplus for the first time since 2012, at $8.1bn. he noted that it was driven by increasing exports of natural gas and petroleum products, both in terms of quantity and price.

He added that the improvement in the current account balance was also due to the lower cost in the import of petroleum products.

Abdel Aal stressed that these figures reflect the importance of building a production base capable of providing alternatives to imports, pointing out that although the increase in the volume of imports contributed to the increase of economic activity and the growth of GDP, it still negatively impacts the current account deficit, which in turns affects the balance of payments.

Abdel Aal said that the foreign direct investment (FDI) falling to $5.9bn in the FY 2018/19, down from $7.7bn in FY 2017/18, urges the need to review and study the state’s plans to attract more FDIs.

According to Abdel Aal, the decline in non-oil commodity exports also requires the study of a new strategy to encourage exports.

“There are other indicators in the balance of payments that need to be taken into consideration, including a decrease in the flow of investments in the securities portfolio to $4.2bn, down from $12.1bn, and capital transactions and net inflow of $8.5bn in FY 2018/19, down from $22bn in FY 2017/18,” Abdel Aal said.

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Credit facilities by banks fall EGP 35.2bn in July to EGP 1.8trn: CBE https://wwww.dailynewssegypt.com/2019/10/02/credit-facilities-by-banks-fall-egp-35-2bn-in-july-to-egp-1-8trn-cbe/ Wed, 02 Oct 2019 19:15:34 +0000 https://ww.dailynewssegypt.com/?p=709824 Private sector receives 60.3% of total facilities, industry at the forefront of beneficiaries, says CBE

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The Central Bank of Egypt (CBE) said the volume of credit facilities granted by banks operating in the local market to their clients during July decreased by 1.9% to EGP 1.819trn, compared to EGP 1.854trn in June.

Credit facilities are loans provided by banks to their clients based on documentary credits and letters of guarantee that were opened to cover import operations.

According to its monthly report issued on Tuesday, the CBE said the private sector accounted for about 60.3% of the total non-governmental credit facilities granted by banks to various economic sectors during July.

The CBE pointed out that the industrial sector came first among the sectors financed by banks, where it received about 33.2% of the total facilities, followed by the services sector, which accounted for 26.8%, then the trade sector by 10.9%.

The agriculture sector, as usual, received the lowest share of credit facilities granted by banks, accounting for only 1.6% until the end of July.

According to the CBE, there are other sectors, which were not elaborated, but included the household sector and got about 27.5% of the size of these facilities.

In the same context, the CBE revealed that bank’s lending balances fell by EGP 36.189bn to reach EGP 1.803trn in July, compared to EGP 1.840trn in June.

The CBE said the decline in banks’ loan portfolio came on the back of the decline in loans granted to the government by about EGP 34.508bn, to EGP 506.278bn in July, compared to EGP 540.786bn in June.

Loans granted to non-government entities fell by EGP 1.681bn to EGP 1.297tn in July from EGP 1.299tn in June.

In a related context, the CBE revealed that banks’ investments in government treasury bills increased by about EGP 12.8bn during August to reach EGP 684.8bn compared to EGP 671.99bn at the end of July.

On the other hand, the CBE said that the total deposits with banks declined during July 2019 by about EGP 8.306bn to reach EGP 3.999tn compared to EGP 4.007tn in June.

The decline came on the back of a decline in government deposits by EGP 26.814bn to EGP 583.638bn in July, compared to EGP 610.452bn in June.

In contrast, non-governmental deposits increased by EGP 18.508bn to reach EGP 3.415tn in July, compared to EGP 3.396tn in June.

Excerpts:

Banks’ investments in treasury bills increased to EGP 684.8bn at the end of August, compared to EGP 671.99bn in July

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Egypt’s current account records $8.2bn deficit in FY 2018/19: CBE https://wwww.dailynewssegypt.com/2019/10/02/egypts-current-account-records-8-2bn-deficit-in-fy-2018-19-cbe/ Wed, 02 Oct 2019 19:13:07 +0000 https://ww.dailynewssegypt.com/?p=709867 BOP records 0.1bn deficits, oil trade balance records $8.1m surplus, FDI net inflows decrease by $1.8bn to $5.9bn

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Egypt’s balance of payments (BOP) recorded an overall deficit of $0.1bn in fiscal year (FY) 18/19, the Central Bank of Egypt (CBE) announced on Monday.

The country’s current account recorded a deficit of $ 8.2bn in FY 2018/19 up from $6bn a year earlier.

Official figures released by the CBE show that the oil trade balance recorded $8.1m surplus for the first time since FY 2012/2013, compared to a deficit of $3.7bn, as a result of the leap in investments in the oil and gas sector.

The main driver behind the increase was the hike in oil exports proceeds by 31.7% to $11.6bn, accompanied with a decline in oil imports payments by 7.5% to $11.5bn, as Egypt halted natural gas imports.

However, CBE’s figures show that Egypt’s non-oil trade balance deficit widened by 13.4%, to register $38bn, up from $33.6bn a year earlier, driven by the rise in non-oil imports by 8.6% to $55bn.

The services surplus rose by 17.2% to $13bn, as the increase in services receipts outpaced that in services payments. The most significant of which was the tourism receipts which recorded $12.57bn.

According to Pharos holding, the surge in tourism receipts is very positive.

On the other hand, investment income deficit rose by 32.3% to record $8.3bn, driven mainly by the pickup in investment income payments to $9.3bn, while the capital and financial account recorded a net inflow of $8.5bn.

Net inflows of portfolio investment in Egypt recorded $4.2bn. However, net portfolio investment in Egypt recorded net purchases of $10.1bn in the second half of the year following net sales of $5.9bn in the first half of the year.

Moreover, net inflows of Foreign Direct Investments (FDIs) in Egypt declined to record $5.9bn down from $7.7bn.

Net disbursements of medium -and long-term loans and facilities recorded $ 4.2bn compared to $7.9bn.

Finally, remittances recorded a slight decrease to record $25.150bn down from $26.393bn, which is insignificant according to Pharos holding.

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Banks apply limited interest cuts after CBE slashes basic rates https://wwww.dailynewssegypt.com/2019/10/01/banks-apply-limited-interest-cuts-after-cbe-slashes-basic-rates/ Mon, 30 Sep 2019 22:22:20 +0000 https://ww.dailynewssegypt.com/?p=709667 Most cuts were limited to variable return certificates

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Banks operating in the Egyptian market applied limited cuts in their interest rates within the first two working days (Sunday – Monday) after the Central Bank of Egypt’s (CBE) decision to cut its basic interest rates by 1% last Thursday.

Since Sunday, banks have held intensive meetings to discuss the fate of interest rates on their saving vessels, retail products, and loans.

Upon the issuance of the CBE’s decision, interest rates on 29 saving certificates issued by 23 banks were affected, as they are linked to basic interest rates at the CBE.

The National Bank of Egypt decided last Thursday to keep interest rates on fixed-rate saving certificates unchanged, to remain at 14% for three-month certificates and 14.25% for quarterly return certificates.

Banque Misr also decided to keep the interest rate of its 3-year saving certificates with a monthly return of 14% unchanged. The bank, however, cut interest on VIP accounts by 1% across all segments.

In a similar move, the National Investment Bank decided to maintain the interest rate of the investment certificate “B” with a monthly return for one year at 14.75%, and the interest of the investment certificate “B” with a quarterly return for three years at 14.25%.

Last Thursday, a CBE official said interest rates on individual bank saving certificates would not be cut, despite the basic interest cut.

The National Bank of Kuwait – Egypt (NBK) maintained the interest rate of its 3-year monthly fixed rate saving certificates at 12% and 12.5% for quarterly returns. The bank merely reduced the interest rate by 0.5% on saving and deposit accounts.

Alexbank decided to cut interest rates on variable-rate savings certificates by 1%, and to suspend the three-year fixed-rate certificates until the fate of interest is settled.

The Egyptian Arab Land Bank decided to reduce the interest rate on variable yield certificates by 1% to 13.5% compared to 14.5%, and to reduce the interest rate on deposits by 0.125-0.25%.

The bank decided to fix interest on triple saving certificates at 12.50% for the monthly return certificate and 12.75% for the quarterly return, in addition to fixing the return on saving accounts.

The yield on the treasury bills floated by the CBE on Sunday also dismissed the decision to cut interest rates.

The CBE has issued, on behalf of the Ministry of Finance, two T-Bill issuances of EGP 18.75bn.

The first tender of EGP 9.25bn was issued for 91 days. The accepted interest rate ranged between 15% as the lowest price, and 15.8% as the highest price, and 15.605% on average, virtually unchanged from the last similar tender issued before the decision, where interest rates were 15%, 15.8%, and 15.627%, respectively.

In the second tender, the CBE requested EGP 6.5bn for 273 days. The acceptable interest rate ranged between 14.6% as the lowest price, 15.401% as the highest price, and 15.261% on average, against 14.5%, 15.27% and 15.261% on the latest similar tender offered on Sunday last week.

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Egyptian pound gains 5 piasters against the US dollar despite CBE’s interest rate cut https://wwww.dailynewssegypt.com/2019/09/30/egyptian-pound-gains-5-piasters-against-the-us-dollar-despite-cbes-interest-rate-cut/ Mon, 30 Sep 2019 14:34:50 +0000 https://ww.dailynewssegypt.com/?p=709551 The average official price of the US dollar at the Central Bank of Egypt (CBE) fell to EGP 16.2186 for buying and EGP 16.3186 for selling on Sunday, down from EGP 16.2669 for buying and EGP16.3669 for selling last Thursday.

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The Egyptian pound appreciated by more than five piasters against the US dollar on Sunday, despite the Central Bank of Egypt’s (CBE) interest rate cut on Thursday.

The average official price of the US dollar at the Central Bank of Egypt (CBE) fell to EGP 16.2186 for buying and EGP 16.3186 for selling on Sunday, down from EGP 16.2669 for buying and EGP16.3669 for selling last Thursday.

The official price of the Central Bank of Egypt (CBE) on Sunday averaged at EGP 16.1989 for buying and EGP 16.3195 for selling, against EGP 16.2578 for buying and EGP 16.3859 for selling on Thursday.

The Egyptian pound appreciated against the US dollar by about 29 piasters since the beginning of September, and by EGP 1.65 since the beginning of 2019.

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Banks allocate EGP 122bn to face doubtful debts until June 2019: CBE https://wwww.dailynewssegypt.com/2019/09/29/banks-allocate-egp-122bn-to-face-doubtful-debts-until-june-2019-cbe/ Sun, 29 Sep 2019 17:42:18 +0000 https://ww.dailynewssegypt.com/?p=709448 Slight increase in non-performing loans at banks in 1H 2019, reaching 4.2% of total loan portfolio compared to 4.1% at end-March, says CBE

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The Central Bank of Egypt (CBE) said that the ratio of non-performing loans reached 4.2% of the total loan portfolio of banks operating in the Egyptian market at the end of June 2019, compared to 4.1% at the end of March 2019.

In its quarterly report on the financial soundness of banks, the CBE pointed out that non-performing loans accounted for 3% of the total loans offered by the top 10 banks operating in the Egyptian market and 2.4% of the top five banks.

The CBE pointed out that banks made allocations of 97.8% of their total non-performing loans at the end of June 2019, and the percentage of these allocations reached 100% in the top 10 banks and the five largest banks operating in the Egyptian market.

Meanwhile, the allocations formed by banks to face doubtful debts amounted to about EGP 122.272bn by the end of June 2019. The share of the top 10 banks of these allocations was EGP 77.666bn, while the top five banks’ share reached EGP 61.876bn, according to the CBE.

The CBE added that the banks’ reserves reached EGP 236.065bn by the end of June 2019, with the share of the top 10 banks being EGP 186.712bn, and the top five banks’ share is EGP 153.668bn.

According to the CBE, the loan-to-deposit ratio in banks operating in the Egyptian market fell to 46.5% at the end of June 2019, compared to 47.5% in March 2019, and 47.8% in December 2018. This ratio reached 45.3% in the top 10 banks and 46.1% in the top five banks.

The CBE said that the loan-to-deposit ratio in the local currency stood at 40.1% at the end of June, unchanged from March, reaching 37% in the top 10 banks and 36.5% in the top five banks.

The ratio of loan-to-deposit in foreign currency at banks dropped to 71% at the end of June, compared to 73.7% in March. The ratio was 78.8% in the top 10 banks and 90.1% in the top five banks.

The private sector accounted for 61.5% of the total loans granted by banks to their customers until the end of June 2019, compared to 59.9% at the end of March 2019, and 58.7% at the end of December 2019, according to the CBE.

The CBE added that the private sector accounted for 54.2% of the total loans offered by the top 10 banks operating in Egypt, while it represents 50.7% of the loans presented by the top five banks.

The total deposits at banks amounted to about EGP 3.992tn at the end of June, compared to EGP 3.914tn at the end of March 2019. About EGP 2.959tn of the total deposits went to the top 10 banks, and about EGP 2.512tn for the top five banks, according to the CBE.

The CBE added that the ratio of deposits-to-assets at banks was 72.6% at the end of June 2019, compared to 69.3% at the end of March. The ratio was 71.6% at the top 10 banks, and 71.4% at the top five banks.

The average liquidity ratio in local currency in banks declined to 41.9% in June 2019, compared to 43.4% in March. This ratio was 43.7% in the top 10 banks and 43.2% in the top five banks.

The average foreign currency liquidity ratio at banks rose to 68.6% in June from 65.7% at the end of March, reaching 67.7% in the top 10 banks, and 67% in the top five.

The CBE said the bank’s securities portfolio, excluding treasury bills (T-Bills), reached 16.6% of the total assets of banks at the end of June 2019, compared to 15.8% at the end of March, reaching 18.2% at the top 10 banks, and 19.6% at the top five banks.

According to the CBE, the value of banks’ investments in securities and T-Bills reached EGP 1.765tn by the end of June 2019, while the top 10 banks’ investments in securities and T-Bills amounted to EGP 1.381tn, and EGP 1.190tn in the top five banks.

The total capital of banks operating in the Egyptian market amounted to EGP 152.661bn by the end of June 2019, according to the CBE.

The bank explained that the capital of the top 10 banks is about EGP 100.378bn, while the capital of the top five banks is about EGP 82.733bn.

While the CBE did not disclose the names of the five or ten largest banks, it is known that they include the National Bank of Egypt (NBE), the Commercial International Bank – Egypt (CIB), Banque Misr, QNB Alahli, Banque du Caire, the Arab African International Bank (AAIB), HSBC, Faisal Islamic bank of Egypt, Alexbank, and Credit Agricole Egypt.

Regarding the capital adequacy index of banks, the CBE pointed out that the ratio of capital base to risk-weighted assets increased to 16.9% at the end of June 2019, compared to 16.5% at the end of March.

The tier 1 capital to risk-weighted assets increased to 14% at the end of June, compared to 13.5% at the end of March.

The CBE said that the going concern capital including conservation buffer should not be less than 6.625%, 7.25%, 7.875%, and 8.5% in 2016, 2017, 2018, and 2019, respectively.

According to the CBE, the ratio of the bank’s common equity to risk-weighted assets of 10.4% at the end of June, compared to 10.3% at the end of March. This ratio was 9.7% at the top 10 banks and 9.1% at the top five banks.

The CBE said the common equity including conservation buffer should not be less than 5.125%, 5.75%, 6.375, and 7% in 2016, 2017, 2018, and 2019, respectively.

The leverage ratio in banks rose to 6.7% in June 2019 from 6.6% in March. This percentage amounted to 6.2% in the top 10 banks and 6% in the top five banks.

According to the CBE, the minimum set for this percentage is 3%.

In a related context, the CBE revealed the total financial position of banks operating in the local market increased by about EGP 436.2bn in one year to reach EGP 5.516tn by the end of June 2019, compared to EGP 5.08tn by the end of June 2018.

The financial position of the top 10 banks increased to EGP 4.1trn at the end of June 2019, compared to EGP 3.788trn at the end of June 2018.

The top 10 banks accounted for about 75% of the total financial position of banks operating in the Egyptian market.

This comes at a time when the financial position of the top five banks increased to EGP 3.527trn at the end of June 2019, compared to EGP 3.249trn at the end of June 2018.

In a related context, the CBE said the net profits of banks operating in the Egyptian market rose to about EGP 62.489bn at the end of June 2019, compared to EGP 45.843bn at the end of June 2018, with a growth rate of about 36.3%.

The rise in the bank profits came in the context of the increase in net interest to about EGP 131.413bn at the end of June 2019, compared to EGP 78.612bn at the end of June 2018, an increase of EGP 52.8bn, a growth rate of 67%.

Banks’ operating income rose to EGP 159.02bn at the end of June 2019, compared to EGP 120.9bn at the end of June 2018, an increase of EGP 38bn (31%).

On the other hand, banks’ total expenses recorded about EGP 96.525bn at the end of June 2019, compared to EGP 75.046bn at the end of June 2018, a growth of 28.6%.

The 10 largest banks operating in the Egyptian market achieved a net profit of EGP 50.909bn at the end of June 2019, compared to EGP 33.326bn at the end of March 2019, according to the CBE.

At the top of this list comes the NBE, Banque Misr, CIB-Egypt, QNB Alahli, Credit Agricole-Egypt, Faisal Islamic Bank of Egypt, and the Housing and Development Bank.

According to the CBE, the net interest achieved by these banks until the end of June 2019 amounted to EGP 105.489bn, compared to EGP 66.647bn by the end of March.

The CBE added the net operating income of these banks reached about EGP 126.138bn at the end of June 2019, compared to EGP 83.613bn at the end of March. In addition, their total expenses reached EGP 75.229bn by the end of June, compared to EGP 50.287bn by the end of March.

The CBE said the five largest banks operating in the Egyptian market achieved a net profit of EGP 42.424bn by the end of the first half (1H) of 2019, compared to EGP 29.264bn at the end of the first quarter (1Q).

According to the CBE, the net interest achieved by these banks amounted to about EGP 91.983bn until the end of June 2019, compared to about EGP 60.461bn in March 2019.

The CBE added that the net operating income at these banks reached about EGP 109.846bn at the end of June, compared to EGP 75.563bn at the end of March.

On the other hand, the expenses of the five largest banks operating in the Egyptian market rose to about EGP 67.42bn during 1H 2019, compared to about EGP 46.3bn during 1Q of the year.

The expenses of banks are increasing year after year, as they are spent on upgrading and supporting their technological structure and geographical expansion, through small and large branches or automated machines and POS, to reach their customers in different regions of the country.

In another context, the CBE revealed that the net open positions in foreign currencies reached 0.4% of the total capital base of the banks operating in the Egyptian market by the end of June 2019.

The same ratio was also recorded in the top 10 banks, while it rose to 0.5% in the top five banks, according to the CBE.

This is the first time that the CBE has added banks’ net open positions in foreign currencies in this report.

The CBE stressed that the total net open (short or long) positions for all foreign currencies shouldn’t exceed 20% of the capital base.

Earlier documents of the International Monetary Fund (IMF) revealed that CBE will not allow exceed the limits of open positions in foreign currencies in the upcoming period, in the framework of reducing the risk of exposure to exchange rate fluctuations.

In November 2017, the CBE adjusted the limits of currency positions at banks operating in the local market with respect to the surplus or deficit in foreign currency positions of any bank, including branches of foreign banks. Accordingly, the surplus or deficit in the position of any currency would not exceed 10% of the capital base.

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CBE authorises 28 banks to provide mobile payment services in Egypt: Amer https://wwww.dailynewssegypt.com/2019/09/29/cbe-authorises-28-banks-to-provide-mobile-payment-services-in-egypt-amer/ Sun, 29 Sep 2019 11:19:55 +0000 https://ww.dailynewssegypt.com/?p=709393 Subscribers reach 13.5 million by end-June, with a total value of transactions of EGP 20bn as of September

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The Central Bank of Egypt (CBE) has authorised 28 banks operating in the Egyptian market to provide mobile payment services, according to the CBE’s Governor Tarek Amer.

He revealed that mobile payment subscribers reached 13.5 million at the end of June 2019, with a total value of transactions of about EGP 20bn until September 2019.

Meanwhile, the number of Meeza card users – a national electronic payment card – reached 2 million until September, Amer said.

He added that the card was linked to about 76,000 electronic points of sale (POS) and 13,000 ATMs, recording total transactions of about 510,000 transactions, valued at EGP 564m.

Amer revealed that 28 banks operating in the Egyptian market have received approvals to provide mobile payment service.

This came during Amer’s speech at the Digital Transformation in Banks and the Future of Financial Intermediation Forum, held on 26-28 September in Sharm El-Sheikh. The speech was delivered on Amer’s behalf by Ehab Nasr, the assistant sub governor for payment systems and business technology sector at the CBE.

Egypt has been aware of the importance of digital transformation and its various positive effects on the national economy and the banking sector, which was evident in President Abdel Fattah Al-Sisi’s chairmanship of the National Payments Council, established in February 2017. The council’s membership includes all relevant ministries and sovereign bodies.

According to the speech, the CBE added a full section to the new Banking Law regarding payment systems and services to provide a legislative basis for payment services and financial technology. Moreover, the Non-cash Payment Law was passed on 16 April 2019 with a view to develop a legislative framework for non-cash payments.

Amer pointed out that the state’s efforts in this field have resulted in many achievements regarding digital transformation, including the launch of the national payment card, Meeza, in addition to the CBE’s cooperation with the Ministry of Finance to automate the collection of government payments, whose first phase was launched on 1 May 2019.

According to Amer, about 16,000 government POS and 16,000 QR codes have been deployed.

The strategy of financial technology was launched during the activities of the Arab and African Youth Forum, held in March 2019 in Aswan governorate, in the presence of President Al-Sisi, as a way of encouraging innovation and the use of financial technology to meet the diverse needs of customers, especially young people.

Amer referred to the establishment of the Fintech Innovation Fund as a new investment platform in cooperation with a number of local and international institutions, and the establishment of the laboratory of financial technology applications, which began its work in June 2019. In addition, the CBE established the Fintech Hub and FinTech Egypt portal to support and connect all parties of financial technology system.

Amer also stressed the keenness of the CBE to strengthen cybersecurity in the banking sector, pointing out to the establishment of a centre to respond to computer emergencies, and the launch of an initiative to distinguish cybersecurity in the banking sector, in cooperation with the Egyptian Banking Institute. The institute aims to graduate 100 specialists in this field over two years, in partnership with five international institutions specialised in IT security.

On the regional level, Amer said that the CBE has set its sights on cooperation with all central banks in various countries, especially Arab central banks, to implement initiatives aimed at promoting digital transformation. The most important of these initiatives is the Arab Clearing System initiative, expected to be launched in 2020, which was implemented by the Arab Monetary Fund, in cooperation with experts and representatives of central banks and Arab monetary institutions.

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Egyptian banking sector awaits repercussions of interest rate cut https://wwww.dailynewssegypt.com/2019/09/28/egyptian-banking-sector-awaits-repercussions-of-interest-rate-cut/ Sat, 28 Sep 2019 19:34:27 +0000 https://ww.dailynewssegypt.com/?p=709313 Banks will begin Sunday to discuss the fate of interest on their CDs, deposits, and loans

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The local banking sector is awaiting the repercussions of the decision taken by the Central Bank of Egypt (CBE) last Thursday to cut interest rates by 1%.

Accordingly, Asset-Liability Committees (ALCO) of banks operating in the local market will begin intensive meetings to discuss the fate of interest rates on their savings and retail products and loans.

Following the CBE’s decision, interest rates on 29 certificates of deposit (CD) issued by 23 banks fell automatically, as their pricing is linked to the basic interest rates at the CBE.

On Thursday, the CBE decided to cut its basic interest rates by 1% to 13.25% for deposits, 14.25% for lending, 13.75% for CBE’s credit and discount rate, and the main operating rate.

CBE’s decision was widely expected by analysts, investment banks, and local and international institutions due to several reasons: the marked decline in the inflation rate by the end of last August – falling below CBE’s target level- and the reduction of the dollar interest by US Federal Reserve.

The Monetary Policy Committee said that this decision comes in light of the continued containment of inflationary pressures and all local and global developments, stressing that the decision is consistent with achieving the target inflation rate of 9% (+/-3%) during the fourth quarter of 2020 and the stability of prices in the medium term.

The committee confirmed that it will continue to make interest rate decisions based on expected future inflation rates, not prevailing inflation rates.

It pointed out that the pace and magnitude of future adjustments in the basic interest rate will continue to rely on the consistency of inflation expectations with the target rates, in order to ensure the continuation of the target downward path of price stability in the medium term.

The committee stressed that it will continue to follow all economic developments and will not hesitate to amend its policy to maintain monetary stability.

In contrast to CBE’s decision, the National Bank of Egypt (NBE) decided on Thursday to keep interest rates on fixed-rate CDs unchanged, to remain at 14% for triple monthly return certificates and 14.25% for triple quarterly return certificates.

Banque Misr also decided to keep the interest rate of its 3-year CD with a monthly return of 14%.

On Thursday, a CBE official said interest rates on individual bank savings certificates would not be cut, despite a cut by the bank.

Haitham Abdel-Fattah, head of treasury and capital markets sector at the Industrial Development Bank (IDB), said that the bank will hold a meeting early next week to discuss its position on CBE’s decision, pointing out that the response of each bank depends on its own circumstances and liquidity position.

Abdel-Fattah pointed out that CBE’s decision to cut interest rates by 1% after cutting it last month by 1.5% is an explicit signal that it has shifted from targeting inflation to targeting growth, especially after succeeding in achieving the target level of inflation.

The decline in the inflation rate in August, reaching its lowest level in almost six years, gave the CBE more room to reduce interest rates with great comfort, given the real interest rates of about 7% positive interest, he said.

Abdel Fattah expected that the decision to cut interest rates for the second time in a row will have a significant positive impact on the Egyptian Exchange this week.

The banking market is awaiting the issuance of the first treasury bills (T-bills) next Sunday to find out the direction of yield on government debt instruments, and the extent of their response to the decision to cut interest rates at the CBE.

The Ministry of Finance issues five auction for debt instruments on a weekly basis, including two T-bills auctions on Sunday and Thursday and one bond auction on Monday.

The yield on debt instruments has fallen significantly since the CBE cut its benchmark interest rates by 1.5% in August.

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CBE cuts interest rates by 1% in line of expectations https://wwww.dailynewssegypt.com/2019/09/26/cbe-cuts-interest-rates-by-1-in-line-of-expectations/ Thu, 26 Sep 2019 14:15:31 +0000 https://ww.dailynewssegypt.com/?p=709183 This is the second interest cut in a row following the 150 basis point on 22 August, and the third in 2019.

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The Monetary Policy Committee (MPC) decided to continue it’s monetary easing cycle and cut the Central Bank of Egypt’s (CBE) interest rates by 100 basis points on Thursday.

Overnight deposit rate currently stands at 13.25%, overnight lending rate at 14.25%, and the main operation at 13.75%, while the discount rate registers at 13.75%.

This is the second interest cut in a row following the 150 basis point on 22 August, and the third in 2019.

The decision came in line with analysts expectations, as Egypt’s annual headline and core inflation recorded 7.5% and 4.9% respectively in August 2019. The lowest rates in more than six years.

On the global front, the monetary easing cycle spread in different countries, lead by the US Federal Reserve, and the European Central Bank.
“This remains consistent with achieving the inflation target of 9% (±3 percentage points) in 2020 Q4 and price stability over the medium term,” the MPC said in a statement on Thursday.

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Strong expectations that  CBE’s basic interest rates will be cut by 50 to 150 basis points https://wwww.dailynewssegypt.com/2019/09/26/strong-expectations-that-cbes-basic-interest-rates-will-be-cut-by-50-to-150-basis-points/ Thu, 26 Sep 2019 14:00:00 +0000 https://ww.dailynewssegypt.com/?p=709278 MPC ecided at its meeting on 22 August 2019 to reduce the interest rate by 150 basis points for overnight lending, overnight deposit, and CBE's main operation, to settle at 14.25%, 15.25%, and 14.75% respectively.

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The Monetary Policy Committee (MPC) affiliated with the Central Bank of Egypt (CBE) will hold its regular sixth meeting of the year on Thursday to discuss the future of basic yield in the CBE, which is the leading indicator for the direction of interest rates on the Egyptian pound in the local market.

MPC ecided at its meeting on 22 August 2019 to reduce the interest rate by 150 basis points for overnight lending, overnight deposit, and CBE’s main operation, to settle at 14.25%, 15.25%, and 14.75% respectively.

The committee also decided to reduce the credit and discount rate by the same percentage to 14.75%.

The CBE aims to achieve an inflation rate of 9% (±3%) during the fourth quarter of 2020, and price stability in the medium term.

Earlier this month, the CBE revealed that the annual rate of core inflation dropped to 4.9% by the end of August 2019, compared to 5.9% in July 2019

, its lowest level in more than 6 years.

The CBE said its core consumer price index, set for its part, recorded a negative monthly rate of 0.4% in August 2019, compared to a positive rate of 0.1% at the end of July 2019.

Most of the experts surveyed by Daily News Egypt forecast a rate cut on Thursday’s meeting.

Mohamed Abdel Aal, a banking expert and board member of the Suez Canal Bank, said that the CBE is likely to cut interest rates again at Thursday’s meeting rather than maintain the rate this time as the monetary easing cycle accelerated worldwide and the US Federal Reserve cut interest rates again by 0.25%.

The wave of global monetary easing, allow the CBE to cut interest rates further, without fear of capital outflaws in debt instruments.

He added that several factors support easing including the appreciation of Egyptian pound against the US dollar and the decline in inflation rate below the CBE target.

Abdel Aal stressed the importance of cutting interest rates to boost economic growth, pointing out that the rate cut in August by 1.5% was good but not sufficient to encourage investors to borrow, as the level of interest on bank loans is still high.

Similarly, Tarek Metwally, a banking expert and former executive board member of BLOM Bank Egypt, said all indicators suggest a possible rate cut of between 1% and 1.5% at a meeting of the MPC on Thursday.

Same views was carried by Haitham Abdel Fattah, head of the treasury and capital markets sector at the Industrial Development Bank, who believes that all conditions encourage the CBE to continue the monetary easing cycle, and to reduce interest rates by between 1% and 1.5%.

Abdel Fattah pointed out that inflation rates have fallen below 5% for core inflation and less than 8% for headline inflation, which supports further cut in interest rates.

Bank expert Hany Abou El-Fotouh predicted that the MPC will move to reduce interest rates by% 1 to 1.5%, especially after the decision of the US Federal Reserve to cut interest rates by 0.25% for the second time in a row.

Abou El-Fotouh pointed out that this would encourage the CBE to reduce interest rates, stressing that the interest rate cut will stimulate the economy in general, and help to get out of the recession dominating the markets, and will contribute to reduce the burden of domestic public debt.

Beltone Investment bank expected the CBE to cut interest rates by 50-100 basis points at the MPC meeting on Thursday, cutting them by about 300 basis points in 2020.

Monette Doss, the company’s macroeconomic and banking sector analyst explained that annual inflation fell below 9% year on year, within the CBE’s target of 9% (+/-3%) in the fourth quarter of 2020, allowing the CBE to continue its monetary easing policy to stimulate economic growth and activity of the money market.

“Furthermore, in the global context of monetary easing, the European Central Bank cut its deposit interest rates by 10 basis points to -0.5% last week, as Egyptian Treasury bills continue to provide attractive returns and encourage inflows from carry trade. We, therefore, expect the Central Bank of Egypt to cut interest rates by 100 basis points at its next meeting,” she said.

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HDB’s mortgage portfolio amounts to EGP 6.6bn: vice chairperson https://wwww.dailynewssegypt.com/2019/09/24/hdbs-mortgage-portfolio-amounts-to-egp-6-6bn-vice-chairperson/ Tue, 24 Sep 2019 13:47:34 +0000 https://ww.dailynewssegypt.com/?p=708964 Bank ready to join CBE initiative to finance middle-income housing once it comes into effect: Sebaey

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The Housing and Development Bank’s (HDB) mortgage portfolio has reached EGP 6.6bn, according to Hassan Ghanem, the bank’s vice chairperson and managing director.

It came on the sidelines of signing a contract between the bank and Orascom Construction to build the HDB’s new headquarters in the New Administrative Capital on Sunday.

Ghanem said the bank has directed EGP 4.8bn of its mortgage portfolio to the Central Bank of Egypt’s (CBE) first initiative to finance limited and middle-income housing.

Meanwhile, Fathy Sebaey, chairperson of the bank, said they will participate in the CBE’s new initiative to finance middle-income housing at a reducing interest rate of 10%.

Sebaey added that the bank’s clients exceeded 2 million, affirming the HDB’s commitment to providing a broad spectrum of services, through every possible way.

On the other hand, he told Daily News Egypt that the bank currently has more than 80 branches, and that they plan to increase their network to reach 100 branches by 2020.

In May 2019, the CBE Governor Tarek Amer announced the launch of a EGP 50bn initiative to finance middle-income housing after an earlier EGP 20bn initiative ended.

According to Sebaey, the maximum funding in the new initiative has been raised to EGP 2m, noting that banks are awaiting issuance of the initiative at any time.

He pointed out that this initiative may be a good opportunity to finance the employees who will be transferred to the New Administrative Capital.

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ADIB-Egypt signs EGP 200m deal with Ora Developers to develop Sheikh Zayed Central Park https://wwww.dailynewssegypt.com/2019/09/24/adib-egypt-signs-egp-200m-deal-with-ora-developers-to-develop-sheikh-zayed-central-park/ Tue, 24 Sep 2019 13:47:19 +0000 https://ww.dailynewssegypt.com/?p=708962 “We hire companies with proven track records of building integrated, modern urban communities”: Sawiris

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The Abu Dhabi Islamic Bank-Egypt (ADIB) and Ora Developers Egypt, a member of Gemini Holding, have signed an EGP 200m financing agreement to support the development and upgrading of the Sheikh Zayed Central Park.

The project is expected to contribute to transforming the park into a new facility for the residents of Sheikh Zayed City with its facilities and activities, such as sports complexes, as well as a range of restaurants and cafeterias, walkways and cycling paths, and a children’s play area.

CEO and Managing Director of ADIB-Egypt, Mohamed Aly, said that this project will have a direct impact on developing the concept of recreational life, expecting a major leap in the standard of service delivery in this area.

He added, “We at ADIB-Egypt are always striving to grow, expand, and support our collaborative efforts with large corporations, as well as local and international institutions.”

For his part, Chairperson of Aura Developers Holding, Naguib Sawiris, said that the vision of the company depends on the establishment of vibrant projects, and contributes to improving the quality of life for the population, which creates modern societies based on the concepts of innovation and sustainability, and provides a new and distinctive lifestyle.

Sawiris pointed out that Ora employs companies that have a proven track record of successfully building integrated communities which combine modern design with innovation, both inside and outside Egypt.

He added that a project such as the development of the Zayed Central Park is in line with these entrenched concepts and contributes to providing direct and indirect job opportunities in the interest of the national economy.

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HC expects interest rate cut by 100 bps at CBE’s Thursday meeting https://wwww.dailynewssegypt.com/2019/09/24/hc-expects-interest-rate-cut-by-100-bps-at-cbes-thursday-meeting/ Tue, 24 Sep 2019 12:59:37 +0000 https://ww.dailynewssegypt.com/?p=708959 Inflationary pressures to ease dramatically following July’s subsidy lift, says Monette Doss

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HC Securities and Investment said annual inflation continued to fall for the third month in a row, after a high of 14.1% in May, with monthly inflation falling 1% on a monthly basis below its forecast.

The annual inflation rate slowed to 7.5% in August from 8.7% in July, as monthly inflation reflected a 0.7% rise in prices compared with 1.8% in the previous month.

Core inflation also slowed to 4.9% in August from 5.9% in July, with the monthly consumer price index (CPI) falling 0.36%, compared to a 0.11% increase in July, according to the Central Bank of Egypt (CBE).

Monette Doss, the company’s macroeconomic and banking sector analyst, expects inflationary pressures to ease dramatically following the July decision to lift subsidies.

She explained that annual inflation fell below 9% year-over-year (y-o-y), within the CBE’s target of 9% (±3%) in the fourth quarter (Q4) of 2020, allowing the CBE to continue its monetary easing policy to stimulate economic growth and activity of the money market.

“Furthermore, in the global context of monetary easing, the European Central Bank cut its deposit interest rates by 10 basis points (bps) to -0.5% last week, as Egyptian treasury bills continue to provide attractive returns and encourage inflows from carry trade. We, therefore, expect the CBE to cut interest rates by 100 bps at its next meeting,” she said.

The Monetary Policy Committee of the CBE decided at its meeting on 22 August 2019 to reduce the interest rate by 150 bps, after keeping it unchanged for three consecutive meetings, following the last rate cut by 100 bps in February 2019.

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Orascom Construction to build HDB headquarters at the NAC for EGP 636m https://wwww.dailynewssegypt.com/2019/09/23/orascom-construction-to-build-hdb-headquarters-at-the-nac-for-egp-636m/ Mon, 23 Sep 2019 12:17:35 +0000 https://ww.dailynewssegypt.com/?p=708796 Building located on 9,843 sqm, to be completed in 18 months

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Vice Chairperson & Managing Director of the Housing & Development Bank (HDB), Hassan Ghanem, signed on Sunday a contract with Chairperson and Managing Director of Orascom Construction Company, Osama Beshay, to implement and establish the bank’s administrative building in The New Administrative Capital (NAC).

The cost of the building will be financed by the bank’s equity, which exceeds EGP 5bn, said Chairperson of the bank, Fathy Sebaey.

Sebaey expected that this new headquarter will have a positive impact on the bank’s activities, thus increasing its revenues and profits.

He explained that this headquarter will be equipped with the latest technology, and will include, in addition to the bank departments, an electronic archive centre for all bank documents.

Furthermore, Sebaey stressed that the NAC will be an important administrative and commercial centre, and its investment will have a great positive return.

Deputy Chairperson and Managing Director of the bank, Hassan Ghanem, said that the building will include branch of the bank alongside the administrations for the headquarters. He stresses that the bank is looking to be in the NAC- the epitome of urban development.

Ghanem pointed out the possibility of the HDB to provide real estate financing for customers wishing to move to the NAC, both inside and outside the initiative of the Central Bank of Egypt for mortgage finance.

The bank’s President’s Deputy for Engineering and Investment Affairs, Mohamed El-Alfy, said that the building is located in an area of 9,843 sqm, with a cost of EGP 636m. The building will be completed within 18 months.

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UNB – Egypt eyes 3% market share by end-2023: El-Sewerky https://wwww.dailynewssegypt.com/2019/09/22/unb-egypt-eyes-3-market-share-by-end-2023-el-sewerky/ Sun, 22 Sep 2019 10:51:09 +0000 https://ww.dailynewssegypt.com/?p=708679 Bank working to advance production, achieve sustainable development in Egypt by focusing on vital sectors such as industry, renewable energy

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The Union National Bank – Egypt (UNB) aims to increase its market share to 3% by the end of 2023, compared to the current 1.1%, according to Ihab El-Sewerky, CEO and managing director of the bank.

In an interview with Daily News Egypt, El-Sewerky said the bank is working to boost production and achieve sustainable development in Egypt by focusing on vital sectors, such as industry and renewable energy.

He added that the bank’s mortgage finance portfolio, within the Central Bank of Egypt (CBE) initiative, reached EGP 154m at the end of June 2019.

He stressed that the bank plans to aggressively expand technological services over the next five years.

Could you tell us about the bank’s business results during the past year?

The bank’s financial position increased by 13% at the end of 2018 to reach EGP 32bn, compared to EGP 28bn in 2017, a growth of EGP 4bn. The bank also achieved a 35% increase in its loan balances and a 12% increase in deposit balances. In the first half (H1) of 2019, the UNB – Egypt achieved an increase in profits to EGP 191.4m, compared to EGP 136.2m in H1 of 2018.

What are the bank’s growth targets in the current year?

The UNB – Egypt will witness a major breakthrough in the coming period, where we aim to acquire a minimum of 3% market share during the next four years, up from the current 1.1%. We also aim to achieve a 60% growth in net profit by the end of this year, based on the adopted plan to increase loans by 23%, deposits by 12%, and assets by 12% during H2 of the year. We seek to offer new products and services to suit different segments of customers, in addition to expanding in the application of digital solutions.

What are the main features of the bank’s expansion plan during the coming period?

Technology is the future, so the bank plans to significantly expand in this sector over the next five years, to keep pace with the digital development that we are witnessing. We have been keen on launching some e-banking services, with an ambitious plan to establish e-branches and activate online banking, along with traditional banking solutions and increasing ATMs, in order to reach different society segments and meet customers’ different needs, thereby increasing the bank’s market share.

What are the sectors that the bank focuses on financing in the Egyptian market?

We are working to promote production and achieve sustainable development in Egypt, by focusing on vital sectors, such as industry and renewable energy, which strongly boosts the Egyptian economy. The bank is pursuing a policy of participating in financing companies that implement all national projects undertaken by the state, as well as an interest in financing small and medium-sized enterprises (SMEs), as this sector represents the base that generates jobs, reduces unemployment, improves income, increases domestic output, and stimulates Egyptian exports. The bank also pays great attention to the SMEs sector, which currently accounts for about 13% of the bank’s total loans and facilitations portfolio. The bank’s mortgage finance portfolio, within the CBE’s initiative, reached EGP 154m at the end of June 2019.

What are the main e-banking products offered by the bank?

The bank currently offers internet and mobile banking for individuals and companies, which allows many banking operations, such as transfers, payment of credit card dues, deposit, and requesting cheque books, in addition to the service of querying accounts of all kinds and transactions that have been done. The bank also provides 24-hour hotline service for non-internet users. Two electronic branches have also been opened, offering electronic services as well as ATM instant services any time of the day. In the near future, the bank will expand in offering cash deposit service through its ATM network, in addition to the issuance of e-wallets for customers and non-bank customers, which allows them to spend and transfer money as well as pay bills, in addition to other services. The UNB – Egypt will contract with an electronic payment company to facilitate repayment of loan instalments and credit card dues electronically. Electronic payment services will also be integrated with various electronic channels in the bank, such as payment of bills, online banking, and ATMs.

How the bank supports the CBE’s efforts to achieve financial inclusion?

The bank carried out different activities to contribute to this goal, including the signing of a cooperation protocol with the Dar al-Ma’arif publishing house to launch a book series, called Young Economist, to increase the economic awareness of young people and introduce them to the importance of saving through banks, as well as electronic payments. The cooperation also included the issuance of a book in sign language to introduce blind or visually impaired people to banking terminology. These publications were distributed to school students of various stages, with the aim of preparing the young generation to know how to save, invest, and deal with the banking system. In addition, each year, the bank conducts a number of activities and events during the Arab Financial Inclusion Week, with the aim of expanding its scope of work and increase the number of beneficiaries of its banking services, by revitalising its presence across Egypt. This helps in providing all advisory services based on the customers’ financial needs. Furthermore, the bank also sponsored the activities of the Global Financial Week, organised by the Egyptian Banking Institute (EBI), to stimulate the financial education process for young people. It comes out of the bank’s belief in the importance of youth in the development process of society. Through sponsorship, a number of university students were hosted at the bank’s main headquarters in Mohandiseen, and educational lectures were arranged for them. The sponsorship also included the initiative “Alashan Bokra” (For Tomorrow), which aims to raise financial awareness for school and university students and to stress the importance of saving. Additionally, there is a simulative “Egyptian Banking System Model” (EBSM) initiative, which is the first model at the level of Egyptian universities to simulate the work of banks in Egypt.Through sponsoring the International Financial Week, the bank also aimed to spread financial awareness among children from the age of eight, through the issuance of a series of comic books, entitled “Alashan Bokra Nehawesh” (Saving for Tomorrow), which will be distributed to school students to develop their saving culture.

How do you evaluate the performance of the Egyptian economy after the completion of the reform programme?

The Egyptian economy has achieved great success, as the GDP of Egypt rose to 5.5%, and foreign exchange reserves also rose to unprecedented levels. In addition, the Egyptian pound is regaining value against the US dollar, and the CBE was able to pay foreign dues on time. With all these indicators, I’m very optimistic about the future of the Egyptian economy. Egypt has achieved a pioneering experience. It is a country that combats terrorism while at the same time achieving economic development, which is a very difficult equation. I expect the growth of the Egyptian economy to continue in the coming period, and I expect to see further declines in the inflation rate, with improved levels of deficit in the state budget and foreign current account, and the growth of the GDP.The banking sector has a large deposit size in addition to banking expertise that enjoys the confidence of international financial institutions, which makes banks ready to finance various development projects, especially those with competitive advantages and rewarding revenues.

What role does the bank play in supporting UAE companies operating in the Egyptian market?

The Egyptian market has about 1,144 UAE companies operating in various sectors. The UAE investments in Egypt are focused on several sectors, including real estate, tourism, retail, industry, petroleum, and health care. The UAE is the eighth largest country in the world and is the second largest Arab country in terms of the volume of investments in Egypt. In light of these figures, the bank’s strategy during the coming period focuses on exploring ways of supporting and cooperating with these UAE entities, especially those working in strategic sectors and major national projects. The bank’s plan includes providing all banking and financial advisory services as well as logistical support to these entities in their dealings with government agencies, in order to facilitate the implementation of their projects in Egypt. This is in addition to our keenness on actively participating in several economic events and conferences held under the government supervision of the two countries, regarding strengthening economic ties, and offering investment opportunities in Egypt, and marketing them to UAE entities.

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Youth tops CIB’s priorities: Abaza https://wwww.dailynewssegypt.com/2019/09/18/youth-tops-cibs-priorities-abaza/ Wed, 18 Sep 2019 14:56:07 +0000 https://ww.dailynewssegypt.com/?p=708355 “We seek to keep pace with banking developments in the world,” says bank’s CEO

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The Commercial International Bank – Egypt (CIB) places youth at the top of its priorities, the bank’s CEO and board member, Hussein Abaza, stressed.

He told Daily News Egypt that the bank is keen to provide the best products to young people, including youth accounts, in addition to sponsoring conferences that support them.

Abaza affirmed CIB’s keenness to keep abreast of the global developments in the field of financial technology (fintech), whether by introducing new services and products or improving the bank’s current services.

He also stressed the bank’s interest in helping the state achieve financial inclusion, pointing out that fintech is one of the most important ways that can help in achieving this goal.

With regard to the new services the bank plans to offer in the market in the coming period, Abaza said that CIB always has something new to offer, and there are several products already under study, but he refused to disclose them at the moment.

As part of its interest in youth, the CIB revealed the details of its sponsorship of two of the world squash tournaments in cooperation with IEvents on Sunday: 2019-2020 PSA Women’s World Championship and PSA Men’s Platinum.

The bank has allocated $615,000 in prizes for the two tournaments, including $430,000 for the women’s championship and $185,000 for the men’s championship.

The two tournaments are scheduled to be held at the foot of the pyramids from 24 October to 1 November 2019.

According to Abaza, the sponsorship of the squash tournaments comes within the framework of the bank’s social responsibility. He stressed that the CIB sponsors squash players in their various stages to maintain Egypt’s leadership in the game.

Furthermore, he explained that the bank’s sponsorship of this game goes over several stages, in cooperation with the Darwish Squash Academy. It involves sponsoring the Egyptian Squash Association to help as many as possible talents to play in international tournaments which would improve their performance.

According to Abaza, the most difficult stage in the lives of young squash players is the period before achieving a global ranking, especially for men, as players have to travel abroad and participate in small tournaments until they can reach a world ranking, which is costly for young players.

To overcome this problem, the bank decided to launch seven small championships in Egypt, with a total prize value of each tournament under $7,000, under the supervision of the Professional Squash Association, which qualifies players to participate in major tournaments without incurring the high costs of traveling abroad.

“The bank sponsors 10 of the best squash players in the world, including five men and five women: Ali Farag, Raneem El Welily, and Tarek Momen. We, at CIB, are proud to support them, as they are like ambassadors of Egypt abroad. They also proved their excellence in squash and other good aspects that the CIB appreciates and aims to spread,” Abaza said.

He concluded that holding the two tournaments at the Giza Pyramids area is also part of the bank’s efforts to promote tourism.

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Banks’ SMEs funding amounts to EGP 146bn, targeting EGP 200bn by year-end: El-Etreby https://wwww.dailynewssegypt.com/2019/09/17/banks-smes-funding-amounts-to-egp-146bn-targeting-egp-200bn-by-year-end-el-etreby/ Tue, 17 Sep 2019 06:20:02 +0000 https://ww.dailynewssegypt.com/?p=708187 The CBE has instructed banks working in the local market to allocate 20% of their loan portfolios to finance SMEs. El-Etreby pointed out that NGOs were also included within this segment.

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Banks operating in Egypt have offered a total funding of EGP 146bn to small and medium-sized enterprises (SMEs) since the launch of the Central Bank of Egypt’s (CBE) initiative to finance such projects, Chairperson of Banque Misr, Mohamed El-Etreby, revealed on Monday.

He pointed out that the banks aim to bring up the figure to EGP 200bn by the end of this year.

El-Etreby added that according to the CBE’s initiative, the banks provide financing to SMEs at a special interest rate up to 5% to support this promising sector. Some EGP 5bn was allocated to finance micro and small projects at this rate, in addition to EGP 15bn for medium enterprises in all sectors, excluding commercial, to finance purchasing equipment and machinery.

The CBE has instructed banks working in the local market to allocate 20% of their loan portfolios to finance SMEs. El-Etreby pointed out that NGOs were also included within this segment.

According to El-Etreby, Banque Misr has injected EGP 24bn in funding SMEs since the launch of the CBE initiative until the end of June 2019, compared to EGP 1.5bn in 2015.

He added that financing SMEs accounts for 19% of the bank’s loan portfolio.

El-Etreby pointed out that the number of beneficiaries of the SMEs initiative amounted to 85,000 households, totalling 590,000 people, noting that the bank increased the number of its employees in the SMEs department from 65 to 138 employees, and raised the number of its branches specialised in the sector from 321 to 521 branches.

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Banks reduce NPLs allocations by EGP 2.95bn in June 2019 https://wwww.dailynewssegypt.com/2019/09/15/banks-reduce-npls-allocations-by-egp-2-95bn-in-june-2019/ Sun, 15 Sep 2019 08:20:46 +0000 https://ww.dailynewssegypt.com/?p=708009 Reserves declined to EGP 236.06bn end-June, compared to EGP 238.89bn end-May

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Banks operating in the local market have reduced their non-performing loans (NPLs) allocations by EGP 2.95bn to EGP 122.27bn in June 2019, compared to EGP 125.22bn at the end of May 2019, the Central Bank of Egypt (CBE) announced.

Banks set aside part of their profits as allocations to deal with doubtful debts, and reducing these allocations indicates an improvement in their NPL index.

In the same context, the CBE revealed that the volume of reserves, which banks are also sparing to face any emergencies or support their capital base, declined to about EGP 236.06bn at the end of June 2019, compared to EGP 238.89bn at the end of May 2019.

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Household sector accounts for 80.4% of total bank deposits https://wwww.dailynewssegypt.com/2019/09/15/household-sector-accounts-for-80-4-of-total-bank-deposits/ Sun, 15 Sep 2019 08:00:35 +0000 https://ww.dailynewssegypt.com/?p=708003 It accounts for 83.6% of total deposits in local currency, 68.7% in foreign currency

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The household sector has accounted for 80.4% of total bank deposits until the end of June 2019.

The Central Bank of Egypt (CBE) said in its monthly report that the  household sector represented 83.6% of total deposits in local currency and 67.7% of deposits in foreign currencies.

According to the CBE, the volume of customer deposits in the banking system increased by about EGP 95.47bn at the end of June 2019 to reach EGP 4.007tn, compared to EGP 3.911tn at the end of May 2019.

The bank pointed out that government deposits recorded EGP 610.45bn at the end of June, compared to EGP 591.882bn at the end of May 2019, an increase of EGP 18.57bn.

The volume of government deposits in local currency amounted to about EGP 503.279bn, and foreign currency deposits to EGP 107.173bn.

The CBE highlighted that non-governmental deposits increased by EGP 76.901bn in June 2019 to reach EGP 3.396tn, compared to EGP 3.320tn at the end of May.

Non-governmental deposits in local currency amounted to about EGP 2.673tn at the end of June, up from EGP 2.594tn at the end of May. The distribution of these deposits came as follows: public enterprise sector by EGP 58.405bn, the private sector by EGP 378.948bn, and the household sector by EGP 2.224tn, and non-residents by EGP 11.858bn.

Non-governmental deposits in foreign currencies recorded about EGP 723.325bn, compared to EGP 725.836bn in the previous month. The distribution of these deposits came as follows: public enterprise sector by EGP 37.639bn, private sector by EGP 186.493bn, household sector by EGP 490.595bn, and non-residents by EGP 8.694bn.

The CBE said growth in total bank deposits rose by 11.97% in June 2019, from 11.34% in May.

The growth rate in deposits in local currency rose in June to 15.8% from 14.9% in May, while the growth rate in foreign currency deposits continued to decline to -0.3% in June from 0.2% in May, CBE said.

According to the CBE, the share of foreign currencies in total bank deposits fell to 21.17% at the end of June, compared to 21.37% at the end of May 2019.

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EBI’s role goes beyond training employees in banking sector: Nossier https://wwww.dailynewssegypt.com/2019/09/15/ebis-role-goes-beyond-training-employees-in-banking-sector-nossier/ Sun, 15 Sep 2019 07:40:26 +0000 https://ww.dailynewssegypt.com/?p=708005 Institute started offering more developed training courses to support financial inclusion, says EBI Executive Director

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The role of the Egyptian Banking Institute (EBI) is not limited to training employees in the banking sector, but also affects directly and indirectly various categories of Egyptians, the EBI Executive Director, Abdel Aziz Nossier, said during a press conference held last Wednesday.

The media briefing revealed the most important achievements and activities of the EBI during fiscal year (FY) 2018/19, which ended in June.

He added that the EBI plays a significant role in improving financial education for different segments of citizens, from children and school students through young people and university students. In addition, we provide employment training programmes for university students. These efforts aim to support the state and the Central Bank of Egypt’s (CBE) plan for achieving financial inclusion.

During the conference, Nossier stressed that the institute has achieved, under the umbrella of the CBE, many outstanding accomplishments and initiatives to cope with the rapid developments in Egypt in all fields. This includes developing financial and banking services which have seen breakthrough in the Egyptian and African banking sector.

“We hope that the EBI turns to be an educational lighthouse, especially for those working in the Egyptian and African banking sector. We hope that the institute turns to be the perfect choice for anyone who wants to increase his knowledge and experience about finance. This is a dream that we started and we believe we are on the right track, and the statistics show that,” he added.

Nossier also explained that the total number of beneficiaries of training and services provided by the institute reached more than 95,000 people in FY 2018/19, an increase of 70% compared to FY 2017/18.

The institute provides basic services, namely training and evaluation for recruitment.

According to Nossier, the number of trainees exceeded 65,000, compared to about 30,000 trainees in FY 2016/17, and about 34,900 trainees in FY 2017/18.

The number of beneficiaries of the evaluation services reached more than 29,000, an increase of 41%, compared to about 3,996 beneficiaries in FY 2016/17 and 20,915 in FY 2017/18.

He added that 2,800 training programmes were provided, with the number of training hours reaching about 74,000, an increase of 19% compared to FY 2017/18.

EBI Executive Director, Abdel Aziz Nossier

Nossier explained that the institute has implemented during the last FY two training courses of the utmost importance: the first project was a financing programme, and the second was a certificate in corporate credit analysis.

He pointed out that the corporate credit analysis course is similar of what JPMorgan offers to its employees. These courses are offered for the first time outside the United State. It included 33 trainees and lasted from January to April 2019.

The institute also had a great success story with the Agricultural Bank of Egypt, as it evaluated about 18,780 bank employees, whether for recruitment, promotion, or development, he added.

“The institute has made many achievements to support the human element in the African banking sector, through training and exchange of experiences, under the umbrella of various initiatives launched under the sponsorship of the CBE in 38 African countries,” Nossier said.

He added that the institute has implemented 70 international programmes and 15 visits to banking and financial institutions with international bodies and institutions, including Moody’s Analytics, Euromoney Learning, House of Learning, ATTF, Financial Edge Training, Institute of Directors, and JPMorgan.

The visits also included the Netherlands; India; the United States; Singapore; the United Kingdom; Italy; South Africa; Malaysia, and Spain, in order to keep abreast of the latest developments in the global banking sector.

“I stress that the EBI does not miss a chance for developing the human element and the infrastructure of the banking sector,” Nossier said.

He explained that the institute has signed a memorandum of understanding with the Information Technology Institute, under the sponsorship of the CBE and the Ministry of Communications, to come up with clear educational paths in the field of financial technology. He pointed out that about 36 trainees received specialised programmes in this regard.

Moreover, Nossier added that the institute also started offering a wider variety of training courses. For example, there are now sign language programmes for employees in the customer service departments “tellers”, pointing out that a number of banks requested such courses.

He added that the EBI also provides programmes for security sector workers, bank headquarters management officials, safe driving, as well as training courses for journalists in the economic field.

“The institute’s activities during the last FY included strategic participation in the preparation of one of the most important economic conferences in Africa, the Seamless North Africa 2019 Conference organised by the CBE in Cairo, hosting the seventh meeting of the Arab Banking Training Network (ABTN), and implementing the certificate of “business development specialist” within the Nile Pioneers Initiative, sponsored by the CBE, Nossier said.

Emphasising the institute’s commitment to international quality standards, Nossier said that the international accreditation of the institute was renewed from the Accrediting Council for Continuing Education & Training (ACCET) for a third period until 2024. The EBI was the first institution in Egypt and the whole region to receive this accreditation in 2009 for a period of five years. A renewal was made in 2014 for another five years.

During the last FY, the institute was awarded by the Child & Youth Finance International (CYFI) for its efforts during the Global Money Week.

He pointed out that the institute carried out large activities in Sohag governorate to support financial inclusion. Its team conducted visits to universities, schools, mosques, churches, and chambers of commerce there, holding meeting with farmers, whether men or women.

He stressed that all of this would not have happened without the unprecedented support received by the institute from the governor of the CBE, whether moral, financial, or logistic support.

Nosseir stressed that he is looking forward to exerting more efforts to provide better services to all employees of the banking sector, which contributes to pushing the Egyptian economy.

Additionally, he pointed out that the institute is expanding and renovating its headquarters and branches to keep pace with the latest methods of learning, including lecture halls, teaching tools, scientific material, and developing the skills of the lecturers themselves.

He explained that the development of about 25% of the scientific material at the institute during the last FY was completed, and the whole development process is expected to be completed by the end of the current FY.

The institute deals with about 38 African countries in the field of training and transfer of expertise, according to Nossier. Plus, the institute aims to increase the number of those countries by 10% in the coming period, focusing on the Nile basin countries.

He explained that the institute is studying the establishment of a special training unit in cooperation with several African countries, pointing out that the first part of the study has been completed, and its results were very promising. Then, the institute will get the approval of its board of directors to establish the unit.

According to Nossier, the expansion of the institute in the African continent comes within a number of objectives that the EBI seeks to achieve during the current FY. They also include diversification in entrepreneurship programmes, raising the efficiency of the internal operations of the institute, and the completion of the development process.

In addition, he added that the institute is currently based in Cairo and Alexandria, and intends to open a new branch in Upper Egypt in the coming period, pointing out that the plan for establishing a branch in Port Said was halted, as it has been proven to be useless.

Nossier stressed that the e-learning programme launched by the institute in February 2018 prevents it from expanding through high-cost branches that will not be resorted to unless the market really needs them. He ruled out the possibility of establishing branches in foreign countries, at least presently.

“The EBI is dealing with 24 universities in Egypt and aims to focus more on private universities in the coming period,” Nossier said.

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AAIB arranges EGP 6bn securitised bonds, Egypt’s biggest transaction in 2019 https://wwww.dailynewssegypt.com/2019/09/15/aaib-arranges-egp-6bn-securitised-bonds-egypts-biggest-transaction-in-2019/ Sun, 15 Sep 2019 06:00:44 +0000 https://ww.dailynewssegypt.com/?p=707991 A securitisation transaction is a debt capital market financial instrument whereby future receivables are converted into financial securities which can then be listed and traded on the stock exchange.

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The Arab African International Bank (AAIB) has been on the frontline of a securitisation transaction worth EGP 6bn as an advisor and lead advisor. This momentous transaction has been issued by the Tameer for Securitization Company for a portfolio of receivables originated by the New Urban Communities Authority. 

Noteworthy, this has been the biggest securitisation in the local debt capital market thus far. The AAIB has been one of the lead arrangers of this milestone transaction, the signing of which was finalised in July 2019, with a share of EGP 2bn. This transaction was done in collaboration with the National Bank of Egypt, the Commercial International Bank, and EFG Hermes.

A securitisation transaction is a debt capital market financial instrument whereby future receivables are converted into financial securities which can then be listed and traded on the stock exchange.

The Vice Chairperson and Managing Director of AAIB, Sherif Elwy, stated that “securitisation transactions are vital financial tools as they allow the diversification of financing sources for a certain tier of clients including real estate developers and consumer finance companies amongst others.”

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Madbouly, Amer inaugurate 43rd session of Council of Arab Central Banks Governors, Arab Monetary Associations on Sunday https://wwww.dailynewssegypt.com/2019/09/14/madbouly-amer-inaugurate-43rd-session-of-council-of-arab-central-banks-governors-arab-monetary-associations-on-sunday/ Sat, 14 Sep 2019 21:28:30 +0000 https://ww.dailynewssegypt.com/?p=707981 Meetings discuss latest economic, financial, monetary developments, banking supervision, financial stability, inclusiveness, and modern financial technologies, according to AMF

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Prime Minister Mostafa Madbouly and Central Bank of Egypt (CBE) Governor, Tarek Amer, will open the 43rd session of the Arab Central Banks Governors and Arab Monetary Associations on Sunday.

According to an Arab Monetary Fund’s (AMF) statement, the session is expected to discuss regional and international monetary, financial, and economic developments, their repercussions on Arab countries, issues of central bank governance, and central bank cryptocurrencies, among other topics.

The agenda also includes reviewing the report of the secretariat of the council presented by Abdul Rahman Bin Abdullah Al Humaidi, general manager of the board of directors of the AMF, the draft financial stability report for 2019, the draft report on a unified Arab economy for 2019.

Additionally, the recommendations and actions of the Arab Banking Supervisory Committee, the Arab Commission for Payment and Settlement Systems, and the Arab Commission for Credit Information would be tackled during the session.

The agenda also includes discussing the recommendations and actions of the Regional Working Group to promote financial inclusion in the Arab states and the Financial Stability Task Force.

It is scheduled for the board to also discuss a number of topics, papers, and reports, the most important of which, “banking supervision of institutions of systemic importance locally: Arab Experiences, Operational Risk Frameworks, Digital Banking Identity, Responsible Finance: policies, tools and experiences.

It also discusses “the movements of risky assets and their impact on financial stability”, “the risks and repercussions of cryptocurrencies on the financial sector”, “Determining the size of the indebtedness of the household sector in the Arab countries and its impact on financial stability”; soundness of indicators of the corporate sector, identify risks, and repercussions on the financial sector in the Arab countries. ”

Papers presented in this session also include “Using Cryptocurrencies in Payment Systems”, “Immediate Payments Experiences in Arab Countries”, “Uses of Blockchain Technology in Payment Processes: Prospects and Opportunities”, and “Applications of Advanced AI Methodologies in the field of credit inquiry” and “Developing the systems of movable assets in the Arab countries”.

The agenda also includes discussion of the activities of the Working Group on Modern Financial Technologies, established by the AMF in December 2018.

In this context, the board will discuss a paper on crowdfunding platforms, prospects and regulatory frameworks, and a blockchain and financial sector safety paper.

The session will also address the proposal of the Regional Laboratory for Regulatory Innovations at the regional level, which was prepared within the framework of the Financial Inclusion Initiative for the Arab region.

In addition to these topics, the agenda includes a number of issues of importance to central banks and Arab monetary associations, especially the follow-up to the implementation of the “Arab Clearing” project where the AMF is intensifying its efforts to establish a regional institution for the clearing and settlement of Arab payments.

This project aims to promote intra-Arab investments and trade and the use of Arab currencies.

The meeting will also discuss the draft unified Arab letter for 2019, which will be presented by the Arab Group at the annual meetings of the IMF and the World Bank, scheduled to be held in October in Washington.

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Bank deposits up by EGP 95.471bn recording EGP 4.007tr in June https://wwww.dailynewssegypt.com/2019/09/12/bank-deposits-up-by-egp-95-471bn-recording-egp-4-007tr-in-june/ Thu, 12 Sep 2019 11:04:57 +0000 https://ww.dailynewssegypt.com/?p=707765 Banks’ credit facilities see EGP 224.7bn rise, private business sector holds 60.7%

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The Central Bank of Egypt (CBE) revealed that customer deposits in the banking system rose by EGP 95.471bn to reach EGP 4.007tr, compared to EGP 3.911tr at the end of May.

In its monthly report released on Tuesday, the bank said that government deposits registered EGP 610.452bn at the end of June, compared with EGP 591.882bn at the end of May, an increase of EGP 18.57bn.

The volume of government local currency deposits amounted to about EGP 503.279bn and foreign currency deposits reached EGP 107.173bn.

The CBE pointed out that non-governmental deposits increased by EGP 76.901bn in June 2019 to reach EGP 3.396tr compared to EGP 3.320tr at the end of May.

It added that non-governmental deposits in local currency reached about EGP 2.673tr by the end of June, compared to EGP 2.594tr at the end of May.

The CBE said the growth ratio in total bank deposits rose to 11.97% in June 2019, up from 11.34% in May.

The growth rate in local currency deposits in rose in June to 15.8% from 14.9% in May, while the growth rate in foreign currency deposits continued to decline to -0.3% percent in June from 0.2% in May.

According to the CBE, the share of foreign currencies in total bank deposits fell to 21.17% at the end of June 2019, compared to 21.37% at the end of May.

In another context, the CBE said that the volume of credit facilities granted by banks operating in the local market to their customers during the fiscal year (FY) 2018/19 increased by 13.8% to reach EGP 1.8543tn.

Credit facilities are loans provided by banks to their clients alongside documentary credits and letters of guarantees that were opened to cover import operations.

The CBE pointed out that the private business sector received about 60.7% of the total non-governmental credit facilities granted by banks to various economic sectors until the end of June 2019.

It added that the industry sector has denominated 33.4% of these facilities, followed by the services sector by 27%, the trade sector by 11%, the agriculture sector by 1.6%, and miscellaneous sectors – including households – by 27%.

In a related context, the CBE revealed that investments of banks in treasury bills (T-Bills) decreased by about EGP 18.6bn during the month of July 2019, to reach about EGP 671.99bn, compared to EGP 690.58bn at the end of June 2019.

Private sector banks’ investments in bills fell to EGP 252.917bn at the end of July, compared to EGP 262.477bn at the end of June, down by EGP 9.6bn.

Investments of public sector banks dropped by EGP 8.4bn to reach EGP 370.253bn.

The CBE also revealed that the total outstanding balances of T-Bills rose to EGP 1.426tn by the end of July 2019, compared to EGP 1.417tr by the end of June 2019, an increase of EGP 9.05bn.

Furthermore, the CBE stated that the balances of 91-day bills reached EGP 127.213bn, while182-day bills reached EGP 233.16bn, and 266-day bills recorded EGP 205.203bn.

The balance of 364-day bills reached EGP 351.239bn, 357-day bills were EGP 321.578bn, and 273-day bills were EGP 188.04bn.

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Domestic public debt records EGP 4.205tr in end-March https://wwww.dailynewssegypt.com/2019/09/11/domestic-public-debt-records-egp-4-205tr-in-end-march/ Wed, 11 Sep 2019 20:02:11 +0000 https://ww.dailynewssegypt.com/?p=707705 Domestic debt records 79% of GDP, of which 86.4% is owed by the government, 7.3% by public economic bodies and 6.3% by National Investment Bank

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The Central Bank of Egypt (CBE) revealed that the gross domestic debt rose by about EGP 97bn at the end of March 2019 to reach EGP 4.205tr, compared to EGP 4.107tr at the end of December 2018.

In its monthly report released on Tuesday, the CBE pointed out that the domestic public debt represents about 79% of Egypt’s GDP.

According to the CBE, the amount of debt owed by the government reached EGP 3.6306tr at the end of March, an increase of EGP 508.8bn during the period from July 2018 to March 2019, equivalent to about 86.4% of the total domestic public debt.

The total domestic debt owed by public economic bodies reached EGP 307.6bn, equivalent to about 7.3% of the total domestic public debt.

The National Investment Bank owed about EGP 266.7bn, equivalent to about 6.3% of the total domestic public debt at the end of March.

Banks operating in the Egyptian market owns the largest share of the local government debt, as they are the largest investors in treasury bills and bonds periodically issued by the government to cover the deficit in the state budget.

Egypt’s external debt rose to $106.2bn at the end of March, compared with $96.6bn at the end of December 2018.

Of the total external debt, medium and long-term debt was $93.8bn, or 88.3%, while short-term debt accounted for 11.7%.

The government’s share of external debt in the first quarter of 2019 rose to about $53.8bn compared to about $48.1bn at the end of 2018.

The CBE’s debt stood at $28.5bn at the end of March, compared to about $28.3bn at the end of 2018.

Offshore bank debt rose to about $10.1bn up from about $7.7bn at the end of 2018, and other sector debts rose to $13.7bn, compared to $12.6bn at the end of 2018.

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