Banking – Daily News Egypt https://eklutdvotyzsri.dailynewssegypt.com Egypt’s Only Daily Independent Newspaper In English Mon, 06 Jan 2020 20:47:27 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.1 CBE offers $800m bill tender on Monday https://eklutdvotyzsri.dailynewssegypt.com/2020/01/05/cbe-offers-800m-bill-tender-on-monday/ Sun, 05 Jan 2020 20:45:36 +0000 https://wwww.dailynewssegypt.com/?p=718396 The proceeds of the tender goes to repay a previous tender offered on 8 January 2019 worth $845.1m

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On Monday, the Central Bank of Egypt (CBE) will offer a treasury bill tender, worth $800m, for 364 days, due on 5 January 2021.

The proceeds of this tender are directed to pay off a previous tender entitlement, which was offered on 8 January 2019, at a value of $845.1m.

The CBE had issued the last bid denominated in dollars on 9 December 2019 with a value of $1bn, for a year, due on 8 December 2020.

The CBE received 35 offers from local and foreign investors at a value of $1.1746bn to cover this bid, of which only 25 offers valued at $1bn were accepted. The interest rate accepted by the CBE was 3.55% as the lowest price, 3.6% as the highest price, and 3.589% as the average, and other offers were rejected where the interest rate reached 3.9%.

In 2019, the CBE issued 6 bids for treasury bills in dollars, which earned about $6.1432bn.

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

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

The CBE had said earlier that foreign investments in Egyptian pound-denominated bills fell to EGP 242.2bn at the end of October 2019 against EGP 264.8bn at the end of September 2019.

Foreign investments in treasury bills increased during the first 10 months of this year by about $4.25bn, or 39.7%, compared to $10.7bn at the end of December 2018.

Before its recovery in 2019, Egypt lost about $10.8bn in foreign investments in treasury bills during the period from the beginning of April 2018 to the end of December 2018, according to CBE data.

These investments had reached about EGP 380.3bn ($21.5bn) at the end of March 2019.

Emerging markets were exposed to a wave of foreign investment exit from government debt instruments starting in April 2018, with the rise of the US dollar, and the growing concerns of the economies of these markets, especially after the crises of Turkey and Argentina, but the crisis slowed down in December 2019, and then reflected positive flows since the beginning of 2019 in a number of these markets.

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10 main tasks before CBE’s new board https://eklutdvotyzsri.dailynewssegypt.com/2020/01/05/10-main-tasks-before-cbes-new-board/ Sun, 05 Jan 2020 14:38:55 +0000 https://wwww.dailynewssegypt.com/?p=718332 New board includes financial, legal, technological and economic expertise alongside the governor, deputies

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The Central Bank of Egypt’s (CBE) board will hold on Sunday its first meeting after President Abdel Fattah Al-Sisi reformed it last Wednesday for the next four years.

The presidential decree No. 678 of 2019 stipulated the appointment of Gamal Negm and Rami Abul Naga as deputy governors, along with a representative from the Ministry of Finance. The decision also included appointing Mohamed Omran, the head of the Financial Regulatory Authority (FRA), and Ali Faramawi, a banking expert, Naglaa El-Ahwany as an economic expert, Ashraf El-Araby as an economist, and Tamer El-Dakkak as a legal expert.

The decision indicated that the appointment of members with experience is 4 years, starting from 27 Noveber 2019. This formation resulted in the departure of Lobna Helal, Deputy Governor of the CBE, Kamal Abu Elkhair, Laila Al Khawaga, Khaled Abdel Rahman, Yahia Al-Dakrouri, and Fakhry Elfiky, while Gamal Negm remained deputy governor and Mohamed Omra remained as head of the FRA.

Al-Sisi issued a decision in November to renew Tarek Amer’s term as Governor of the CBE for another 4 years, to continue until November 2023.

Gamal Negm

Gamal Negm, CBE’s dynamo

Gamal Negm, who was kept as deputy governor of the CBE, in considered the “dynamo” of the CBE. He is also tasked with the banknote printing and risk management department.

Negm is a board member of the FRA, a member of the Board of Trustees of the Anti-Money Laundering Unit in Egypt, and a non-executive chairperson of the Arab International Bank.

From February 2008 until November 2011, Negm held the position of Sub Governor of the CBE for the Supervision Sector, where he supervised various departments, the office, banking affairs, cash control, credit risks, issues, overall risks, supervisory instructions, and Basel applications, until he was appointed deputy to the CBE governor.

Since joining the CBE in July 2004, Negm was responsible for the bank’s development, overseeing the implementation of the Egyptian banking sector’s development plan, which is to address the problem of non-performing debt in banks, the administrative and financial restructuring of public sector banks, and support and development of the monitoring and supervision sector in the CBE.

Prior to joining the CBE, Negm had 25 years of experience in the banking field, during which he held several positions in the top management of international and local banking institutions that enriched his experience in the field of credit and risk management, internal audit, and financial supervision.

Rami Abul Naga

Rami Abul Naga: Young experience in reserve management

Rami Abul Naga was appointed CBE deputy governor. He previously held the position of CBE’s sub governor for the money market sector and the cash reserve management. Abul Naga took charge of supervising and managing the international investment portfolio and management of foreign exchange reserves, negotiating with international financial institutions to attract more foreign investments, discussing various financing methods, communicating with credit rating institutions, and supervising the implementation of monetary policy through the management of local liquidity and open market operations. He was also responsible for the follow-up of developments in domestic and international money money markets, and also participated in negotiations with the International Monetary Fund (IMF), and was responsible for regulating the fund’s programme and its compatibility with the requirements of the CBE and the Egyptian economy.

Abu El Naga joined the CBE in 2005 as a manager of the short-term investment portfolio in the cash reserve management. In 2014, he was appointed as head of the reserve management, treasury, and trading department. In 2016, Abu El Naga was promoted to assistant sub governor for the markets sector, then the sub governor for markets.

He is a graduate of the American University in Cairo with a major in Business Administration and Economics and holds a master’s degree in finance from City University in the United Kingdom. He had also obtained many training courses and certifications approved by various international institutions, such as the World Bank, the US Federal Reserve, the German Central Bank, and others.

Ashraf El-Araby

Ashraf El-Araby: economic experience in the field of planning

Ashraf El-Araby, the former Minister of Planning, has been appointed as a member of the CBE’s new board.

He is an economic expert specialised in planning and economic development, having almost 20 years of experience in the field.

He had taken the position of Minister of Planning, Follow-up and Administrative Reform in 5 successive ministerial portfolios, where he held this position in Ibrahim Mahlab’s cabinet during his first term, the cabinet of Ibrahim Mahlab for his second term, the cabinet of Hazem Beblawi, and the cabinet of Hisham Kandil. El-Araby combines both theoretical knowledge and practical experience, where he  published many research papers in prestigious local, regional, and international periodicals and taught at Kansas State University, Cairo University, and the French University in Cairo.

He was born on 14 December 1970 and holds a Bachelor’s Degree in Economics from the Faculty of Economics and Political Science at Cairo University in 1992, then a master’s degree in economics from the same college in 1997, and received a doctorate from the University of Kansas in America in 2004, which gave him the award for the best graduate student in Department of Economics at the university.

Ali Faramawy

Ali Faramawy: representative of the technology sector

Ali Faramawy was also appointed member of the CBE’s new board to represent the technology sector, a sector that plays a major role in achieving the goals of the state and the CBE for disseminating financial inclusion and electronic payments.

Faramawy was previously appointed as a member of the advisory council of President Abdel-Fattah Al-Sisi.

Faramawy was born in Alexandria Governorate in 1964, and obtained a Bachelor’s of Engineering from Alexandria University in 1986, a diploma in Computer Science in 1992, and a Master of Business Administration “Strategic Marketing” from the British University of Hull in 1998. Faramawy joined Microsoft in 1997 and started in his capacity as general manager of the company in Egypt, and held many high-level positions, most notably the position of the regional director of the company for sales, marketing, and services in the Middle East and Africa in 2002. He also held the position of Vice President of the company in Europe, Middle East and Africa in 2004, and has been vice president of the company since 2011.

Tamer Al Dakkak: a prominent legal personality

Tamer Al Dakkak, vice president of the State Council and legal adviser to the CBE is a prominent legal personality, due to his great experience. His role came out strongly with talk of the new banking law, which the CBE was preparing for in two years.

The choice of Al Dakkak in the formation of the Board of Directors of the CBE is an important and positive matter in light of approaching the application of the new banking law, which would establish governance and supervision in the CBE and legalise the introduction of digital technology, without prejudice to the achievement of the safety allocated for Egyptian banks.

Nagla El Ahwany
Nagla El Ahwany

Nagla El Ahwany: sole female member of the board

Nagla El Ahwany also has great economic experience due to her professorship at the Faculty of Economics and Political Science at Cairo University, and she also held the position of Minister of International Cooperation in the cabinet of Ibrahim Mahlab, the first government under President Abdel-Fattah Al-Sisi.

Nagla El Ahwany is an academic personality with many pieces of research in economics, and she held many academic positions, including executive director and chief economist at the Egyptian Centre for Economic Studies, and director of the Centre for European Studies at the Faculty of Economics and Political Science.

El Ahwany also held consulting positions in the American Chamber of Commerce in Cairo, the International Labour Organisation office in Cairo, and the Economic and Social Commission for Western Asia.

Mohamed Omran: voice of non-financial service providers

Mohamed Omran

Mohammed Omran, chairperson of the FRA, was reappointed to the CBE Board of Directors. He holds a Master’s Degree in Business Administration from Cairo University, and a Ph.D. in Finance from Plymouth University in the United Kingdom.

Omran previously was deputy chairperson of the Egyptian Exchange from 2006 to 2010 and then became head of the EGX from September 2011 up until right before the June 2013 revolution, then he refused to work under the umbrella of the Muslim Brotherhood’s rule.

He returned in August 2013 until June 2017, and served as chairperson of the Eurasian Stock Exchanges Association, Professor of Finance at the Arab Academy for Science and Technology, and also served as vice-chairperson of the Holding Insurance Company for operations for a year.

Mohamed Abdel Aal, banking expert

Mohamed Abdel Aal, a banking expert, and a member of the Suez Canal Bank Board of Directors said that the CBE board of directors, in its previous formation, succeeded in ferrying the Egyptian economy to safety and beyond, after its success in supervising and contributing to the implementation of the economic, monetary and financial reform programme, in cooperation with the IMF, bearing full responsibility for all its results.

He added that the new board is an extension of the previous one, as it includes experts among its members who have knowledge and experience, each in their field of specialisation, in addition to the executive members, who are the governor and his deputy.

Mohamed Abdel Aal

He pointed out that if the previous board succeeded in carrying out its mission, in difficult circumstances, along with the testimony of all global banking and economic circles. He is confident that the new board will achieve the same level of success in the next stage.

Abdel Aal pointed out that this stage may be more difficult in terms of challenges, burdens, and responsibilities, because it requires fixing, devoting and maintaining the gains achieved by the economic reform programme, and pushing and directing the banking sector towards demanding contemporary global technology.

Abdel Aal stressed that the Board of Directors of the CBE in its new formation is fully aware of its vital and important role defined in its strategic plans, laws, policies, and procedures. Everyone knows the high academic and practical level of its members, and that they are able to implement the CBE’s visions in accordance with the most sophisticated global technological transformations.

Maintaining the independence of the CBE

The first task on the agenda of the new board of directors of the CBE is to preserve its independence and its monetary policy. The CBE’s monetary policy is the main axis and cornerstone of the Egyptian economy since the CBE represents the Egyptian economy’s national security while setting up controls that prevent conflicts of interest.

He said that the new board of directors will also have to strengthen the supervisory role over banks in the next stage, which is one of the more dangerous tasks, given that 89% of Egyptian society’s savings are kept in bank accounts.

According to Abdel Aal, there is another important file before the new board of directors, which is to maintain price stability, a reasonable rate of inflation, within the limits set by the board of directors, and also maintain a balanced monetary policy, in relation to the interest rate, which reflects the balance between the requirements of economic growth, the reduction in the cost of public debt, and a positive real interest rate, helps to develop family savings.

He pointed out that the CBE in its new formation is also required to maintain the stability of the exchange rate in a way that reflects the mechanism of supply and demand, and achieve a balance between market forces, exporters, importers, and others.

He said, that there is another important task, which is overseeing a coordinated strategy with the relevant ministries in the country to encourage the national industry. This would enable the national industry to increase its contribution to the gross domestic product, and improve Egypt’s attractiveness in direct and indirect investments, pointing out that monetary policy will play a crucial role, along with the revitalisation initiative announced by the CBE.

Among the tasks entrusted to the new board of directors, according to Abdel-Aal, is overseeing the implementation, activation, and proper application of the initiatives that were launched to support industry, housing, and tourism, and work to renew previous initiatives related to financing low and middle-income housing.

Concluding a new agreement with the International Monetary Fund

He said one of the most dangerous and most important tasks is also the possibility of concluding a new agreement with the International Monetary Fund (IMF), and studying the dimensions and feasibility of this agreement, whether in terms of its objectives or areas, and whether the potential agreement with the fund will be limited to technical support and structural reform. These agreements will have to come after the success of the financial and monetary reform and may help in developing a contract for a credit preparedness programme or a new negotiated financing package with the fund.

Abdel Aal pointed out that among the tasks assigned to the new board of directors is also to maintain the level of cash reserves to preserve the adequacy of balances to cover Egypt’s import needs for a period of no less than 8 months. He pointed out that this goal is important as it helps stabilise the Egyptian currency and Egypt’s fulfilment of international obligations and continue import flows.

The tenth task before the CBE Board of Directors with its new formation is, according to Abdel Aal, to achieve financial inclusion via electronic payment transformation .

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NBE studies establishment of rowing club in Cairo https://eklutdvotyzsri.dailynewssegypt.com/2020/01/05/nbe-studies-establishment-of-rowing-club-in-cairo/ Sun, 05 Jan 2020 14:28:07 +0000 https://wwww.dailynewssegypt.com/?p=718327 Bank to continue sponsoring the Egyptian Rowing Federation and other games in coordination with the Ministry of Youth and Sports, says Aboul Fotouh

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The National Bank of Egypt (NBE) studies the establishment of a new rowing club in Cairo, in cooperation with the Egyptian Rowing Federation, besides its existing rowing club in Alexandria, said the NBE’s Vice Chairperson Yehia Aboul Fotouh.

It came during a press conference held by the Egyptian Rowing Federation last Thursday, to talk about the federation’s achievements in 2019, including winning the 13th African Rowing Championship held in Tunisia, and Egyptian Mohamed Abdel-Khalek Al-Banna’s qualification to the 2020 Tokyo Olympics.

The conference was attended by Aboul Fotouh, and Amr Al-Nouri, head of the Egyptian Rowing Federation.

Aboul Fotouh emphasised that the NBE pays special attention to sports in general, and rowing in particular. The bank aims to attract more young people to practice rowing, so that Egypt’s participation in international and regional championships could increase.

The NBE sponsors most of sports federations in Egypt, in addition to 20 players qualified for the Tokyo Olympics. However, the value of sponsorship contracts varies from one sport to another, as it is calculated according to the needs of each game. The bank also has several teams in various games, including football, basketball, handball, and rowing.

The NBE focuses its support on individual sports, in particular, as Egyptian athletes excel at such games in international championships, yet they do not receive enough support.

In cooperation with the Ministry of Youth and Sports, the NBE sponsors some games, such as handball, in which the Egyptian team won the IHF Men’s Youth World Championship (under-19), the third place in the IHF Men’s Junior World Championship (under-21), and the eighth place in the World Men’s Handball Championship. Additionally, the bank sponsors volleyball, taekwondo, and squash.

Al-Nouri said the Egyptian Rowing Federation, under the sponsorship of the NBE, participated in six international championships, and qualified for the Tokyo Olympics. He stressed that the federation seeks to spread rowing nationwide, and revive the sport in many clubs that halted its activities in the recent period.

Egypt aims to promote indoor rowing locally, and hosts international championships, in addition to adding offshore rowing to the federation, and expanding in talent scouting to empower the national teams.

The Egyptian Rowing Federation also seeks to increase the number or rowing players nationwide to raise the competitiveness of the national teams and clubs at the global and continental levels, as well as adopting international quality standards using modern scientific methods.

For the federation to play this role, Al-Nouri stressed that it needs about EGP 20m in 2020, pointing out that the Ministry of Youth and Sports provides about EGP 900,000 only to the federation, besides further financial support when participating in world championships. Therefore, the NBE and other institutions that sponsor rowing have a major role in supporting the game.

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NBE’s financial position records EGP 1.7trn in 2019 https://eklutdvotyzsri.dailynewssegypt.com/2020/01/05/nbes-financial-position-records-egp-1-7trn-in-2019/ Sun, 05 Jan 2020 14:05:38 +0000 https://wwww.dailynewssegypt.com/?p=718325 Bank’s deposits reached EGP 1.3trn, while loans were EGP 570bn, including EGP 90bn of retail loans and EGP 57bn for SMEs funding, says Aboul Fotouh

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The National Bank of Egypt’s (NBE) financial position reached about EGP 1.7trn at the end of December 2019, Yehia Aboul Fotouh, vice chairperson of the bank, announced last week.

The bank’s deposit portfolio reached about EGP 1.3trn, while the loan portfolio recorded about EGP 570bn, of which about EGP 90bn are retail loans, representing about 12% of the bank’s loan portfolio, and EGP 57bn that have been directed to financing small and medium-sized enterprises (SMEs).

Aboul Fotouh noted that the Central Bank of Egypt’s (CBE) recent decision to increase the debt-to-income ratio for personal loans to 50% from 35%, will surge the demand for such loans, and thus support the purchasing power of individuals. It will also have a positive impact on stimulating demand for goods and services, and thus supporting Egypt-made products and the whole economy in general.

Regarding the bank’s profits, it reached about EGP 9bn at the end of the first half (H1) of the fiscal year FY 2018/19, with hopes to double this figure by the end of the FY 2018/19, as the numbers are still under verification until now.

On a different note, Aboul Fotouh said there are continuous meetings between the bank and defaulting companies and those that are about to default, to solve their problems and settle their debts, whether within the CBE’s initiatives for debt settlement or outside such initiatives.

He noted that the bank has recently settled a debt of EGP 50m in the tourism sector.

The NBE’s non-performing loan (NPL) portfolio, including retail loans, reached about EGP 10bn, accounting for 1.5% of the bank’s total loan portfolio, which is about EGP 570bn, until the end of December 2019.

There has been a noticeable revival in the tourism sector in the recent period, which helped troubled bank clients in this sector settle their bad debts.

Aboul Fotouh revealed that the NBE pumped EGP 1.8bn to replace and renovate 20 hotels in Egypt, within the CBE’s initiative to support tourism, adding that more tourist companies applied to obtain such loans, and the bank is currently studying their requests.

On 5 December 2019, the CBE launched an initiative to exempt defaulting factories from accumulated interests, amounting to EGP 31bn, while the original debt amounted to EGP 6bn. The initiative’s beneficiaries include 5,184 factories.

The CBE Governor Tarek Amer said that this initiative gives the opportunity for these factories to have a new start. The CBE will also remove those factories from the blacklist of defaulters, provided that they pay 50% of the original loan. Therefore, those companies and factories will be able to deal with the banking system again, based on their creditworthiness and the feasibility of their projects.

On a different note, Aboul Fotouh estimated the NBE’s foreign currency inflow at about $68bn from the floating of the exchange rate on 3 November 2016 until the end of 2019, pointing out that this sum was pumped entirely to finance import operations by the bank’s clients.

Meanwhile, Egypt has received a total foreign currency inflow of about $200bn since the floating decision until the end of last year.

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Al-Ahly Medical to establish its first-ever hospital soon, costing over EGP 100m https://eklutdvotyzsri.dailynewssegypt.com/2020/01/04/al-ahly-medical-to-establish-its-first-ever-hospital-soon-costing-over-egp-100m/ Sat, 04 Jan 2020 21:11:23 +0000 https://wwww.dailynewssegypt.com/?p=718246 The NBE’s Vice Chairperson Yehia Aboul Fotouh said the company has previously established three health centres, and intends to expand in the establishment of such centres in the coming period.

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Al-Ahly Medical Company (AMC), owned by the National Bank of Egypt (NBE), will soon open its first-ever hospital in Mokattam district, at a cost exceeding EGP 100m.

The NBE’s Vice Chairperson Yehia Aboul Fotouh said the company has previously established three health centres, and intends to expand in the establishment of such centres in the coming period.

Aboul Fotouh is also the Chairperson of the AMC, while Adel Allam is the CEO of the company.

It comes in the framework of the NBE’s strategy to support health and education services, through financing projects in these two sectors directly or directing a large part of its corporate social responsibility’s spending in these areas. The bank has financed the construction of several universities recently.

The NBE’s subsidiaries include Al Ahly Capital Holding Company, the investment arm of the bank, Al Ahly Exchange, Al Ahly Mortgage Finance, Al Ahly Leasing Company, Al-Ahly Medical Company, and Al Ahly for Reclamation and Land Agriculture. The NBE also holds shares in some companies, including the Egyptian Banks Company, Fawry, and e-finance.

Aboul Fotouh said in a previous statement that the NBE has decided to add money factoring to Al Ahly Leasing Company, ruling out the establishment of a company specialised in factoring at the present time. He added that they still study the launch of a new company to finance microenterprises.

He added that the NBE aims to exit from five or six companies during the current fiscal year, as well as selling some land plots worth EGP 1bn, in partnership with Banque Misr.

In the framework of the bank’s investment rotation, Aboul Fotouh noted that “when an investment project reaches a certain stage, we exit it and enter another.”

On a different note, Aboul Fotouh revealed that the bank aims to expand its non-banking financial services in the coming period.

Al Ahly Capital Holding has recently announced its acquisition of Pharos Securities Brokerage. The company is also close to completing its acquisition of other subsidiaries of Pharos, including Pharos Promotion and Underwriting, Pharos Asset Management, and Pharos One. The merger procedures are to be completed this month.

This step aims to turn Al Ahly Capital into an integrated investment bank, Aboul Fotouh said, denying reports about the bank’s intention to acquire other companies at the present time.

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CBE to offer $800m worth T-Bills next Monday https://eklutdvotyzsri.dailynewssegypt.com/2019/12/31/cbe-to-offer-800m-worth-t-bills-next-monday/ Tue, 31 Dec 2019 17:56:14 +0000 https://wwww.dailynewssegypt.com/?p=717994 The proceeds of the tender goes to repay a previous tender worth $845.1m offered on 8 January 2019

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The Central Bank of Egypt (CBE) will offer next Monday $800m dollar-denominated treasury bills due on 5 January 2021.

The proceeds of this tender are directed to repay a previous tender, which was offered on 8 January 2019, at a value of $845.1m.

The CBE’s last T-Bill offering was on 9 December with a value of $1bn due on 8 December 2020. The CBE received 35 bids from local and foreign investors at a value of $1.1746bn, of which only 25 bids valued at $1bn were accepted. The interest rate accepted by the CBE was 3.55% as the lowest price, 3.6% as the highest price, and 3.589% as an average.

During the year 2019, the CBE has made six T-Bill offers in US dollar, which gained about $6.1432bn.

T-Bills are short-term debts issued by the government with maturity periods ranging from three to six months. They are usually issued by the state’s finance ministry through the central bank to local and foreign institutions. The offering aims to increase the country’s foreign exchange liquidity to meet the needs of the government, repaying its external debts, and maintaining its foreign reserves.

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

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

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IDB to open first business centre in Borg Al Arab in 2020 https://eklutdvotyzsri.dailynewssegypt.com/2019/12/31/idb-to-open-first-business-centre-in-borg-al-arab-in-2020/ Tue, 31 Dec 2019 17:13:07 +0000 https://wwww.dailynewssegypt.com/?p=717987 Among those activities was the bank’s sponsorship of the Business Centre for design and manufacture of modules, with its extensive experience in the field of financing and supporting industrial activities.

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The Industrial Development Bank (IDB) intends to open the first business development centre in Borg El Arab in the beginning of 2020.

In a statement, the bank said that this comes in coordination with all relevant partners in the economic system to support domestic products and increase its competitiveness. The bank has recently sponsored many important industrial and vital projects as part of its participation in the Nile Pioneers initiative.

Among those activities was the bank’s sponsorship of the Business Centre for design and manufacture of modules, with its extensive experience in the field of financing and supporting industrial activities.

This comes within the bank’s strategy to actively contribute to the Nile Pioneers initiative, which is funded by the Central Bank of Egypt (CBE) with the aim of developing, qualifying, and increasing the capabilities of young businesspersons. It also aims to increase awareness of these projects, encourage intermediate industries, create investment opportunities, choose promising ideas, nurture them, and provide more banking services.

The bank also aims to serve as a liaison between companies and entrepreneurs in geographic areas with promising investment opportunities, especially in the areas of manufacturing in all its fields, which increases job opportunities for young people, supporting entrepreneurs, and encouraging startups.

It also comes from the bank’s role as one of the leading and qualified financial institutions in supporting and encouraging Egyptian industry, especially small and medium enterprises (SMEs).

These efforts are part of the bank’s role in supporting economic development, and in line with the state’s strategy to achieve sustainable development and encourage industry and investment, by providing all forms of support from distinct products and credit programmes that suit all sectors within the Egyptian economy.

A centre for industry and reliable production tools within the SME circle and entrepreneurs helps obtain the tools needed for projects at lower and qualitative costs, rather than importing them at higher prices. This contributes towards localising the industry and supporting its local component, and saves approximately EGP 4bn spent on imported moulds.

The support of this type of activities will contribute to achieving the bank’s goals, from spreading awareness and technical and administrative training to SME owners and startups. This also helps in facilitating the availability of the necessary financing by the bank to continue and contribute to the growth of entrepreneurship in the Egyptian market, and increase the contribution of SMEs and entrepreneurs in improving the gross national product, creating new job opportunities.

This support can increase the competitiveness of the local product, encouraging export, and reducing imports, which is a step complementary to the financing initiatives launched and supported by the CBE.

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Al Ahly Capital acquires Pharos Securities https://eklutdvotyzsri.dailynewssegypt.com/2019/12/31/al-ahly-capital-acquires-pharos-securities/ Tue, 31 Dec 2019 13:47:35 +0000 https://wwww.dailynewssegypt.com/?p=717957 The bank finishes the procedures for acquiring Pharos Securities, Pharos Portfolio Management, and Pharos First Fund within a month

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Al Ahly Capital Holding Company, the investment arm of the National Bank of Egypt, signed an acquisition contract for Pharos Securities.

The contract was signed by Karim Saada, Al Ahly Capital Holding Company’s managing director and Elwy Taymour, chairperson of Pharos Securities and managing director of Pharos Holding, the main owner.

The necessary studies for the acquisition were carried out by the Arab Legal Consultants (ALC) and the PWC as a financial advisor, and KPMG as a tax advisor. Al Tamimi & Company acted as a legal advisor for Pharos Holding Company.

Hisham Okasha, chairperson of the National Bank of Egypt, said that the acquisition of Pharos is part of the plan of the National Bank of Egypt to establish an integrated investment bank, through the National Capital Holding Company.

He added that this deal also comes within the bank’s strategy to expand non-bank financial services, in an effort to attract more foreign investments to the Egyptian market. It is also to invest the outcome of the success achieved by the economic reform programme in Egypt in recent years, which resulted in growth in the Egyptian Exchange business, interest in increasing turnover, and the expected revitalisation of the government’s IPO programme during the coming period.

Okasha announced the decision to nominate Saada, the managing director of the company as a non-executive chairperson of the board of directors of Pharos Securities.

Okasha emphasised the vital role of the Al Ahly Capital Holding Company during the previous period, which has a capital of EGP 5bn, with investments exceeding EGP 9bn.

He explained that the company had a prominent role in the fields of petrochemicals, agricultural industries, medical services, building materials, and industrial complexes. It also contributed to the establishment of many new companies, such as the Egyptian Company for the Production of Ethylene and its Derivatives and Al-Ahly for Medical Services and Al-Ahly for Land Reclamation and Agriculture.

The company also played a pivotal role as a major partner and financial advisor in the largest agricultural and industrial project in Minya to produce sugar, at an investment cost of $1bn with one of the largest Arab investors specialised in the field.

For his part, Elwy Taymour, co-founder and CEO of Pharos Group assured that the selection of Al Ahly Capital Holding Company exclusively to carry out all the necessary studies, and has resulted in the signing of the acquisition contract. Taymour stated that this is a clear indication of confidence in the professionalism of the company’s work team and their clear ability to continue to provide the best services to Pharos Securities through its employees.

Saada said that the acquisition of specialised companies, which aims to implement the strategic plan for the presence of Al Ahly Capital Holding extensively in non-banking financial services, is done gradually by participating in establishing specialised companies or choosing the best companies that are supervised and managed by capable leaders.

He emphasised that Pharos Securities Trading Company, established in 2006 as an extension to the activity of Mohamed Taymour with a distinguished business precedent for nearly 14 years, is the fifth largest trading company in the Egyptian market. The volume of its transactions exceeded EGP 250bn in addition to its capable work team.

Saada stressed that the acquisition of Pharos Securities entails completing the procedures for acquiring Pharos to promote and cover the underwriting of securities and Pharos to form and manage the securities portfolios, investment funds, and the Pharos First Fund. This will take a time period of up to a month, aiming to strengthen the channels of providing non-banking financial services through the National Bank of Egypt group and Al Ahly Capital Holding Company, with a complete restructure of the company to maximise its role in investment services activity.

He added that the Pharos Securities brokerage team will continue to provide the company’s distinguished services to its client base in various categories, with elaborate plans to increase these customers by taking advantage of the network of clients and partners of the National Bank of Egypt and Al Ahly Capital Holding Company.

Ahmed El-Saeed, head of the bank’s investment group, said that investment in non-banking financial services is one of the most important pillars that the National Bank of Egypt’s investment group is keen on.

He added that the bank has several diverse activities such as Al-Ahly Leasing, Al-Ahly for real estate finance, and Al-Ahly Money Exchange. It also contributed to a number of electronic payment companies such as Egyptian Banks Company, Fawry, and e-finance, as well as investment funds for financial technology, which come in line with the state’s plans to expand these systems in order to achieve the highest levels of efficiency in the movement of payments.

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CBE reveals most prominent bank financial safety indicators by 3Q2019 end https://eklutdvotyzsri.dailynewssegypt.com/2019/12/29/cbe-reveals-most-prominent-bank-financial-safety-indicators-by-3q2019-end/ Sun, 29 Dec 2019 09:30:59 +0000 https://wwww.dailynewssegypt.com/?p=717788 EGP 306bn increase in the total financial position of banks to reach about EGP 5.822trn

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The Central Bank of Egypt (CBE) said the total financial position of banks operating in the domestic market rose to about EGP 5.822trn by the end of September 2019, against EGP 5.516trn by the end of June 2019, making an increase of EGP 306bn.

The CBE, in its quarterly report on the financial safety of banks, explained that the financial position of the biggest 10 banks recorded about EGP 4.373trn by the end of September, against EGP 4.1trn by the end of June, an increase of about EGP 273bn.

The 10 largest banks account for about 75.11% of the total financial position of the banks operating in the Egyptian market.

That comes as the financial centre of the biggest five banks recorded a rise of about EGP 206bn, reaching about EGP 3.733trn by the end of September 2019, compared to about EGP 3.527trn by the end of June.

The share of the five big banks reached about 64.11% of the total financial position of the banks operating in Egypt.

Regarding the quality of the bank loan portfolio, the CBE said the rate of non-regular loans recorded 4.5% of the total loan portfolio of banks operating in the Egyptian market by the end of June 2019, compared to 4.2% by the end of June 2019.

The CBE explained that the ratio of irregular loans reached 3.5% of total loans of the top 10 banks operating in the Egyptian market, while it reached 2.8 % by the five largest banks.

The CBE indicated that banks made 97.4% allocations of their total non-regular loans by the end of June 2019. The percentage of these allocations reached 100% with the major 10 banks and the five banks operating in the Egyptian market.

The volume of allocations made by banks to face the doubtful debts reached EGP 124.646bn by the end of September 2019, and the share of the 10 big banks from these allocations was EGP 79.728bn.

According to the CBE, the volume of allocations in the major five banks hit EGP 63.987bn.

The CBE added that the banks have formed reserves of EGP 243.029bn by the end of September 2019, of which the share of the big 10 reached EGP 189.965bn. In addition, the volume of reserves by the major five banks reached about EGP 158.475bn.

The ratio of loans to deposits in banks operating in the Egyptian market declined to 44.1% by the end of September 2019, compared to 46.5% in June, which reached 42.2% for the major 10 banks, and 42.5% with the top five banks.

The CBE explained that the ratio of loans to local currency deposits declined to 38.9% by the end of September, compared to 40.1% in June, which reached 35.8% at the largest 10 banks, and recorded 35.3% at the top five banks.

The ratio of loans to foreign currency deposits in banks dropped to 67% by the end of September, compared to 71% in June. This figure recorded 71.4% for the top 10 banks, reaching 80.8% for the top five banks.

“The private sector has accounted for 64% of the total loans granted by banks to their clients until the end of September 2019, compared to 61.5% by the end of June,” the CBE stated.


It explained that the private sector acquired 57.4% of the total loans at the top 10 operating banks in Egypt, while 53.9% of the loans were at the top five banks.

“Total bank deposits by the end of September 2019 reached EGP 4.14trn, the top 10 banks accounted for about EGP 3.083tn, while the volume of deposits at the largest five banks operating in Egypt is about EGP 2.623trn”, according to the CBE

By the end of September 2019, the bank’s deposit rate reached about 71.3%, the CBE added, compared to 46.5% by the end of June. This made 70.7% for the top 10 banks and 70.4% for the top five banks.

The CBE reported a rise in the average real liquidity ratio in the local currency of banks in September 2019 to 45.8%, compared to 41.9% in June. The rate was 49.4% for the top 10 banks, and 50% for the top five banks.

At the same time, the average percentage of real foreign currency liquidity at banks rose to 73.9% in September, compared to 68.6% by the end of June. The rate was 74.8% for the top 10 banks, with 75.3% for the top five banks.

CBE said that the bank’s securities portfolio, which is not included in the treasury bills (T-Bills), reached about 19.2% of the total bank assets by the end of September 2019, compared to 16.6% at the end of June. This was 21.6% at the top 10 banks, and 23.6% at the top five banks.

According to the CBE, the volume of banks’ investments in securities and T-Bills reached EGP 1.995tn by the end of September 2019. The volume of investments of the 10 major banks with about EGP 1.603tn and about EGP 1.402tn with the major five banks.

“The total capital of banks operating in the Egyptian market reached EGP 156.236bn by the end of September 2019, compared to EGP 152.661bn by the end of June.

The bank explained that the capital of the big 10 banks hit about EGP 104.172bn in September, compared EGP 100.378bn in June, while the capital of the big banks reached about EGP 82.516bn, compared to EGP 82.733bn.

While the CBE did not disclose the names of the five or ten major banks, it is known that they are topped by the National Bank of Egypt (NBE), the Commercial international bank (CIB), Qatar National Bank, Arab African International Bank, HSBC, Faisal Islamic Bank, Alexandria Bank, and Credit Agricole.

With regard to the capital adequacy index of banks, the CBE explained that the ratio of capital base to risk-weighted assets rose to 18.1% by the end of September 2019, compared to 16.9% by the end of June, which reached 18.1% at the top 10 banks, and 18.2% the five major banks have.

The rate of the first tranche of bank capital to risk-weighted assets rose to 15.5% by the end of September, compared to 14% by the end of June, which reached 15.6%

The CBE said the total of the first tranche plus the precautionary support should be at least 6.625% for 2016, 7.25% for 2017, 7.875% for 2018, and 8.5% for 2019.

According to the CBE, the ratio of continuous capital in banks to risk-weighted assets at 11% risk weights by the end of September 2019, compared to 10.4% by the end of June. The rate was 10.4% for the top 10 banks and 9.8% for the top five banks.

The CBE instructions state that the continuing capital base plus the precautionary pillar must be at least 5.125% for 2016, 5.75% for 2017, 6.375% for 2018, and 7% for 2019.

The bank’s leverage ratio rose to 7.2% by the end of September, compared to 6.7% in June, 6.8% in the top 10 banks and 6.5% in the top five banks.

According to the CBE, the minimum set for this rate must be at least 3%.

In another context, it was disclosed that net foreign exchange positions reached 3.5% of the total capital base in banks operating in the Egyptian market by the end of September 2019, compared to 0.4% in June.

CBE explained that this ratio reached 4.7% with the biggest 10 banks. In the top five banks, it rose to 5.8%.

This is the second time that the CBE has included the statement on the banks’ foreign exchange positions in this report.

The CBE stressed that the value of the total surplus or deficit in foreign currency centres should not exceed 20% of the capital base.

Earlier documents of the International Monetary Fund (IMF) revealed that the CBE will not allow exceeding the limits of the foreign exchange centres open in banks in the coming period within the framework of reducing the risk of exposure to exchange rate fluctuations.

In November 2017, the CBE amended the currency positions cap on banks operating in the local market, for the value of a bank’s surplus or deficit in foreign currency positions, including foreign bank branches, so that the value of the surplus or deficit at the centre of a foreign currency would not exceed 10% of the capital base.

The value of the total surplus or deficit in currency positions should not exceed (foreign or domestic) 20% of the capital base.

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Egyptian banking sector’s net profits reach EGP 60.758bn in September https://eklutdvotyzsri.dailynewssegypt.com/2019/12/26/egyptian-banking-sectors-net-profits-reach-egp-60-758bn-in-september/ Thu, 26 Dec 2019 07:30:31 +0000 https://wwww.dailynewssegypt.com/?p=717487 Top five banks hold 48.98% of total profits, and biggest 10 gain EGP 42.13bn

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Banks operating in the Egyptian market achieved net profits of EGP 60.758bn in September 2019, according to the Central Bank of Egypt (CBE).

In a recent report, the CBE said that the largest five banks accounted for about 48.981% of the total profits achieved by banks operating in the local market, as the amount of profits achieved by these banks reached about EGP 29.76bn.

The top 10 banks gained EGP 42.13bn, equivalent to about 69.34% of the banks’ total profits.

The top banks in Egypt include the National Bank of Egypt, Banque Misr, the Commercial International Bank, Banque du Caire, QNB Alahli, Credit Agricole – Egypt, Faisal Islamic Bank of Egypt, and the Housing and Development Bank.

According to the CBE, the net returns achieved by banks operating in Egypt at the end of September 2019 amounted to EGP 105.198bn, and the share of the top 10 banks amounted to EGP 70.722bn, equivalent to about 67.227%. The share of the top five banks reached EGP 50.239bn, equivalent to about 47.756% of net returns.

It added that the net income of all banks amounted to about EGP 128.416bn at the end of September 2019, and the top 10 banks acquired EGP 85.161bn, equivalent to 66.316%, while the largest five banks contributed EGP 60.568bn, equivalent to 47.165%.

According to the CBE, the return on the average assets (ROAA) of banks operating in the Egyptian market recorded 1.3% at the end of September, while the ROAA reached 1.3% at the top 10 banks, and 1.1% at the top five banks.

It added that the return on average equity reached 18.4% for the top 10 banks, while it reached 16.3% for the top five.

The net profit margin was 2.7% across all banks, 2.7% at the top 10 operating banks in Egypt, and 2.3% at the top five banks.

On the other hand, the banks’ expenses amounted to EGP 67.658bn at the end of September, of which about EGP 43.0bn belonged to the top 10 banks, equivalent to 63.6%, and about EGP 30.8bn belonging to the largest five banks, equivalent to about 40.2%.

This jump in bank expenses comes against the background of modernising and supporting technological structure and geographical expansion, whether through small and large branches or through automated teller and POS machines, to serve customers nationwide.

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CBE postpones MPC meeting to 16 January to decide on interest rates https://eklutdvotyzsri.dailynewssegypt.com/2019/12/25/cbe-postpones-mpc-meeting-to-16-january-to-decide-on-interest-rates/ Wed, 25 Dec 2019 18:28:10 +0000 https://wwww.dailynewssegypt.com/?p=717442 After four interest cuts since the beginning of 2019, analysts and bankers have different expectations of MPC’s decision

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The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) postponed it’s 26 December meeting for the final time this year to decide on interest rates at the bank, and pushed it to 16 January. Bankers’ and analysts’ expectations differed about the meeting, after the MPC has cut rate four times since the beginning of 2019.

The committee decided in its last meeting on 14 November to cut rates by 1% to 12.25% for deposit, 13.25% for lending, 12.75% for credit, discount, and main operation rates at the CBE.

The CBE revealed earlier this month that the annual rate of core inflation decreased to 2.1% in November, compared to 2.7% in October, while the general inflation rate measured by the Central Agency for Public Mobilization in Statistics (CAPMAS) in cities increased to 3.6% in November, compared to 3.1 % in October. This rise in the annual general inflation rate is the first since May 2019, after witnessing a significant decline during the past five months. The CBE aims to achieve an annual inflation rate of 9% (±3%) on average, by the last quarter of 2020.

Tarek Metwally, a banking expert, said for the first time in a while, the possibilities of maintaining and reducing interest rates are equal.

He explained that the CBE may keep its rates unchanged after the bank has imposed four cuts this year and managed to control inflation in the recent period, noting that despite the rise of the monthly inflation rate again in December, it is still within the levels targeted by the CBE.

Metwally added that the US Federal Reserve’s decision to stabilise US dollar’s interest – after three consecutive cuts – also enhances the chances that the CBE would keep its rates unchanged.

However, he believes the possibilities of lowering the interests are also there to complement the monetary easing plan and support the market and investment activity, especially in light of the continuous decline in inflation rates. This gives the CBE more room for further rate cuts, given its impact on reducing the cost of local debt.

According to Metwally, the CBE is more likely to stabilise rates if the meeting was held in December, with the continuation of the monetary easing policy in the coming year.

A Reuters poll showed that the CBE was likely to keep key interest rates unchanged on Thursday since inflation increased in November, after falling near a 14-year low. Nine out of 14 economists expected that the CBE would keep interest rates unchanged, while four predicted a 50 bps cut, and only one saw a 100 bps cut.

Mona Bedir, chief economist at Prime Holding, said it is expected that the annual rate of inflation in cities will increase more in December, to end the year at about 7%, still less than the rate targeted by the CBE. Hence, it is likely that the CBE would prefer to keep interest rates stable at the next MPC meeting.

Wael Ziada, executive chairperson of Zilla Capital, said the exceptionally low inflation rate and the fact that the CBE allowed banks to increase loans to individuals indicate that the economic downturn policy may have exceeded its target during the period of implementation. Accordingly, the easing cycle is likely to continue, so he sees the MPC making another 50 bps cut.

Aliaa Mamdouh, director of macroeconomics and strategy at Beltone Financial, said that the average inflation rate is expected to reach 4.7% in the fourth quarter (4Q) of 2019, down from about 7% in 3Q of the year.

Mamdouh expected the interest rates to stabilise, while the CBE tests liquidity in the wake of significant cuts that were applied in 2019.  She also anticipated it to absorb the impact of the displacement of fixed income portfolios, with the balance’s restoration to the portfolios at the end of the year as usual.

Radwa El-Swaify, head of research at Pharos Holding, expected the CBE will keep interest rates unchanged on their next meeting.

She said there are expectations for inflation rates to rise during December at a monthly rate of about 0.5% and to reach 6.5-7% annually, which will prompt the MPC not to move interest rates and to cut it again during 1Q of 2020.

She explained that the annual rate of inflation during November recorded 3.6% annually, which is slightly lower than expectations of 3.9%.

Noteworthy, the MPC decided in its 14 November meeting to reduce the basic interest rates by 1% to 12.25% for deposits, 13.25% for lending, and 12.75% for credit, discount, and operations rates.

Haitham Abdel Fattah, director general of treasury and financial markets at the Industrial Development Bank, said there is more than one reason that support the continuation of the CBE in its monetary easing policy, and the reduction of basic interest rates at the next MPC, while there is no single reason that requires fixing interest rates.

He explained that in terms of macroeconomic indicators, inflation rates still give a wide room for the monetary policymaker to make further reductions in basic interest rates, in light of the high real interest rate of 8%, which is the difference between inflation and interest rates, which supports the possibility of a further cut to target growth and stimulate the economy.

Besides the stability of inflation, the continuing increase in the country’s foreign exchange reserves and foreign investors’ growing interest in the government debt instruments, despite the beginning of the easing cycle several months ago, also support the possibility of further rate cuts, he explained.

Abdel Fattah pointed out that the recent auctions of the Ministry of Finance witnessed a high turnout by foreigners, reflected in the number of times the bids were covered, which reduced the return on treasury bills last Thursday.

On the other hand, the IHS Markit’s Egypt PMI, which measures the performance of the non-oil private sector, declined in November for the fourth consecutive month to 47.9%, compared to 49.2% in October, and recorded the lowest level since September 2017. This indicates a market slowdown that leads to strong drops in production and new orders, which also supports the CBE trend of a new cut in interest rates, reducing the cost of borrowing to stimulate the market.

Abdel Fattah emphasised that no pressures had been observed in the market that required maintaining interest rates without reducing or flushing in a competing emerging market for Egypt, making interest rate cuts disturbing to the appetite of foreign investors. On the contrary, the Egyptian debt market is still very attractive to indirect foreign investments.

He suggested that the monetary policymaker could make a reduction of 50-100 bps at the next meeting, pointing out that the slight decline in the exchange rate of the US dollar against the Egyptian pound during the recent period, as well as the decline in oil prices globally, may impact a new decrease in fuel prices by January 2020, which supports the stability of inflation readings.

Abdel Fattah ruled out a positive reflection of the interest rate cut on the real estate market or investment in assets, stressing that the acquisition of a property is linked to two main factors, purchasing power of individuals and the suitability of the asset price for this purchasing power.

He added that the consumers are aware that the value of real estate in Egypt is exaggerated, expecting a violent reverse movement in the real estate market within the next few months, whether by shifting investment away from above average and luxury housing, or reducing prices to match the real value of assets.

Local real estate developers in the last two years started to sell their properties in instalments with simple or zero down payments, but the market did not witness any improvement, and therefore he sees a reverse wave coming soon.

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Balances of HDB’s Children & Youth Saving Account total EGP 645m https://eklutdvotyzsri.dailynewssegypt.com/2019/12/25/balances-of-hdbs-children-youth-saving-account-total-egp-645m/ Wed, 25 Dec 2019 18:03:44 +0000 https://wwww.dailynewssegypt.com/?p=717435 Bank prepares for a national savings project in cooperation with youth and social solidarity ministries, says Hassan Ghanem

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The holders of Children & Youth Saving Account with Prizes in the Housing and Development Bank (HDB) has reached about 180,000 people with a total balance of EGP 645m.

Hassan Ghanem, chairperson and managing director of the HDB, said this account was issued in 1991, with the aim of spreading saving awareness among children and under-21 youth.

This saving account holder may have the priority to obtain a unit of HDB housing projects, he added, noting that this comes within the state’s plan to provide suitable housing units for young people.

The HDB also cooperates with the Ministry of Youth and Sports and the Ministry of Social Solidarity to launch a national savings project for young people in different universities and youth centres to promote the concept of savings.

The HDB held recently the second periodic prize draw for 2019 Children & Youth Saving Account, which has been held regularly since the issuance of this saving vessel. A periodic draw is carried out every six months for balance of EGP 100.

This is the 36th draw since the bank has started this initiative. The results were as follows:

Mayar Mahmoud Salem, the first prize of a EGP 200,000 worth housing unit.

Sama Tamer Sami, the second prize of a EGP 100,000 worth housing unit.

Youssef Mohamed Ali, the third prize of a housing unit with EGP 50,000 down payment.

Walid Matar, the deputy head of retail banking at HDB and head of the executive committee of Children & Youth Saving Account, said this national project for saving is one of the goals of the bank, which was established basically to serve the community.

He noted that this saving vessel also falls under the umbrella of financial inclusion strategy launched by the Central Bank of Egypt to increase saving awareness in the society and increase the bank customers, especially young people.

Matar said the HDB visits schools and presents gifts and prizes to students to further stimulate the saving culture.

In addition, Mohamed Megahed, Deputy Minister of Education, praised the role played by the HDB in the development of young Egyptians in various fields, most notably in education.

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MSMEDA undertakes EGP 62m urban development in Cairo’s Zawya El Hamra https://eklutdvotyzsri.dailynewssegypt.com/2019/12/23/msmeda-undertakes-egp-62m-urban-development-in-cairos-zawya-el-hamra/ Mon, 23 Dec 2019 20:33:32 +0000 https://wwww.dailynewssegypt.com/?p=717265 The project’s finance granted by AFD

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The Micro, Small and Medium Enterprise Development Agency (MSMEDA) is developing an informal housing area in Zawya El Hamra neighbourhood in Cairo, with a total financing of EGP 62m, granted by the French Development Agency (AFD).

The first phase of the project includes developing the area’s facilities and two schools, and building health units, gardens, public markets, a microbus station.

The second phase focuses on providing training programmes, where 150 women have been trained in sewing, jewellery making, and household waste recycling. MSMEDA will also facilitate access to the area’s residents to the agency’s loans.

MSMEDA invited journalists to visit the area, where the agency reviewed its projects there, in the presence of several MSMEDA leaders, including Medhat Masoud, head of the Central Sector for Community and Human Development in the agency, along with representatives of the European Union and the AFD.

Noteworthy, MSMEDA is implementing urban upgrading and employment promotion programmes in several informal housing areas both in Cairo and Giza, including Zawya El Hamra, Izbat Khairallah, Ard El Liwaa, and Mit Okba, all funded by the AFD through a €15m grant from the EU since January 2017.

The agency’s urban upgrading programmes come in the framework of the state plan to achieve sustainable development, through creating employment opportunities and developing infrastructure.

MSMEDA also provides training programmes to the residents of these informal housing areas, enabling them to establish their own small and micro projects.

The agency implements these projects in partnership with the governorates and ministries concerned, through small local contractors and NGOs.

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CBE raises limits on consumer loan instalments to 50% of borrower’s total monthly income https://eklutdvotyzsri.dailynewssegypt.com/2019/12/22/cbe-raises-limits-on-consumer-loan-instalments-to-50-of-borrowers-total-monthly-income/ Sun, 22 Dec 2019 20:00:48 +0000 https://wwww.dailynewssegypt.com/?p=717153 The CBE decided to keep the maximum for personal housing loans at 40% of the total monthly income.

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The Central Bank of Egypt (CBE) decided on Sunday to raise the percentage of loan instalments granted to individuals for consumer purposes up to 50% of their total monthly income, instead of 35%. The rise tackles personal loans, credit cards, and loans for the purpose of purchasing cars for personal use.

The CBE decided to keep the maximum for personal housing loans at 40% of the total monthly income.

In a letter from Governor Tarek Amer to Banks operating in Egypt, the amendment of these percentages comes in light of the improvement of economic indicators and the rise in the gross domestic product, in addition to the vigorous follow-up of indicators for financial banks.

The CBE said it will monitor the performance indicators of banks periodically and reconsider these ratios if necessary.

According to bank officials, this decision will increase the retail banking activity, especially as it comes with a reduction in interest rates, which will increase the demand for this type of loan significantly during the coming period.

In January 2016, the CBE said banks need to cap the total loan instalments for consumer purposes, such as credit cards, personal loans, and loans for private car purchase, at 35% of the total monthly income, after withholding taxes and social insurance.

The CBE allowed banks to increase that percentage to 40% in the case of granting real estate loans for personal housing, according to Law No. 148 of 2001, and this applies to what is granted from loans for consumer purposes as of issuing these decisions.

Bank loans to the retail sector achieved a growth rate of 7.6% during the third quarter of 2019, supported by a reduction in interest rates several times during 2019.

According to the data of the CBE, individual loans from banks increased by about EGP 25.5bn during the third quarter of 2019, compared to an increase of only EGP 5.3bn during the same period last year, and bank financing for individuals in local and foreign currencies amounted to EGP 359bn by the end of last September, against EGP 333.5bn at the end of June.

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Banque du Caire leads banking alliance to raise €150m for financing MDF factory https://eklutdvotyzsri.dailynewssegypt.com/2019/12/22/banque-du-caire-leads-banking-alliance-to-raise-e150m-for-financing-mdf-factory/ Sun, 22 Dec 2019 07:45:36 +0000 https://wwww.dailynewssegypt.com/?p=717110 The factory is being built in Idku, Beheira, with a production capacity of 205,000 annually, at a total cost of €215m

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Banque du Caire has managed to win the leadership of a banking alliance to raise a loan of €150m to finance part of the investment cost of establishing a factory for the production of medium-density fibreboard (MDF) wood, which is one of the new projects of the Holding Company for Petrochemicals.

The factory is established in Idku, Beheira governorate, with an annual production capacity of 205,000 tonnes, and the total investment value of the plant reaches €215m.

The factory is considered the first industrial project that reaps the fruits of the economic reform policies that took place during the past period. As part of the required investment requirements, it also observed investments in infrastructure, which has positively impacted the investment climate, and encouraged investors to start pumping new investments with development goals in the first place.

Banque du Caire succeeded in grabbing the role of promoter, financing agent, main bookrunner, and guarantor of the loan, considering competition with alliances that included local and foreign institutions, and banks, thanks to the bank providing competitive financing terms.

This came after discussions that targeted knowledge of the technical details of the project. Accordingly, the offer can be submitted consistently with it, as one of the bank’s directions towards financing projects with development goals for the economy and society.

The winning alliance includes the National Bank of Egypt and Banque Misr, as primary bookrunners, in addition to the National Bank of Egypt’s role as general coordinator and financing agent, and Banque Misr’s role as the technical bank.

Amr El Shafei, vice-chairperson of Banque du Caire, said that the financing of this project comes in light of the bank’s directives towards contributing to advancing economic development, as a national role that banks must play, to encourage projects that aim to produce value-added products, within the framework of changes and the new developments in the investment climate in Egypt.

This project is the first of its kind to produce MDF wood using rice straw in the Middle East with German technology, aiming to produce that kind of wood using rice straw, which is one of the remnants of rice cultivation that farmers used to burn in the past, considered one of the most important causes of environmental pollutants before. Thus, the project, in addition to being for economic development, has also a positive environmental aspect, as it will contribute to converting one of the chronic environmental problems in Egypt into a product with added value, which the state aspires during the coming period to implement in similar projects.

The project also aims to provide direct and indirect job opportunities, up to 2,000 ones, and the company that owns the project aims to export about 50% of the targeted production, which will contribute to providing part of the foreign currency flows to the state.

The project was financed as a result of the convergence of financial expertise on the part of banks, the technical expertise owned by the Holding Company for Petrochemicals, and the discussions that began under the leadership of Banque du Caire with the Holding Company for Petrochemicals, in the early stages of the project, with a view to arrive at a financing and technical proposal for a project that would be a pride for national industry of Egypt between countries in the Middle East.

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HDB’s NIAT increases to EGP 1.521bn in 9M of 2019: chairperson https://eklutdvotyzsri.dailynewssegypt.com/2019/12/22/hdbs-niat-increases-to-egp-1-521bn-in-9m-of-2019-chairperson/ Sun, 22 Dec 2019 07:00:38 +0000 https://wwww.dailynewssegypt.com/?p=717011 These profits came despite the challenges that the banking sector has faced since the beginning of the year, including CBE’s interest rate cut and applying the IFRS 9

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The Housing and Development Bank (HDB) revealed that its net income after taxes (NIAT) increased to EGP 1.521bn in the first nine months (9M) of 2019, compared to EGP 1.395bn in the same period of 2018, an increase of 9%. It’s also 104.5% higher than the bank’s target for this period of the year.

HDB overcome many challenges

Hassan Ghanem, chairperson and managing director of the HDB, said the bank succeeded in achieving these profits despite the challenges that the Egyptian banking sector has been experiencing since the beginning of the current fiscal year.

He told Daily News Egypt that the most prominent of these challenges was the Central Bank of Egypt’s (CBE) decision to cut its interest rates. Despite the importance of this decision to support investment and reduce inflation, it has lowered the income of banking activities, while the interest on some savings vessels, such as time deposits, remained the same until they were renewed, which for some time affected the bank’s profitability, he explained.

Ghanem added that among those challenges was also the application of the new International Financial Reporting Standard (IFRS9), which aims to further hedge expected credit losses (ECL), in order to strengthen the financial positions of banks. The application of this standard required the preparation of an advanced technological environment, and the qualification of the staff responsible for the application of the standard.

Adjusting tax accounting for investment in state debt instruments

Ghanem said that the change in the tax policy regarding investment in state debt instruments, the high prices of government services, and growing costs of assets the bank is buying to open new branches increased the HDB’s expenditures from previous years, which in turn, affected the bank’s profits. We also should take into account the great competition between banks in attracting new customers, whether for deposits or loans.

According to Ghanem, despite all of this, the bank was able to achieve higher profits than targeted, thanks to the professional management of the bank and the efforts of workers that help achieve the goals of senior management in continuing to achieve growth.

Significant growth in loans and deposits despite market competition

Regarding other performance indicators of the bank, Ghanem revealed that the bank’s loans portfolio increased to EGP 16.55bn at the end of September 2019, an increase of EGP 2.94bn (21.7%) compared to September 2018. In addition, customer deposits hiked to EGP 38.8bn, an increase of EGP 4.7bn (13.8%) in the comparison period.

He noted that the bank’s capital adequacy ratio (CAR) reached 20.74% according to Basel II requirements, in light of the optimal application of credit policies, with the bank’s investment portfolio free of any risk assets. The return on average equity reached 36.9%, and return on average assets 3.1%

Ghanem explained that the growth rates in the bank’s operating income increased at good rates at the end of September 2019 than September 2018, where the total revenue amounted to EGP 5.9bn compared to EGP 5.4bn, an increase of EGP 502m (9.3%).

The return on loans and similar revenues reached EGP 4.9bn compared to EGP 4.6bn, an increase of EGP 254m (5.5%) in the comparison period. In addition, fee and commission income reached EGP 248.1m compared to EGP 227.2m, an increase of EGP 20.9m (9.2%).

According to Ghanem, the profits of the bank’s subsidiaries reached EGP 127.2m at the end of September 2019, compared to EGP 77.9m in September 2018, an increase of EGP 49.3m (63.2%).

Higher expenses due to expansion and infrastructure modernisation

On the other hand, the administrative expenses at the bank increased by 20% in 9M of 2019, which Ghanem attributed to opening new branches of the bank to reach out all society segments, especially those who do not have banking dealings, to achieve financial inclusion.

These steps coincide with providing banking services that commensurate with the customers’ needs, which enhances the bank’s position in the market and increases its spread nationwide.

Ghanem indicated that the bank is also interested in implementing the required modernisation of its technological infrastructure, to provide the best and fastest services to its customers, which also increased the bank’s total expenses.

He stressed that the results achieved by the bank reflect its strength thanks to its risk management system which enables the HDB to enhance its position and maintain high market share to be among the top 10 banks in Egypt.

He pointed out that the bank can achieve this based on its strategy that aims to meet the needs of customers, including finding competitive solutions and attracting new customer segments, in line with the policy of the state and the CBE in spreading banking culture and financial inclusion.

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Egypt’s bank deposits and loans up EGP 126.34bn, EGP 12bn respectively in September 2019 https://eklutdvotyzsri.dailynewssegypt.com/2019/12/22/egypts-bank-deposits-and-loans-up-egp-126-34bn-egp-12bn-respectively-in-september-2019/ Sun, 22 Dec 2019 06:30:33 +0000 https://wwww.dailynewssegypt.com/?p=717035 Bank’s credit facilities declined by EGP 31.7bn in three months to EGP 1.822tn: CBE

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The Central Bank of Egypt (CBE) revealed that the deposits in the banks operating in the Egyptian market increased by about EGP 126.34bn to EGP 4.152tn in September, compared to EGP 4.026tn in August 2019.

The CBE indicated in its latest report on the performance of banks until the end of September, that government deposits in the local and foreign currencies increased by EGP 41.76bn to EGP 617.657bn, compared to EGP 575.897bn in August. It added that non-governmental deposits with banks increased by EGP 84.587bn to EGP 3.534tn in September, compared to EGP 3.450tn in August.

The non-governmental deposits in local currency reached EGP 2.840tn in September, compared to EGP 2.741tn in August, while the non-governmental deposits in foreign currencies amounted to about EGP 694.721bn from EGP 708.419bn in the comparison period.

According to the CBE, the share of deposits in foreign currencies declined to about 19.54% of the total deposits in banks at the end of September, compared to about 20.40% at the end of August.

In addition, the growth rate of total deposits in banks was 13.10% in September, compared to 11.91% in August, indicating that the growth of deposits in local currency was 18.9%, compared to 16.9%, while the growth of deposits in foreign currencies was -5.7% in September against -4% in August.

The CBE indicated that the household sector acquired about 80.7% of the total deposits in banks, pointing out that this sector acquired about 83.8% of the deposits in the local currency, and 68.3% of the deposits in foreign currencies.

Also, the CBE said that the credit facilities granted by banks operating in the local market to their customers during the period from July to September 2019 recorded a decrease of 1.7%, reaching EGP 1.822tn.

Credit facilities refer to loans granted by banks to their customers, in addition to letters of credit and guarantee, which they grant to customers to cover import operations.

The CBE indicated in its monthly report issued last Tuesday that the private business sector obtained about 59.7% of the total non-governmental credit facilities granted by banks to the various economic sectors. The CBE said that the industrial sector came at the forefront of businesses funded by banks, as it alone got about 32.8% of the total of these facilities, followed by the services sector which accounted for 26.4% of them, then the trade sector with 10.8%. As usual, the agriculture sector received the lowest percentage of the credit facilities granted by banks, as it acquired only 1.7% of the facilities until the end of September 2019.

According to the CBE, there are other sectors, which were not mentioned in detail, including the household sector, which received about 28.3% of these facilities.

As for the loan portfolios in banks, the CBE revealed a rise to EGP 1.807tn in September, compared to EGP 1.795tn in August, an increase of about EGP 11.872bn.

Additionally, loans granted to the non-governmental sector increased to EGP 1.323tn at the end of September, compared to EGP 1.31tn at the end of August.

In the same context, the CBE data showed that public sector banks’ investments in government treasury bills decreased to EGP 313.07bn at the end of October, compared to EGP 349.09bn in September, a decrease of EGP 36bn. In contrast, private banks’ investment increased to EGP 299.407bn in October, compared to EGP 283.49bn in September, an increase of EGP 15.917bn.

The investments of specialised banks recorded about EGP 19.336bn in October, compared to EGP 19.644bn in September, a decrease of about EGP 308m, while investments of foreign banks’ branches in Egypt declined by about EGP 3bn to EGP 32.1bn at the end of October, compared to EGP 35.41bn at the end of September.

Meanwhile, banks’ investments in securities, which include stocks, bonds, and investment fund securities, increased by EGP 98bn to EGP 1.995tn in September, compared to EGP 1.896tn at the end of August. Meanwhile, banks’ investments in securities in the local currency hit EGP 1.637tn in September, compared to EGP 1.536tn in August, while investments in foreign currencies recorded EGP 357.4bn in September, compared to EGP 360.1bn in August.

The CBE revealed also that the financial position of banks increased by about EGP 184.927bn to EGP 5.822tn during September, compared to EGP 5.637tn in August.

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PHD, CIB sign EGP1.1bn medium-term loan to refinance some existing debt https://eklutdvotyzsri.dailynewssegypt.com/2019/12/19/phd-cib-sign-egp1-1bn-medium-term-loan-to-refinance-some-existing-debt/ Thu, 19 Dec 2019 07:00:38 +0000 https://wwww.dailynewssegypt.com/?p=716942 The Loan is segregated into Tranches A and B, with maturity of five and four years respectively, complemented by a grace period of five months.

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Egypt’s developer Palm Hills Developments (PHD) has signed a medium-term loan agreement for EGP1.1bn with the Commercial International Bank of Egypt (CIB).

The company announced during a press conference held on Wednesday that the facility will replace an existing syndicated medium-term loan previously granted by Arab African International Bank (AAIB) and other banks.

The Loan is segregated into Tranches A and B, with maturity of five and four years respectively, complemented by a grace period of five months.

Tranche A will refinance Golf Views and Golf Extension projects worth EGP828m and EGP100m due to other projects. While Tranche B will refinance the outstanding exposure of Palm Hills Katameya by EGP171m.

PHD received a very competitive financing package, when compared to the terms and conditions of the existing syndicated medium-term loan, reflecting improvements in the company’s credit risk rating.

Yasseen Mansour, PHD’s chairperson and group CEO commented, “The facility will enable the company to increase its financial flexibility by improving its credit terms, whilst strengthening its relationship with CIB. The competitive financing package is a strong testimony to PHD’s continuously improving credit rating and sound financial position. This move comes in line with our strategic direction to focus on optimisation of leverage, reducing financing costs, and the enhancement of our cash flow position”.

For his part, Mohamed Fahmy executive board member at PHD said that the company’s financing is variable and evolving with market requirements.

Fahmy pointed out that the company has some bank facilities as it seeks to re-finance, elaborating that the company has a group of projects that they started financing years ago. Moreover, the implementation rate of our projects reached about 90 or 95%, therefore, the risk is low to get loans by banks.

He further noted that there are some other re-financing agreements that will be announced in the coming period.

Ali Thabet, PHD’s chief financial officer, said that his company welcomes the Central Bank of Egypt’s initiative to finance middle-income units, however, they are waiting for the final mechanism of implementation to see whether it is in line with the company’s policies or not.

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NBE, Holdipharma sign cooperation protocol to finance pharmacies https://eklutdvotyzsri.dailynewssegypt.com/2019/12/18/nbe-holdipharma-sign-cooperation-protocol-to-finance-pharmacies/ Wed, 18 Dec 2019 17:24:19 +0000 https://wwww.dailynewssegypt.com/?p=716884 Bank’s SMEs portfolio amounts to about EGP 64bn, benefiting 74,000 projects, targeting EGP 100bn in 2020, says Aboul Fotouh

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Yehia Aboul Fotouh, vice chairperson of the National Bank of Egypt (NBE), and Mohamed Abdel Samad, chairperson and managing director of Holdipharma for Marketing & Export, signed a cooperation protocol to finance pharmacies, medical centres, hospitals, laboratories, and radiology centres, which fall under the umbrella of small and medium-sized enterprises (SMEs).

The protocol will secure necessary financing for the purchase of pharmaceuticals, medical equipment, and chemicals provided by Holdipharma, while ensuring the speedy implementation of these projects.

Holdipharma for Marketing & Export is a subsidiary of the Holding Company for Pharmaceuticals, Chemicals, and Medical Supplies, which helps the company’s customers of pharmacies, hospitals, laboratories, and others to obtain the necessary financing for their projects.

Meanwhile, Aboul Fotouh said that the bank’s portfolio of direct and indirect SMEs loans amounted to about EGP 64bn, benefiting about 74,000 projects, which are planned to increase to EGP 100bn by the end of next year.

For his part, Ahmed Hegazy, chairperson of Holding Company for Pharmaceuticals, said the cooperation with the NBE would help his company to implement its ambitious plan to develop its pharmaceutical companies.

For his part, Abdel Samad said that the protocol strengthens the commitment of the holding company and its subsidiaries to provide the best medical products and services to its clients.

He pointed out that the number of pharmacies dealing with Holdipharma amounts to 30,000, while the sales of its subsidiary El Gomhouria Co. for Trading Chemicals & Medical Appliances reached EGP 4.2bn.

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HSBC launches SWIFT gpi technology in Egypt https://eklutdvotyzsri.dailynewssegypt.com/2019/12/18/hsbc-launches-swift-gpi-technology-in-egypt/ Wed, 18 Dec 2019 15:55:40 +0000 https://wwww.dailynewssegypt.com/?p=716867 SWIFT gpi technology enables financial institutions to provide greater transparency and end-to-end tracking of a transaction, with all involved parties receiving real-time confirmation when a payment is credited.

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HSBC Egypt has joined SWIFT global payments innovation service (gpi), enabling greater digital tracking, speed, and certainty of cross-border payments to and from Egypt, the bank announced on Tuesday.

Noor Adhami, regional head of Global Liquidity & Cash Management at HSBC MENAT

SWIFT gpi technology enables financial institutions to provide greater transparency and end-to-end tracking of a transaction, with all involved parties receiving real-time confirmation when a payment is credited.

“Clients will now be able to issue, manage, and track their transfers until they are credited in the beneficiary account, through one platform and in real-time,” Ahmed Badawi, country head, Global Liquidity and Cash Management at HSBC Egypt, said.

“Enquiries on beneficiary payments used to take up to three days, SWIFT gpi reduces this to only a few minutes with payment status visible to clients on HSBCnet,” he added.

Egypt is the second HSBC site in the Middle East to adopt SWIFT gpi, following the UAE which began using the service in April 2018.

Globally, HSBC has enabled SWIFT gpi across 45 countries with more than 90% of HSBC’s payments using the technology, empowering clients to see end-to-end payment status via HSBCnet Track Payments.

Moreover, Richard Lelong, country head, Commercial Banking HSBC Egypt, said, “The Egyptian government and the Central Bank of Egypt recognise the value in transitioning to a more digitally-based payments ecosystem. HSBC is delighted to be able to support this initiative by setting a new digital standard in cross-border payments.”

Ahmed Badawi, Country Head, Global Liquidity & Cash Management, HSBC Bank Egypt

More than 160 financial institutions around the world use SWIFT gpi, with more than $100bn in SWIFT gpi messages sent daily across 350 international payment corridors.

According to Noor Adhami, regional head of Global Liquidity & Cash Management at HSBC MENAT, the bank’s introduction of SWIFT gpi to Egypt would make cross-border payments simpler, faster, and safer for the bank’s customers.

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Banking sector is one of the most important pillars of Egyptian economy: Attijariwafa Egypt https://eklutdvotyzsri.dailynewssegypt.com/2019/12/16/banking-sector-is-one-of-the-most-important-pillars-of-egyptian-economy-attijariwafa-egypt/ Mon, 16 Dec 2019 17:46:08 +0000 https://wwww.dailynewssegypt.com/?p=716667 Attijariwafa Bank Egypt opened four new branches in Cairo and Giza

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Attijariwafa Bank Egypt aims to benefit of Egypt’s distinguished geographical location as a gateway to the Middle East and East Africa, said Hicham Seffa, managing director of Attijariwafa Bank Egypt.

“We believe Egypt is a promising market, especially after the marked improvement in the economic and financial conditions in Egypt with recognised by international institutions,” Seffa said.

The government and the Central Bank of Egypt (CBE) launched an initiative to finance medium and large industrial projects that reflects the importance of the banking sector to the Egyptian economy, and that it is one of the most important pillars of the economy with good liquidity rates, asset quality, and capital base that contributed to overcoming many challenges.

Seffa’s statements came on the sidelines of Attijariwafa Bank Egypt’s opening ceremony on Sunday of a new branch in the Arabella Mall in the Fifth Settlement, which comes within several successive openings of new branches in Cairo and Giza, including Maadi Corniche, Palm Strip Mall, and Kargo Mall in the Sixth of October city, bringing the number of the bank’s branches in Egypt to 64 branches.

Moreover, Retail and Business Banking Director, Abderrafie Al Hashmi, said the opening of Attijariwafa Bank’s four new branches is part of the bank’s ambitious expansion strategy, which includes adding new services and branches to reach the target segments of customers and achieve financial inclusion.

He drew attention to the bank’s efforts to equip its branches with electronic services and developing internet and mobile banking services.

Attijariwafa Bank was launched in Egypt on 3 May 2017 after acquiring all the shares of Barclays Bank Egypt, which had debuted in the Egyptian market more than 150 years ago.

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Crédit Agricole Egypt primarily aims to achieve sustainability, innovation: managing director https://eklutdvotyzsri.dailynewssegypt.com/2019/12/15/credit-agricole-egypt-primarily-aims-to-achieve-sustainability-innovation-managing-director/ Sun, 15 Dec 2019 08:30:40 +0000 https://wwww.dailynewssegypt.com/?p=716540 Crédit Agricole’S loan-to-deposit ratio reached about 57% in general, and 67% in local currency

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Crédit Agricole says its main goal is to achieve sustainability and innovation, as well as supporting the state in digital transformation, encouraging electronic payments, and financial inclusion.

Pierre Finas, managing director of Crédit Agricole Egypt, said in a press conference last week, that the bank is keen on participating in the Central Bank of Egypt’s (CBE) industry support and middle-income housing initiatives. However, the bank will not take part in the initiative of exempting financially troubled factories from accumulated interests on their loans because this situation does not apply on any of the bank’s clients.

Crédit Agricole discussed with the CBE the required share of SMEs financing in a bank’s loan portfolio, which was set at 20% by the CBE, Finas pointed out.

The bank has not achieved this percentage so far, especially as it is linked to the growth of the bank’s loan portfolio, so the larger the loan portfolio gets, the more serious challenges the bank faces to achieve this ratio, he added.

Finas said the bank has 7,000 SMEs clients, and offers them a package of financial and non-financial banking services. He emphasised that the bank is working on the digital transformation of all its services, with the aim of creating an integrated base of digital services for its clients, whether individuals or companies. One of every three customers in the bank has been registered in digital services, Finas noted, and about 1m digital banking transactions were made this year.

According to the bank’s managing director, the bank’s priorities in the coming period are to increase the bank’s activities, and to present distinguished banking services with added-value, alongside corporate social responsibility.

The bank’s 2020 business strategy focuses on expanding its branch network, developing its infrastructure, increasing efficiency, and introducing new products, all with the aim to achieve customer satisfaction.

On the other hand, Finas stressed that Credit Agricole is one of the largest French banks, and its market share in some regions of France reaches 50%, and 25% in the whole country, while its market share in Egypt is 1.22%. However, the bank does not aim to increase its market share as much as it wants to strengthen its presence in Egypt, Finas added.

With regard to increasing the bank’s capital, in line with Egypt’s new Banking Law, he asserted that the bank is fully prepared to comply with the law, and has enough assets to increase its capital to the required limit in the law.

Moreover, Walie El-Din Lotfy, deputy managing director of the bank, said Credit Agricole Egypt aims to increase its electronic transactions to about 50% by 2021, noting that one of every three clients in the bank uses electronic products. The past period witnessed a 25% increase in the bank’s total transactions and a 10% decrease in traditional transactions at branches, which indicates the growing dependence on electronic channels, he added.

He pointed out that the bank’s new cashless branch in Dandy Mall is still facing some difficulties as the clients are not fully familiar with cashless technology, but the bank is determined to develop the financial culture of its clients.

Credit Agricole Egypt serves 400,000 clients through 80 branches, as well as electronic channels, and aims to increase them to 85 branches by the end of 2020, Lotfy said. In addition, the bank plans to launch 130 new automated teller machines at tourist destinations to serve the tourism sector.

On a different note, Finas said that the growth of the bank’s commercial activities in 2019 reflects its balanced business model which is based on diversity of services, and balancing between various lines of business, which contributed to achieving the bank’s results.

He added that the increase in the bank’s profitability is mainly due to the bank’s keenness to meet the needs of its clients and support them in their projects and investments.

Credit Agricole Egypt’s net profit has increased to about EGP 1.868bn at the end of September 2019, compared to about EGP 1.675bn at the end of September 2018, a growth of 11.5%.

Finas stressed that the bank always adhere to its real role, which is lending not investment in debt instruments, pointing out that the loan-to-deposit ratio in the bank reached about 57% in general, and this percentage rises to 67% in the local currency.

He added that the bank’s loan portfolio increased by 11% to EGP 23.487bn at the end of September 2019, compared to EGP 21.158bn at the end of September 2018.

This development was mainly driven by a 13.6% increase in corporate loans to EGP 15.997bn, compared to EGP 14.088bn in the comparison period, as well as a 7.6% increase in individual loans, recording EGP 7.478bn against EGP 6.952bn.

With regard to the bank’s deposit portfolio, Finas said it recorded EGP 41.134bn at the end of September 2019, compared to EGP 43.484bn at the end of September 2018, a decrease of 5.4%. Moreover, the bank saw a decline in its term deposits and savings certificates by 8.8% to EGP 22.222bn until September 2019, compared to EGP 24.365bn in the same period last year. Other deposits also decreased by 1.1% to reach EGP 18.912bn, compared to EGP 19.119bn in the comparison period.

Finas also highlighted the decrease in irregular loans to 3.11% of the bank’s loans portfolio in September 2019, compared to 3.27% in December 2018, pointing out that the bank covered these loans with provisions of 140% of the total of these loans.

The bank’s capital adequacy ratio reached 19.36% at the end of September 2019, which exceeds the prescribed ratio by the CBE, which is 12.5%.

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Bank Audi Egypt targets SMEs portfolio of EGP 5bn by 2019 end: managing director https://eklutdvotyzsri.dailynewssegypt.com/2019/12/15/bank-audi-egypt-targets-smes-portfolio-of-egp-5bn-by-2019-end-managing-director/ Sun, 15 Dec 2019 08:00:20 +0000 https://wwww.dailynewssegypt.com/?p=716536 The bank’s bad loans do not exceed 4%

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Bank Audi Egypt aims to increase its small and medium-sized enterprises (SMEs) loan portfolio to EGP 5bn by the end of 2019, in line with the Central Bank of Egypt’s (CBE) SMEs initiative, Mohamed Bedeir, managing director of Bank Audi Egypt, told Daily News Egypt.

Bank Audi, one of the major players in the banking market, has a total retail finance of EGP 7.3bn at the end of September 2019, representing 26% of the total loans and facilities portfolio, which recorded EGP 28.1bn in this period.

Daily News Egypt interviewed Bedeir to find out the bank’s latest plans, digitalisation efforts, and performance in 2019.

By Hossam Mounir

What are the main features of the bank’s business strategy in the coming years?

At Bank Audi, we always put our customers first by reviewing the bank’s strategy quarterly according to the economic changes on the local and global levels. The bank has a strong growth plan to further expand in the Egyptian market.

Currently, the Egyptian government is focusing on digitalisation of the economy. This comes in line with Bank Audi’s continuous close monitoring of the latest worldwide technological trends in all relevant industries. The bank took serious steps in this respect, as it has collaborated with one of the international professional services firms in order to develop a medium-term digital strategy that encloses course of actions and initiatives. These initiatives include rethinking of the organisation processes, services, and roles from a technology-enabled perspective.

What are the main indicators of the bank’s performance related to the deposits and loans portfolios and the size of profits?

The bank’s total retail finance reached EGP 7.3bn at the end of September 2019, representing 26% of the total loans and facilities portfolio, which records EGP 28.1bn in this period. The bank’s non-performing loans (NPL) portfolio is also among the best in the Egyptian banking sector, reaching 4% in line with the international ratios related to NPLs especially after the application of the International Financial Reporting Standards (IFRS) starting from 2019.

As of 30 September, the bank’s performance indicators showed total assets of EGP 71.7bn, net loans of EGP 26.8bn, total shareholders’ equity of EGP 6.8bn, total customer deposits of EGP 62bn, and net profit of EGP 1.088bn. Bank Audi targets profit growth of around 20% per annum.

What are the latest developments regarding the SMEs financing, and how large is the bank’s SMEs portfolio?

The bank’s management is keen on supporting the CBE initiatives. The CBE backs SMEs being the main pillar of the economic development in any country, decreasing unemployment rates and reducing poverty. At Bank Audi Egypt, we target an increase in the SMEs portfolio to EGP 5bn by the end of 2019.

What is the bank’s strategy regarding mortgage finance?

Bank Audi Egypt provides a competitive mortgage loan programme with many benefits, and one of these benefits provide clients with a flexible repayment period up to 20 years. Moreover, the bank has highly experienced sales team to help clients choose the right unit that suits their needs.

How many branches does Bank Audi have in Egypt, and do you have a geographical expansion plan?

Bank Audi has a strategic plan to further expand in the Egyptian market. We aim to open new branches before the end of 2019, and we successfully opened some since the beginning of the year in different areas, including Port Said Port, Cairo International Airport, Fifth Settlement, Shebeen El Koum, Damanhour, and Ismailia.

The new branches offer clients the best products and services being a pioneer in providing competitive retail banking products and services in the market. Bank Audi has 52 branches, of which 49 are offering conventional banking services and products, while three branches offer Islamic services and products. By the end of 2019, our branches will reach 55, of which four will be dedicated to Islamic banking and the remaining 51 will be conventional branches.

What is the bank’s recent position regarding NPLs, what is the size of provisions set aside to cover them?

Banks play a key role in the development of Egypt’s economy. As the boundaries and aspects of development expand, a more flexible and sophisticated banking system is needed. Our bank can only support businesspeople and big corporates to restore financial stability and position after drawbacks which will only benefit the Egyptian economy. We are proud to announce that bad debts in Bank Audi Egypt do not exceed 4%, which is one of the best ratios in the Egyptian market. As for the provisions dedicated to cover the risks in the bank, they recorded EGP 350.575m as for September 2019.

How much is the capital of the bank currently, and do you intend to increase it during the coming period?

As of 30 September, the paid-in capital of the bank was EGP 2.152bn, while its total capital is EGP 6.850m with a capital adequacy ratio of 22.03%, while the minimum ratio set by the CBE’s regulations is 12.50%. Bank Audi Egypt is constantly increasing its capital since it was established in 2006.

What is the role played by the Bank in spreading financial technology and electronic payments in the Egyptian market?

Bank Audi recognises the importance of being at the forefront of technological change by offering e-payment and alternative solutions. So, we provide our clients with the latest technologies in our e-payments platform.

The bank offers Audi Online, a secure, fast, and flexible platform that allows clients to manage their money at their convenience, and its number of users reached 56,000. Moreover, the bank offers “Audi2Pay” mobile wallet application. It’s a new easy, secure, and smart tool that allows clients to make everyday payments directly from their smartphone, that currently serves around 15,000 clients.

Moreover, Bank Audi implements 3.17m  financial transactions through its ATM network.

In 2019, we succeeded to divert 40% of retail transactions from traditional banking to digital channels, including ATMs and online banking, up from 5% in 2018.

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IDB pumps EGP 2.2bn the Thousand Factories initiative and EGP1.2bn in real estate mortgage financing in November https://eklutdvotyzsri.dailynewssegypt.com/2019/12/14/idb-pumps-egp-2-2bn-the-thousand-factories-initiative-and-egp1-2bn-in-real-estate-mortgage-financing-in-november/ Sat, 14 Dec 2019 18:11:22 +0000 https://wwww.dailynewssegypt.com/?p=716506 SMEs portfolio increased to EGP 3bn: Azzam

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The Industrial Development Bank (IDB) will be pumping EGP 1.2bn into the real estate mortgage financing initiative for low and middle income families until the end of November 2019.

IDB’s Chairperson Maged Fahmy stressed that the bank has achieved great booms and unprecedented operating rates in recent years, as a result of the successful and distinguished management that keeps pace with successive developments in banks worldwide, becoming one of the most developed banks in the past year.

He added that it is in this spirit that the IDB supports national initiatives, which work to alleviate the Egyptian citizen’s suffering. It also works with the sectors that work to advance the Egyptian youth.

Deputy Chairperson of the Board of Directors Hamdy Azzam said the bank pumped EGP 2.2bn in funds for a number of factories within the “Thousand Factories” initiative, which the bank launched to finance 1,000 small and medium factories at the beginning of this year. It also allocated EGP 7.5bn initially directed at all industrial activities especially labour-intensive and export-oriented ventures.

Azzam added that the bank’s portfolio of small and medium-sized projects registered EGP 3bn by the end of November 2019, as a result of transferring a portfolio of EGP 500m from medium companies to large companies.

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Crédit Agricole Egypt transforms club memberships into prepaid cards https://eklutdvotyzsri.dailynewssegypt.com/2019/12/14/credit-agricole-egypt-transforms-club-memberships-into-prepaid-cards/ Sat, 14 Dec 2019 06:30:11 +0000 https://wwww.dailynewssegypt.com/?p=716439 One-third of bank’s customers has beem registered in its e-services

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In light of Credit Agricole’s raison d’être to achieve customer satisfaction and offer best customer service, Crédit Agricole Egypt has unveiled, on Wednesday, an innovative service, the first of its kind in Egypt, aiming to support the concept of “cashless” transactions and financial inclusion by reaching out to various segments of society, in alignment with the Central Bank of Egypt’s (CBE) directions.

This new service came in collaboration with Alexandria Sporting Club, to transform its club membership cards into prepaid Visa Cards, allowing club members to use their membership cards for payments.

Moreover, the bank cooperated with the Egyptian Shooting Club to also turn their membership cards into prepaid cards.

The announcement came during a press conference held by the bank in the presence of Pierre Finas, the bank’s managing director, and Walie Lotfy, deputy managing director, as well as journalists to review some of the bank’s main achievements during the year.

With regard to the bank’s digital transformation process, which resulted in the launch of an integrated platform of digital services, called “Banki”, the bank’s senior officials have highlighted that one-third of the bank’s customers has been registered in the digital service.

Furthermore, nearly 1m transactions have been carried out during 2019 using the bank’s digital services.

The bank’s representatives also reviewed Crédit Agricole’s plan for geographical expansion, Crédit Agricole Egypt opened in early 2019 its first cashless branch.

The bank also celebrated the launch of its cutting-edge system of customer relationship management (CRM), using the latest worldwide technology systems.

During the media gathering, Crédit Agricole Egypt shared the results of its good performance, as demonstrated by the recent reaffirmation by Fitch Ratings in November 2019 for Crédit Agricole Egypt’s long-term issuer default rating at ‘AA+’ and short-term rating at ‘F1+’, with a stable outlook. Fitch Ratings also stated that Crédit Agricole Egypt’s profitability is among the best in the private-sector banks in Egypt. The bank’s financial results showed a net profit of EGP 1.868bn during the first nine months of 2019, an increase of 11.5% compared to the same period last year.

Crédit Agricole Egypt has moved to finding new digital solutions provided by startups, in alignment with the Central Bank of Egypt’s direction. In this context, the bank has taken part in the launch of the first French-Egyptian competition for startups in Egypt, in partnership with 15 French companies operating in Egypt, in light of the Declaration of Intent that was signed during the latest visit of French President Emanuel Macron to Egypt in January 2019.

As for its plans for year 2020, Crédit Agricole Egypt announced the launch of several new banking services, including a new service for companies, namely ‘Digital Trade Finance’, which facilitates obtaining letters of credit and guarantees for commercial activities. The bank also plans to launch a new scheme, called Loyalty, to reward its customer.

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CBE offers $1bn in 1-year T-Bills https://eklutdvotyzsri.dailynewssegypt.com/2019/12/09/cbe-offers-1bn-in-1-year-t-bills/ Mon, 09 Dec 2019 11:30:37 +0000 https://wwww.dailynewssegypt.com/?p=716029 CBE floated five bill tranches worth $5.1432bn in 2019

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The Central Bank of Egypt (CBE) issues on Monday a dollar-denominated treasury bill, worth $1bn for a year, due on 8 December 2020.

The CBE uses the proceeds of this bid to pay the value of a previous bid submitted by the bank on 11 December 2018 at a value of $1.103bn and is due on Tuesday, 10 December 2019.

The CBE issued its latest dollar-denominated treasury bills on 18 November 2019, at a value of $1.56bn for a year, due on 17 November 2020. In this bid, the CBE received 43 offers from local and foreign investors at a value of $1.721bn, of which 33 were accepted at just $1.56bn. The interest rate accepted by the CBE was 3.55% as the lowest price, 3.6% as the highest price, and 3.587% as an average, and other offers were rejected at higher rates up to 3.9%.

During the year 2019, the CBE offered five bids for treasury bills in dollars, through which they obtained about $5.1432bn.

It is noteworthy that the CBE allows subscribing to these bills for both local banks and foreign institutions, with a minimum subscription of $100,000 and its multiples. The return on these dollar bills is determined according to several indicators, the most important of which are the amount of dollar liquidity in the market, alternative investment opportunities available to local and foreign banks and financial institutions, and the country’s credit rating.

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Amer starts second term in CBE by launching three initiatives to support industry, medium income housing https://eklutdvotyzsri.dailynewssegypt.com/2019/12/08/amer-starts-second-term-in-cbe-by-launching-three-initiatives-to-support-industry-medium-income-housing/ Sun, 08 Dec 2019 14:00:18 +0000 https://wwww.dailynewssegypt.com/?p=715942 Directives from president to allocate EGP 100m for industry sector, EGP 50bn for medium housing with 10% interest

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Tarek Amer, governor of the Central Bank of Egypt (CBE), started his second term by launching three initiatives in coordination with the government to support industry and medium income housing.

Last Wednesday he held a press conference with Prime Minister Moustafa Madbouly to announce the details of the three initiatives.

Madbouly said that they are related to industry and that these directives come straight from the president in order to support the sector as a locomotive of growth.

He pointed out that the industry funding initiative aims to fund already existing industries that want to expand, by providing them with EGP 100bn and 10% declining interest.

He noted that the funding will cover all existing industries, giving priority to industries that currently require high importation for production requirements.

He explained that a large number of factories has the ability to expand but lacks the funds to buy new machines and workers, stressing that the initiative was discussed and a lesser interest was chosen.

According to Madbouly, the second initiative is about dealing with troubled factories that have hauled operation. He explained that it includes a programme to remove lots of burdens and allow owners to restart operation.

He added that the third initiative is related to the real estate sector for medium income families. Noting that the state gave great attention over the past period to social housing and people living in slums.

He explained that this is where the idea of the programme came from, with a support value of EGP 50bn as these units are provided with a small interest rate that encourages medium income families.

For his part, Amer said that the government discussed over the past few months ways to stimulate job growth, increase exports, and produce local goods as alternatives for imported goods.

He added that CBE decided to allocate EGP 100bn so banks may provide credit facilitations to medium and large indsutrial projects whose sales reach a maximum of EGP 1bn, allocated to funding investment goods or funding operating capital with a declining 10% interest rate, depending on the needs, with priority given to alterative industries or export industries.

Amer explained that the new initiative would cover 96,000 industrial establishments, describing it as a big step in which the Ministry of Finance and the CBE bear a great sacrifice, as they will cover the cost difference between the current interest rate on loans and the new announced interest rate for the beneficiaries of the initiative.

The Governor of the Central Bank indicated that this initiative comes four years after the launch of the initiative to finance small projects with a value of EGP 200bn, at 5% interest, and that this initiative achieved good results, as it provided credit facilities to 86,000 small projects.

According to Amer, the total loans granted to the industrial sector in Egypt amount to EGP 432bn for 182,000 industrial establishments, and that the new initiative will be a big boost for the industrial sector. He urged all Egyptian banks to join this initiative, saying, “We will not be satisfied until we are assured that the industrial sector in Egypt is making huge steps forward.”

He also discussed the initiative to exempt distressed factories from accumulated interest, which included 5,184 factories and have issues with banks, saying, “We have been reviewing the problem of troubled factories over a period of six months, and we will direct banks to exempt these factories from accumulated interest.”

He said that the size of these interests over the past years amounted to EGP 31bn.

He pointed out that the government’s initiative to exempt troubled factories from the accumulated benefits gives new opportunities for these institutions to start again.

“We decided to remove these companies from the negative lists of the CBE, provided that they pay 50% of the principal’s value, and therefore these companies and factories will be able to return to dealing with the banking system again based on their suitability, study, and the viability of their projects, without any backgrounds that hinder them from working,” according to Amer.

He pointed out that the original debt for all troubled companies is EGP 6bn.

He also discussed the mortgage finance initiative for medium housing, as EGP 50bn were allocated to it initially, at a rate of 10%, and the installment is one 20 years.

In this regard, Amer pointed out that the volume of mortgage financing on the budgets of Egyptian banks is very small, and therefore there is a great scope for increasing real estate financing over the budgets of Egyptian banks, and this initiative will contribute to the growth of the real estate market, which is one of the more important sectors, and will work to reduce its burdens through a longer period of repayment.

Amer stressed that the banking sector is in a very good place, enabling it to provide any funding required for the planned development, and that these initiatives will be a good start.

He added that the three initiatives will be implemented by state-owned banks and joint ones where the state has stakes, and he urged foreign banks to review with their main centres outside Egypt to join the initiative.

For his part, Mohamed Abdel-Aal, a member of the Suez Canal Bank Board of Directors, said that these three initiatives launched by the CBE in cooperation with the government, are a continuation of the previous presidential initiatives, which were adopted by the CBE, within the framework of the economic reform programme.

He added that the form in which these initiatives were launched reflected the existing and real coordination between the government, as one entity and a funding body for these initiatives.

According to Abdel-Aal, there is a close relationship between the launch of these initiatives and the success of the monetary policy reform programme, explaining that had it not been for the success of monetary policy to contain inflation and thus reduce interest, initiatives would not be launched with low interest rates.

He pointed out that those initiatives, just as they will benefit the sectors they target, such as, will also benefit the banks.

He explained that directing bank money to finance the industrial sector or mortgage financing is a better alternative for investing in government debt instruments, as this improves the ability of the banking system to exploit the liquidity available, which in turn leads to an improvement in the ratio of loans to relatively low deposits.

Abdel-Aal pointed out that the three initiatives are integrated in their impact, and unite to achieve added value, which is to create jobs, reduce unemployment rates, and increase growth rates to the targeted rates of 6.4% during the coming period.

He pointed out that for the second time, the government and the CBE aim to dismiss troubled factories and restart their operation as well as solve their problems with banks away from lawsuits and courts.

With regard to the mortgage financing initiative for middle income individuals for which EGP 50bn were allocated, Abdel-Aal said that this initiative aims to encourage medium housing, after the state’s success in achieving good growth rates in distinguished and above-average housing.

He added that this initiative will encourage young people to own their own housing units. It will also activate the movement of real estate developers, especially medium-sized companies, as it will lead to a decrease in real estate prices that are currently exaggerated.

According to Abdel-Aal, the Industry Financing Initiative, for which EGP 100bn was allocated, targets industries that produce alternative goods for the goods we import, which will help to provide foreign exchange, and thus improve the balance of payments, and will also increase production and increase job opportunities, as well as increase economic growth.

For its part, Beltone investment bank assured that these initiatives will would be positively reflected on supporting the recovery of industrial investments and the role of the private sector in the economy as well as supporting the Egyptian Stock Exchange (EGX) as well as easing pressures on the pound.

The bank said in a report that these initiatives confirm support ing the recovery of investments in the industrial sector and the private sector, and represents the last stop for the Egyptian economic reform programme, indicating that the decision, along with the policy of reducing interest rates and reducing the price of natural gas to factories, would provide a breather for the industrial sector, and open ed the way for the growth of factories that achieve revenues less than EGP 1bn per year.

It added that the initiatives would ill also support the recovery of capital spending by the end of 2020, which is another positive indicator, which reflects the growth of investments led by the private sector, which leads to expectations of an improvement in the PMI by the second half of 2020, as well as reducing pressures on the local currency.

It explained that the initiatives of the industrial sector would ill reflect the strength of the local currency, indicating that the U.S. dollar may move in a narrow price range against the Egyptian currency between EGP 16 and EGP 15.90, while drawing an expectation of an improvement in the banks’ business volume, the improvement in the quality of the assets, and a neutral impact on the banks, while defaulting factories are exempt from paying the accumulated interest.

It emphasized the positive impact of the real estate financing initiative on the companies participating in the initiative, increasing competition in the interest rates offered and closing the financing gap in the secondary real estate market.

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Five banks to begin collecting mortgage finance instalments electronically amid CBE initiative https://eklutdvotyzsri.dailynewssegypt.com/2019/11/30/five-banks-to-begin-collecting-mortgage-finance-instalments-electronically-amid-cbe-initiative/ Sat, 30 Nov 2019 19:25:30 +0000 https://wwww.dailynewssegypt.com/?p=715365 277,000 customers in 15 banks and eight mortgage finance companies are to benefit from the service when fully implemented

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Five public and private banks will begin collecting mortgage finance instalments electronically under the Central Bank of Egypt’s (CBE) mortgage initiative on Sunday.

Last week, the CBE and the Mortgage Finance Fund (MFF) launched an initiative to collect mortgages electronically in partnership with the funding banks.

The CBE said that this initiative comes within the framework of achieving the objectives of the National Payments Council, by developing and automating payment, collection systems, and cooperating with all state institutions to provide easier service to the Egyptian citizens.

The CBE explained that this initiative helps MFF clients to pay their housing units’ instalments through mobile wallet or ATM bank cards, rather than going monthly to the headquarters of banks.

The CBE added that the electronic payment service for the mortgage finance instalments will be free of charge, as the customer will not bear any additional burdens when using the system. The service is available on all mobile phone wallets operating in the Egyptian market.

According to the CBE, the service will be available to the public as of Sunday for the clients of the five largest funding banks in the MFF programme. These banks are the National Bank of Egypt (NBE), Banque Misr, Banque du Caire, Commercial International Bank (CIB), Housing and Development Bank (HDB), which have more than 222,000 clients in the programme.

The CBE explained that the new system aims to provide better services to the MFF customers, by switching cash collection transactions into electronic payment method.

According to the CBE, this system relies on benefiting from the base of 14.5m mobile phone wallets users and 35m bank card holders, with the addition of new customers to achieve financial inclusion targets.

The CBE pointed out that the system contributes to saving time, effort, and money for clients of the MFF, where the system will work 24 hours, without the customer need to visit the branch.

The CBE said that the banks will open a mobile wallet for customers if they do not already have one, by simplified procedures using the national ID only, and the issuing bank will send the request to collect the instalment to the client’s mobile phone portfolio at the specific date of the monthly instalment. Through this, customer will be able to review the instalment data and then approve the payment, by entering the PIN of his mobile’s wallet.

The CBE pointed out that the new system is planning to expand in the future, to include the remaining funding sources for the clients of MFF projects, namely 15 banks and eight mortgage companies, bringing the total number of users of the electronic payment service within the system to 277,000 customers.

The NBE announced at the end of last week the implementation of the CBE’s initiative and the launch of the e-collection service for mortgage instalments.

The NBE’s Chairperson Hisham Okasha said that the bank aims to benefit from all the possibilities and technological means available in order to support electronic payment methods, to keep pace with the direction of the State and the National Council for electronic payments on the digital transformation of banking transactions.

The NBE’s Deputy Chairperson Dalia El-Baz said that the service allows payment through the mobile phone wallet or bank cards easily, where the customer does not need to visit branches to pay the monthly instalments. In turn, this allows attracting a new category of customers to enter the banking sector.

El-Baz stressed the possibility of recharging the mobile phone wallet in cash through the NBE ATM network that is available across the country, in addition to the machines of the other banks involved in the service. They can also recharge their wallet through ”Fawry” service, with the resumption of the work to increase the number of companies within the network of authorized service providers.

The service also offers the possibility to withdraw cash from the wallet, which has been launched by the bank as part of its strategy to expand the digital banking services.

Tarek Fayed, chairperson and CEO at Banque du Caire, said that it was decided to launch the service of mortgage payments through the electronic wallet “Cairo Cash”, or through deposit in the ATMs of the bank’s customers.

Fayed explained that this is in line with the government’s orientation and the initiatives of the CBE’s digital transformation, for a cashless society, and to facilitate measures for customers, by providing an easier and safer alternative to save time and effort and ease the pressure on customer service staff in the branches.

Banque du Caire signed a cooperation protocol with the MFF at the end of last week to expand the bank’s participation in financing the fund’s clients by increasing the bank’s funding to low-income citizens from EGP 2bn to EGP 5bn.

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Why CBE Governor Tarek Amer was selected to serve another 4-year term? https://eklutdvotyzsri.dailynewssegypt.com/2019/11/27/why-cbe-governor-tarek-amer-was-selected-to-serve-another-4-year-term/ Wed, 27 Nov 2019 06:45:39 +0000 https://wwww.dailynewssegypt.com/?p=715085 CBE under Amer succeeded in managing the files of monetary policy and exchange market, which reflected positively on the performance of the national economy as a whole, say bankers

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Egypt’s President Abdel Fattah Al-Sisi issued a decision on Monday renewing the tenure of the Central Bank of Egypt’s (CBE) Governor Tarek Amer for more four years until November 2023.

According to local bankers who spoke to Daily News Egypt, the renewal of Amer’s term in office did not come as a compliment, but it had strong reasons. The CBE, led by Amer, managed the files of monetary policy and exchange market successfully, which reflected positively on the performance indicators of the national economy as a whole.

When the name of Tarek Amer is mentioned, the decision which changed the course of the Egyptian economy always comes to mind. It is the floatation of the exchange rate conducted by Amer on 3 November 2016.

This decision was undoubtedly the boldest in the history of the Egyptian banking sector, if not in the history of the Egyptian economy as a whole.

It had positive impacts on the Egyptian economy, most notably the return of foreign exchange inflows to the Egyptian market again, and the entry of more than $200bn to Egypt over three years. Besides, the CBE achieved a big leap in terms of foreign exchange reserve, reaching its highest level following the floatation.

Amer was first appointed as the Governor of the CBE in November 2015. He has since led a development revolution within the bank and the banking sector as a whole.

In addition to the monetary reform, the CBE was keen on launching a series of initiatives to support the strategic sectors in the country, and support the development environment and investment climate.

Amer led Egypt’s successful negotiations with the International Monetary Fund (IMF) to obtain a loan of $12bn, which was a strong testimony to the recovery of the Egyptian economy.

This was not the first time that Amer has participated in a reform programme, as he also played a major role in the reform plan implemented in 2004-2008 when he served as the deputy governor of the CBE at the time.

Continuing the development of the banking system

The Agricultural Bank of Egypt’s Chairperson El Sayed El Kosayer said the renewal of Amer’s term confirms the political leadership’s confidence and satisfaction with Amer’s management of the monetary policy in the past four years.

He pointed out that Amer has now the opportunity to continue his successful path, and complete the development of the banking system, which was praised by all international financial institutions, especially the IMF.

He added that this decision also achieves stability and intensify coherence of the banking system, and supports its ability to serve the Egyptian economy and economic development. It also supports achieving financial inclusion and digital transformation in Egypt in accordance with the strategy of the state and the National Council for Payments.

The monetary policy file

Moreover, Maged Fahmy, chairperson of the Industrial Development Bank, said Amer deserves to serve another term.

He pointed out that Amer managed the monetary policy file efficiently, and the bold decisions he took, especially the decision to float the exchange rate, had positive effects on the Egyptian economy as a whole.

Fahmy added that Egypt is now witnessing a stable exchange market, a low level of inflation, and a trend towards cutting interest rates to encourage investment.

According to Fahmy, Amer should work in his second term at the CBE to complete the banking reform programme, especially after the successful drafting of the new banking law. He added that he should continue to target inflation rates, in addition to resuming the reduction of interest rates to stimulate the economy.

Amer was re-chosen for the difficulty of coming period

According to Mohamed Abdel Aal, a board member of the Suez Canal Bank, the reason for re-choosing Amer for another term was not only due to President Al-Sisi’s satisfaction, the local and foreign banking sectors’ admiration of Amer, or even the risks he took without hesitation to achieve economic growth. According to Abdel Aal, the main reason is the difficulty of the upcoming stage that requires Amer’s experience and management skills.

He pointed out that the coming period would be the most difficult for Egypt’s economy. It is the stage of stabilising the positive impacts of the economic programme, which are often difficult to achieve, as was the case in many emerging countries.

Abdel Aal believes that there are eight old and new files that will define the second term of Amer, to ensure the strict implementation of the new Banking Law after the Parliament’s approval.

He added that these files also include maintaining the gains of the economic programme, the most important of which is controlling price stability under the targeted inflation rate and focusing on pushing and supporting the monetary policy that stimulates economic growth.

According to Abdel Aal, achieving exchange rate stability following the floatation policy based on the supply and demand mechanism is also an important file. In addition, the CBE implemented important initiatives that are effective in increasing employment rates for young people, while giving preferential advantage to initiatives to support entrepreneurs, applications of transformation, and financial technology.

“There may be deeper coordination with the monetary policy committee to advance the financial inclusion programme and bring the informal economy into the formal economy,” Abdel Aal said.

He added that the CBE’s governor is also required to maintain the growth of the foreign exchange reserve with an enough rate to secure importation needs for at least nine months, as well as a reasonable real interest rate (the nominal interest adjusted for the rate of inflation), which achieves the objectives of the monetary policy and the interests of depositors from the household sector and investors. Amer will also supervise the moving of the headquarters of the CBE to the New Administrative Capital.

Abdel Aal expects a rapid improvement in the exchange rate of the Egyptian pound after the renewal of Amer’s tenure, with a new price level close to EGP 15.5 per US dollar. He also expects the interest rate to stabilise at its current levels until the new year, where a further decline of 200 basis points is expected during the first half of the new year.

Five bold decisions and measures

Amer took a series of decisions and measures during his first term, topped by floatation and drafting the new banking law:

Floatation of the exchange rate

The most difficult and important decision for Amer was the decision to liberalise the exchange rate on 3 November 2016, and therefore to eliminate the parallel market.

That decision contributed to the US dollar returning to official channels, in addition to the abundance of foreign liquidity at banks and the growing cash reserves.

Banks directed to support SMEs

The CBE also obliged banks operating in the Egyptian market to allocate 20% of their credit portfolios to support small and medium enterprises (SMEs), aiming to inject EGP 200bn for these projects within four years with a facilitated interest.

Lifting restrictions on foreign currency transfer

In 2017, the CBE cancelled the instructions issued in February 2011 regarding the maximum transfer limit of $100,000 or its equivalent per customer once a year, which has already been applied to Egyptian individuals and companies, except for transfers related to import transactions, dues of foreigners resulting from their investments in Egypt, and remittances of foreign companies operating in Egypt. This confirmed that the entry and exit from the Egyptian market is safe for investors.

United Bank offered to a strategic investor

In the light of transparency and preventing conflicts of interest, the CBE decided to offer the United Bank to be sold to a strategic investor. The bank chose the consortium of EFG Hermes and Evercore to act as a financial advisor in offering a stake to a strategic investor in the 99.9% share capital of the United Bank.

The selection came after the trade-off between five offers for a group of the largest companies working in the field of financial consulting and promotion to accomplish many tasks. Their tasks included the promotion of the deal to a selected group of prestigious financial institutions, the preparation of a preliminary fair value study for the United Bank, in addition to the representation of the CBE and the United Bank before potential acquirers. 

New Banking Law

The CBE, headed by Tarek Amer, has finalised the draft of the new banking law. It aims to implement the best banking practices globally, as the CBE has used international financial institutions, in addition to reviewing banking laws in various countries to get acquainted with the latest legal applications and regulations followed by international banks.

Six initiatives led by Amer

During his tenure as the CBE’s Governor, Tarek Amer succeeded in stimulating economic growth, launching several initiatives following the decision to liberalise exchange rates, led by the SME and Real Estate Finance Initiative. He supported the tourism and industry sectors, adopting policies that support financial inclusion and developing systems for electronic payments in coordination with the National Council for Payments.

Mortgage Finance Initiative

The initiative was launched by CBE in February 2014, to provide long-term financing with decreasing subsidies for low, medium, and above middle income at 7%, 8%, and 10.5%, respectively, benefiting more than 200 thousand families, with a financing volume of EGP 20bn.

The CBE allocated EGP 10bn to the initiative as a first tranche. After it ran out, it added a second tranche of the same value. In February, the CBE installed new controls on the initiative, limited to financing only low-income people. This came after consuming the entire first and second tranche, estimated at EGP 20bn.

SMEs Initiative

Amer also succeeded in adopting the initiative to support small and medium enterprises launched by the CBE with the directives of Al- Sisi in January 2016. The CBE obliged banks operating in the Egyptian market to allocate 20% of their credit portfolios to support small, medium, and micro enterprises (MSMEs), aiming to pump EGP 200bn for them in four years, with an interest rate of 5%.

In May 2019, Amer decided to approve the addition of banks’ shareholdings in the direct investment funds targeted at small startups within the 20% of the bank’s total credit facilities to MSMEs under the instructions issued in this regard.

Tourism Sector Support Initiative

CBE launched several initiatives that serve the tourism sector and its employees. The bank decided to launch an initiative to finance the replacement and renovation of tourist and hotel facilities worth EGP 5bn in February 2017, with banks providing 75% financing at a 10% interest rate, up to a maximum of 10 years, according to the customer’s credit study.

In December 2018, the bank also decided to extend the validity of its initiative to support retail facilities related to the tourism sector until the end of December 2019, during which banks will be allowed to carry over the dues of consumer loans and mortgages for personal housing for an additional six months from the due date. This is provided for regular customers working in the tourism sector.

Nile Pioneers Initiative

In February 2019, Amer also launched the Nile Pioneers initiative, purposed to support the growth of small businesses and encourage the establishment of startups in targeted economic sectors using modern technology and providing technical and administrative support, in continuous coordination with all concerned partners in the economic system.

The initiative is implemented by Nile University in accordance with a five-year agreement with CBE, in cooperation with the Micro, Small and Medium Enterprises Development Agency (MSMEDA), the Ministry of Planning, the Academy of Scientific Research and Technology, banks, and the Egyptian Banking Institute.

Financial inclusion initiatives

The CBE also declared 27 April to be the Arab Financial Inclusion Day through cooperation with the Board of Governors of Central Banks and Arab Monetary Institutions. The Central Bank allowed banks to be present outside their branches in remote areas across different regions of Egypt. During the Financial Inclusion Week, lots of products are made available for customers and they get the chance to open new accounts without expenses or a minimum limit.

FinTech Hub

In June 2019, the CBE’s FinTech and Innovation Unit launched the first financial technology platform in Egypt “FinTech Hub”

The platform supports and connects all parties of the financial technology system, including innovative financial technology entrepreneurs, financial institutions, financial technology service providers, experts, and investors, thereby fostering entrepreneurship in Egypt.

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Winners and losers of CBE’s interest rate cut https://eklutdvotyzsri.dailynewssegypt.com/2019/11/17/winners-and-losers-of-cbes-interest-rate-cut/ Sun, 17 Nov 2019 16:47:07 +0000 https://wwww.dailynewssegypt.com/?p=714197 Government, investors, and EGX are the most beneficiaries from the decision, while bank depositors are the most harmed

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The local market is anticipating the impacts of the Central Bank of Egypt’s (CBE) last Thursday interest rate cut decision on various sectors.

While the government, investors, and the Egyptian Exchange are the most beneficiaries from the decision, bank depositors are the most harmed, as banks will also cut interest rates on their savings vessels. Banks operating in the Egyptian market on Sunday will hold intensive meetings to discuss the fate of interest rates on their savings vessels, retail products, and loans, after the CBE’s decision.

The CBE decided during its Monetary Policy Committee’s (MPC) meeting on 14 November to cut its basic interest rates by 1% to reach 12.25% for overnight deposit, 13.25% for overnight lending, and 12.75% for main operation rate.

This was the fourth rate cut in 2019, as the first cut was in February by 100 basis points, and the CBE kept the interest rates unchanged for three consecutive MPC meetings over five months. In August, the MPC meeting resulted in a 150-basis-point cut, followed by another slash of 100 basis points in September.

Collectively, the CBE’s interest rates have seen nine movements since the exchange rate liberalisation on 3 November 2016.

The CBE raised its interest rates by 7% over three meetings in 2016 and 2017, before cutting them by 6.5% over six meetings in 2018 and 2019.

The CBE’s last decision was highly expected by analysts, investment banks, and local and international institutions, in light of the marked decline of the inflation rate below the CBE’s target level, along with the rise of the Egyptian pound price against the US dollar, and the Federal Reserve’s frequent cuts of its interest rates.

The MPC said in its interpretation of the recent rate cut that the continued decline in the annual rate of inflation recording 4.8% in September and 3.1% in October 2019, the lowest rate since December 2005, reinforced the CBE’s decision to reduce its interest rates.

It added that this decline in inflation was driven by lower annual food inflation, supported by favourable base effects stemming from the transitory shock to prices of fresh vegetables in the previous year.

The committee also pointed out that the annual inflation rate of non-food commodities increased in October 2019 due to the relatively high prices of services, which contributed to slightly rising annual core inflation rate to 2.7% in October from 2.6% in September 2019, the lowest since April 2006.

The MPC pointed out that the preliminary data indicates the stability of the real GDP growth rate to 5.6% during the third quarter (3Q) of 2019, after recording 5.6% during the fiscal year (FY) 2018/19, the highest rate since FY 2007/08, noting that the contribution of private sector increased in 2Q19, for the first time since 2Q17.

The real private demand growth has been picking up to support the stability of real aggregate demand growth.

Moreover, employment rose, contributing favourably to the continued decline of the unemployment rate to 7.5% in 2Q19, thereby narrowing by almost 6 percentage points from its peak in 3Q13.

Globally, the expansion of economic activity continued to weaken, financial conditions eased, and uncertainty regarding trade policies continued to weigh on the outlook. Meanwhile, international oil prices remain subject to volatility due to potential supply-side factors that include geopolitical risks.

Incoming data continued to confirm the moderation of underlying inflationary pressures, notwithstanding the expected impact of unfavourable base effects on near-term inflation rates due to the reversal of the transitory shock to prices of fresh vegetables in the previous year. Accordingly, the MPC decided to cut key policy rates by 100 basis points.

The reduction of policy rates in the 14 Nov. and previous meetings of the MPC provide appropriate support to economic activity, while remaining consistent with achieving the inflation target of 9% (±3 percentage points) in 4Q20 and price stability over the medium-term.

The MPC asserted that it closely monitors all economic developments and will not hesitate to adjust its stance to preserve monetary stability.

Immediately after the CBE decision, interest rates of about 29 certificates issued by 23 banks were affected. The interest rates on these certificates dropped automatically, as their pricing is linked to the CBE’s interest rates.

Banque Misr decided to cut interest rate on its three-year fixed rate savings certificate by 1% to 13%.

The bank also cut interest on certificates based on the interest rate corridor – rate between overnight lending rate and overnight deposit rate –  by 1% to 12%.

In a similar move, the National Bank of Egypt (NBE) decided to reduce the interest rate on the bank’s platinum certificates by 1% to 13% for the monthly return and 13.25% for the quarterly return.

The Bank has also decided to reduce the return on platinum certificates with variable return by 1%. A decision is to be made regarding the rest of the saving vessels in the bank over the upcoming period.

At the National Investment Bank, it was decided to reduce the interest rate by 2% on the three-year investment certificate “B” to 12% instead of 14%.

To illustrate, Mohamed Abdel Aal, board member of the Suez Canal Bank, said that the CBE’s decision to cut interest rates was expected in light of the improvement in the Egyptian economy indicators and the market’s need for further cuts in interest rates to trigger borrowing in banks.

Abdel Aal explained that despite the improvement of the indicators of the Egyptian economy, the rate or value of bank lending for financing investment activities is still weak.

He pointed out that despite the availability of deposits in banks amounting to about EGP 4tn, the loans did not exceed EGP 1.8tn, which means that the ratio of lending to deposits is less than 50%, which is not ambitious, and does not achieve the economic growth target of 6%. Consequently, most investors are hoping to cut rates to a level that actually motivates them to borrow.

At the same time, according to Abdel Aal, there are no concerns for foreign direct investment and foreign investments in government debt instruments, because there is still a difference in interest in favour of the Egyptian pound against other foreign currencies, and there are no risks for the household sector due to the interest rate cuts.

Haitham Abdel Fattah, head of Treasury and Capital Markets Sector at the Industrial Development Bank (IDB), said that the CBE’s continued interest rate cut is an explicit signal that it has shifted from targeting inflation decline to targeting growth increase, especially after its success in achieving its target level of inflation.

Abdel Fattah expected that the decision to cut interest rates would have a big positive impact on the Egyptian Exchange this week.

With regard to the bank’s position on the decision, Abdel Fattah said that the bank will hold a meeting this week to discuss the implications of the decision on interest rates, pointing out that the response of each bank to the CBE’s decision depends on its own circumstances and liquidity.

Radwa al-Swaifi, head of research at Pharos Holding, said the CBE’s rate cut of 100 basis points was in line with expectations, due to a significant slowdown in inflation since the beginning of the year.

She ruled out that foreign investments in the domestic debt instrument would be affected by the rate cut, due to the real increase in real yields so far, especially after the monetary easing carried out by the Federal Reserve last week and in light of the growing price of the Egyptian pound against the US dollar.

She stressed that the reduction of interest supports two main objectives, namely the rise of private investment, which is essential for sustainable growth rates, especially in light of the Ministry of Finance’s target growth of 6.4% in FY 2020/21, as well as reducing debt service, which leads to narrowing the fiscal deficit.

Meanwhile, the banking market is awaiting the issuance of the Sunday treasury bills, the first after the recent rate cut, to find out the direction of interest rates on government debt instruments and the impact of the CBE’s decision.

The Ministry of Finance issues five bids for debt instruments weekly, including treasury bills, on Sunday and Thursday, then a bonds bid on Monday of each week.

Similarly, Beltone Financial said that the decision came in line with their expectation, supported by the low single-digit inflation witnessed in October 2019 of 3.1%. We believe the favorable base effect and EGP strength will continue to advocate benign annual inflation readings throughout FY19/20e, keeping inflation rates within the CBE’s target zone of 9% (±3%) by the end of 2020, barring any unexpected price shocks.

They explained that the EGP will remain at around EGP16 per US Dollar. Although the rate cut should improve business sentiment, particularly with local investors, we believe an uptick in private demand growth remains key to unlocking CAPEX lending potential.

Beltone believes that despite interest rate cuts, yields on government securities should remain attractive, particularly with the government aiming to make EGP-denominated debt Euroclearable. 

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