Egyptian banks perform globally by achieving strong growth rates

The Central Bank of Egypt has managed to lead an integrated economic and banking reform program, which began with the decision to liberalize exchange rates in November 2016, and its success in controlling the consequences of the decision to control inflation , which rose to 35.3% for the first time since 1986, which saw a significant decrease within a year, which recorded 8.5% in July 2018, to reach 13.15 by the end of June 2022 % to settle.

The Central Bank is also working to improve the financial solvency of the banking sector, as it has issued a new banking law that includes many articles to develop and strengthen the sector, the most important of which is the collection of the minimum issued and fully paid up capital is. for the bank up to £ 5 billion, and $ 150 million for branches of foreign banks.

The Central Bank has managed to improve the rates of financial inclusion in Egypt, as the percentage of those dealing with the banking sector increased by more than 110% within 5 years, to jump from 27% at the end of 2016 to about 56.2% at the end of last year 2021.

The number of women dealing with banks also increased by 171%, from 5.9 million to 16 million during the same period.

Due to the continuous efforts of the Egyptian banking sector over the past 5 years, the Central Bank has written a new success story in the exploitation of its monetary instruments and its supervisory capacity as the sector continued to gain the lead and its place in the first ranks in the global banking arena, after succeeding in achieving historic growth rates that exceeded its counterparts of sectors Banking in major economic countries, led by Tariq Hassan Amer, Governor of the Central Bank of Egypt.

Amwal Al-Ghad has prepared a survey on the growth rates of the major banking indicators in 6 economically superior countries in the world, among European, emerging, Arab and African countries.

98.8 % The rate of increase in the financial position is 123% for loans and 121% for deposits

In terms of financial position, the survey revealed that the Egyptian banking sector has achieved positive growth rates of 98.85% over the past 5 years, bringing the financial position of Egyptian banks from £ 4,340 billion at the end of December 2016 to £ 8.63 billion in December. 2021, better than its Chinese counterpart, which has grown. Its banks rose by 71.86%, and it also outperformed Saudi banks, which achieved a growth rate of 43.16% in the same period.

The banking sector performed better in the growth rate of its financial position above its US counterpart, whose banks achieved a growth in their financial position by 42.39%, and the Egyptian banks performed better than the UAE, which grew by 27 , 12%, and also surpassed the Kenyan banks, which achieved a growth of 19.55%.

The growth rate of total deposits was also fair for the Egyptian banking sector, which managed to achieve 121.04% growth over the last 5 years, bringing the total deposits from £ 2.92 trillion at the end of December 2016 to 6.45 trillion in December 2021 brought standing, which performed better. its Chinese counterpart, which achieved a growth rate of 115.27%, and its US counterpart with a growth rate of 59.08% during the same period.

The Egyptian banks performed better than the Kenyan banks, which achieved a growth rate of 44.94% over the past 5 years, and the Saudi banks, which recorded 29.16% growth, as well as the UAE banks, which recorded a growth of 25.86%.

In terms of the loan portfolio, the survey revealed the superiority of the Egyptian banking sector by achieving positive growth rates of 123.12%, rising from £ 1.36 trillion at the end of December 2016 to £ 3.03 trillion in December 2021 rose, which outperformed its Kenyan counterpart, which recorded a growth of 62.37%, followed by Chinese banks, which grew by 57.71%, then Saudi banks, which growth rates of 45.31 % achieved.

The banking sector has also surpassed its US counterpart in terms of loan portfolio growth over the past 5 years, as US banks achieved 32.22%, and UAE banks, which achieved growth rates of 15.13%.

“Sovereign wealth funds” and “foreign banks” praise the high growth rates of the sector

The results of the survey prepared by “Amwal Al Ghad” were fair to the Egyptian banking sector, and a new certificate of confidence confirming its global value and wisdom in building a strong sector capable of to support and support the economics of institutions and individuals in the light. of crises and emergency unrest.

On the other hand, the superiority of the Egyptian banking sector and the achievement of high growth rates led to sovereign funds being lured to pump their investments in the local market into various sectors and economic activities during the coming period. And another 10 billion raised by the Saudi sovereign fund.

The Saudi Public Investment Fund is also looking forward to acquiring The United Bank, expressing its strong interest in investing in the financial and banking sector in Egypt due to the resilience of local banks in the face of successive crises.

At the UAE level, financial services companies and lending companies are also among the main objectives of the UAE ADQ Holding Company “Abu Dhabi Sovereign Fund”, which has a 17.15% stake in Commercial International Bank and an 11.8% stake in the acquired financial technology. company Fawry, as part of a $ 2 billion investment package agreed with the Egyptian government.

The strength of the Egyptian banking sector and its ability to achieve high growth indicators over recent years have also led to new foreign banks being attracted to enter the local market, demonstrated by Standard Chartered seeking Council approval. of Directors of the Central. Bank of Egypt will grant a business license as a foreign banking branch in Egypt. It will have branches in Cairo next September, with a second branch to open next year in 2023 in Alexandria.

Standard Chartered Bank’s announcement of its entry into the Egyptian market came as a certificate of confidence the world offers to the Egyptian banking sector, especially after the former revealed the reasons for entering Egypt and explained that it was seeking its first branch in Egypt due to the stability that the Egyptian banking sector has witnessed in recent years, which is represented in its ability to deal with many crises and limit their consequences, thanks to the rational leadership of the Central Bank.

Standard Chartered added that the implementation of the Central Bank of Egypt’s strategies has contributed to improving the financial solvency of banks and the efficiency of managing and managing all types of risks, and taking appropriate precautions, which has led to maintaining financial support and high capital requirements that exceed the set minimum, as well as high liquidity ratios, which are positively reflected on the economy as a whole.

Bankers: Proactive measures boosted growth in performance indicators

Alaa Farouk: The high growth rates have encouraged the world to invest in the sector

Alaa Farouk, chair of the board of the Agricultural Bank of Egypt, believes that it has made the sector more capable thanks to the proactive vision of the Egyptian Central Bank and its wise decisions taken as a precaution before the outbreak of crises. of global and local challenges, and has led to the achievement of historical growth rates that have surpassed many banking sectors in Many countries in the world have the most important banking indicators of loans, deposits and assets.

Farouk added that the success and strength of the Egyptian banking sector paved the way for the entry of Arab sovereign funds, in addition to attracting new foreign banks to invest and work in the Egyptian market as one of the best aspects of investing in the Arab region despite the global economic turmoil.

He pointed out that the emergence of the main indicators of the banking sector was due to the proactive measures taken by the Central Bank of Egypt to maintain market balance and the stability of economic conditions through effective monetary policy instruments, such as the introduction of various low interest rate initiatives that encourage investment to prevent a phase of economic stagnation in the face of crises.

Muhammad Al-Sabban: She has strong financial solvency and the ability to overcome crises

Mohamed Al-Sabban, Assistant Managing Director of The United Bank, said the Egyptian banking sector had managed to overcome local challenges such as the repercussions of the economic reform program, and other global challenges such as the outbreak of the Corona pandemic, global inflation and the aggravation of the Russo-Ukrainian war, and managed to achieve high growth rates that proved their merit and strong performance The banking sector.

He added that banks operating in the Egyptian market have strong solvency and the ability to overcome crises, in addition to great liquidity in terms of local and foreign currencies, adding that the digital revolution initiated by Egyptian banks gives them a fierce rival for their global counterparts, and strengthens the base of merchants with banks and increases the use of transactions.

He pointed out that Egyptian banks are among the strongest economic sectors in the country, and always support the economy to stand up and withstand crises, and the local market is attractive for global banks and international entities to join and to invest because of its banking power and wise leaders.

Sahar Eldamaty: We have the ingredients for the success of any banking institution

In turn, Sahar El-Damaty, a banking expert and former vice-president of Banque Misr, said that the indicators of Egyptian banks proved the strength of the financial indicators of the banking sector thanks to the ability of the leaders of the Central Bank. and banks operating in the local market to address crises and adapt monetary policy instruments to support and sustain the local economy.

She added that the high growth rates of the banking sector encouraged international institutions to enter the Egyptian market despite the emergence of many economic crises, and made Egypt a fertile ground attractive to international banks such as Standard Chartered Bank. success of any banking institution.

Growth rates of banking sectors in some countries of the world over 5 years (2016-2021)

Banks by country Financial position growth rate loan growth rate Deposit growth rate
Egyptian banks 98.85% 123.12% 121.04%
Chinese banks 71.86% 57.71% 115.27%
Saudi banks 43.16% 45.31% 29.16%
Kenyan banks 19.55% 62.37% 44.94%
US banks 42.39% 32.22% 59.08%
UAE banks 27.12% 15.13% 25.86%

Egypt

Element December 2016 December 2021 the growth
loans 1.358 trillion pounds 3.03 trillion pounds 123.12%
origin 4,340 trillion pounds 8.63 trillion pounds 98.85%
deposits 2.918 trillion pounds 6.45 trillion pounds 121.04%

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