The capital of banks operating in the Egyptian market reached EGP 128.42bn at the end of the first half (H1) of 2017, according to the Central Bank of Egypt (CBE).
In a recent report on the financial soundness of banks, the CBE stated that the capital of the top 10 banks operating in Egypt recorded about EGP 82.673bn, while the capital of the top five is about EGP 64.497bn.
However, while the CBE refrained from naming the top five or ten banks in Egypt, it is known that they include the National Bank of Egypt (NBE), Banque Misr, the Commercial International Bank (CIB), Banque du Caire, the Arab African International Bank, QNB ALAHLI, HSBC, Faisal Islamic Bank, Alexandria Intesa San Paolo, and Crédit Agricole.
In the report, the CBE pointed out that the return on average assets of banks operating in the Egyptian market remained unchanged at 2% at the end of H1 2017. The indicator hit 1.9% in the top 10 banks and 1.8% in the top 5 alone.
It added that the return on average bank equity recorded 30.9% at the end of June 2017, the same ratio of March, while it reached 32.1% among the top 10 banks, and 33.2% among the top 5.
Furthermore, the net interest margin increased to 4.6% at the end of June 2017, unchanged from March. This was the same level as the top 10 banks, while the ratio fell to 4.5% in the top 5 of these.
In addition, the CBE noted that the ratio of loans to deposits in banks rose to 47.2% in June, compared to 47.1% in March 2017, and also rose to 44.4% among the top 10 banks and 45.6% among the top 5.
The ratio of loans to deposits in local currency rose to 40.7% in June, compared to 40.2% in March 2017. It also rose to 36.2% in the top 10 banks and 36.8% in the top 5.
The ratio of loans to foreign currency deposits in banks fell to 62.2% in June from 62.8% in March 2017. The same indicator reached 63.7% among the top 10 banks and 68.1% in the top 5.
According to the CBE, the private sector accounted for 63.9% of the total loans granted by banks at the end of June, compared to 66.1% at the end of March 2017.
The private sector also accounted for 56.3% of loans granted by the top 10 banks and 52.9% of loans granted by the top 5.
The ratio of non-performing loans at banks operating in the Egyptian market fell to 5.5% of the total loan portfolio at the end of June, compared with 5.7% in March 2017, according to the CBE.
The report stated that the ratio of non-performing loans fell to 3.7% of total loans in the top 10 banks operating in the Egyptian market, and the ratio also declined to 3.2% among the top 5.
According to the CBE, the banks made provisions of 99.1% of the total non-performing loans in June, unchanged from March 2017. The ratio of these provisions amounted to 100% in both the top 10 banks and the largest 5 of these.
The report also noted that the total volume of provisions amounted to EGP 107.859bn at the end of June 2017. The top 10 banks in Egypt had a share of EGP 63.249bn of these provisions, while the top five banks alone accounted for EGP 53.477bn.
Moreover, the CBE stated that the banks have set up reserves of EGP 185.846bn at the end of H1 2017. The share of the top 10 banks amounted to EGP 147.816bn. The volume of reserves in the top five banks reached EGP 125.819bn.
The report added that the average liquidity in the local currency in banks fell in June 2017 to 47.7% compared to 49.7% in March this year. The ratio fell to 49.5% in the top 10 banks and 47.3% in the top 5.
On the other hand, the average liquidity in foreign currencies increased to 65.7% at the end of June, compared to 64.5% in March 2017. The ratio rose to 66.4% in the top 10 banks and 65.1% in the top five.
According to the CBE, the total deposits at banks until the end of June 2017 reached EGP 3.028tn, including EGP 2.2454tn in Egypt’s top 10 banks and EGP 1.879tn in the top 5 alone.
The CBE added that the deposits to assets ratio in June 2017 rose to 68.8% from 68% in March 2017. The ratio stood at 66.5% for the top 10 banks and 66.7% for the top 5.
In another matter, the CBE said that banks’ securities portfolio reached 16.2% of total banks assets in June, compared to 16.6% in March 2017. This ratio was 16.7% for the top 10 banks and 16.2% for the top 5 of these.
It also pointed out that the banks’ investments in securities and treasury bills reached EGP 1.537tn at the end of June 2017. The investments of the top 10 banks in securities and bills recorded about EGP 1.217tn, against about EGP 1.008tn among the top 5.
Regarding banks’ capital adequacy index, the CBE explained that the ratio of capital base to risk-weighted assets in banks fell to 14.5% at the end of H1 2017 compared to 14.7% in the first quarter (Q1) 2017. This ratio was 14.5% among the top 10 banks and 14.8% in the top 5.
The ratio of the tier 1 capital to risk-weighted assets declined to 11.4% in June, compared to 11.9% in March 2017. The ratio was 11.2% for the top 10 banks and 11.4% for the top 5 of these.
The report also noted that the common equity to risk-weighted assets declined to 8.5% in June, compared to 8.6% in March 2017, with 7.7% in the top 10 banks and 7.3% in the top 5.
Banks’ leverage ratio rose to 6.2% in June from 6% in March 2017. The ratio stood at 5.8% in the top 10 banks and 5.7% in the top 5.
The CBE said that the percentage has become re-commendatory since the end of September 2015 and will be so until 2017.
This percentage will be obligatory from 2018 with a lower margin stated by 3%.
