The percentage of non-performing loans at banks working in the Egyptian market declined to 5.3% of the total loan portfolio by the end of September 2017, compared to 5.5% in June 2017, according to the Central Bank of Egypt (CBE).
The CBE explained in a recent report about financial safety that the percentage of non-performing loans reached 3.7% of the total loans in the largest ten banks working in Egypt, and reached 3.1% in the five largest banks.
CBE noted that banks have allocations representing 98.8% of the total non-performing loans in September 2017, and the percentage reached 100% at the ten largest banks in the Egyptian market.
“The volume of allocations that banks have formed to face debts doubtful to be collected reached EGP 109.499bn by the end of September 2017, and the share of the ten largest banks reached EGP 66.272bn of these allocations, while the volume of allocations in the five largest banks reached EGP 56.56bn,” the CBE said.
It added that banks have formed reserves worth EGP 174.101bn by the end of the third quarter (Q3) of 2017, where the ten largest banks’ share of that value reached EGP 137.673bn, while reserves reached EGP 115.985bn.
According to the CBE, the percentage of loans to deposits at banks working in the Egyptian market declined to 45% in September 2017, compared to 47.2% in June 2017. The percentage reached 42.9% at the ten largest banks, and 44% at the five largest banks.
The CBE explained that the ratio of loans to deposits in local currency declined to 40.7% in September 2017, compared to 37% in June 2017. The percentage declined to 33% at the ten largest banks, and recorded 33.3% at the five largest.
The ratio of loans to deposits in foreign currencies at banks increased to 69.8% in September, compared to 62.2% in June, recording 74.7% at the ten largest banks, and 83.8% at the largest five.
“The private sector accounted for 63.7% of the total loans provided by banks to their clients until the end of September 2017, compared to 63.9% by the end of June 2017,” according to the CBE.
It added that the private sector accounted for 55.7% of the total loans in the ten largest banks working in Egypt, while it accounted for 52.4% of the loans at the five largest banks.
“Total capital of banks working in the Egyptian market reached EGP 141.257bn by the end of the third quarter of 2017 in June,” the CBE said.
The bank explained that the capital of the largest ten banks is estimated to be EGP 91.127bn, while the capital of the five largest banks reached EGP 72.997bn.
While CBE has not revealed the names of the five or ten largest banks, it is known that these banks are topped by the National Bank of Egypt (NBE), Banque Misr, the Commercial International Bank (CIB), Banque du Caire, Qatar National Bank (QNB), Bank of Alexandria, and Credit Agricole.
According to the CBE, the yield on average assets at the banks working in the Egyptian market reached 2% by the end of the third quarter of 2017, no change compared to the end of the first and second quarters. It reached 1.9% in the ten largest banks and recorded 1.8% in the five largest banks.
He added that the yield on average property rights at banks reached 30.9% by the end of September 2017, no change compared to June and March 2017. It reached 32.1% at the ten largest banks, while reaching 33.2% at the five largest banks.
The profit margin reached 4.6% by the end of June 2017 without change compared to March, the same level achieved at the largest ten banks, while this margin declined to 4.5% for the five largest banks.
“The decline of average liquidity in the local currency at banks in September 2017 declined to 41.7%, compared to 47.7% in June 2017. This percentage declined to 43% for the largest ten banks, and declined to 40.5% at the largest five banks,” according to the CBE.
On the other hand, average liquidity in foreign currency at banks increased to 74.8% by the end of September 2017, compared to 65.7% in June 2017. This percentage increased to 77.5% at the largest ten banks, recording 78.3% at the five largest banks.
“Total deposits at banks reached EGP 3.161tn until the end of September 2017, with the ten largest banks owning EGP 2.319tn of them, while the five largest banks own EGP 1.949tn,” CBE said.
Deposits to assets ratio at banks in September 2017 reached 67.7%, compared to 68.8% in June 2017. This ratio reached 66.1% at the largest ten banks and 65.3% at the largest five.
On the other hand, the CBE said that the banks’ securities portfolio reached 14.2% of the total assets at banks in September 2017, compared to 15.4% in June. The percentage reached 15.6% at the largest ten banks and 15.1% at the largest five.
Banks’ investments in securities and treasury bills reached EGP 1.543tn by the end of September 2017, as the investment volume of the largest ten banks reached EGP 1.222tn, with the top five alone investing EGP 1.016tn.
In terms of the capital adequacy index, the CBE explained that the ratio of the capital base to the risk-weighted assets with bank risks increased to 14.7% by the end of the third quarter of 2017, compared to 14.5% by the end of the first quarter. The ratio reached 14.3% at the ten largest banks, as well as 14.4% at the largest five banks.
The ratio of the first portion of the capital at banks to the risk-weighted assets filled with bank risks increased to 11.9% in September 2017 compared to 11.4% in March. The ratio reached 11.3% at the largest ten banks and 11.3% at the largest five banks.
According to the CBE, the ratio of the continued capital at banks to the risk-weighted assets reached 8.5% in September 2017, without change compared to June 2017. This ratio reached 7.4% at the largest ten banks and 7% at the largest five.
The financial leverage percentage in banks increased to 6.3% in September, compared to 6.2% in June. This percentage reached 5.9% at the largest ten banks and 5.7% at the largest five.
The CBE said that this percentage will be a trial until the end of 2017, and binding from 2018 with a 3% minimum.
