The National Bank of Egypt (NBE) and Banque Misr announced the launch of two new savings certificates for a period of three years, with a return of fixed 19% and decreasing 22%.
The two banks said, in a statement on Sunday, that the issuance of these two certificates reflects the positive vision of a decrease in interest rates during the coming period, with the expected gradual decline in inflation rates, with the stability of the markets in light of international and domestic changes and CBE’s policy to target inflation.
The first certificate was offered for a period of three years, with a fixed return of 19% annually, to be paid monthly. The second certificate is for a period of three years, with a decreasing interest rate of 22% for the first year, 18% for the second year, and 16% for the third year, and the return is paid monthly.
The minimum amount for purchasing the certificate is EGP 1,000 and its multiples. It is possible to borrow with its guarantee, and credit cards of all kinds can be issued.
The certificate cannot be retrieved before the lapse of six months starting from the working day following the day of purchase, while it can be retrieved before the end of the period in accordance with the rules and conditions announced by the bank, and the certificate is retrieved at the end of its period with its full nominal value.
This step by the two government banks comes as a response to CBE raising its basic interest rates by 2% last Thursday, to reach 18.25% for deposits, 19.25% for lending, and 18.75% for the credit and discount rate and the price of the main operation at CBE.
The two banks had collected over EGP 1.2tn from the last two issuances of high-yield certificates, at a rate of EGP 750bn from issuing a one-year certificate with a return of 18% in March 2022, and about EGP 470bn from issuing a one-year certificate also with a return of 25% in January 2023.
The Assets and Liabilities Committees (ALCO), which is responsible for determining interest levels in banks, began intensive meetings to discuss adjusting the interest rates on their savings and loan products after CBE’s decision, and after the step taken by the National Bank of Egypt and Egypt, in order to preserve its customers and its deposit portfolio.
The interest rates on variable-return certificates and some loan products linked to CBE’s basic interest rates increased automatically after CBE’s decision to raise interest.
