Egyptian banks have overcome various challenges from the local and global economies in recent times. They have achieved strong business results and announced ambitious plans and strategies for the future.
The Egyptian economy has faced many difficulties, especially due to the ongoing conflict in Gaza, but local and international banks remain optimistic. They are encouraged by the progress in talks with the International Monetary Fund for an aid package and the significant foreign direct investments in the Egyptian market.
Last year, the World Bank said that the Egyptian banking sector can withstand crises, with a lower loan-to-deposit ratio, showing sector stability and liquidity.
Fitch Ratings, a global credit rating agency, predicted strong growth in the Egyptian banking sector in the next decade, with plenty of room for expansion in banking services and the potential to increase the depositor base.
A report by the Information and Decision Support Center at the Cabinet said that banks in the Egyptian market have played a key role in mobilising local and foreign savings, protecting clients and investors, and enjoying liquidity and profitability, supporting financial stability, which is essential for sustainable economic growth.
Standard & Poor’s, another global credit rating agency, said that the Egyptian banking sector has strong local liquidity, with a low loan-to-deposit ratio, and high growth rates in deposits. It also said that banks’ decisions to offer high-yield certificates of deposit are likely to boost profitability.
Moody’s Investors Service said that the financing structure of Egyptian banks is stable, with significant precautionary liquidity, strong profitability, and flexible loan performance. These factors help balance the banking sector’s risks.
Oxford Business Group said that years of strict financial regulation have created a robust banking system in Egypt, with high capital adequacy ratios and lower levels of non-performing loans, reducing some of the worst economic impacts of crises, including the COVID-19 pandemic.
The International Monetary Fund said that the Egyptian banking sector continues to show its resilience in the face of challenges, noting that financial safety indicators as of June 2022 reveal a highly liquid banking sector with enough capital levels and low levels of non-performing loans.
