The National Bank of Egypt (NBE) is studying expansion into Saudi Arabia in the next period, said chairperson of the bank, Hisham Okasha. The bank had a regional expansion strategy which was put on hold following the 25 January Revolution.
The bank is targeting an initial average growth of 10% during the current fiscal year (FY) for various indicators across deposits, loans, facilities, or individual finances.
The bank’s assets are growing quickly. They increased by approximately EGP 195bn in the third quarter of 2016 and registered EGP 650bn at the end of March compared to EGP 520bn at the end of June 2015.
Okasha attributed the fast growth of assets to the increase in deposits with high rates, which registered EGP 522bn at the end of March compared to EGP 447bn at the end of June 2015. The significant growth in savings is a result of customers’ growing confidence in the bank.
What is the value of the bank’s savings from the Platinum Certificate?
The Platinum Certificate with its different maturities and segments acquires nearly 50% of the savings at the bank, about EGP 229bn as of the end of March. This saving scheme is in high demand as it is the saving scheme of every family in Egypt, especially pensioners.
How much did the bank collect from US dollar saving schemes?
The NBE’s dollar savings amount to $500m from the subscriptions to all US dollar saving certificates at the bank, including Belady Certificate, AhlMasr USD Certificate, and the Egyptian Pound Certificate, with an interest rate of 15% which requires giving up the dollar.
The NBE is in full communication with Egyptians abroad through the correspondent banks and branches of the banks abroad. The bank receives inquiries from expatriates through its website.
What is the size of the US dollar financings provided by the NBE during the last period?
The bank provided dollar financings worth more than EGP 6bn for importers from its own resources during a five-month period, from the end of last October until March 2016.
What is the investment strategy of the bank in companies during this year?
The NBE is studying contributing with shares in the launch of new companies with investors from home or abroad in the sectors of new and renewable energy and cement. However, I am unable to disclose details about those partnerships until real steps have been taken.
What is the targeted size of the small- and medium-sized enterprises (SMEs) portfolio after four years?
The bank is targeting to raise its SMEs portfolio to EGP 65bn by the end of 2019, compared to EGP 23bn in March. Directing 20% of the bank’s credit portfolio, which is quickly increasing, to the SMEs sector is a challenge. The bank’s credit portfolio increased from EGP 177bn in December to EGP 195bn at the end of March.
The NBE is working on strengthening its SMEs department by adding 500 new employees to the current 950.
The bank granted EGP 1.7bn worth of loans during the first three months of this year from which 2,665 owners of small and very small enterprises benefited. In addition, we were able to attract 2,200 new customers, which shows the actual application of the principle of financial inclusion. The bank directed 75% of financings to expansion activities and 25% to projects that are established recently, which is a positive indicator for the involvement of the informal sector in the formal economy.
Is the bank considering applying again to acquire CI Capital now that the deal has come to a halt?
I do not think we will compete to acquire CI Capital again in light of current issues with the deal. The bank altered its strategy by using its subsidiary companies to offer supplementary financial activities. The bank has a company to manage funds and assets, as well as our investment arm, Alahli Capital. The bank offers financial consulting through its branches. We also invested in the Dubai World Trade Centre. We are always working to manage the portfolio in order to achieve the aimed target and capital turnover.
What are the solutions you pose to solve the US dollar crisis? What is causing the shortage?
The currency crisis lies in the management of foreign liquidity. The state should overcome issues such as tax evasion and the insatiable import of low-quality products. Solving these issues will ease solving the dollar crisis.
The CBE is just an intermediary between the supply and demand for foreign currency. It does not have its own resources to hard currency or means to increase its reserves. However, it has resources that inject US dollars, including the Suez Canal, Egyptians abroad, exports, and tourism.
There is another reason behind the dollar crisis, which is the random control over some activities, as well as speculation in the parallel market, where some find their best interest in maintaining a high exchange rate and accepting losses in selling currency for their own shady purposes.
The parallel market is crisp. Just by talking about a deposit from the UAE, the market fell 100 piasters. This indicates that the prices there are subject to speculation.
Industry must be encouraged and its resources managed. About 35% to 45% of US dollar resources are wasted, such as the goods and products that require dollars.
Cryogenic refrigerators contribute to keeping goods safely during transport, which saves dollars indirectly. Several projects can bring indirect benefits, such as the national roads network project.
Did the bank select a time for the resumption of offering dollar bonds on foreign markets?
The bank postponed issuing bonds on international markets due to the instability of the global economy. We are awaiting more stability to take similar steps.
How much were the bank’s contributions to social responsibility activities?
The bank has contributed EGP 1.25bn over six years. We aim to contribute over EGP 330m this year compared to EGP 250m in 2014 and EGP 150m in 2013.
