Banking
From The Report: Egypt 2018
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In addition to having one of the largest banking sectors in North Africa, Egypt’s is also one of the most profitable. In more recent times, lenders have made easy gains on high-yielding government debt following the 2011 revolution, while an improving macroeconomic environment and the flotation of the local currency led to another robust performance for the sector in 2017. However, there are numerous challenges facing domestic lenders, such as a controversial new banking law and a bold lending target to small and medium-sized enterprises set by the regulator. Both of these issues are linked to the goal of redefining the role of banks in Egypt’s wider economy.

This chapter contains a roundtable with Dante Campioni, Managing Director and CEO, Alexbank; Mohammed El Etreby, CEO, Banque Misr; Hisham Ezz El Arab, Chairman, Commercial International Bank; and Hisham Okasha, Executive Chairman, National Bank of Egypt.

Articles from this Chapter

Overview

Ripe for change: In the aftermath of the successful move to a free-floating currency, the regulator has outlined a host of new targets
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In addition to having one of the biggest banking sectors in the North African region, Egypt’s is also one of the most profitable. In more recent times, lenders have made easy gains on high-yielding government debt following the 2011 revolution, while an improving macroeconomic environment and the flotation of the local currency lead to another robust performance for the sector in 2017. “The Egyptian banking sector has been the backbone of the economy since the first reforms in 2004, and…

Analysis

Sweeping reforms: Regulators propose a radical draft law that would significantly alter the structure of the sector
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The published draft of the new banking law, the latest reform from the Central Bank of Egypt (CBE), was made public in July 2017, and its potential changes fast became a major talking point for the sector. Formulated after lengthy consultation with global experts – which included meetings with the IMF, the World Bank and the Bank of England – the law has been welcomed by some as an essential upgrade of the governing legislative framework that has been in place for 14 years. One of the…

Overview

Taking action: Dante Campioni, Managing Director and CEO, Alexbank; Mohammed El Etreby, Chairman, Banque Misr; Hisham Ezz El Arab, Chairman, Commercial International Bank; and Hisham Okasha, Executive Chairman, National Bank of Egypt
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Interview:Dante Campioni; Mohammed El Etreby; Hisham Ezz El Arab;Hisham Okasha What have been the short-term consequences of the currency flotation for the banking sector? DANTE CAMPIONI: First, we saw an immediate increase in foreign currency flows coming into the banking sector, as the new parity led to direct foreign exchange (forex) transactions into formal channels. The consequence of this was an increasing availability of forex to satisfy the commercial needs of companies. According…

Analysis

Lending a hand: An expanding microfinance segment improves access to funding for smaller players
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Financial inclusion has become a more prominent component of government strategy over recent years, as authorities work to meet the demands for social justice which have arisen from Egypt’s recent political transition. Elsewhere on the continent, microfinance regulation has also played a large role in raising financial inclusion across segments of society, and in Egypt a similar trend is gathering momentum. In addition, the sector is well placed to support widespread lending growth. Early…

Analysis

Striking a balance: Ongoing reform agenda seeks to keep liquidity in check
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The liquidity scenario in Egypt has shifted significantly in recent years. In terms of local currency liquidity, levels have remained buoyant despite a challenging economic environment. Elsewhere in the MENA region, governments have had to resort to drawing heavily on banking sector deposits to address the fiscal shortfalls caused by low global oil prices. As a net energy importer, Egypt has not followed this trend and government deposits have remained relatively solid. As of October 2017…

Analysis

Digital drives: A host of government initiatives are raising financial inclusion
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Since the waves of social unrest that swept across the Middle East in 2011, governments from Morocco to Oman have responded with strategies aimed at including a greater proportion of society within the nation’s formal economy; however, these efforts to date have met limited success. According to the Consultative Group to Assist the Poor, a global partnership of over 30 organisations seeking to advance financial inclusion, nearly 70% of adults in the Arab world – which has a total population…

Overview

Fintech revolution: Technological solutions are evolving the sector landscape
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Once reserved for ambitious start-ups and industry-leading tech operators, financial technology ( fintech) has since caught the attention of major private sector firms and government planners alike, becoming a regular feature in budget speeches and strategic development plans. As fintech progressively plays a larger part in the lives of consumers, investors have quickly come to recognise its potential as a growth industry. The tech-focused Janus Henderson Global Technology Fund, for example, has grown by more than 160% since February 2013, and by some 30% over 2017. Fintech is rapidly advancing across an array of global hubs. While the…