Banking
From The Report: Egypt 2020
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The largest of its kind in North Africa, Egypt’s banking sector has also long been seen as one of the most stable in the region. Since 2010 the industry has overcome the challenges of political revolution, currency crises and an interest rate environment that has acted as a barrier to credit extension. In early 2020 the outlook for the sector was broadly positive, but by the close of the first quarter it became apparent that Covid-19 would have a deleterious effect on the domestic economy. As a result, Egypt’s financial institutions are likely to focus on maintaining their asset quality rather than boosting their lending portfolios. Social distancing, meanwhile, is set to add momentum to the more widespread adoption of online banking and digital payments, which should help to boost financial inclusion. This chapter contains an interview with Hisham Ezz Al Arab, Chairman and Managing Director, Commercial International Bank.

Articles from this Chapter

Overview

Sound finances: Regulatory reform and digitalisation facilitate business lending
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The largest of its kind in North Africa, Egypt’s banking sector has also long been seen as one of the most stable in the region. Since 2010 the industry has overcome the challenges of political revolution, currency crises and an interest rate environment that has acted as a barrier to credit extension. While Egypt’s macroeconomic outlook at the beginning of 2020 suggested more favourable conditions for the nation’s lenders, the impact of the global Covid-19 pandemic has dampened the…

Interview

Take it to the bank: Hisham Ezz Al Arab, Chairman and Managing Director, Commercial International Bank, on boosting financial inclusion
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Interview:Hisham Ezz Al Arab How would you evaluate the capacity of Egypt’s banks to lead the country’s post-Covid-19 recovery? HISHAM EZZ AL ARAB: Egyptian banks are among the largest on the continent in terms of revenue, number of branches and scale of operations. Although the way in which the banking sector interacted with customers changed during Covid-19 in light of calls to stay at home, due to the industry’s well-capitalised and agile nature, it will continue to provide important…

Analysis

Open invitation: Government policy and private sector activity are fuelling the development of digital banking solutions
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Egypt’s sizeable informal economy represents a significant challenge for the government. With between 40% and 60% of economic activity taking place out of sight of the Ministry of Finance, the government’s economic reform agenda faces a number of obstacles. Informal employment is generally characterised by low-wage, low-skill activity with limited potential for the kind of productivity increases that the government has deemed necessary for the nation’s long-term economic growth. Perhaps…

Analysis

Money matters: Shifts in monetary policy support lending to the private sector
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Higher interest rates following the flotation of the Egyptian pound in 2016 made it costly for businesses and individuals to obtain funding from Egyptian banks. The depreciation of the currency also raised input costs for businesses and reduced their ability to expand operations, thereby reducing demand for funding to cover capital expenditure. Banks, meanwhile, found it easier to lend to the government in a high interest rate environment, further restricting private sector lending growth…

Overview

Competing coins: A new proposed digital currency is pushing central banks to respond to technological disruptions
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The first cryptocurrency transaction in history was feted in just two words: “Running Bitcoin”. This came in the form of a tweet on January 11, 2009 by Hal Finney, a US software developer. Some 10 years and over 1600 initial coin offerings later, the world of crypto-, virtual and other digital currencies looks to have provoked an active response from financial sector leaders. However, this was sparked not by an entity with an established cryptocurrency profile, but by social media giant Facebook. In June 2019 the company introduced its digital currency Libra. Initially set to launch the following year, Facebook announced in March 2020…