Suez Canal Bank plans to break into retail banking, real estate financing, and SME finance, after focusing on previous years of financing only the big corporate sector, according to the chairperson of the bank, Hussein Refaei.
Refaei pointed out that the bank has already completed the establishment of three specialised departments in the service of these activities. The preparation of qualified human cadres to serve these activities is being prepared in preparation for the start of the bank’s launch.
According to Refaei, the board of directors of the new bank under his leadership, which was elected several months ago, is currently preparing the work plan of the bank over the next three years, noting that the plan is to be finalised by the end of this year.
He added that the main features of the plan are to continue to support the large corporate sector, which has been the focus of the bank since its inception, either directly or by arranging and entering into syndicated loans for its own interests, in addition to providing retail banking services, real estate financing, and SME financing.
He pointed out that the bank is currently participating in the initiative of the Nile Bank, launched by the Central Bank of Egypt (CBE), and is looking into the work of a protocol with the Industrial Development Authority to be present within the Commission and be able to serve the various entrepreneurs who travel to it.
Suez Canal Bank recently signed two contracts with the Small, Medium and Micro Enterprises Development Authority (SMEDA) worth EGP 100m to finance these projects.
According to Refaei, the bank aims to reach the portfolio of financing small and medium enterprises to EGP 400m by the end of 2017, compared to about EGP 300m and about EGP 140m at the beginning of the year.
He added that the bank also plans to increase the portfolio of loans of major companies and syndicated loans by the end of 2017 to EGP 9.5bn, compared to about EGP 9bn currently.
He explained that the bank entered into several joint loans arranged during the last period, including the two loans that were arranged for the benefit of the electricity sector by Ahli Bank of Egypt, where the bank received a share of these loans estimated at EGP 2.2bn, and the bank is considering another share.
“Suez Canal Bank aims to add 10 new branches during the year 2018, in various governorates of the republic, headed by the governorates of the Suez Canal area, to increase the network of branches to 50 branches,” according to Refaei.
The bank currently has 36 branches, and two branches will be opened in Nasr City and the 5th Settlement in two months.
In response to a question about the role of the bank in the service of the projects being established in the Suez Canal area, Refaei said that the bank currently has seven branches in the governorates of the Suez Canal, and seeks to increase the number of branches in this region, as he approached the opening of a new branch in Ismailia and obtained the approval of the Central Bank of Egypt (CBE) to open another branch in the West Qantara area.
Refaei stressed that the bank’s presence in the Canal area is part of the bank’s strategic and core objectives, pointing out that the bank is seeking to be present in the New Administrative Capital through a major, not a traditional branch, to serve those in the region.
“Suez Canal Bank intends to issue three new products as part of the bank’s retail banking activity before the end of this year, in addition to the launch of internet banking and mobile banking services soon,” said Refaei.
He added that the bank’s certificate of harvest recently succeeded in attracting about EGP 500m, bringing the bank’s total deposit portfolio to more than EGP 29bn.
In response to a question about the extent to which the bank needs to increase its capital to support its expansion plan, Refaei said that the bank’s capital is currently EGP 2bn and that it does not need to make any new increase, at least for the time being, pointing out that any new capital increase stops on developments in the volume of the bank’s operations during the coming period.
In a related context, Refaei revealed that the Suez Canal Bank has financed foreign trade agents with more than $500m since the exchange rate was released on 3 November 2016. He said the bank does not have a single document to cover at this time.
He pointed out that the bank recently opened a document in favor of the Public Authority of Supply worth $12m, to help the authority to import basic commodities.
Refaei ruled out borrowing from international institutions to support the bank’s foreign exchange at the moment, pointing out that the bank does not need these loans at present.
In response to a question about the board’s handling of the new formation with the file of default, Refaei said that the board of directors attaches great importance to this file at the moment, and formed specialised and professional teams to deal with these debts.
He also revealed the bank’s recent success in concluding 20 defaulted debt settlements with a value of about EGP 200m, and other adjustments are being made with a number of large debtors.
Refaei confirmed that all the bad debts at the bank are covered by full provisions, which prevented the bank from making profits for a period of 4 to 5 years. He revealed that the bank achieved profits of EGP 200m by the end of last year and is expected to grow by the end of this year.