The National Bank of Egypt’s (NBE) financial position reached about EGP 1.7trn at the end of December 2019, Yehia Aboul Fotouh, vice chairperson of the bank, announced last week.
The bank’s deposit portfolio reached about EGP 1.3trn, while the loan portfolio recorded about EGP 570bn, of which about EGP 90bn are retail loans, representing about 12% of the bank’s loan portfolio, and EGP 57bn that have been directed to financing small and medium-sized enterprises (SMEs).
Aboul Fotouh noted that the Central Bank of Egypt’s (CBE) recent decision to increase the debt-to-income ratio for personal loans to 50% from 35%, will surge the demand for such loans, and thus support the purchasing power of individuals. It will also have a positive impact on stimulating demand for goods and services, and thus supporting Egypt-made products and the whole economy in general.
Regarding the bank’s profits, it reached about EGP 9bn at the end of the first half (H1) of the fiscal year FY 2018/19, with hopes to double this figure by the end of the FY 2018/19, as the numbers are still under verification until now.
On a different note, Aboul Fotouh said there are continuous meetings between the bank and defaulting companies and those that are about to default, to solve their problems and settle their debts, whether within the CBE’s initiatives for debt settlement or outside such initiatives.
He noted that the bank has recently settled a debt of EGP 50m in the tourism sector.
The NBE’s non-performing loan (NPL) portfolio, including retail loans, reached about EGP 10bn, accounting for 1.5% of the bank’s total loan portfolio, which is about EGP 570bn, until the end of December 2019.
There has been a noticeable revival in the tourism sector in the recent period, which helped troubled bank clients in this sector settle their bad debts.
Aboul Fotouh revealed that the NBE pumped EGP 1.8bn to replace and renovate 20 hotels in Egypt, within the CBE’s initiative to support tourism, adding that more tourist companies applied to obtain such loans, and the bank is currently studying their requests.
On 5 December 2019, the CBE launched an initiative to exempt defaulting factories from accumulated interests, amounting to EGP 31bn, while the original debt amounted to EGP 6bn. The initiative’s beneficiaries include 5,184 factories.
The CBE Governor Tarek Amer said that this initiative gives the opportunity for these factories to have a new start. The CBE will also remove those factories from the blacklist of defaulters, provided that they pay 50% of the original loan. Therefore, those companies and factories will be able to deal with the banking system again, based on their creditworthiness and the feasibility of their projects.
On a different note, Aboul Fotouh estimated the NBE’s foreign currency inflow at about $68bn from the floating of the exchange rate on 3 November 2016 until the end of 2019, pointing out that this sum was pumped entirely to finance import operations by the bank’s clients.
Meanwhile, Egypt has received a total foreign currency inflow of about $200bn since the floating decision until the end of last year.