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Egypt: Egypt Commercial Banking Report





Egypt Commercial Banking Statement

While amount the major economies of the world have been harmfully hit by the financial crisis, the banking industry in Egypt remains largely sure, showing its relative separation from and resilience to the world crisis. Egypt has shown substantial evolution in the banking sector reforms over the years. The central bank’s NPL management plan has helped banks to settle around 90% of total outstanding NPLs. With the fast merger and acquisitions in the recent past, the banking sector has become stronger and well-organized. The number of banks operating in Egypt concentrated to 39 as of the end of December 2008 from 57 in 2004.

Egyptian banks have notably intensified their lending activity in the last years. Credit facilities provided to the business segment contribute to the better part of bank loans. Nevertheless, foreign sector loans are experiencing quick expansion on account of rise in loans to the private business segment, mostly to the trade sector in foreign currency. In next, banks are expected to further intensify their lending activities with the rising request for loans from domestic inclunding foreign sector. Resultantly, the bank loans are expected to grow at a CAGR of about 13% during the period spanning from 2009-10 to 2013-14.

During our research, we found that Egyptian banks have not only seen increase in lending activities but have as well seen reckonable increase in the deposits on rising consumer confidence on the system. With rapid expansion in household deposits, the country is expected to see a thriving influx of deposits at a CAGR of close to 15% during our estimate period. Long-term, fix maturity deposit products will account for the majority (over 80%) of increase.

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