CAIRO: The National Bank of Egypt (NBE) recently received a LE 2.2 billion ($400 million) loan to improve its financial standing, mainly by raising the bank’s capital.
The loan, granted by the World Bank and given to NBE by the Central Bank of Egypt, is part of the second phase of the Egypt Financial Reform Program. It has a 20-year term with an interest rate of 0.25 percent.
Tarek Amer, NBE’s chairman, told Al-Ahram daily newspaper that “the loan will help raise NBE’s capital from LE 2.7 billion to LE 4.9 billion in 2010.
In phase one of the Egypt Financial Reform Program, which spanned 2004-2008, Egypt received $500 million.
According to the World Bank, the program’s main objective is to “build a more resilient and competitive financial sector with a sound banking system and insurance industry that could contribute better, in the medium-term, to the provision of modern and effective financial services.
Amer take over as chairman of the board in early 2008 after serving as the deputy governor of CBE.
Mohamed Kosbah, a member of the Muslim Brotherhood’s parliamentary bloc, had submitted a request to investigate the deterioration of NBE, which led to low returns to investors, and its rank to slide to the bottom two Egyptian banks in terms of profitability.
In a statement on his website, Kasbah warned that this could “lead to the collapse of this great institution in Egypt.