The financial position of the Industrial Development and Workers Bank of Egypt (IDWBE) amounted to EGP 10.432bn at the end of June 2017 compared to EGP 6.896bn by the end of 2016, an increase of EGP 3.536bn and a growth rate of 51%, according to Maged Fahmy, the chairperson of the bank.
During a press conference held last week, Fahmy pointed out that the bank’s clients’ deposits increased to EGP 5.674bn by the end of June 2017, compared to EGP 2.657bn by the end of 2016, an increase of EGP 3.017bn and a growth rate of 114%.
He added that the bank’s total loan portfolio reached EGP 7.313bn in June 2017 compared to EGP 5.120bn in December 2016, an increase of EGP 2.193bn and a growth rate of 43%. The total loan portfolio stood at EGP 5.995bn against EGP 3.692bn—an increase of EGP 2.303bn with a growth rate of 62%.
Net profits also went up at the end of June 2017 to EGP 154m, up from EGP 68m at the end of December 2016—an increase of EGP 86m and 126%. This is in addition to savings in the provision of taxes of EGP 145m that will be included within profits during the year, as a result of the bank’s reconciliation with the Egyptian Tax Authority.
Fahmy said that the net income from the proceeds received amounted to about EGP 244m at the end of June 2017 compared to EGP 146m last year, an increase of EGP 98m and a growth rate of 67%.
He pointed out that the bank has succeeded in achieving these results by expanding its new customer base, conducting regular market studies to identify customer needs, offering complete product packages and banking services, issuing new products, reviewing existing products and rewriting and developing them.
He added that the bank has also succeeded in improving customer service and increasing the efficiency of distribution and communication channels by increasing the number of branches, improving the efficiency, and improving the performance of the current workforce through training and re-mapping the flow of operations.
He noted that the bank pays particular attention to small and medium-sized enterprises (SMEs) in accordance with the initiative of the Central Bank of Egypt (CBE) and in line with the state plan. The loan portfolio for these projects amounted to EGP 1.832bn on 10 July 2017 compared to EGP 150m only at the end of December 2011.
Fahmy also said that the bank gives priority to its clients in CBE’s initiatives, where it provided 100 clients with facilities of EGP 193m, next to approving facilities of EGP 81m to 88 clients that will be completed within a month.
Fahmy pointed out that facilities were granted under the initiatives of the CBE with a yield of 5% for small projects, which amounted to EGP 181m, noting that there are cases under study and approval worth EGP 68m.
According to Fahmy, the bank has adopted a new strategy in retail banking, under the name of retail banking for the development of society, pointing out that the bank has already started to activate that principle through several programmes, which have been put forward through many schemes, with more in the pipeline.
He said that the bank will finance the cost of connecting natural gas to 53,000 units with funding of EGP 87m. It is intended to finance linking drinking water to 60,000 homes soon at a cost of EGP 150m.
Regarding the real estate finance activity, according to CBE’s initiative, Fahmy said that the bank granted 1,688 low-, middle- and upper-middle-income clients EGP 167m according to the subsidised interest rate of about 7%, 8%, and 10.5% respectively, There are some more 1,000 cases under study that should receive funding of EGP 100m.
“The IDWBE has reconciled with the Egyptian Tax Authority to settle the tax and penalties of delay since 1995/96 amounting to about EGP 557m. The bank paid EGP 120m, which were deducted from the provision for this purpose amounting to EGP 265m. A further EGP 145m will be added to the bank’s profits in 2017,” Fahmy said.
Regarding the bank’s restructuring project, Fahmy explained that the bank has signed the Employee Restructuring Project in cooperation with PricewaterhouseCoopers (PWC). He said that this project aims to develop the system of work within the bank and put it in the ranks of developed banks to achieve a breakthrough in the coming period.
He added that the restructuring project is based on three axes, the most important of which are the functional restructuring of all sectors and departments of the bank, job analysis, and preparation of the job description, assessment of the career ladder, updating of the functional wages and job levels, the definition of an action plan to apply the new financial and functional grades, evaluation of workers through supervisors and interviews, design and prepare employee development plans and training programmes.
On another matter related to the development process, Fahmy revealed that the bank has prepared a strategic plan to complete the bank’s building in New Cairo before the end of 2018, according to an investment plan worth EGP 250m.
Fahmy explained that constructions worth EGP 66m have been completed last year. Another part worth EGP 59m will be completed throughout 2017, and the rest of the constructions worth EGP 125m will be completed in 2018. He noted that the bank has yet to decide how to benefit from this building based on a plan to develop the bank’s business.
He added that as a result of the ageing of programmes, servers, and computer systems during the past years and the need for the bank to support and develop the information technology sector to improve its own status during the coming period, it set an investment budget this year to complete a huge project to replace and renew servers and develop procedures security and protection of the banking system.