The National Bank of Egypt (NBE) aims to increase its assets to EGP 1.5tn by the end of June 2018, compared to about EGP 1.364tn at the end of June 2017, according to Yehia Abu El-Fotouh, vice chairperson of the bank.
Abu El-Fotouh told Daily News Egypt that the bank is looking forward to achieving this goal through increasing its deposits and loans.
The general assembly of the NBE met on Tuesday to approve the financial statements of the bank for the fiscal year (FY) that ended in June 2017.
The bank’s business results revealed a hike in its assets, recording EGP 1.3645tn in FY 2016/2017 compared to about EGP 703.3bn at the end of FY 2015/2016, an increase of EGP 660bn.
The NBE achieved a 15% growth in its pre-tax profit to reach EGP 22.5bn at the end of FY 2016/2017, while the net profit after taxes reached EGP 13.4bn, an increase of 8% compared to 2015/2016.
According to Abu El-Fotouh, the bank seeks to maintain this level of profit during the current fiscal year, in light of the challenges that the market has been witnessing since the liberalisation of the exchange rate, including the high cost of deposits at the bank.
In November 2016, the NBE offered two savings certificates, a three-year certificate with an interest rate of 16% and another 18-month certificate with an interest rate of 20%, to attract more liquidity from the market and reduce high inflation rates.
The NBE savings certificates also aimed to prompt customers to sell their liquidity in foreign currency to the bank following the floatation of the pound.
The NBE collected EGP 451bn worth of investments from its savings certificates up to mid-January 2018.
Meanwhile, the bank revealed that its small- and medium-sized enterprises (SME) portfolio reached EGP 35.7bn in June 2017 compared to EGP 24.5bn in June 2016, a growth of about 45%.
The SME portfolio offered EGP 10bn to these projects under the Central Bank of Egypt (CBE)’s initiative to support SMEs, benefiting about 11,000 customers.
According to Abu El-Fotouh, the bank seeks to increase its loans for SMEs to EGP 40bn by the end of June 2018.
This came in line with the bank’s belief in the vital role played by SMEs in achieving integrated and balanced economic development, and reducing unemployment.
Regarding the major corporate sector, the bank increased its loan portfolio for these companies by EGP 156.7bn in FY 2016/2017, to reach EGP 325.3bn.
According to Abu El-Fotouh, the bank aims to increase its major corporate loans portfolio to EGP 350bn by the end of June 2018.
Bloomberg International named the NBE as the best bank in the Egyptian and African banking markets for the syndicated loans that the bank managed and marketed as a finance agent in 2017.
With regard to the bank’s non-performing loans portfolio, the NBE signed settlement agreements worth EGP 6.6bn with 291 financially-troubled customers. The bank offered additional funding to help other customers overcome their financial crises after conducting detailed studies.
Abu El-Fotouh said that the ratio of non-performing loans to total loans fell to 2.1% in June 2017 compared to 2.3% in June 2016. The bank aims to reduce this ratio to 1.5% by the end of June 2018.
NBE deposits rose to EGP 861.7bn at the end of June 2017 compared to EGP 558.6bn at the end of June 2016, an increase of more than EGP 300bn. The bank’s deposits reached EGP 900bn in mid-December 2017.
According to Abu El-Fotouh, the bank targets a EGP 1tn deposit portfolio by the end of the current FY in June 2018.
He said the bank aims to increase the number of its branches to 430 by the end of June 2018 compared to about 413 branches currently.
The NBE increased its ATMs to about 3,507 in June 2017, an increase of 774 machines compared to June 2016.
According to Abu El-Fotouh, the number of NBE’s ATMs reached about 3,800 currently, and the bank aims to increase it to 4,000 by the end of the current fiscal year, as part of a strategic plan to provide various alternatives for a variety of banking operations.
The NBE concluded a number of agreements with foreign financial institutions that may exceed $1bn.
The bank is currently in talks with foreign institutions to sign similar agreements worth $500m. The negotiations are expected to be completed before the end of the current fiscal year.
With regard to the bank’s social responsibility, Abu El-Fotouh said that the NBE focused on supporting three main axes: the health and education sectors, development of slums, and combating poverty.
He pointed out that the NBE’s total contributions in FY 2016/2017 amounted to about EGP 973m, a growth of 97% compared to FY 2015/2016. The bank target the same volume of donations by the end of the current fiscal year, Abu El-Fotouh said.
With the aim to support the bank’s expansion plans and to create future skilled employees, the NBE provided about 1,500 new job opportunities during the FY 2016/2017.