The Chairperson and Chief Executive Officer of Banque du Caire Tarek Fayed, said that the bank is ready to be floated on the Egyptian Exchange (EGX) at any time, following the completion of its restructure and achieving strong results by the end of the first half (H1) of this year.
The government announced earlier that it plans to raise a stake in Banque du Caire on the EGX, as part of its plan to float shares of public companies and banks on the stock exchange to raise between EGP 6bn and EGP 8bn per year, which is part of the economic reform programme that the government embarked on in agreement with the International Monetary Fund (IMF).
In February 2018, the EGX approved the listing of shares of Banque du Caire with a capital of EGP 2.25bn distributed to 562.5m shares at a nominal value of EGP 4 per share.
According to Fayed, the timing of the float and the stake to be offered have not been set yet, highlighting the coordination between the bank’s board of directors, its owner (Misr Financial Investment Company owned by Banque Misr), the Central Bank of Egypt (CBE), and the Ministry of Finance.
“We hope that the conditions of the financial markets will improve globally and locally so that the IPO process will take place as soon as possible,” he added.
Fayed ruled out any impact on the bank’s employees, saying that the administration is working to ensure the rights of all 7,500 workers along with granting them incentives.
He was officially appointed as chairperson of Banque du Caire in January 2018, along with two deputy chairperson, Amr El-Shafei and Hazem Hegazy.
According to Fayed, since the administration took over; they have been working on internal restructuring of the bank’s departments, raising the operational efficiency of all employees and strengthening them with some expertise to achieve an advanced position in the Egyptian market, commensurate with the size and position of the bank.
Fayed said during the press conference held last week that the bank has developed new departments to raise its efficiency and provide the best competitive banking services within the banking sector, including the establishment of an international banking sector, aiming at introducing innovative banking solutions to customers in the field of liquidity management, foreign trade, addressing different segments of retail banking customers.
According to Fayed, Banque du Caire will soon start providing wealth management services to clients.
“Banque du Caire has an ambitious strategy to expand in all banking sectors, contributing to financial inclusion and new customer segments,” Fayed said.
The bank plans to open 25 new branches at the beginning of 2019. The bank also plans to add 20 to 25 branches annually over the next three years. The number of ATM machines is planned to reach 1,000 machines by the end of 2019.
“Digital banking services are a top priority for Banque du Caire’s strategic plan this year. The bank plans to launch the Internet and mobile banking at the beginning of 2019. It is currently studying the expansion of advanced digital banking services, along with the possibility of using blockchain to improve services,” he added.
He explained that the introduction of these products comes in line with the strategy of the CBE to promote digital banking services at the banking sector, because of its impact on the expansion of financial inclusion.
Fayed affirmed that the expansion plan of Banque du Caire will not only be at the local level, but will also extend to external expansion. He pointed out that the bank is opening a representative office in the UAE before the end of this year, in order to expand business in the UAE and Gulf countries. The bank is also currently restructuring the Cairo International Bank in Uganda.
“Over the past years, Banque du Caire has played a major role in the area of social responsibility and sustainable development. The bank’s strategy is not only to provide banking services to customers, but also to take into account the community dimension in all policies and procedures,” he noted.
He added that the bank is always working to increase the annual financial allocation that is directed to support social responsibility initiatives in various sectors, especially education, health, nutrition, medical and scientific research, village development initiatives and others.
Banque du Caire is one of the largest banks operating in the Egyptian market with assets of EGP 150bn and a market share of 4%. It operates through 220 branches and 700 ATMs to serve 2.1 million clients.
According to Fayed, the strategy of the bank aims to boost its market share to 6% of the total assets of the Egyptian banking sector within five years.
The results of Banque du Caire during H1 2018 revealed a leap in its financial indicators. The bank’s total pre-tax profits rose to EGP 2.2bn by the end of June 2018, compared to EGP 1.5bn by the end of June 2017.
The bank’s net profit for H1 2018 rose to EGP 1.2bn, compared to EGP 827m in H1 2017, compared to EGP 808m during the year that ended 31 December 2017, with a return on equity of 42%.
According to Fayed, the profits achieved by the bank during H1 2018 are characterised by operating profits resulting from the expansion of the bank in all banking activities, pointing out that it was the result of unprecedented effort for all employees of the bank. It also clearly reflects the great effort exerted by the national banks and the banking sector in supporting the Egyptian economy and the efficiency and ability of these banks to overcome all difficulties and obstacles to reach unprecedented results.
Fayed pointed out that net income from the end of H1 2018 rose to EGP 2.7bn compared to EGP 2.2bn in H1 2017, an increase of 24%, as a result of the increase in the volume of business.
Net return on equity increased to 4.1% compared to 3.5%. Net income from fees and commissions rose to EGP 467m against EGP 400m at an increase of 17%.
“Banque du Caire managed to increase its total loan portfolio during the first six months of 2018 by 13% to reach EGP 50.5bn compared to EGP 44.5bn at the end of 2017. In line with the bank’s strategy to expand the financing of labour-intensive projects, which contribute to the creation of export opportunities, in addition to financing national projects and infrastructure,” Fayed said.
He pointed out that the bank’s loan portfolio was characterised by diversification. The credit portfolio increased from EGP 19.9bn to EGP 24.2bn, a growth rate of 22%.
According to Amr El-Shafei, deputy chairperson, the bank’s new management has been responsible for restructuring the bank’s credit department and supporting some cadres, as well as adopting a new policy on granting loans that does not depend on participation in syndicated loans only.
He explained that about 60% of the bank’s total loan portfolio was syndicated loans, but that figure has now fallen significantly.
According to El-Shafei, about EGP 28bn of the bank’s total loan portfolio was injected directly, while some EGP 7bn were indirect.
El-Shafei noted that there are 100 companies that requested loans, which are being studied by the bank now.
The financial indicators of Banque du Caire also showed an increase in the volume of loans to small and medium-sized enterprises (SME) during H1 2018 at EGP 769m, an increase of 57%.
According to Fayed, these projects represent the nerve of the national economy, for its ability to achieve growth and provide employment opportunities, commensurate with the policy of the state and the directions of the CBE to achieve sustainable development, pointing out that Banque du Caire has the expertise to exceed locally and regionally to finance these projects.
He added that the bank also succeeded in increasing the volume of micro-loans by EGP 1bn in H1 2018, marking an increase of 45% compared to the same period of 2017.
The CBE’ Governor Tarek Amer said in previous statements that he has high hopes for Banque du Caire in supporting micro enterprises.
Amer pointed out that the CBE aims to have strong banks specialised in financing these projects in the Egyptian market, similar to the international banks specialised in this field, pointing out that Kenyan Equity Bank has done this 10 years ago.
According to Fayed, Banque du Caire holds 25% of this microfinance activity in the Egyptian market, with a direct financing portfolio of EGP 3.7bn and a customer base of more than 192,000 customers.
He stressed that the bank is keen to expand microfinance, based on the leadership it has achieved in this field, which extends for more than 16 years, noting that the micro-projects financed by the bank contributed to the provision of about 700,000 jobs and a sustainable production project.
“Banque du Caire has succeeded in diversifying the corporate loan portfolio and expanding in all sectors and geographical regions. About 14% of the bank’s new customer portfolio was added during the first six months of 2018, especially the facilities granted to companies in the form of direct financing of working capital,” he explained.
He added that during H1 2018, the bank also succeeded in increasing new customers in the field of SMEs by 25% and increasing the number of customers of micro-enterprises by about 25%.
Fayed pointed to the success of the bank in boosting the size of the mortgage finance portfolio to EGP 1.4bn. He pointed out that the number of clients benefiting from the mortgage finance initiative launched by the CBE for about 17,000 customers is expected to reach EGP 1.7bn by the end of 2018, with growth of 90% over 2017.
He pointed out that the bank granted about 4,131 beneficiaries’ loans worth EGP 375m during H1 2018, a growth rate of 41% compared to the end of 2017.
As part of the bank’s keenness to develop its technological infrastructure, Banque du Caire also cooperated with Temenos to develop the bank’s core banking system.
According to Hazem Hegazy, deputy chairperson, the bank’s plan aims to provide distinguished services to satisfy all customers, noting that all employees of the bank are trained to provide these services in the best manner.
He added that the bank’s depositors are also identified, offering a package of products and services suitable for each segment.
“Banque du Caire is aiming to achieve a major start in the financing of small and medium-sized enterprises, as the bank has enormous capabilities to launch in the service of this important sector,” he said.
Hegazy explained that there is permanent coordination with the branches in this regard, and establishing special funding centres for these projects.
With regard to microfinance, Hegazy explained that 100 employees have been appointed to finance these projects, the largest allocated to these projects in banks operating in the Egyptian market as a whole, which indicates the interest of the bank in these projects, because of their great role in serving the economy and eroding unemployment and improving the living conditions of citizens.