The total financial position of banks operating in Egypt increased by EGP 648.9bn in the first three quarters (1Q-3Q) of fiscal year (FY) 2019/20, to reach EGP 6.165trn. This reflects the time period between July 2019 and March 2020.
In a report released on Monday, the Central Bank of Egypt (CBE) indicated that the total capital of banks operating locally increased to about EGP 156.652bn in March 2020, compared to EGP 152.661bn in June 2019.
The total bank reserves recorded about EGP 263.132bn in March 2020, compared to EGP 236.065bn in June 2019. The volume of allocations in banks amounted to EGP 135.437bn in March, compared to EGP 122.272bn in June 2019.
The CBE added that the total investment by banks in securities and local treasury bills (T-Bills) rose during March 2020 to about EGP 2.374trn, compared to about EGP 1.766trn in June 2019.
The CBE’s monthly report revealed that the total deposits in the banking sector increased by EGP 119.7bn to EGP 4.426trn in March, compared to EGP 4.306trn in February 2020.
Government deposits alone increased by EGP 55,092bn to EGP 675.720bn in March, compared to EGP 620.628bn in the previous month. Non-government deposits amounted to EGP 3.750trn in March, compared to EGP 3.685trn in February, an increase of EGP 64.639bn.
Non-government deposits in local currency increased by EGP 52.747bn to EGP 3.103trn, while deposits in foreign currencies hiked by EGP 11.91bn to EGP 646.656bn.
Moreover, the CBE said the credit facilities granted to customers by banks operating in the local market reached about EGP 2.0202trn by the end of March 2020. This reflects an increase of EGP 165.9bn, or an average of 8.9%, during the period from July 2019 to March 2020.
The CBE attributed this rise to an EGP 120.8bn increase in the size of non-government credit facilities, or a rate of 9.2%. There was also a commensurate EGP 45.1bn increase in the size of facilities granted to the government, an average of 8.3%.
The CBE explained that the increase in balances granted to non-government entities came as a result of the increased volume of local currency facilities, which saw a rise of EGP 132.9bn. At the same time, facilities in foreign currencies decreased by EGP 12.1bn.
Credit facilities refer to loans granted by banks to their customers, in addition to letters of credit and guarantee to cover import operations.
The CBE indicated that the private business sector obtained about 58.9% of the total non-governmental credit facilities granted by banks to the various economic sectors.
It pointed out that the industrial sector has received the most funding from banks, as it alone received about 31.5% of the total of these facilities. This was followed by the services sector which accounted for 25.8% of them, then the trade sector with 10.6%.
The agricultural sector received the lowest percentage of credit facilities granted by banks, acquiring only 2% of facilities in March.
According to the CBE, other sectors, which were not mentioned in detail but including the household sector, received about 30.1% of the size of these facilities.
The CBE said that foreign investments in Egyptian T-Bills decreased by the equivalent of EGP 37.819bn in April to the equivalent of EGP 111.481bn. This compared to the equivalent of EGP 149.3bn reported in March.
Foreign investments in Egyptian government debt instruments have been declining since March, after a strong recovery since the beginning of 2019.
A CBE report had revealed that the total outstanding t-bills balance recorded EGP 1.574trn in April, compared to EGP 1.485trn in March.
Public sector bank t-bills investments recorded about EGP 468.14bn at the end of April 2020, compared to EGP 309.4bn at the end of March.
Private sector bank investments amounted to EGP 336.984bn in April, compared to EGP 330.892bn in March. At the same time, specialised bank investments recorded about EGP 32.835bn in April, compared to EGP 30.211bn in the previous month.
Investments made by foreign bank branches recorded about EGP 35.888bn in April, compared to EGP 36.353bn in March.
The CBE said the banking sector’s net foreign assets declined by the equivalent of EGP 171.5bn during 1Q-3Q FY 2019/20, comprising of EGP 90.4bn at banks and EGP 81.1bn at the CBE.
This comes at a time when the CBE indicated that the net domestic assets of the banking system increased by EGP 584.6bn in the same period, with a growth rate of 16.4%.