The Central Bank of Egypt (CBE) has revealed, in a monthly report issued on Thursday, the performance indicators for banks working in the Egyptian market at the end of the first half (H1) of 2020.
The CBE revealed that the volume of credit facilities granted by banks operating in the local market increased 18.7% to EGP 2.2trn by the end of June 2020. This amounted to an increase of EGP 346.1bn during the period from July 2019 to June 2020.
It attributed this increase to the EGP 215.3.5bn rise in the volume of credit facilities granted by banks to non-government bodies, at a rate of 16.4%. There was also an increase in the volume of facilities granted to the government by EGP 130.8bn, at a rate of 24.1%.
He explained that the increase in the funds granted to non-government bodies came as a result of the EGP 230.6bn increase in local currency facilities, while foreign currency facilities decreased by the equivalent of EGP 15.8bn.
Credit facilities include the loans granted by banks to their clients, in addition to documentary credits and letters of guarantee opened for them to cover import operations.
The CBE explained that the private business sector obtained about 60.2% of the total non-governmental credit facilities granted by banks to various economic sectors.
It pointed out that Egypt’s industrial sector ranked first among those sectors financed by banks, as it alone received about 32.1% of the total facilities. It was followed by the services sector, which acquired 25.5% of the finance, and then the trade sector with 10.7%.
The agricultural sector continued to obtain the lowest percentage of the credit facilities, acquiring only 2.1% of the volume of these facilities until the end of June 2020.
According to the CBE, there are other sectors, which he did not mention in detail, on top of which is the family sector, which received about 29.6% of the volume of these facilities.
The family sector acquired a large share of the loans provided by banks, with the share increasing on a daily basis. This follows the CBE’s decision to raise the maximum percentage of loan instalments to 50% of the borrower’s total income, instead of the previous 30%.
At the same time, the agricultural sector is still suffering from the weakness of financing provided to it, due to banks’ reservations regarding this sector. The exception to this general rule is the Egyptian Agricultural Bank (EAB), which specialises in financing and serving this sector.
In the same context, the CBE revealed an increase in the volume of deposits at banks during fiscal year (FY) 2019/2020, which ended last June. This saw a growth rate of 17.3% over the year to about EGP 4.7trn, compared to about EGP 4.007trn reported in June 2019.
The CBE stated that the volume of government deposits rose by EGP 131.816bn to EGP 744.39bn by the end of June 2020, compared to the EGP 612.57bn recorded at the end of June 2019.
Government local currency deposits were reported at about EGP 642.36bn by the end of June 2020 compared to EGP 537.15bn in the previous year. At the same time, government foreign currency deposits amounted to EGP 102.03bn, compared to EGP 75.42bn.
The CBE report added that the volume of non-governmental deposits increased by EGP 385.41bn during FY 2019/2020 to reach about EGP 3.956trn, compared to EGP 3.570trn in FY 2018/2019.
The report also noted that non-governmental deposits in local currency increased by EGP 380.09bn to EGP 3.281trn by the end of June 2020, compared to EGP 2.901trn by the end of June 2019.
Non-governmental deposits in foreign currency increased by EGP 5.32bn, to reach EGP 674.3bn by the end of June 2020, compared to EGP 668.98bn.
According to the CBE, the total financial position of banks came in at about EGP 6.408trn by the end of June 2020, compared to EGP 5.516trn by the end of June 2019.
Bank capital reached about EGP 173.701bn during H1 of 2020, compared to EGP 152.661bn at the end of June 2019.
In the same context, the CBE revealed a decline in the banking sector’s net foreign assets, equivalent to EGP 169.9bn during FY 2019/2020, to reach about EGP 130.214bn. This compared to the EGP 352.269bn recorded in the same period of 2019.
This comes at a time when the CBE has indicated that the banking sector saw an increase of EGP 854.1bn in net domestic assets during the period from July 2018 to June 2020, reflecting a growth rate of 23.7%.