The financial position of banks operating in the Egyptian market increased EGP 207bn to EGP 7.554trn in March 2021, compared to EGP 7.347trn in February 2021.
In a recent report, the Central Bank of Egypt (CBE) said that the capital of banks in the local market amounted to EGP 177.92bn in March, compared to EGP 174.7bn in February.
Meanwhile, the volume of free reserves amounted to EGP 347.826bn, and the balance of provisions for doubtful debts recorded EGP 165.588bn.
The CBE said that the volume of credit facilities granted by banks operating in the local market to their customers amounted to EGP 2.648trn in March 2021. It also pointed to an increase in the volume of these facilities by EGP 448.2bn within nine months, with a growth rate of 20.4%.
Credit facilities are the loans granted by banks to clients, along with documentary credits and letters of guarantee that they open to cover import operations.
The CBE attributed this rise to the increase of EGP 258.9bn in the volume of credit facilities granted by banks to the government, at a rate of 38.4%. This was also driven by the increase of EGP 189.3bn in the volume of facilities granted to non-government parties, at a rate of 12.4%.
It explained that the increase in the balances granted to non-government parties was the result of an increase in the volume of facilities in local currency, amounting to EGP 252.3bn. There was also an increase in facilities in foreign currencies, equivalent to EGP 6.6bn.
The CBE explained that the private business sector obtained about 59% of the total non-governmental credit facilities granted by banks to the various economic sectors.
He pointed out that the industrial sector received the most financing among the sectors financed by banks. It obtained about 30.1% of the total of those facilities, followed by the services sector, which acquired 25.1% of them, and then the trade sector by 10.8%.
The agricultural sector, as usual, obtained the lowest percentage of the volume of credit facilities granted by banks to the various economic sectors. It acquired only 2% of the volume of those facilities in March 2021.
According to the CBE, there are other sectors which were not mentioned in detail. They include the family sector, which obtained about 32% of the volume of those facilities.
The CBE announced an increase in the total lending balances granted by banks to their clients by EGP 73.109bn to record EGP 2.610trn in March 2021, compared to EGP 2.537trn in February 2021.
The balances of loans granted to the government amounted to EGP 910.026bn in March 2021, compared to EGP 861.566bn in February 2021, an increase of EGP 48.460bn.
Loans granted to the government in local currency increased by EGP 49.320bn, reaching EGP 636.914bn in March 2021. This compared to the EGP 587.594bn granted in February 2021.
Loans granted to the government in foreign currencies decreased by about EGP 86m to reach EGP 273.112bn in March 2021, compared to EGP 273.972bn in February 2021.
The total loans granted to non-government entities increased by EGP 24.649bn to reach EGP 1.700trn in March 2021, compared to EGP 1.675trn. Balances in local currency amounted to EGP 1.456trn in March, compared to EGP 1.428trn in February, an increase of EGP 28.108bn.
Loans granted to the agricultural sector amounted to EGP 32.158bn in March, compared to EGP 31.215bn in February. Loans granted to the industrial sector amounted to EGP 398.044bn in March, compared to EGP 395.554bn in February.
Loans granted to the trade sector scored EGP 169.871bn in March, compared to EGP 164.731bn in February.
Loans granted to unidentified sectors amounted to EGP 530.659bn in March, compared to EGP 518.182bn in February. Loans granted to the family sector recorded EGP 529.386bn in March, compared to EGP 516.939bn in February.
Foreign currency loan balances recorded EGP 244.078bn in March 2021, compared to EGP 247.537bn in February.
The loans granted to the household sector in foreign currencies amounted to EGP 8.305bn in March, compared to EGP 8.431bn in February.
On the other hand, the portfolio of securities and bank investments in Treasury bills (T-bills) recorded about EGP 2.838trn in March, compared to EGP 2.736trn in February 2021.
The CBE revealed that deposits in banks recorded about EGP 5.515trn in March. This reflected an increase of EGP 141.45bn, compared to EGP 5.374trn in February 2021.
It explained that government deposits recorded EGP 980.7bn in March, compared to EGP 945.8bn in February 2021.
Deposits were divided into EGP 851.5bn, in local currency, in March, and EGP 129.1bn in foreign currencies.
Non-governmental deposits recorded about EGP 4.535trn in March 2021, compared to EGP 4.428trn in February 2021.
Non-governmental deposits in local currency recorded about EGP 3.875trn, of which EGP 66.972bn were in the public business sector. A further EGP 493.6bn was recorded in the private business sector, EGP 3.299trn for the household sector, and EGP 15.4bn for non-residents.
Foreign deposits amounted to EGP 659.7bn in March 2021, of which: EGP 31.236bn were for the public business sector; EGP 169.04bn for the private business sector; EGP 444.8bn for the household sector; and EGP 14.661bn for non-residents.
Foreign and domestic assets
The CBE said that net foreign assets rose by EGP 155.3bn during the period extending from July 2020 to March 2021, to reach about EGP 277.391bn.
It explained that this increase is the result of an increase in net foreign assets in banks, equivalent to EGP 391bn, and net foreign assets at the CBE, equivalent to EGP 62.2bn.
It pointed out that the local assets of the banking system increased during the same period by EGP 437.8bn, or 9.9%. This was driven by the increase in domestic credit by EGP 336.4bn, at a rate of 6.9%. The negative balance of the net budget items decreased by EGP 101.4bn, at a rate of 23.6%.
The CBE explained that domestic credit rose as a result of an increase in net liabilities of the private sector by EGP 111.5bn, the household sector by EGP 97.2bn, the government sector by EGP 129.3bn, and the public business sector by EGP 1.6bn.