Country Financial Sector Profilesback

Financial Sector Overview

Economic Landscape

Over the last decade Egypt has witnessed an uprising and subsequent major events which significantly changed the political landscape. During this tumultuous decade, a number of Arab and western countries stepped in with bilateral loans and grants to the tune of 54 USD billion for the Arab Spring countries (Egypt, Morocco, Tunisia and Jordan). Pressure was building on the Egyptian currency with a gap between official and unofficial rates widening by as much as 20% in early 2016. The Government embarked on a number of structural reforms aimed at spurring the economy, enhancing the business environment, and promote a balanced and inclusive growth; the most prominent of which was a devaluation of the Egyptian pound in November 2016. Other reforms included subsidy removals and restructuring of the social safety net to counteract the impact of the structural reforms, given 28% of the population being below the poverty line. On the investment side, Egypt increased its infrastructure spend significantly. The implementation of reforms along with the gradual restoration of confidence and stability have started to yield positive results. In fiscal year (FY) 2018, real GDP grew at 5.3 %, compared to 4.2 % in FY 2017. The economic pickup is driven by public investments, private consumption, and exports of goods and services (such as oil, ICT and tourism). Meanwhile, inflation continued to ease, despite upward pressure from decreased subsidies and subsequent increases in energy costs and transport fares. Egypt is among the most-improved countries in the 2019 World Bank Doing Business report.

Overview of the Financial Sector

The Egyptian financial sector is considered one of the most mature and attractive markets in Middle East and North Africa (MENA) due to the availability and diversity of many financial institutions. The financial sector in Egypt comprises 38 banks and several non-bank financial institutions (NBFIs) which include: 36 insurance companies and 1 reinsurance company, brokerage houses, investment banks, asset managers, pension funds, factoring companies, leasing companies and 901 microfinance institutions (MFIs). Banks are regulated by the Central Bank of Egypt, while all NBFIs are regulated by the Financial Regulatory Authority (FRA). Although not included in the financial sector aggregate balance sheet, the Egyptian Post Office and the National Investment Bank, a specialized state-owned bank, perform functions which are linked to the financial sector. The Post Office accepts deposits and offers financial services along with e-Government payments from 4,000 branches spread all over Egypt, with 24 million customers and a balance sheet of 200 LE (Egyptian pound) billion (11.4 USD billion) as of June 2017. The National Investment Bank (NIB), is a quasi-government body which was established to finance national and social development projects with a total loan book of 266 LE billion or 15.2 USD billion, as of 2018.

Total capitalization of the domestic capital market registered 911 LE billion (52 USD billion, 22% of GDP), with 224 listed companies in the Egyptian Exchange (EGX) and average trading value of 40 USD million/day, as of June 2018. Capitalization of listed corporate bonds and securitized issues booked 6.1 LE billion (346 USD million, or 0.15% of GDP) as of June 2018. The Egyptian Financing Supervisory Authority (EFSA) is the integrated government agency that regulates the financial services industry in Egypt.

Banking Sector

Total assets of Egyptian banks booked 5.6 LE trillion (320 USD billion, 136% of GDP). Historically the sector has been dominated by the big four public sector banks: National Bank of Egypt (NBE), Banque Misr (BM), Banque du Caire and Bank of Alexandria (BoA), which captured a market share of more than 60%. In 2006, Bank of Alexandria was privatized through an 80% sale to Intesa Sao Paolo for a deal consideration of 1.6 USD billion. In 2019, the 3 remaining public sector banks capture a market share of around 44%. The largest private sector bank, the Commercial International Bank (CIB), total assets stood at 327 LE billion (18.7 USD billion) as of the third quarter of 2018, accounting for 6% of the market.

Egypt’s banking sector financial soundness indicators improved substantially compared to the period before the 2004-2008 first phase of the banking reforms. There were several pillars to the program which included restructuring of state-owned banks and non-performing loan, increased banking sector efficiency and capitalization, Basel III implementation, supervisory capacity upgrade and strengthening NBFIs. Domestic bank credit to the private sector to GDP stood at 28.5% while domestic credit by the financial sector reached 99 % of the GDP, as of end of 2017. In terms of financing extended by economic sector, credit to the agricultural sector (private and public sector in local and foreign currency) booked less than 1% of GDP, industry 10%, services (including trade) 11.7% and 6.3% to individuals as of end of November 2018. Credit to households grew at an average annual rate of 25% from June 2015 to June 2018.  Non-performing loans in the banking sector prior reforms stood at 17% in 2002, falling to 14.8% in 2008 and to 4.4% as of September 2018. Despite these banking performances during the last decade, more than half of the country remains unbanked and resorts to almost entirely cash transactions.  In order to modernize the national financial system and offer a greater range of services to its unbanked and underserved population, Egyptian banks are investing in financial technology and innovations. These include the implementation of internet and mobile banking, electronic payments systems and cybersecurity measures to protect consumers against financial fraud.

Financial Inclusion

Egypt has made financial inclusion as a priority during the last years. The country has adopted various programmes to widen the scope of cashless transactions through introducing electronic systems in several government entities. In parallel, several measures were taken to encourage bank account penetration which recorded 32.8 % of Egyptian adults in 2017.

Microfinance

The number of MFIs reached 901 as of June 2018, with a total lending portfolio of 15.6 LE billion and a total of 2.9 million borrowers in the second quarter of 2018. MFIs are classified into 3 tiers: tier A, the handful of large associations and corporate lenders with some access to bank finance eligible under the CBE’s Micro Small and Medium Enterprises (MSME) initiative windows and significantly large balance sheets (total lending of 8.6 LE billion as of June 2018 and 2.1 million borrowers); tier B lenders with balance sheets of between 10 LE million and 50 LE million (total lending of 610 LE million and 0.2 million borrowers); and Tier C which holds the balance of lending and borrowers and is widely distributed across a multitude of small and regional entities. The market is forecast to grow to a total lending size of 30.0 LE billion over the coming five years and 4 million active customers by the end of 2019. NGOs have the highest number of customers with a 63 % market share and 1.8 million customers, while enterprises (733,000 clients) and banks (342,000 clients) rank second and third respectively. However, the ranking is different in terms of total financing in the microfinance sector since banks granted 5.8 LE billion (325.8 USD million) making up 37.6 % of all the sectoral financing. In the second quarter of 2018, women constituted 70% of active customers. The overall growth of the microfinance industry is supported by the issuance of the FRA regulations, to regulate the work of investment funds in the microfinance industry, which encourages the establishment of a number of investment funds directing their assets to invest in the microfinance industry.

SME Finance

Bank credit to MSMEs rose from 6% of total lending in 2012 to close to 15% of total lending in June 2018. The ratio should reach 20% of total lending by 2020 as per CBE directions, under a four-year initiative to encourage bank lending to MSMEs. This initiative has several prongs including subsidized lending rates, reserve requirement relief, MSME loan guarantees, and a dedicated MSME unit within the CBE. In return, banks were allowed to reduce the level of mandatory reserves held with the CBE by the amount lent to SMEs. The CBE broadened the definition of SMEs to include more mid-sized firms and allowed financing from NGOs and international financial institutions to count towards banks’ mandatory portfolio allocation. Recent years have seen a dramatic turnaround in funding to the segment. A total of 67.6 LE billion (3.7 USD billion) had been disbursed under the CBE’s initiative by the end of 2017, up from 22.2 LE billion (1.2 USD billion) in 2016. Despite the host of reforms and initiatives launched which are a step in the right direction, there still are access to finance supply and demand bottlenecks. A number of capacity building and infrastructure upgrades both at borrower level for MSMEs and within banks remain necessary to remove these bottlenecks.

Digital Finance

North Africa have been slow to join the emerging mobile banking market but the situation is set to change into a more dynamic growth as the regions’ banks recognize mobile's potential to reach efficiently unbanked populations and propose new services. Being one of the largest telecom markets in Africa, mobile penetration rate in Egypt reached 105% in 2017. Currently, 10 out of the 38 banks operating in Egypt provide their customers with mobile banking services. Considering that only 32.8% of Egypt’s citizens have access to a bank account, but an estimated 98 % own a mobile phone, the scale of the financial inclusion opportunity associated with this market is very clear. Even if only 1.8% of adults in Egypt hold a mobile money account in 2017, 22.8% made and received digital payments the same year. Around 95% of transactions in the country are cash-based but progresses have been made recently to promote a “cashless society” through electronic payments: 17.6 million debit cards were issued by financial institutions in 2014 and the CBE approved a new version of the regulations for “Mobile Payment Services Regulations” in November 2016. The new regulations will allow banks’ customers to transfer or receive funds and remittances via their mobile accounts.

Remittances inflows

Egypt was the top remittances recipient country in Africa with 29 USD billion in 2018 (around 10% of the GDP) and the fifth in the world. Following the local currency (LE) flotation that took place in November 2016, remittances inflows significantly increased by 33% in 2017 and 19% in 2018; suggesting that the flotation and subsequent strong depreciation has prompted Egyptians to send more money home through the formal channels.

Insurance Sector

The Egyptian insurance industry is one of the oldest in the region but despite its long history, the market remains at a relatively nascent stage of growth compared to those in advanced economies. There are 37 insurance companies in 2018, including 14 life companies, 22 non-life companies and 1 reinsurance company. Takaful (Islamic finance insurance product) is proposed by 10 companies and represents 27% of the market. The distribution network involved (8632) individual and (68) corporate brokers, with a licensing renewable period of 3 years. In 2017, total insurance premiums amounted to 23.51 LE billion or 1.6 USD billion, an increase of 35% compared to 2016. Low penetration rate (0.7% of GDP in 2017) and modest insurance density demonstrate that there could be significant constraints on future growth. The Egyptian parliament recently approved a comprehensive 600 LE billion health insurance bill.

Stock Exchange and Capital Markets

Founded in 1883, Egypt’s stock exchange (EGX) comprises two exchanges, Cairo and Alexandria, governed by the same board of directors and sharing the same trading, clearing and settlement systems. EGX 30 Index is the major stock market index which tracks the performance of 30 most liquid stocks traded on the Egyptian Exchange. As of May 2019, the national market capitalization represented 17.7% of 2018 GDP and stood at 43.7 USD billion. Financial services account for 71% of the represented sectors. The stock market turnover slightly decreased from 16.68 USD billion in 2016 to 14.51 USD billion in 2017. EGX also witnessed 6 Initial Public Offerings (IPOs) in 2017 with a total value of 225 USD million, mainly characterized by 56 % foreign participation and significant level of oversubscriptions. NILEX, an initiative by EGX, is a stock market segment dedicated to SMEs. 33 companies are listed on NILEX, of which 29 have traded securities. Outside of the Johannesburg Stock Exchange (JSE), the EGX is currently exhibiting the second highest daily turnover across the African exchanges with a total of 72 USD million traded daily, compared to the JSE’s 1.8 USD billion. Egypt is also ranked third (after South Africa and Botswana) in the Africa Bond Market Development Index 2017 Ranking Report.

The outstanding balances of treasury bonds and bills in local currency owed by the government amounted to EGP 1.6998trillion by the end of 2017. The largest investors of treasury bonds and bills are banks operating in the Egyptian market. The government offers treasury bonds and bills on a regular basis to cover state budget deficit.

Bonds and bills are issued through 15 banks participating in the primary dealers’ system in the primary market, according to an agreement between the government and banks since 2014. Also, these banks sell a portion of these bonds and bills in the secondary market to individual investors as well as domestic and foreign institutions.

Egypt is the first destination of private equity investors in North Africa. The country respectively benefitted from 40% and 41 % Private Equity (PE) deals by volume and by value between 2013 and 2018; amounting to 65 PE deals with a combined value of 1.52 USD billion. Deal activity in Egypt has increased to 9 percent of total transactions in 2017 (2016: 6 percent). The increase has been driven by the rise in investor confidence following the devaluation of the Egyptian Pound in September 2016 and a series of regulatory reforms instituted in June 2017 that provide various investment incentives. Other economic reforms and a new investment regime have also improved the business environment, supporting foreign direct investment and improving the confidence of PE players.

Pension System

Egypt's social security system is administered by the National Organization for Social Insurance (NOSI) through two separate schemes – one covers government workers (civil servants, armed forces, police force, etc.) and the other, workers in the public and private enterprises, some self-employed, casual workers and Egyptians working abroad. Pension system assets in Egypt were around 6 USD billion in 2016 representing 1.78% of GDP.  In 2010, the parliament adopted a pension reform to replace the long prevailing pay-as-you-go-scheme. Egyptian reformers developed a hybrid multi-pillar model combining Notional (non-financial) Defined Contribution (NDC) Scheme with a Financial Defined Contribution (FDC) scheme. Starting 2013, new workers covered by the pension regime would designate between 65 and 80% of their pension contribution to the NDC scheme. The remaining 20 to 35 % would be dedicated to the FDC scheme. The contribution rate is set at 16.5 % of earnings for employees and 10 % of payroll for employers, with possibility of additional voluntary contributions.


Contact Details Information of Banks operating in Egypt

 BANKS   CONTACTS   WEBSITE 
 ADDRESS   TELEPHONE   EMAIL 
 AGRICULTURAL BANK OF EGYPT   GIZA, DOKKI   (+20) 33327201   pbdac@pbdac.com.eg   https://www.abe.com.eg 
 AL AHLI BANK OF KUWAIT    Building B227, Smart Village, Cairo-Alex Desert Road, Giza   (+20) 353 54 0000   info@ahliunited.com   http://www.abkegypt.com/ 
 BANQUE DU CAIRE   Maarouf, Qasr an Nile, Gouvernorat du Caire   (+20) 257 53 185   board30@bdc.com.eg   http://www.banqueducaire.com 
 BNP PARIBAS BANK   3 Latine America st. Garden City-Cairo   (+20) 27948324   bnppegypt@bnpparibas.com    http://www.bnpparibas.com/ 
 COMMERCIAL INTERNATIONAL BANK   Nile Tower Building 21/23
Charles de Gaulle Street
11th Floor
Giza Area
2430
 
 (+20) 3747-2000   cib.customercareunit@cibeg.com   https://www.cibeg.com/ 
 ARAB AFRICAN INTERNATIONAL BANK    Midan El Saray El Koubra,Garden City, Cairo   (+20)  24886679     inquiry@aaib.com   https://aaib.com/ 
 EGYPTIAN ARAB LAND BANK   Building
Gameat El Dowal El Arabeya Street 78
Al Dokki 
 (+20) 3338 3691   eal@eal-bank.com   www.eal-bank.com 
 EGYPTIAN ARAB REAL ESTATE BANK   78 Gameet El Dowal El Arabeyya st.- Mohandeseen- Giza   (+20) 33383579   mortgage@eal-bank.com    http://www.eal-bank.com 
 SUEZ CANAL BANK   9 Abdel Kader Hamza St., Garden City, Cairo, Egypt. P.O.BOX 11516   (+20)  2794 2714    Int-div@scbank.com.eg    www.scbank.com.eg/indexEn.aspx 
 CREDIT AGRICOLE EGYPT    4 / 6 Hassan Sabri st. - Zamalek
Le Caire - Egypte 
 (+20) 27380126     https://www.ca-egypt.com/en/personal-banking/ 
 (+20) 26050560 
 NATIONALE SOCIETE GENERALE BANK   5, Champollion St.

Down Town Cairo
 
 (+20) 25749376     https://www.societegenerale.com/en/search/site/egypt 
 CITIBANK    Al Mesallah Sharq, Qesm Al Attarin, Alexandrie    (+20)3 4844206   ashish.bhugra@citi.com   www.citibank.com/egypt/homepage/home.htm 
 NATIONAL BANK OF EGYPT   NBE Tower, 1187 Corniche El Nil St., Boulak, Cairo.   (+20)  25945000   enquiries@nbeuk.com   www.citibank.com/egypt/homepage/home.htm 
 BANK OF ALEXANDRIA   49 Kasr El Nil St., Downtown, Cairo   (+20) 2391-3822   CRS@Alexbank.com   https://www.alexbank.com/ 
 BANQUE MISR   151 Mohamed Farid St., Downtown, Cairo   (+20) 02 02 23 91     www.banquemisr.fr/ 
 ARAB BANK PLC   35 Abdel Khalek Tharwat St., Downtown, Cairo   (+20)  2397 02 02   dmagdy@arabbank.com.eg   www.arabbank.com.eg/ 
 EXPORT DEVELOPMENT BANK OF EGYPT   Building 108
Mohy El Din Abou El Ezz Street


 
 (+20) 3761-9006     www.ebebank.com/ 
 HSBC BANK EGYPT   306 Corniche El Nil St. Maadi, Cairo   (+20)  2614 9500    ibcegypt@hsbc.com   https://www.hsbc.com.eg 
 BARCLAYS BANK    12 Al Sheikh Youssef Sq., Garden City, Cairo   (+20) 2366 2620     https://www.home.barclays/about-barclays/around-the.../egypt 
 INDUSTRIAL DEVELOPMENT BANK   2, Abdel-qader Hamza Street, Cairo Center Building -Garden City, Cairo   (+20) 2793 4110   rch@idbe-egypt.com    http://www.idbe-egypt.com 
 SOCIETE ARABE INTERNATIONALE DE BANQUE   56, Gameat El Dewal Al Arabia St., Mohandessin, Giza   (+20) 33325270   customer.care@saib.com.eg   http://www.saib.com.eg/ 
 BLOM BANK EGYPT   61 Ninety St.-El Tagamo' El Khames-New Cairo
P.O.Box: 410 El Tagamo' El Khames 
 (+20) 33322770   blomcallcenter@BLOMBankEgypt.com   https://www.blombankegypt.com 
 EMIRATES NBD   Plot 85, El-Tesseen Street, New Cairo   (+20) 27265000   bnppegypt@bnpparibas.com   www.emiratesnbd.com.eg 
 QATAR NATIONAL BANK AL AHLI   1 El Mahatta Sq.

Maadi, Cairo 
 (+20) 27680000   QNBIndia@qnb.com   http://www.qnbalahli.com 
 MISR IRAN DEVELOPMENT BANK   The Nile Tower - 21 Charles Degaulle Ave. (Ex. Giza St.)Giza P.O.   (+20) 3572 7311   midb@midb.com.eg   http://midb.com.eg 
 BANK AUDI   Building
Cairo-Alexandria Desert Road
Pyramids Heights Office Park
757 
 (+20) 3531 3300   contactus.egypt@bankaudi.com.lb   www.bankaudi.com.eg 
 AHLI UNITED BANK   81 El-Tesseen Street
Sector A, Fifth Settlement 
 (+20) 22499500   Egypt.CallCenter@AhliUnited.com   https://www.ahliunited.com/ 
 FAISAL ISLAMIC BANK OF EGYPT   149, El-Tahrir Street

Galla Square - Dokki

Giza 
 (+20) 37621285   giza@faisalbank.com.eg   http://www.faisalbank.com.eg/ 
 HOUSING AND DEVELOPMENT BANK   12, Syria St., Mohandeseen, Giza   (+20) 37492013     www.hdb-egy.com 
 AL BARAKA BANK   60, Mohie Elddin Abu Elezz Street,
P.O. Box 455,
Dokki, Giza 
 (+20) 37481222   centeral@albaraka-bank.com.eg   https://www.albaraka.com/ 
 NATIONAL BANK OF KUWAIT   5th Settlement
New Cairo, Plot 155
229 
 (+20) 26149300     www.nbk.com.eg 
 ABU DHABI ISLAMIC BANK   9A Rostom Street, Garden City   (+20) 2231 9951   ADIBEgypt@adib.ae    https://www.adib.eg/ 
 UNION NATIONAL BANK EGYPT   Ever Green Building, Down Town 10 Street Talaat Harb   (+20) 25780702      http://www.unb-egypt.com 
 EQYPTIAN GULF BANK   El Orman Plaza Building
8,10 Ahmed Nessim St., Giza 
 (+20) 23317776   info@egbbank.com.eg   www.eg-bank.com 
 NATIONAL BANK OF ABU DHABI   143, Banks Zone, New Cairo,
P.O. Box 278, Fifth Settlement, Cairo 11835 
 (+20) 24075000   ir@bankfab.com   https://www.nbad.com/ 
 MASHREQ BANK   Zone 1,1A,10,11,12 Plot 72 Al Mahaad Al Eshteraky Street - Heliopolis   (+20) 24529303   rafikkh@mashreqbank.com   https://www.mashreqbank.com/ 
 NATIONAL BANK OF GREECE   32, Haroun str., Mesaha Sq. - Dokki, Giza   (+20) 33312400   nbg-cairo@nbg.com.eg   http://www.nbg.com.eg/en/ 
 ARAB INTERNATIONAL BANK   35 Abdel Khalek Sarwat Street

PO Box 1563

Cairo,  11511 
 (+20) 23918794   arinbank@mst1.mist.com.eg   https://www.aib.com.eg/ 
 ABC BANK   1, El Saleh Ayoub St., Zamalek, Cairo    (+20) 27362684   abcegypt@bank-abc.com   https://www.bank-abc.com/ 
 ATTIJARIWAFA BANK    Al Kasr Al Aini, Qasr Ad Dobarah, Qasr an Nile   (+20) 23662715   yourvoice@attijariwafa.com.eg.   http://www.attijariwafabank.com 
 PRINCIPAL BANK FOR DEVELOPMENT AND AGRICULTURAL CREDIT    110 El Kasr El Ainy st.- Cairo   (+20) 27951229   pbdac@pbdac.com.eg   http://www.pbdac.com.eg 
 NATIONAL BANK OF OMAN   133 /135 Abdul Azziz Fahmy st. Heliopolis   (+20) 22900154   ask@nbo.co.om    http://www.nbo.co.om 
 PIRAEUS BANK EGYOPT   10 Talaat Harb st.- Cairo   (+20) 25778933      http://www.ecb.com.eg/ 
 SCOTIA BANK   3 Ahmed Neseem st.- Giza   (+20) 33365734    bnscairo@menanet.net    http://www.scotiabank.com 
 THE UNITED BANK   106 El Kasr El Ainy st.- Cairo Center Tower- Cairo   (+20) 33326000   theubeg@theubeg.com   http://www.theubeg.com 
 AL WATANY BANK OF EGYPT    13 El Themar st.- Gamaet el Dowal El Arabeyya- Mohandeseen- Giza   (+20) 33358551   service.quality@alwatany.net    http://www.alwatany.net 
 TOTAL                         42          

 

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At a Glance

At a Glance Source
Population in thousands (2017): 97,553.15
GDP per capita (current US$) 2017 - World Average 10,721.61: 2412.73
Account (%) age 15+) - (2014 vs 2017): 14% | 33%
Agriculture Orientation Index - Credit ( Agriculture, Forestry and Fisheries share of GDP) (2015 vs 2016): 0.10 | 0.09
Financial Inclusion Strategies: n/a
Domestic credit provided by financial sector (% of GDP) 2017: 99.05
Made or received digital payments in the past year (% age 15+) (2014 vs 2017): 8% | 23%
Remittances % of GDP for 2017: 0.055
Mortgage Interest Rate / Mortgage Term (years): 6% | 20

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