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 USD 54 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, rising from 128th in 2017 to 120th in Doing Business in 2019.

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 LE (Egyptian pound) 200 billion (USD 11.4 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 LE 266 billion or USD 15.2 billion, as of 2018.

Total capitalization of the domestic capital market registered LE 911 billion (52 USD billion, 22% of GDP), with 224 listed companies in the Egyptian Exchange (EGX) and average trading value of USD 40 million/day, as of June 2018. Capitalization of listed corporate bonds and securitized issues booked LE 6.1 billion (USD 346 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 LE 5.6 trillion (USD 320 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 USD 1.6 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 LE 327 billion (USD 18.7 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 LE 15.6 billion (USD 876.3 million) 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 LE 8.6 billion (USD 483.1 million) as of June 2018 and 2.1 million borrowers); tier B lenders with balance sheets of between LE 10 million and LE 50 million (between USD 0.6 million and USD 2.8 million), a total lending of LE 610 million (USD 34.3 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 LE 30.0 billion (USD 1.7 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 LE 5.8 billion (USD 325.8 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 LE 67.6 billion (USD 3.7 billion) had been disbursed under the CBE’s initiative by the end of 2017, up from LE 22.2 billion (USD 1.2 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 LE 23.51 billion or USD 1.6 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 LE 600 billion (USD 40.8 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 USD 43.7 billion. Financial services account for 71% of the represented sectors. The stock market turnover slightly decreased from USD 16.68 billion in 2016 to USD 14.51 billion in 2017. EGX also witnessed 6 Initial Public Offerings (IPOs) in 2017 with a total value of USD 225 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 USD 72 million traded daily, compared to the JSE’s USD 1.8 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 LE 1.7 trillion (USD 115.7 billion) 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 USD 1.52 billion. Deal activity in Egypt has increased to 9% of total transactions in 2017 (2016: 6%). 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 - 2018

BANKS

ADDRESS

PHONE

EMAIL

WEBSITE

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/

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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Source

At a Glance

At a Glance Source
Population in thousands (2019): 100,388.07
GDP per capita (current US$) 2019 - World Average 10,721.61: 3020.03
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: 0.101
Mortgage Interest Rate / Mortgage Term (years): 7% | 15

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