Strong growth predicted for Egypt's lending sector in 2011

Jan 19, 2011

Analysts predict that Egypt's lending sector will experience strong growth in 2011, after the economy successfully withstood the financial crisis.

"The Financial Sector Reform Program (2004-08) helped the domestic financial system to weather the global financial crisis, forcing banks to strengthen their capital and clean up non-performing loans (NPLs)," Sayem Ali, Economist with Standard Chartered Bank, told Gulf News.

The growing financial confidence and strong economic indicators, coupled with stable interest rates, should boost bank lending, the news source reports.

According to a document released by Pharos Holding Investment Bank, the aggregate NPL ratio of banks was down marginally to 14.7 percent in 2009 from 14.8 percent in 2008, while banks' risk-weighted capital increased to 15.3 percent from 14.7 percent in the same period.

Furthermore, Youssef Botrous-Ghali, Egyptian Finance Minister, announced in a speech last week at parliament that the economy is expected to grow by 6.5 per cent in 2011, Le Progrès Egyptien newspaper reports.