The Central Bank of Egypt (CBE) recently released the key financial soundness metrics for Egyptian banks as of the end of 2023.
According to a new report, CBE noticed a decline in the non-performing loan ratio to 3% at the end of 2023, down from 3.3% in the previous two quarters and 3.5% in the first quarter.
Non-performing loans accounted for 2.4% of total lending among Egypt’s ten largest banks, with the top five institutions reporting a lower percentage of 2.2%.
According to the report, banks plan to set up provisions for 88.7% of their total non-performing loans by December 2023, up from 88.6% at the end of September. The coverage ratio was greater among the ten largest banks, at 95.2%, with the top five reaching 100%.
According to the CBE, banks have set aside EGP 346.922 billion for anticipated loan losses by the end of the year, with the ten largest banks accounting for EGP 264.464 billion. “The five largest banks set aside EGP 231.231 billion.”
Furthermore, banks have amassed reserves of EGP 476.473 billion. The top ten banks own EGP 376.826 billion in reserves, while the five largest banks have EGP 324.416 billion.
Customer Deposits
According to the CBE, total client deposits at banks would rise to roughly EGP 10.137 trillion by December 2023, up from EGP 9.765 trillion at the end of September, representing an increase of EGP 372 billion. The ten largest banks had EGP 7.885 trillion in deposits, accounting for 77.78% of the total, while the five largest banks accounted for 68.41%, with EGP 6.935 trillion.
At the end of the year, banks had a deposit-to-asset ratio of 71.5%, up from 66.3% in September. The percentage was 70.9% at the ten largest banks and 70.8% at the five largest.
The CBE reported a decline in the average real liquidity ratio in local currency to 36.8% in December from 38.5% in September. This percentage was 35.4% for the ten largest banks and 34.3% for the top five.
The actual liquidity ratio in foreign currencies also fell to 67.5% from 69.9%. At the 10 largest banks, this ratio was 66.4%, and at the five largest, it was 63.5%.
Total Financial Position
The CBE said that the entire financial position of banks in the local market is expected to reach EGP 14.2 trillion by the end of 2023.
On the asset side, cash holdings reached EGP 116.385 billion, local bank balances were EGP 2.606 trillion, and foreign bank balances were EGP 323.372 billion. Customers’ loans and debit balances amounted to EGP 5.462 trillion, while the securities portfolio and treasury bill investments were EGP 5.183 trillion. Other assets, not listed by the CBE, totaled EGP 508.073 billion.
Liabilities included bank capital at EGP 410.877bn, reserves at EGP 476.473bn, and allocations balance at EGP 346.922bn. Local interbank obligations were EGP 781.917bn, obligations to foreign banks were EGP 429.275bn, and total deposits stood at EGP 10.137trn. Bonds and long-term loan balances were EGP 566.388bn, with other liabilities not specified in detail by the CBE.
Net Profit
Banks in the Egyptian market reported robust activity in 2023, culminating in net profits of EGP 283.388bn. The top 10 banks accounted for approximately 74.92% of this total, amassing about EGP 212.315bn, while the five largest banks held about 61.24%, totaling EGP 173.557bn.
Leading the list of these banks were NBE, CIB, Banque du Caire, QNB Alahli, Credit Agricole – Egypt, Faisal Islamic Bank of Egypt, and HDB.
The CBE stated that net bank revenue was EGP 582.497bn, net activity revenue was EGP 686.161bn, and total expenses were EGP 402.773bn.
For the 10 largest banks, net revenue was EGP 448.143bn, net activity revenue was EGP 521.588bn, and total expenses were EGP 309.273bn.
The five major banks reported a net revenue of EGP 376.799bn, net activity revenue of EGP 436.413bn, and total expenses of EGP 262.856bn as of the end of December.
