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The Central Bank of Egypt (CBE) revealed that the total financial position of banks operating in the local market increased to EGP 10.037trn in the first half (1H) of 2022, from about EGP 9.413trn in the second quarter (2Q) of 2022, an increase of about EGP 624bn.
In its quarterly report on financial soundness indicators of banks in Egypt, the CBE has announced that on the assets side, cash balances in banks in June 2022 amounted to EGP 76.532bn, and the balances of banks locally increased to about EGP 1.608trn, and amounted to EGP 222.074bn abroad.
It added that the lending and discount balances recorded about EGP 3.564trn, while the portfolio of banks’ investments in securities and treasury bills recorded EGP 3.739trn.
In terms of liabilities, the CBE explained that banks’ capital amounted to EGP 234.69bn; reserves recorded EGP 428.928bn, while allocations amounted to EGP 219.589bn.
The liabilities of banks towards each other in Egypt amounted to EGP 303.226bn, while their liabilities to banks abroad recorded EGP 219.252bn, and the total deposits amounted to EGP 7.353trn. The balances of bonds and long-term loans amounted to EGP 371.388bn.
Non-performing loans
The CBE said that the non-performing loans to the total loan portfolio ratio decreased to 3.2% in the Egyptian banking market in June 2022, compared to 3.3% in March 2022.
The CBE said that the percentage of non-performing loans amounted to 2.4% of the total loans in the top 10 banks operating in the Egyptian market, and reached 1.9% in the top five banks.
The CBE indicated that banks made 92.1% of their total non-performing loans in June 2022, compared to 92.3% in March 2022, and the percentage of these allocations reached 100% at the top 10 and five banks operating in the Egyptian market.
“The volume of allocations that banks made to face doubtful debts amounted to about EGP 219.589bn in June 2022, and the share of the top 10 banks of these allocations was EGP 159.801bn, while the volume of allocations in the top five banks amounted to EGP 136.012bn,” said the CBE.
It added that the banks formed reserves worth EGP 428.928bn, of which the share of the top 10 amounted to EGP 310.148bn, while the volume of reserves at the top five banks amounted to EGP 275.165bn.
Loans-to-deposit ratio
The CBE said that the loan to deposit ratio in banks operating in the Egyptian market decreased to 48.6% in June 2022, compared to 49.3% in March 2022, and this ratio amounted to 49.5% at the top 10 banks, and 50% at the top five.
The CBE explained that the ratio of loans to deposits in local currency decreased to 45.5% in June, compared to 46.1% in March, and this percentage reached 45.5% at the top 10 banks, and recorded 45% at the top five.
The ratio of loans to deposits in foreign currencies in banks also declined to 66.8% in June, compared to 68.4% in June. This ratio was recorded at 73.9% at the top 10 banks, and 83.4% at the top five.
“The private sector accounted for 58.1% of the total loans granted by banks to their clients until the end of June 2022, compared to 57.3% in March 2022,” said the CBE.
It explained that the private sector acquired 49.8% of the total loans at the top 10 banks, and 45.6% of the loans at the top five.
Deposits
The CBE said that the total deposits in banks jumped to about EGP 7.353trn in June 2022, compared to EGP 6.961trn in March 2022, an increase of about EGP 392bn. It pointed out that the top 10 banks account for EGP 5.704trn of those deposits, while the volume of deposits at the top 10 banks is about EGP 5.704trn, and EGP 5.070trn at the top five.
It added that the ratio of deposits to assets in the sector amounted to 73.4% in June 2022, compared to 74.1% in March, and this ratio reached 72.9% at the top 10 banks and 72.6% at the top five.
The CBE indicated that the average actual liquidity ratio in local currency in banks in June 2022 decreased to 44.3%, compared to 44.7% in March.
On the other hand, the average ratio of actual foreign currency liquidity at banks increased to 78.4% in June, compared to 74.6% in March. This ratio reached 78.1% at the top 10 banks, and recorded 78% at the top five.
Investment in securities
The CBE said that the volume of investments of banks operating in the local market in securities and treasury bills amounted to EGP 3.739trn in June 2022, compared to EGP 3.549trn in March 2022, an increase of about EGP 190bn.
The CBE indicated that the volume of investments of the top 10 banks in these instruments amounted to EGP 2.970trn, and about EGP 2.660trn at the top five banks.
According to the CBE, the banks’ securities portfolio, excluding treasury bills, decreased to 25.2% of total assets in June 2022, compared to 26.9% in March 2022. This percentage amounted to 27.4% at the top 10 banks and 28.2% at the top five.
Capital adequacy
The CBE said that the ratio of the capital base to risk-weighted assets in banks decreased to 20.9% in June 2022, compared to 21.9% in March 2022, and this ratio reached 20% at the top 10 banks, and 20.2% at the top five.
The ratio of the tier 1 capital to risk-weighted assets at banks decreased to 17.1%, compared to 17.4%, and this ratio reached 15.9% at the top 10 banks and 15.8% at the top five.
According to the CBE, the common equity to risk-weighted assets amounted to 12.2% in June, compared to 13.1% in March. This ratio reached 11.1% in the top 10 banks and 10.6% in the top five.
The leverage ratio in banks declined to 6.9% in June, compared to 7% in March. This ratio reached 6.2% in the top 10 banks and 6% in the top five. According to the CBE, the percentage is with a lower margin stated by 3%.
Net open position in foreign currencies
The CBE revealed that the net open position in foreign currencies to capital base reached -1.9% in June 2022, compared to -0.2% in March 2022.
The CBE explained that this percentage amounted to -2.9% at the top 10 banks, and -3.3% at the top five. The total net open (short or long) positions for all foreign currencies shouldn’t exceed 20% of the capital base.
Electronic payment services
The CBE has also revealed a boom in electronic payment services in banks in the first half of 2022.
It said that the number of debit cards issued by banks increased to 22.959 million cards in June 2022, compared to 21.551 million cards in December 2021, an increase of 1.4 million cards, with a growth rate of 6.5%.
The number of prepaid cards increased to 28.274 million, compared to 26.068 million. The number of credit cards reached 4.810 million cards, compared to 4.470 million cards.
The number of ATMs of banks increased to 21,459 in June 2022, compared to 19,014 in December 2021. The number of electronic points of sale (POS) increased to 188,429, compared to 177,350.
Profits and revenues
As a result of the strong performance of banks during the first half of this year, the banks achieved a net profit of EGP 56.868bn in June 2022.
The CBE revealed that banks achieved a net return of EGP 141.032bn, and net activity revenues amounted to EGP 171.462bn, while expenses recorded EGP 114.595bn.
The CBE indicated that the top 10 banks acquired 77.63% of the banks’ total net profits, as they achieved net profits of EGP 44.148bn.
It added that the top 10 banks achieved a net return of EGP 106.959bn, net activity revenues amounted to EGP 130.534bn, and total expenses EGP 86.385bn.
According to the CBE, the top five banks accounted for 64.1% of the banks’ net profits, as their net profits amounted to EGP 36.495bn.
It explained that the five major banks achieved a net return of EGP 90.021bn, net activity revenues amounted to EGP 109.840bn, and total expenses amounted to EGP 73.346bn.
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