CBE announces financial soundness indicators for the Egyptian banking system in the first half of 2021

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The Central Bank of Egypt (CBE) revealed Financial Soundness Indicators (FSIs) of banks operating in the Egyptian market, including asset quality, capital adequacy and earnings in the first half (H1) 2021.

In its quarterly FSI report, the CBE said the total financial position of banks operating in the local market increased to around EGP 7.948 billion in June 2021, from EGP 7.554 billion in March 2021.

As for the bank balance, the banks’ cash position stood at EGP 65.190 billion in June 2021, compared to EGP 54.189 billion in March 2021. Interbank deposits in Egypt stood at EGP 1.066 billion, so they reached EGP 307.5 billion from banks abroad.

Loan and discount balances recorded around EGP 2.903 billion, while the equity portfolio and banks’ investments in treasury bills recorded EGP 2.87 billion.

In addition, CBE said that the total capital of banks in Egypt stood at EGP 185.357 billion in June 2021, up from EGP 177.920 billion in March 2021, with reserves registering EGP 362.183 billion, while the balance of allocations amounted to approximately EGP 170.349 billion.

Banks’ liabilities to each other in Egypt stood at EGP 304.598 billion, while their liabilities to banks abroad amounted to EGP 100.469 billion. Total deposits were around EGP 5,731 billion, while long-term bond and loan balances stood at EGP 243.973 billion.

In an important indicator of the quality of the banks’ loan portfolio, the CBE said the percentage of non-performing loans (NPLs) stood at 3.5% of the total loan portfolio of banks operating in the Egyptian market in June. 2021.

CBE explained that the percentage of non-performing loans stood at 2.6% of the total loans of the top 10 banks operating in the Egyptian market, and stood at 2.2% in the top five banks.

The CBE also reported that loan provisions on total NPLs reached 94.5% in June 2021, up from 96.5% in March 2021, and the percentage was 100% in the top 10 and 5 banks operating on the Egyptian market.

The volume of provisions set up by banks to deal with bad debts amounted to approximately EGP 170.349 billion in June 2021. The share of the top 10 banks in these allocations was EGP 115.467 billion, while it reached 96.73 billion EGP in the top five banks.

Total bank reserves reached EGP 362.183 billion in June 2021, of which the Big 10’s share was EGP 273.288 billion, while the Big Five’s share was EGP 226.847 billion.

The net profit of banks operating in the Egyptian market recorded around EGP 51.006 billion in June 2021.

The report released by CBE found that the net return was 150.746 billion EGP, the business income was about 185.113 billion EGP and the total expenditure was about 134.107 billion EGP.

The top five banks accounted for 73.74% of bank net profits, registering EGP 37.613 billion. They also accounted for 70.6% of net sales, reaching around EGP 130.792 billion. The incomes of the five banks amounted to 105.902 billion EGP, while their expenses amounted to 93.179 billion EGP.

The top 10 banks accounted for 85.7% of total net profits. They also accounted for 80.3% of total turnover, with a value of 148.823 billion EGP. The Big 10’s net return stood at EGP 121.177 billion, while their total spending stood at EGP 105.061 billion in June 2021.

CBE said the loan-to-deposit ratio at banks operating in the Egyptian market rose to 50.8% in June 2021, from 48.4% in March 2021, and this ratio reached 50.8% in the top 10 banks and 51.8% in the lead. five.

The CBE explained that the local currency loan-to-deposit ratio stood at 47.9% in June 2021, up from 45.1% in March 2021, and this ratio reached 47.3% in the top 10 banks and 47, 5% in the top five.

The foreign currency loan / deposit ratio increased to 68.8% in June 2021, from 68.2% in March 2021, and this ratio recorded 74.5% in the top 10 banks, and 83.8% in the five large.

The private sector accounted for 57.1% of total loans granted by banks to their customers until the end of June 2021, against 59% in March 2021, according to CBE.

The private sector also accounted for 48.5% of total loans granted by the top 10 banks operating in Egypt, and 44.2% of loans granted by the top five banks.

CBE said the volume of investments by banks operating in the local market in securities and treasury bills amounted to around EGP 2.87 billion in June 2021.

He pointed out that the investment volume of the top 10 banks in these instruments amounted to around EGP 2.265 billion, while around EGP 1.985 billion in the top five banks.

The Bank’s securities portfolio, excluding Treasury bills, reached around 23.8% of total assets in banks in June 2021, compared to 23.7% in March 2021, and this percentage reached 25.4% in the top 10 banks, and 26.3% in the top five.

In the same context, the CBE said that the total deposits in banks reached 5.731 billion EGP in June 2021. The top 10 banks accounted for 4.490 billion EGP of this amount, while the volume of deposits in the top five banks operating in Egypt was around EGP. 3.946 billion.

The ratio of deposits to assets in banks stood at 72.2% in June 2021, compared to 27.9% in March 2021, and this ratio reached 71.7% in the top 10 banks and 71.2% in the first five.

The CBE reported a drop in the local currency liquidity ratio in June 2021 to 45.5%, from 47.2% in March 2021, and this ratio was recorded at 45.6% in the top 10 banks, and has reached 44.2% in the top five banks.

The foreign currency liquidity ratio also fell to 73.2% in June 2021, from 76.8% in March 2021, and this ratio reached 72.1% in the top 10 banks, and 72.4% in the first five.

The CBE said the ratio of capital to risk-weighted assets stood at 19% in June 2021, unchanged from March, and this ratio reached 18.7% in the top 10 banks and 18, 3% in the top five.

At the same time, the ratio of Tier 1 capital to risk-weighted assets increased to 16.8%, from 16.7% during the comparison period, and this rate reached 16.5% in the 10 top banks and 16.1% in the top five.

According to the CBE, the ratio of common stocks to risk-weighted assets stood at 13.2% in June 2021, up from 13.4% in March 2021, and it reached 12.4% in the top 10 banks and 11.7% in the top five.

In addition, the leverage ratio stabilized at 6.9% in June 2021, unchanged from March, and this ratio reached 6.3% in the top 10 banks and 6% in the top five. According to CBE, the percentage of leverage is with a lower margin of 3%.

On the other hand, the CBE revealed that the net open position in foreign currencies relative to equity reached -2.4% in June 2021, compared to -08% in March 2021. This percentage stood at -3.5% in the top 10 banks, and – 4% in the top five banks.

The CBE stressed that the total net open positions (short or long) for all foreign currencies should not exceed 20% of capital base.



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