The Central Bank of Egypt (CBE) revealed that the total financial position of banks operating in the local market increased to EGP 10.037 billion in the first half (1H) of 2022 from around EGP 9.413 billion in the second quarter. (2T) of 2022. , an increase of approximately EGP 624 billion.
In its quarterly Financial Soundness Indicators report for banks in Egypt, the CBE announced that on assets, bank cash balances in June 2022 stood at EGP 76.532 billion, and bank balances locally increased to around 1.608 trillion EGP, and amounted to 222.074 billion EGP abroad.
He added that loan and discount balances recorded around EGP 3.564 trillion, while banks’ investment portfolio in securities and treasury bills recorded EGP 3.739 trillion.
In terms of liabilities, the CBE explained that the banks’ capital amounted to EGP 234.69 billion; reserves recorded EGP 428.928 billion, while allocations amounted to EGP 219.589 billion.
Banks’ liabilities to each other in Egypt amounted to EGP 303.226 billion, while their liabilities to banks abroad amounted to EGP 219.252 billion, and total deposits amounted to EGP 7.353 billion. of EGP. The balances of long-term bonds and loans amounted to EGP 371.388 billion.
The CBE said the ratio of non-performing loans to total loan portfolio decreased to 3.2% in the Egyptian banking market in June 2022, from 3.3% in March 2022.
The CBE said the percentage of non-performing loans stood at 2.4% of total loans in the top 10 banks operating in the Egyptian market and reached 1.9% in the top five banks.
The CBE reported that banks granted 92.1% of their total non-performing loans in June 2022, compared to 92.3% in March 2022, and the percentage of such allocations reached 100% in the top 10 and five banks. operating in the Egyptian market.
“The volume of allocations that banks made to deal with bad loans amounted to approximately EGP 219.589 billion in June 2022, and the top 10 banks’ share of these allocations was EGP 159.801 billion, while the volume of allocations in the top five banks amounted to EGP 136.012 billion,” the CBE said.
He added that the banks formed reserves worth EGP 428.928 billion, of which the share of the top 10 amounted to EGP 310.148 billion, while the reserve volume of the top five banks amounted to to EGP 275.165 billion.
Loan to deposit ratio
The CBE said the loan-to-deposit ratio in banks operating in the Egyptian market decreased to 48.6% in June 2022 from 49.3% in March 2022, and this ratio stood at 49.5% in the top 10 banks, and 50% in the Top Five.
The CBE explained that the ratio of local currency loans to deposits decreased to 45.5% in June, from 46.1% in March, and this percentage reached 45.5% in the top 10 banks and recorded 45% in the top five.
The ratio of loans to foreign currency deposits with banks also fell to 66.8% in June from 68.4% in June. This ratio was recorded at 73.9% in the top 10 banks and 83.4% in the top five.
“The private sector accounted for 58.1% of total loans granted by banks to their customers until the end of June 2022, compared to 57.3% in March 2022,” the CBE said.
He explained that the private sector acquired 49.8% of total loans in the top 10 banks and 45.6% of loans in the top five.
The CBE said total deposits in banks increased to around EGP 7.353 billion in June 2022 from EGP 6.961 billion in March 2022, an increase of around EGP 392 billion. He pointed out that the top 10 banks account for EGP 5.704 trillion of such deposits, while the volume of deposits in the top 10 banks is around EGP 5.704 trillion and EGP 5.070 trillion for the top five.
He added that the ratio of deposits to assets in the sector stood at 73.4% in June 2022, compared to 74.1% in March, and this ratio reached 72.9% in the top 10 banks and 72.6% in the top five.
The CBE reported that the average real liquidity ratio in local currency at banks in June 2022 decreased to 44.3% from 44.7% in March.
On the other hand, the average ratio of banks’ effective foreign currency liquidity rose to 78.4% in June, from 74.6% in March. This ratio reached 78.1% in the top 10 banks, and reached 78% in the top five.
The CBE reported that the investment volume of banks operating in the local securities and treasury bills market amounted to EGP 3.739 billion in June 2022, compared to EGP 3.549 billion in March 2022, an increase of around 190 billion EGP.
The CBE reported that the investment volume of the top 10 banks in these instruments amounted to EGP 2.97 trillion, and around EGP 2.66 trillion for the top five banks.
According to the CBE, the securities portfolio of banks, excluding Treasury bills, decreased to 25.2% of total assets in June 2022, compared to 26.9% in March 2022. This percentage stood at 27.4% among the top 10 banks and 28.2% among the top five.
The CBE said the ratio of capital base to risk-weighted assets in banks decreased to 20.9% in June 2022 from 21.9% in March 2022, and this ratio reached 20% in the top 10 banks, and 20.2% in the Top Five.
The ratio of Tier 1 capital to risk-weighted assets of banks decreased to 17.1%, from 17.4%, and this ratio reached 15.9% in the top 10 banks and 15.8% in the top five.
According to the CBE, the common equity to risk-weighted assets ratio stood at 12.2% in June, down from 13.1% in March. This ratio reached 11.1% in the top 10 banks and 10.6% in the top five.
Banks’ leverage ratio fell to 6.9% in June from 7% in March. This ratio reached 6.2% in the top 10 banks and 6% in the top five. According to the EPC, the percentage is with an indicated lower margin of 3%.
Net open position in foreign currency
The CBE revealed that the net open position in foreign exchange relative to the capital base reached -1.9% in June 2022, compared to -0.2% in March 2022.
The CBE explained that this percentage was -2.9% for the top 10 banks and -3.3% for the top five. The total net open positions (short or long) for all foreign currencies must not exceed 20% of the capital base.
Electronic payment services
The CBE also revealed a boom in electronic payment services in banks in the first half of 2022.
He said the number of debit cards issued by banks increased to 22.959 million cards in June 2022 from 21.551 million cards in December 2021, an increase of 1.4 million cards, with a growth rate by 6.5%.
The number of prepaid cards rose to 28.274 million from 26.068 million. The number of credit cards reached 4.810 million cards, compared to 4.470 million cards.
The number of bank ATMs increased to 21,459 in June 2022 from 19,014 in December 2021. The number of electronic point of sale (POS) increased to 188,429 from 177,350.
Profits and income
Thanks to the strong performance of the banks in the first half of this year, the banks made a net profit of EGP 56.868 billion in June 2022.
The CBE revealed that the banks made a net return of EGP 141.032 billion and net activity income amounted to EGP 171.462 billion, while expenses recorded EGP 114.595 billion.
The CBE reported that the top 10 banks acquired 77.63% of the banks’ total net profits, as they made net profits of EGP 44.148 billion.
He added that the top 10 banks achieved a net return of EGP 106.959 billion, net business income amounted to EGP 130.534 billion and total expenses amounted to EGP 86.385 billion.
According to the CBE, the top five banks accounted for 64.1% of banks’ net profits, with their net profits amounting to EGP 36.495 billion.
He explained that the five major banks achieved a net return of EGP 90.021 billion, net business income amounted to EGP 109.840 billion and total expenses amounted to EGP 73.346 billion.