The National Bank of Egypt (NBE)’s customer deposit portfolio until mid-December 2017 was about EGP 900bn, according to Yehia Abu ElFotouh, NBE vice president.
He explained that the outcome of the bank’s high-yield savings certificates issued by the bank in November 2017 amounted to about EGP 430bn.
In November 2016, NBE offered two savings certificates, the first, a three-year certificate at a rate of 16% and the second, 18-month certificates at a rate of 20%, in order to attract large amounts of local liquidity from the market, reduce the high inflation rates, and attract Egyptians to subscribe to those certificates and the sell their possessions of foreign currency following the decision to float the pound.
According to Abu ElFotouh, despite the increased cost of these certificates to the bank that reached about 23.3%, and after the Central Bank of Egypt (CBE) increased the legal reserve ratio of deposits, the bank has no intention to reduce its interest rate at the present time.
He added that the return of these certificates is subject to periodic review by the bank, pointing out that the reduction of yield is strongly linked to the reduced rate of inflation.
While confirming that the bank’s profits were affected by the high return it pays to the customers of these certificates, Abu ElFotouh stressed that the bank plays this role in the framework of its community role to support its depositing customers in managing their affairs and to cope with the wave of high prices witnessed in the market following the implementation of the economic reform programme.
He expected the bank to achieve a net profit of EGP 13bn at the end of the current fiscal year 2017/2018 in June 2018.
In another area, Abu ElFotouh pointed out that the bank’s loan portfolio reached about EGP 400bn by mid-December, of which about EGP 32bn were loans for small and medium enterprises (SMEs), and about EGP 42bn were retail loans.
According to Abu ElFotouh, the bank aims to achieve 15-20% growth rates in its various activities by the end of the current fiscal year in June 2018, except for SMEs, for which the bank aims to expand its funding without limits.
He denied that banks prefer to invest in government debt instruments, and that it is not enough to focus on lending to customers.
He explained that it is better for banks to invest in lending to customers, whether large or small. However, there is a saturation in the market. There was no demand for borrowing, so banks sought to find other opportunities to invest their money, which is government debt.
On the other hand, Abu ElFotouh said that the bank’s foreign exchange earnings during the period from 3 November 2016 to mid-December 2017 amounted to about $18bn, pointing out at the same time that the bank during the same period financed foreign trade operations worth about $19bn.
“NBE aims to increase the number of branches by about 50 branches annually, focusing on large branches, because of the continuous and significant increase in the number of bank customers,” said Abu ElFotouh.
He explained that small branches do not suit the bank because of the large size of its customers in various regions of Egypt, therefore, it always tends to open large branches.
He revealed that the bank bought a piece of land in the finance and business districts of the New Administrative Capital, in preparation for the establishment of a large branch there, noting that, after completing the payment of 20% of the price of that land, Abu ElFotouh expects the branch to be complete and ready to receive customers by the beginning of 2019.
Abu ElFotouh confirmed that the NBE is still present in Al-Arish through two branches operating in a very normal manner, despite the targeting of one of its branches by terrorist groups recently and the human and material losses that resulted.
Abu ElFotouh said that the bank and state authorities are coordinating there to secure the two branches on an ongoing basis.
With regard to bank expansions outside Egypt, Abul ElFotouh said the bank is currently present in China, London, Sudan, South Africa, Ethiopia, and the United Arab Emirates, either through branches or representative offices in those countries, and plans to open a branch in Saudi Arabia.
NBE was the first Egyptian, Arab, and African bank to obtain a Chinese Yuan license through its branch in Shanghai, with the aim of opening new horizons for cooperation between China, Egypt, and all countries in the region.
“NBE is proceeding on parallel tracks. The first track is the opening of more branches across Egypt. The second track is the expansion in the provision of technological services, in order to attract the largest number of citizens and achieve financial inclusion,” according to Abu ElFotouh.
Abu ElFotouh pointed out that the NBE has succeeded during the last year alone—specifically from November 2016 to November 2017—in attracting about one million new customers, which has had an impact on increasing pressure on branches and employees, and also reflected on the performance of service for customers. So it became necessary to develop a large number of branches and establish new ones.
He explained that the completion of the renovation and development of 229 branches has been completed, including 21 branches whose locations have been moved to new premises, and 159 branches that have been developed and expanded, in addition to 27 electronic branches in various governorates.
“NBE has contracted with 20 universities so far so that students can pay their fees through electronic bank cards, and we are currently negotiating with other universities and a number of schools,” according to Abu El Fotouh.
His statements came on the sidelines of the tour, with Daily News Egypt and a number of other newspapers and media outlets last Thursday, of the bank’s main branch in downtown Cairo after its recent renovation and reopening.
According to Abu ElFotouh, this branch dates back to 1906, when the bank bought it as its fourth branch after the Qasr El Nil branch (which later became the headquarters of the CBE) and the London and Khartoum branches.
He added that the branch serves some 150,000 customers, including 5,500 Ahli Platinum customers. The branch also includes 10 tellers for the elderly and people with special needs, 16 tellers for customers, four for large local currency deposits, two for large amounts of foreign currency, and nine tellers for senior clients of the Al Ahli Platinum service.
There are six receptionists, eight corporate customer service offices, 24 individual customer service offices, 12 senior customer service offices, and an ATM area.
He pointed out that the quality of services received by customers of this branch and the time they took were examined. Main services take from one minute to five minutes, while other services take up to 45 minutes, therefore customers are divided based on their required services.
“The development of this branch is an extension of the bank’s continued interest in studying customer needs and seeking to overcome all the obstacles that may be encountered while receiving banking services,” said Abu ElFotouh.
He stressed that the development of the branch was not limited to the renovation of buildings and furniture in customer halls and back offices only, but also to provide new facilities for the service of a large group of elderly customers or people with special needs, with the availability of elevators and paths equipped for them, to facilitate and mitigate any obstacles they may face throughout the process at the bank.