Beltone Financial revealed in a recent report the most prominent strengths and weaknesses in the performance of 10 of Egypt’s banks in the first quarter of this year, which ended on 31 March.
According to the report, obtained by Daily News Egypt, the first quarter (Q1) of 2018 was positive in general for banks in Egypt, which realised good growth in operating profits and grew stronger than expected in terms of loans, amid stable assets and capital structure measures.
Beltone pointed out that the results of Housing and Development Bank (HDB), Credit Agricole, and Faisal Islamic Bank exceeded its expectations and market estimates, thanks to the faster-than-expected growth in HDB, a refund of provisions at Credit Agricole, and a record gain in Faisal Islamic Bank.
“Abu Dhabi Islamic Bank’s results were the only ones that came in below our expectations, despite the doubling of its earnings compared to the first quarter of 2017, due to the higher allocations, “according to Beltone.
The report noted that the profits of the 10 banks rose by 32% in Q1 2018 compared to Q1 2017 and 22% compared to Q4 2017, while the return on average equity (ROAE) increased by 30% compared to 25% in Q4 2017 and 27% in Q1 2017.
“The profits of these banks were boosted by higher operating profits which increased by 22% on an annual basis and 5% on a quarterly basis, outperforming the total growth in operating expenses, accompanied by lower actual tax rates for some banks,” Beltone stated.
Moreover, the report noted that most of the 10 banks covered by the report saw a good rise in loans growth during the first quarter of 2018 compared to the previous two quarters, when the total deposits of these banks marked a growth averaging 4%.
Abu Dhabi Islamic Bank recorded the highest growth rate in loans during Q1 2018, scoring 15%, followed by the Export Development Bank of Egypt with 7%, while QNB AlAhli, Suez Canal Bank, and Faisal Islamic Bank suffered a slight contraction compared to December levels.
Banks achieved solid growth in their deposits portfolios during the first quarter of 2018, as total deposits increased by 4%. The savings and current accounts, along with retail deposits, accounted for some 90% of all deposits, especially at Commercial International Bank (CIB), QNB AlAhli, Credit Agricole Egypt, and Abu Dhabi Islamic Bank, according to Beltone.
Meanwhile, Beltone pointed out that seven out of 10 banks covered by the report managed to trim their non-performing loans (NPL) on a quarterly basis, while the other three banks suffered an increase in NPL ratios, adding that total NPL in the 10 banks declined from 6% in December 2017 to 5% in March this year.