The value of deposits at the banks operating in the Egyptian market increased by 15.3% at the end of November 2018, according to the Central Bank of Egypt (CBE).
The CBE stated in a recent report that deposits in the local currency increased by 16.9%, while deposits in foreign currencies grew by 9.4%. It added that the household sector accounted for 79.2% of total deposits at banks.
The report said that total deposits in Egypt increased by EGP 64.825bn at the end of November 2018 to EGP 3.761tn, against EGP 3.696tn in October 2018.
“The total houosehold deposits in the banking sector amounted to EGP 2.489tn, of which about EGP 1.990tn in local currency and the equivalent of about EGP 498.624bn in foreign currencies,” according to the CBE.
It added that the household sector accounted for 72.7% of the total deposits in local currency and about 67.8% of foreign currencies deposits. The household sector includes only non-corporate individuals.
According to the head of the treasury sector at one of the banks in Egypt, it is very natural that the household sector takes the largest proportion of deposits in banks, not companies, as individuals are saving, and companies are putting some of their liquidity in banks, not for the sake of savings, but for other reasons related to their businesses.
He noted that bank savings are still preferred by the household sector because it is deemed a riskless investment and grants a semi-stable return for long periods to help them manage their livelihoods.
He pointed out that the savings of the household sector in Egypt is one of the lowest saving rates in many countries because of the small size of the middle class which has the greatest savings capacity in Egypt compared to other countries.
Besides the household sector, there is also the private business sector, which is the second top saving sector in banks. This sector includes all the private companies operating in the local market, even if owned by one person or one family and also non-profit organisations.
The value of deposits from the private business sector at banks at the end of November 2018 reached EGP 549.271bn, including EGP 352.232bn was in local currency and EGP 197.039bn in foreign currencies.
The public business sector’s deposits amounted to EGP 103.06bn, of which EGP 63.455bn was in local currencies and EGP 39.605bn in foreign currencies.
According to the CBE, this sector includes public sector companies subject to Law No. 203 for 1991 and other public sector companies that are not subject to this law.
Apart from these three sectors, there are also government deposits, valued at EGP 602.27bn, including EGP 490.23bn in Egyptian pound and EGP 112.04bn in foreign currencies.
The size of external or non-resident savings stood at EGP 17.667bn, including EGP 9.7bn in local currency and EGP 7.967bn in foreign currencies.
In another context, the CBE revealed that the total value of credit facilities granted by banks to their customers increased by EGP 69.696bn during November 2018 to reach EGP 1.770tn, up from EGP 1.701tn in October 2018.
Credit facilities are loans provided by banks to their clients alongside documentary credits and letter of guarantees that were opened to cover import operations.
According to the CBE, the total credit facilities granted to the government reached about EGP 542.75bn, including EGP 212.54bn in local currency and EGP 330.21bn in foreign currencies.
The total facilities directed to non-government bodies reached EGP 1.228ttn, including about EGP 913.504bn in local currency and about EGP 314.462bn in foreign currencies.
According to the CBE, the private business sector received 60.9% of the total non-governmental credit facilities granted by banks to various economic sectors until the end of November 2018.
It added that the industrial sector was at the forefront of the sectors financed by banks. It alone accounted for 33.9% of the total credit facilities provided to non-government bodies, followed by the services sector which accounted for 28.3% and the trade sector by 10.8%.
As usual, the agricultural sector received the lowest share of the credit facilities granted by banks to different economic sectors, accounting for only 1.4% until the end of November 2018.
The CBE added that there are other sectors that were not mentioned in detail, topped by the household sector. They obtained about 25.6% of these facilities.
In the same context, the CBE disclosed that total bank lending stood at EGP 1.758tn at the end of November 2018, compared to EGP 1.689tn in October 2018, growing by EGP 69.35bn, of which the private sector accounted for 59.3%.
Government loans recorded EGP 542.75bn, including EGP 212.54bn in Egyptian pound and EGP 330.21bn in foreign currencies.
According to the CBE, the non-government loans recorded about EGP 1.216tn, including EGP 902.704bn in local currency and EGP 313.432bn in foreign currencies.