New opportunities for Egypt’s banks

New opportunities for Egypt’s banks

Despite the impact of the coronavirus on the economy in general and the banks in particular, the Egyptian banking system will remain stable in 2021, according to a report issued by the international ratings agency Moody's.

The sector's profits, as seen in results published by the listed banks, edged down in 2020 due to an increase in bad loans as some corporate borrowers found it difficult to meet their obligations amid the pressing economic conditions.

The second factor that hit the bottom line was the decline in investment income as the Central Bank of Egypt (CBE) opted to reduce interest rates by a total of four per cent during 2020.

The sector's star, the Commercial International Bank (CIB), reported a 14 per cent drop in profits for the first nine months of 2020 compared to the same period the previous year. Financial indicators for Credit Agricole Egypt showed that during the first nine months of 2020 its profits declined by 44.4 per cent year-on-year. The Housing and Development Bank's financial indicators revealed that for the first nine months of 2020 its profits had declined by six per cent on an annual basis.

The Moody's report, however, noted that the