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Total financial position of banks operating in Egypt breaks EGP 10trn barrier in June 2022: CBE Total capital reaches EGP 234.690bn, reserves stand at EGP 428.927bn, and allocations to face doubtful debts record EGP 219.589bn
The Central Bank of Egypt (CBE) revealed that the total financial position of banks operating in the local market, other than the CBE, increased by EGP 2.089trn during fiscal year (FY) 2021/22, reaching about EGP 10.037trn in June 2022. In a recent report issued by the CBE, it explained that on the assets side, cash balances in banks amounted to about EGP 76.532bn, and the balances of banks locally amounted to EGP 1.606trn, while their balances in banks abroad amounted to EGP 222.074bn. It added that the lending and discount balances of customers recorded about EGP 3.564trn, while the stock portfolio and banks' investments in treasury bills recorded EGP 3.739trn. In terms of liabilities, the CBE explained that banks' capital amounted to about EGP 234.690bn, and reserves recorded EGP 428.927bn, while the balance of provisions amounted to EGP 219.589bn. The obligations of banks towards each other in Egypt amounted to EGP 303.226bn, while their obligations to banks abroad recorded EGP 219.252bn. Total deposits amounted to EGP 7.353trn, while the balances of bonds and long-term loans amounted to EGP 371.388bn. The monthly bulletin of CBE revealed that customer deposits in the banking system increased in June 2022 by about EGP 162bn, reaching EGP 7.372trn, compared to EGP 7.210trn in May. The CBE explained that government deposits recorded EGP 1.494trn in June, compared to EGP 1.435trn, of which EGP 1.288trn were in local currency, and the equivalent of about EGP 205.102bn was in foreign currency. He pointed out that non-governmental deposits recorded EGP 5.878trn in June, compared to EGP 5.775trn in May, of which about EGP 5.007trn are in the local currency, and about EGP 870.9bn are in foreign currencies. According to the CBE, the public business sector's share of non-governmental deposits in local currency amounted to about EGP 98.7bn, the private business sector about EGP 706.9bn, the household sector about EGP 4.181trn, and the rest of the other sectors, including non-residents, and the balances of checks and remittances about EGP 16.072bn. It added that the public business sector acquired nearly EGP 46.4bn of non-governmental deposits in foreign currencies, the private business sector about EGP 267.4bn, the household sector about EGP 532.4bn, and the rest of the other sectors, including non-residents and purchased checks and transfers about EGP 25bn. According to the CBE, the household sector accounted for 80.8% of the total deposits in banks, as its total deposits amounted to EGP 4.713trn, pointing out that the sector acquired about 8.9% of the total deposits in local currency, while its share of deposits in foreign currencies amounted to about 62.9%. The CBE explained that the growth rate in the total deposits in banks amounted to 24.55% during June 2022, compared to 24.2% in May, pointing out that the growth rate in deposits in local currency recorded 23.6% compared to 24.2%, while the growth rate of deposits in foreign currencies was 30.1% against 30.5%. According to the report, the share of deposits in foreign currencies decreased to 14.51% of the total deposits in banks in June 2022, compared to 14.78% in May. The CBE also revealed that the balances of credit facilities granted by banks for their customers in June 2022 increased to about EGP 3.564trn, an increase of EGP 661bn during FY2021/22. Credit facilities are the loans granted by banks to their customers, along with documentary credits and letters of guarantee that they open for them to cover import operations. The CBE attributed this increase to the increase in credit facilities granted by non-government banks by EGP 409bn, at a rate of 22.7%, and credit facilities granted to the government by EGP 252bn, at a rate of 22.8%. The increase in the balances granted to the government came as a result of the increase in balances of foreign currencies, equivalent to EGP 149.1bn, and balances in local currency by EGP 102.9bn. He added that according to the relative distribution of non-governmental credit facilities balances, the private business sector obtained 61.2% of the total balances in May. According to the sectors of economic activity, the industrial sector obtained 28.3% of these stocks, followed by the services sector by 26.7%, then the trade sector by 10.8%, the agriculture sector 2.4%, and the undistributed sectors obtained 31.8% of them and the household sector 31.5%. The CBE also announced an increase in the total balances of loans provided to bank customers, other than the CBE, during June 2022 by about EGP 52bn, to reach EGP 3.490trn, compared to EGP 3.438trn in May 2021. According to the CBE, the volume of loans granted to the government amounted to EGP 1.302trn, of which EGP 868.5bn were in local currency, and the equivalent of EGP 434.05bn in foreign currencies, while the total non-governmental loans increased to It reached EGP 2.187trn, including EGP 1.923trn in local currency, and the equivalent of about EGP 264.319bn in foreign currencies. The CBE indicated that the agriculture sector acquired about EGP 49.58bn of the total non-governmental loans in local currency, the industrial sector EGP 490.08bn, the commercial sector EGP 220.3bn, and the services sector EGP 478.8bn, while the rest of the undistributed sectors, which include the household sector, individuals, local non-profit organizations and foreign bodies operating in Egypt, amounting to EGP 683.7bn. The agricultural sector accounted for EGP 3.1bn of total non-governmental loans in foreign currencies, the industrial sector about EGP 130.3bn, the commercial sector the EGP 14.708bn, and the service sector about EGP 104.533bn, while the rest of the undistributed sectors, including the household sector, natural individuals, local non-profit organizations and foreign bodies operating in Egypt, acquired about EGP 11.623bn. In another context, the CBE announced an increase in the volume of domestic liquidity during FY202/22 by EGP 1.255trn, or 23.4%, to reach about EGP 6.611trn in June 2022. The CBE explained that the increase in domestic liquidity was reflected in the growth of quasi-money by EGP 965.2bn, at a rate of 23.5%, and the money supply by EGP 289.8bn, at a rate of 23.1%. It said that this increase in quasi-money came as a result of an increase in non-current deposits in local currency by EGP 769.3bn, at a rate of 23.3%, and deposits in foreign currencies, worth about EGP 195.9bn, at a rate of 30.1%, or the equivalent of EGP 55.2bn at a rate of 8.5%, excluding the impact of the change in the exchange rate. The increase in the money supply came as a result of an increase in current deposits in local currency by about EGP 184.6bn, a rate of 31.7%, and an increase in cash in circulation outside the banking system by EGP 105.2bn, at a rate of 15.6%. The report indicated that the increase in domestic liquidity during FY2021/22 came as a result of the rise in net domestic assets and the decline in net foreign assets of the banking system. The net domestic assets of the banking system increased by EGP 1.876trn, or an average of 36.8% during FY2021/22, as a result of an increase in domestic credit by EGP 1.365bn, at a rate of 25.2% on the one hand, and the net budget items by EGP 511bn. It explained that domestic credit increased as a result of an increase in net liabilities of the government by EGP 933.9bn, liabilities of the private business sector by EGP 286.8bn, and the household sector by EGP 139.1bn, and liabilities of the public business sector by EGP 5.9bn. It added that net foreign assets decreased by nearly EGP 621.7bn during FY2021/22, as a result of a decrease in net foreign assets in banks, equivalent to EGP 243bn, and net foreign assets at the CBE by the equivalent of EGP 378.7bn.
