The financial statements of a number of banks showed a relevant increase in the first half of 2012, marking the beginning of the recovery of economy. A number of bankers attributed such an improvement to the high return on government debt instruments as banks turned to invest in these instruments after lending rates dropped due to the political instability in the country. However, the political and economic situations have been improving gradually after the presidential elections. Ismail Hassan, chairman of Misr Iran Development Bank and former governor of the Central Bank of Egypt (CBE), said the banks in Egypt played an important role in providing the finance required to plug the state's budget deficit and finance private-sector and developmental projects which deteriorated in 2011 after the turmoil that followed last year's revolution. The increase in return on treasury bills remarkably contributed to improving the banks' financial results in the first half and offset the retreat in the volume of loans, Hassan affirmed. The Central Bank of Egypt (CBE) followed up all the developments that occurred in the banking sector and succeeded in managing the critical period the country passed through as it took decisions suitable for this period such as lowering the reserve requirement ratio from 14% to 10%, he noted. Hassan expected banks to achieve better results in the upcoming period as the government is working on executing developmental and infrastructure projects and it plans to attract more local and foreign investments to the country. Saeed Zaki, member of the board of directors at the Egyptian Gulf Bank, said the main reason behind the improvement of the financial results in the first half of 2012 is the high return on government debt instruments as banks turned to invest in such instruments when lending rates fell. Zaki expected the current political stability to contribute to regaining the confidence of investors in the Egyptian market as some of them stopped their investment in the country after last year's unrest. Therefore, the financial results of banks will improve with the increase in investments as they will require more finances from banks. The year-over-year net profit growth rates of banks that announced their financial results in the first half of 2012: The name of the bank The year-over-year net profit growth rate Commercial International Bank (CIB) 29.4% Société Générale Generale Bank (NSGB) 7.1% Faisal Islamic Bank of Egypt 85.5% Egyptian Gulf Bank 71.6% Union National Bank 10.2%
