CAIRO: With two days of optimistic lectures that seemed defiant in the face of the collapse of the international financial markets, a spirited discussion by six of Egypt's sharpest banking minds proved no different. Even as moderator Richard Banks pressed the panel on the oddly upbeat tenor of the conference, the bankers held firm, asserting that Egypt would weather this financial storm better than most. This panel did, however, seek to reframe the optimistic spirit of the conference by discussing, at some length, that its performance in this time of economic uncertainty was smoother relative to other developing - and most developed - countries. "All the indicators are robust, said the managing director of Barclays Bank Egypt and North Africa Khalid Elgibaly. He also sought to add perspective, noting that Egypt's growth rate of 7.2 percent, which he expects to fall to 6 percent in the slowdown, is comparatively robust. "That will still be double the global growth rate, he said, citing a 3 percent growth rate globally. "Our banking sector here is very underdeveloped, noted Suha Najjar of Pharos Holding. Najjar argued that this simple banking system harmed Egypt's growth potential in good economic climates but protected it from disaster in bad patches. The session, which was thematically disunified because it was held largely in a question and answer format, discussed at some length the shallow penetration of banks into the Egyptian population. "We are all focusing on how to build SME [small- and medium-enterprises] lending and micro lending, said Elgibaly. Other bankers in the panel cited statistics of between 10 and 30 percent bank penetration in the country. Mohamed Ozalp, vice chairman of Banque Misr, and Essam Abu Hamed, vice chairman of the Housing and Development Bank, represented the public sector banking system, which dominated much of the conversation. Ozalp predicted the continued strength of the public sector banks, noting, "We have seen inflows of deposits because psychologically people still think public sector banks might be more secure. Elgibaly echoed the news that clients have been transferring funds from private sector banks to public sector ones in an effort to secure their funds. Several on the panel also made something of a good-natured assault on the public sector banks. "I think we have too many banks, argued Najjar. Abbas Hilmi, senior managing director at Concord, argued that the postponement of the government's privatization strategy, brought on by the recession, made the time right for bank consolidation. "Let's use [the changing economic climate] to consolidate, he said. He argued that if a number of the public sector banks were consolidated, Egypt might be able to build one of the hundred largest banks. Despite the sunny outlook that has sometimes seemed divorced from broader realities, this panel's attempts not only to qualify its enthusiasm but to present policy options going forward added an important layer to the conference's dialogue.
