Gamal Moharam has been a player in the Egyptian commercial banking sector for much of his career. With his departure late last year from Piraeus Bank Egypt, where he served as chairman and CEO, he is moving in a new direction but maintaining strong ties to the sector. While Moharam dabbled in other areas following his graduation from Cairo University in 1974, his focus has largely been on banking. He forayed into commercial banking in 1979 working as a credit and marketing officer at Citibank. He worked at Piraeus from 2002 to 2008, leaving the bank in mid-December in what he describes as "an amicable divorce. While he holds a number of other positions, such as non-executive chairman of MGM Financial and Banking Consultants, Moharam said most of his time these days goes into two companies formed earlier this year: Newscape Egypt and Servfund. Moharam is the non-executive chairman of financial advisory services firm Newscape Egypt, which is affiliated to London-based Newscape Capital Group. The company, which was established in April, provides banking advisory services and helps clients raise equity and capital. Newscape is also applying for a license from the Capital Market Authority (CMA) to evaluate businesses for mergers and acquisitions, as well as a license to form a private equity fund that will be directed at small and medium-sized enterprises (SMEs). Moharam's work at Newscape will keep him immersed in the banking industry, and he does anticipate that his connections in the sector come in handy. "Being close to the banking community will help, he said, "either [by] showing the banks good opportunities or helping clients raise capital. Servfund, where he also serves as non-executive chairman, is a mutual fund administration company that was established in January. Moharam says that changes to the capital market regulatory framework enacted last year require each new fund to have an independent company act as registrar, as well as calculate its net asset value (NAV). He expects that funds pre-dating the changes will be required to do this in the future, rather having banks serve as the registrar for mutual funds while fund managers calculate their NAVs. The company received its license to operate as a fund administrator earlier this month. Moharam's banking background left him disposed to the type of service Servfund will provide. "I'm a person that likes the fee business, he said, adding that he believes in simple products. Influenced by his work with both the Bank of New York and its forerunner Irving Trust, which he describes as focused on generating revenue from fees, he said, "This is my culture as well. I grew up with this. Moharam continues to observe developments in Egypt's banking industry and is generally optimistic about its prospects - even amid the swirl of the global financial crisis. "Egyptian banks are on the right path. That's for sure, he said. While financing of some areas such as trade may suffer as a result of the crisis, he expects significant growth in the future for mortgages and lending to SMEs. Local banks are more selective today in making new loans than they were before the global financial crisis, Moharam said, but are ready to lend to customers seeking funding for financially viable projects. "I don't think any bank will find an opportunity with a good cash flow and sound basis, and not give the money to start, he said. The culture of lending today has moved away from the "name lending, which he said was previously the modus operandi for the sector. "Most of the credit decision that were made in the last two or three years were based on cash flow [and] on the right banking practices. Although he is generally optimistic about the sector's developments, he anticipates the international crisis to lead to an increase in non-performing loans (NPLs) in the Egyptian banking system. In the past, he said, Egyptian banks were inflexible regarding NPLs, and characterizes the results of this approach as far from successful. The banking culture has shifted, and he hopes that banks will respond appropriately to NPLs in the current crisis, working with customers to resolve their issues. "If we see NPLs - and we will see NPLs because of the crisis - we should act accordingly with a different culture than the old one.
