Union National Bank (UNB) Egypt is forging ahead with its expansion strategy and plans to have a total of 30 branches across the country by year's end. While this would seem like quite an ambitious goal given the current state of the economy, the bank opened four new branches in Cairo, Mansoura and Assiut earlier this month, bringing the total to 17. UNB-Egypt, which operates under the umbrella of UAE-based Union National Bank Group, was established as a joint stock company in 2006, starting out with just eight branches. In two years time, that number has more than doubled. Interestingly enough, their initial plan when they first forayed into Egypt was to launch 20 branches every year, but due to Central Bank regulations, that number was reduced to 10, said Mohammed Nasr Abdeen, UNB's vice chairman. In an interview with Daily News Egypt, Abdeen said, "UNB is paying great attention to the Egyptian market. Abdeen, who has 30 years of experience in the banking sector - 25 of them with UNB - was in Cairo for the launch of the Obour and Hegaz branches in early June. Maintaining the pace of growth does not mean UNB-Egypt has escaped the global economic crisis unscathed. Like most businesses locally and internationally, the bank has had to reprioritize and shift the gears of expansion from fast to medium. For one, the bank has had to reconsider the location of new branches, Abdeen said. UNB-Egypt's products and services portfolio includes current accounts, joint accounts, saving accounts, and time deposits. The relatively low-income level of the majority of Egyptians does not hinder the bank's operations since one of its main target segments is the middle class. It also focuses on catering to small- and medium-sized enterprises (SME). "SMEs contribute most to the middle class [development], which will reflect on the whole society, and will consequently increase the market size, he said. "We are seeking the middle class customers who have almost vanished [in Egypt], even though the middle class is very important for the development of society. Egypt's per capita income is $1,580 compared to the UAE's $23,770. Between 20 to 30 percent of UNB-Egypt's portfolio is directed to SMEs, 30 to 35 percent to retail banking and between 35 to 50 percent to corporate finance, Abdeen said. The bank's short- and medium-term loans aim to support industries such as telecommunications, electricity, petrochemicals and cement - funding projects that contribute to the development of Egypt's economy, Abdeen said. In dealing with the competition, the bank's strategy is to focus on "product innovation based on customers' needs, he added. UNB-Egypt's capital has varied over time. It increased from LE 112 million to LE 900 million in 2007, then went down to LE 504 million, up to LE 546 million, and now stands at LE 591.5 million. The bank aims to be among the top five-ranked banks in Egypt, Abdeen said. Operating in the Arab world's most populous country, with only around 10 percent of the population being banked, the stage is set for UNB-Egypt to realize its goals.
