By Nasser Youssef The first half of the second year of the revolution ended yesterday, during which the economy has suffered a sharp recession. The economic troubles reached their most critical point in the second quarter of 2012. During the period, large financing deals were nearly absent from the scene while syndicated loans were also lacking, in contrast to their presence during the last three years. The total value of syndicated loans arranged in the first half of 2012 was only EGP 3.6 billion. The three large government owned banks, the National Bank of Egypt, Banque Misr, and Banque du Caire, contributed most of the funds to the loans. Private and foreign banks made nearly no contribution to arranging the syndicated loans. Before the revolution the private and foreign banks had played a prominent role. Contributing to the absence of foreign companies in arranging syndicated loans was fear and uncertainty about the political future of the country. The Banque du Caire, the third largest government bank, played a prominent role in arranging the first two syndicated loans of the year, the value of which was EGP 925 million in total. The numbers for the first half of 2012 came in contrast to data from the previous year when the total value of syndicated loans equaled EGP 16 billion. Banks last year arranged 8 deals for the electricity, petroleum, petrochemicals, communications, tourism, and agricultural sectors. The banks hope that the announcement of a popularly elected president will stimulate economic activity once again and that suspended deals can be reactivated. An official with Banque Misr stated that the role of foreign banks declined sharply after the revolution, adding that the foreign banks played an important role in the Egyptian financial market that is impossible to ignore. Some foreign banks, however, had pulled out of the Egyptian financial market before the revolution. HSBC, for example, withdrew from a deal to help finance the University of Alexandria hospital system valued at EGP 1.4 billion. The official from Banque Misr stressed the need to provide more financing with the aim of assuring investors that the field is safe and stable in the long run. He said that banks are still afraid of the risk that exists in the Egyptian market as a result of the constantly changing political situation.
