Bank Audi-Egypt to expand loan portfolio to include SMEs, among other sectors

Bank Audi-Egypt increased its deposit holdings by 17%, and increased the value of its loans portfolio by 47% in 2015; in 2016, the bank aims for additional 20% increase

Bank Audi-Egypt is considering large funding opportunities worth more than EGP 11bn in various economic sectors throughout 2016, according to Mohamed Abbas Fayed, Vice Chairman and managing director of the bank.
Fayed told Daily News Egypt that part of the funding will be provided individually, while the rest will be provided through loans that the bank arranges, in cooperation with other banks.
He added that the bank achieved an increase of 47% in its loans portfolio, whereby it increased from EGP 12.6bn by the end of 2014, to nearly EGP 18.5bn by the end of 2015.
Fayed stated that the bank's loans portfolio made significant gains in the funds it provides to companies. There has been a 50% appreciation in the total value of loans provided to companies from 2014 to the end of 2015, whereby it increased from EGP 9.5bn to nearly EGP 14.3bn.
There has been a 41% increase in the total value of retail loans provided, with year-on-year appreciation from EGP 2.9bn to nearly EGP 4.1bn by the end of 2015.
Fayed pointed out that the loans portfolio for small and medium enterprises (SMEs) also increased by 76% in the total value of loans provided, increasing from EGP 300m in 2014, to EGP 1bn at the end of 2015. Fayed attributed this growth to a reclassification of projects in accord with the new definitions provided by the Central Bank of Egypt (CBE).
According to Fayed, Bank Audi-Egypt increased its deposit holdings by 17% in 2015, whereby the total holdings reached EGP 31.8bn. The bank also annouced a 21% increase in the size of assets, recording EGP 37.3bn.
Fayed noted that Bank Audi-Egypt aims to achieve an increase that exceeds 20% in all its activities in 2016.
He revealed that the bank will sign a cooperation agreement with the International Finance Corporation (IFC) on 31 January in order to obtain consultations and technical help to expand its funding to SMEs.
He added that the bank is also preparing to sign another agreement with the European Bank for Reconstruction and Development (EBRD) for a loan that will be allocated towards funding similar projects.
The bank hired a management firm that specialises in funding SMEs, and plans to propose a new programme to support these kinds of projects, according to Fayed.
He added that the programme will not be limited to financing alone, but will also expand to training SME founders, with the aid of the expertise of the IFC.
He explained that this step is aligned with the initiative launched by the CBE to finance these projects, and increase the size of loans provided to them to more than 20% of the total loan portfolios of banks operating in the Egyptian market, compared to the current average of 6%.
Outside SME investment, Fayed said the bank is considering financing projects in the transportation sector, including the new metro line, in addition to projects in renewable energy. The bank also anticipates proposing projects in the Suez Canal Area Development project.
Fayed highlighted that no single sector obtains more than 15% of Bank Audi-Egypt's loan portfolio.
Bank Audi-Egypt most prominently finances initiatives in the sectors of petroleum, energy, road infrastructure, transportation, construction materials, food stuffs, and packaging sectors.