CAIRO: Egypt s conservative banking culture protected it from the worst of the global slowdown and an expected regulations overhaul will likely encourage credit growth, Credit Agricole Egypt s managing director said on Sunday. Henri Guillemin said the bank, which has been in Egypt since 2001 and has a 2 percent market share, had seen a mild impact from the credit crisis, with some slowdown in loan activity. Yes there is an impact, which is mainly felt in sectors like textiles, tourism, automobiles (and) real estate to a certain extent, Guillemin said. After this shock, people are getting their acts together again and are starting to do business again. But he added: It is clear the financial crisis ... was a plus, there were no exotic products in this market, the regulation was very tight and this protected the Egyptian banking sector. Credit Agricole Egypt was formed following the merger of Calyon Bank Egypt and Egyptian American Bank. The bank is 60 percent owned by Credit Agricole and 20 percent owned by Mansour and Maghraby Group, a diversified Egyptian firm. The remainder is traded on the Egyptian stock exchange. Guillemin said Credit Agricole had inherited a loan-to-deposit ratio of 22 percent from the merged banks, but it had since grown to 38 percent. Loan growth rate was 50 percent in 2008. This might look very high but actually we were starting from a low base, he told reporters. Guillemin said he expected retail growth to double within five or six years, but that growth had slowed in the early months of 2009. Personal lending stood at only 20 percent of the bank s total lending, he said. Risk is a major concern because to expand our loan portfolio by creating bad debts is something we would like to avoid, he said. He added: We are here for the long term. We don t see any reason to take undue risk. There are still a lot of products and sectors where we would like to test the waters, he said. Guillemin said he expected the central bank to upgrade the regulatory framework within months to encourage further growth, particularly in trade and mortgage financing and some capital market operations, without elaborating. Analysts say only between 10 and 15 percent of Egypt s 77 million population have bank accounts.
