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Private sector acquires 66.3% of total bank loans to clients by December: CBE Non-performing loans rate declines to 5.8% of total loans in banks, with allocations of 99.1%
The private sector has obtained 66.3% of total loans provided by banks to their clients until December, compared to 70% by the end of September, according to the Central Bank of Egypt (CBE). The CBE mentioned in a report that the loans granted to the private sector represented 55.3% of total loans provided by the five largest banks to their clients, while it recorded 59.6% at the ten largest banks. The amount of non-performing loans in banks working in the Egyptian market has reached 5.8% of the total loan portfolio by the end of December, compared to 5.9% in September 2016, according to the CBE. These loans recorded 3.4% at the five largest banks operating in Egypt, while they reached 3.7% for the ten largest banks. The report furthermore mentioned that banks working in the local market have created allocations of 99.1% for total non-performing loans in December, compared to 99% in September 2016. While the five and ten largest banks offered allocations of 100%. The banks have increased their allocations to cover the non-performing loans, in light of the revaluation of loans in foreign currency after the CBE's decision to float the local exchange rate, as well as to avoid any delay in payment after the increase of their value. According to the CBE, these numbers were true until the end of the fiscal year on 30 June 2016 for the public sector, and 31 December for other banks. "The yield of average assets in banks working in the Egyptian market was stable at 1.5% in December 2016, without a change compared to September, while it reached 1.6% at the 10 largest banks. The yield of average property rights was stable at 24.4%, whereas it recorded 25.1% at the five largest banks, and 27.9% at the 10 largest banks. The net margin yields stood at 4%, while it reached 3.8% at the five largest banks and 4.1% at the ten largest banks," the report stated. The report added that average actual liquidity in local currency in banks declined to 52.2% in December, compared to 56.7% in September. It recorded 52.1% at the five largest banks, and 53.2% at the ten largest banks. The average actual liquidity in foreign currencies increased to 66.8% in December, compared to 59.9% in September. This ratio recorded 71.6% at the five largest banks, and 70.8% at the ten largest banks. The CBE's report pointed out that the loans to deposits ratio in banks working in the Egyptian market has increased to 47.2% in December, compared to 44.2% in September, while this ratio recorded 45.6% at the five largest banks, and 44.6% at the ten largest banks. The total loans ratio to deposits in local currency declined to 38.5% in December, compared to 38.7% in September. This ratio recorded 36.1% at the five and ten largest banks. The loans to deposits ratio in foreign currencies slightly increased to 66.5% in December, compared to 66.4% in September, while it recorded 67.4% at the five largest banks and 63.7% at the ten largest banks. The ratio of assets to deposits in banks in December has declined to 69.8%, compared to 71.9% in September. This ratio recorded 66.8% at the five largest banks and 68.7% at the ten largest banks. The securities portfolio recorded 18% of total bank assets in December, compared to 21.5% in September, while this ratio recorded 19.4% at the five largest banks and 19.7% at the ten largest banks, according to the report. With regard to capital adequacy, the CBE revealed that the capital base to risk-weighted assets reached 14.1% in December, without a change compared to September, while this ratio recorded 13.5% at the five largest banks and 13.8% at the ten largest banks. The first portion of banks' capital to risk-weighted assets declined to 11.3% in December, compared to 11.7% in September, while this ratio recorded 10.3% at the five largest banks and 10.6% at the ten largest banks. The ratio of continued capital in banks to risk-weighted assets reached 9% in December, compared to 9.2% in September, while this ratio recorded 7.1% at the five largest banks and 7.7% at the ten largest banks. The leverage ratio in banks declined to 5.1% in December, compared to 5.3% in September, recording 4.7% at the five and ten largest banks. The CBE said that the ratio was a trial ratio starting from September 2015 and will continue to be so until the end of 2017. Starting in 2018, the ration will be obligatory with a minimum of 3%.
