NBK - Egypt targets 20% total growth in 2018: CEO & managing director

NBK Group fully believes in Egyptian market, potential opportunities it offers, promising future ahead, says Hassan

The National Bank of Kuwait – Egypt (NBK – Egypt ) aims to achieve 20% growth in all its activities and indicators in 2018, according to Yasser Hassan, chief executive officer and managing director of the bank.
Hassan explained, in an interview with Daily News Egypt, that the bank aims to increase the number of its branches to 50 and to expand aggressively in retail banking activity based on digital banking, in addition to increasing the volume of credit granted to various economic sectors.
National Bank of Kuwait (NBK), the owner of National Bank of Kuwait – Egypt, celebrated last week 10 years of its presence in the Egyptian market following its acquisition of Alwatany Bank of Egypt (AWB) in 2007.
According to Hassan, the bank has succeeded in attracting more than EGP 30bn in new deposits to reach more than EGP 40bn at the end of September 2017, compared to EGP 10bn in 2007.
The bank also injected more than EGP 18bn into different channels of the Egyptian economy during those ten years alone, boosting the loans portfolio to EGP 25bn at the end of September, up from EGP 7bn in 2007.
How do you see the bank's 10 years of operations in Egypt?
The first 10 years of NBK's life in Egypt are success stories, starting with the acquisition of Alwatany Bank of Egypt (AWB) and entering the market as the first Kuwaiti bank in Egypt, and then developing a restructuring plan for the bank. The bank's financial results show improvement across all indicators since then.
For example, NBK – Egypt has achieved a growth of 376% in profits since its entry to the Egyptian market, to record about EGP 1.16bn by the end of September. Since then, the bank's assets increased by more than 349% to reach EGP 55.7bn.
We are proud of the bank's past years in Egypt and the success we have achieved, and we are determined to achieve more success and place the bank at a more advanced position in the coming period.
What are the most important challenges faced by the bank in Egypt during those 10 years?
NBK was determined from the outset to establish itself as a leader in providing banking services to the Egyptian market and has remained committed to this promising market.
The Kuwaiti group did not hesitate for a moment to inject more investments into the bank in Egypt, realising that the challenges facing the Egyptian economy are temporary and will be overcome, which has already happened.
We are now a leading banking experience for the global NBK group in one of the largest markets in the Middle East and North Africa, the Egyptian market.
What is your vision for the future of the Egyptian economy after the reform program being implemented?
Our vision of the Egyptian economy is very optimistic, and this optimism is built on facts rather than expectations.
The Egyptian economy has succeeded, during the past period, in overcoming difficult challenges and achieving great achievements by taking economic reform measures, foremost of which is the decision to liberalise the exchange rate, which has achieved great positive results at the level of the banking sector, as well as the cash flows to the Central Bank of Egypt (CBE).
Other decisions related to new legislation and restructuring of the state budget have also been taken.
The success of these decisions has changed how international rating institutions view the Egyptian economy, raising its status from stable to positive.
Foreign confidence in the Egyptian economy has also returned strongly, and this is reflected in the volume of foreign exchange inflows by foreign investors.
In the coming period, we expect this positive outcome to increase significantly and reflect on the level of foreign direct investment while continuing the process of economic reform.
How did the parent bank support NBK – Egypt over the years?
NBK Group is fully aware of the importance of the Egyptian market, the potential opportunities it offers, and the promising future ahead of this market, which has over 90 million people and represents a great opportunity to implement expansions and benefit from the size of the large market.
I would like to point out that NBK Group has been trying to enter the Egyptian market since the 1990s. And in 2007, it was able to acquire Alwatany Bank of Egypt (AWB). Since that date, the group has not stopped providing support to its unit in Egypt.
The bank has recently received a $55m support loan from the group to support the capital base. The group is open to all future options to support the bank in Egypt in case it is needed, as the Egyptian market is one of the most important foreign markets of the Kuwaiti group.
How do you see the floatation of the pound a year after the decision? And how did it affect the bank's activity in Egypt?
As I mentioned before, the decision to liberalise the local currency's exchange rate was one of the most important decisions of the economic reform programme. It achieved positive returns for the Egyptian economy, attracted unprecedented cash flows, supported the size of foreign exchange reserves, and eliminated the problem of hard cash availability.
Of course, NBK benefited from this decision in increasing its dollar revenues and the increase of remittances from Egyptians abroad, especially from Kuwait, which has more than 700,000 Egyptians.
What are the most important indicators of the performance of your bank during the past period?
The bank has set ambitious plans since its entry into the Egyptian market and has restructured many sectors, which has significantly affected its financial performance.
This is evident in the financial indicators released at the end of September, compared with the same indicators in 2007. The bank achieved a profit of EGP 1.16bn at the end of September, compared with about EGP 240m in 2007.
NBK – Egypt's assets increased to EGP 55.7bn from EGP 12.4bn.
The bank also succeeded in forming a portfolio of loans for individuals and companies exceeding EGP 25bn, compared to only EGP 7bn in 2007.
Deposits also increased from EGP 10bn in 2007 to EGP 40bn this year.
During the past period, we also raised the bank's capital to EGP 1.5bn to meet the expansion plan.
What are your objectives for the various activities during the coming period?
Following the great success of the credit sector in the past period, we aim to expand strongly in retail banking in 2018 and increase our credit portfolio by relying on digital banking as the true future for banking.
In the coming period, we will launch mobile payment services, "smart wallets", as well as mobile banking services. We are also working on the development of online banking, which will greatly contribute to attracting new segments of customers to the bank, and benefit from the widespread use of modern technology among Egyptians, especially youth.
These services also meet the CBE's goal of achieving financial inclusion.
We aim to achieve about 20% growth across the bank's activities in 2018 to reach 50 branches.
We also seek to increase the geographical spread of the bank by increasing its network of branches. The bank now has 43 branches spread across the best locations in different Egyptian governorates and cities, and we aim to increase them to about 60 branches by 2020.
The bank is also one of the few banks in the Egyptian market that has an Islamic license, in addition to conventional licensing. It has two Islamic branches, which allows the bank to offer Shariah-compliant products as well as traditional products.
What is the bank's market share and what is its targeted share?
NBK – Egypt enjoys a promising market share, which has been successful since its entry into the Egyptian market and through the implementation of strategic and ambitious plans.
Of course, we aim to increase this ratio in the future by expanding retail and corporate banking and targeting new customer segments to reach a position that reflects NBK's leadership in providing banking services.
What projects and activities does the bank focus on financing in Egypt?
NBK is keen to take advantage of all the opportunities available in the Egyptian economy, in view of its excellence and the opportunity to finance all economic sectors without exception.
Therefore, the bank aims to diversify its credit portfolio and finance all types of projects, including the recently launched national projects.
Last year, the bank arranged one of the biggest local market deals worth $300m for the Arab Petroleum Pipeline Company (SUMED) to implement one of the most important projects in the field of petroleum and energy, which proves the bank's leadership and keenness to support the development efforts in the country.
What is the bank's capital now and are there plans to increase it?
The bank's current capital stands at EGP 1.5bn, which is in line with the new regulations of the CBE's new banking law currently under discussion. The bank has a strong capital base that enables it to increase capital on demand.