The CBE reveals the most important indicators of the financial sustainability of the Egyptian banking sector in the third quarter of 2021


The Central Bank of Egypt (CBE) revealed the most important financial sustainability indicators for banks operating in the Egyptian market during the third quarter (3Q) of 2021.

According to the CBE, the total financial position of banks operating in the local market increased to around EGP 8.484 billion in September 2021, from around EGP 7.948 billion in June 2021.

On the asset side, the total cash balance of banks was around EGP 63.891 billion, compared to around EGP 65.190 billion during the comparison period. Balances with banks in Egypt recorded around EGP 1.275 billion, while balances with banks abroad stood at EGP 232.204 billion.

Customer loans and remittances recorded around EGP 2.948 billion, while treasury bill securities and investments reached EGP 3.018 billion.

On liabilities and equity, the CBE said total banks’ capital was around EGP 198.583 billion in September 2021, up from EGP 185.357 billion in June. On the other hand, reserves recorded 349.543 billion EGP, while provisions amounted to approximately 178.080 billion EGP.

Obligations to banks in Egypt amounted to around EGP 297.941 billion, while obligations to banks abroad recorded EGP 116.381 billion and total deposits reached EGP 6.059 billion, while long-term bonds and loans amounted to EGP 236.421 billion.

Regarding asset quality, the CBE said non-performing loans to total loans stood at 3.6% in September 2021, up from 3.5% in June 2021.

The CBE revealed that the 10 largest banks operating in the Egyptian market accounted for 2.7% of total NPLs, while the percentage reached 2.3% in the five largest banks.

The banks’ loan provisions covered 92.8% of their total NPLs in September 2021, up from 94% in June 2021. At the same time, the loan provisions of the 10 largest banks operating in the Egyptian market covered 100% of their non-performing loans. .

“The volume of provisions that banks allocated to cover bad loans was approximately 178.08 billion EGP in September 2021, and the share of the 10 largest banks of these provisions was 122.232 billion EGP, while it stood at EGP 103.004 billion in the five largest banks. “, According to the CBE.

Egyptian banks declared reserves worth EGP 349.543 billion in September 2021, of which the share of the 10 largest banks was EGP 264.389 billion, while the reserve volume of the five largest banks was to about EGP 222.725 billion.

In addition, the CBE said that the loan-to-deposit ratio at banks operating in the Egyptian market decreased to 48.8% in September 2021, from 50.8% in June 2021, and this ratio reached 48.8%. in the 10 biggest banks and 49.6% in the 5 biggest banks.

The ratio of loans to deposits in local currency stood at 45.3% in September 2021, against 47.9% in June 2021, and this ratio reached 44.6% in the top 10 banks, and recorded 44, 7% in the top five banks.

The ratio of bank loans to foreign currency deposits rose to 71.9% in September 2021, against 68.8% in June 2021, and this ratio reached 78.5% in the top 10 banks and 88.4% in the top five banks.

“The private sector represented 58.2% of the total loans granted by banks to their customers in September 2021, against 57.1% in June 2021”, according to the CBE.

The private sector acquired 49.7% of total loans in the top 10 banks operating in Egypt, compared to 45.5% in the top five banks.

The CBE said that the total deposits in banks amounted to about 6.059 billion EGP in September 2021, of which about 4.720 billion EGP was in the top 10 banks, while the volume of deposits in the top five. largest banks operating in Egypt is around EGP 4.157 billion. .

The ratio of deposits to assets in banks stood at 71.65% in September 2021, against 72.2% in June 2021, and this ratio reached 70.9% in the top 10 banks and 70.4% in the first five.

The CBE noted that the local currency liquidity ratio in banks increased to 45.6% in September 2021, from 45.5% in June 2021, and this ratio was 45.7% in the top 10 banks and 44.6% in the top five banks.

At the same time, the foreign currency liquidity ratio in banks decreased to 65.5% in September 2021, from 73.2% in June 2021, and this ratio reached 62.7% in the top 10 banks and 61.1% in the top five.

The CBE said that the volume of investments by banks operating in the local market in securities and treasury bills amounted to around EGP 3.018 billion in September 2021, up from around EGP 2.87 billion in June 2021. Investments by Top 10 banks in these instruments amounted to around EGP 2.379 billion, compared to around EGP 2.094 billion in the top five.

The equity portfolio of banks, excluding Treasury bills, reached 24.8% of total bank assets in September 2021, against 23.8% in June 2021. This percentage reached 26.7% in the top 10 banks, and 27.6% in the top five.

The CBE said the ratio of capital base to risk-weighted assets at all banks increased slightly to 19.03% in September 2021, from 19% in June 2021, and this ratio reached 18.9. % in the top 10 banks and 18.4% in the Top five.

The ratio of Tier 1 capital to risk-weighted assets increased to 17.1% in September 2021, from 16.8% in June, and this ratio reached 16.7% in the top 10 banks and 16.3% in the top five.

According to the CBE, the ratio of common stocks to risk-weighted assets stood at 13.1% in September 2021, up from 13.2% in June 2021, and this ratio reached 12.3% in the 10 largest banks and 11.6% in the 5.

In addition, the bank leverage ratio fell slightly to 6.7% in September, from 6.9% in June 2021, and this ratio reached 6.1% in the 10 largest banks and 5.8% in the first five. According to the EPC, the percentage with a lower margin is indicated as 3%.

In another context, the CBE revealed that the net open position in foreign currencies relative to equity reached -2.2% in all banks operating in the Egyptian market in September 2021, compared to -2.4% in June 2021. This percentage was -3.4% in the top 10 banks and -3.9% in the top five. The total net open positions (short or long) for all foreign currencies must not exceed 20% of the capital base.

Meanwhile, the CBE revealed that banks operating in Egypt recorded net profits of around EGP 80.103 billion in September 2021. They achieved a net return of EGP 213.260 billion, while net income rose to a net profit of EGP 213.260 billion. amounted to EGP 265.537 billion and total expenditure amounted to EGP 185.434. billion.

According to the CBE, the top 10 banks accounted for around 85.9% of total profits, as they made around EGP 68.877 billion in September 2021. The top 10 banks achieved net revenues of EGP 212.051 billion, net returns of EGP 169.280 billion; and total expenditure spent of EGP 143.174 billion.

As for the top five banks, they accounted for 74% of total industry profits, recording 59.333 billion EGP, achieving net income of 184.531 billion EGP and net return of 146.013 billion EGP, as well as total expenditure. of EGP 125.198. billion.

The CBE said that the banks’ average return on assets registered 1.2% in September 2021, while the average return on equity was 14.9% and the net return margin reached 3.7%, unchanged from June and March 2021.

In the top 10 banks, the return on average assets reached 1.2% in September, while the return on average equity reached 15.9% and the net return margin reached 3.6%.

The return on average assets in the top five banks was 1%, while the return on average equity was 14.5%, and the net return margin reached 3.3%.



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