Export Development Bank of Egypt (EBE) was established for the purpose of boosting Egyptian exports. The Bank offers banking and financial services to encourage the export activities of the agricultural, industrial, commercial and services sectors. One of the main business lines and activities of the Bank is the Corporate Banking and Loan Syndication Activities.
How do you assess the resilience of Egypt’s banking sector?
During 2004-2009, Egypt saw a period of consolidation, reform, and implementation of Basil II. The Central Bank of Egypt had become very involved and built a solid base to absorb potential market shocks. Therefore, once the 2008 global financial crisis approached, the Egyptian banking sector was protected. Something similar happened during the 2009 Dubai crisis. Egyptian banks had limited exposure and largely remained intact. The real test for the Egyptian financial sector was the 2011 Arab Spring and subsequent turmoils in 2013. These were much more impactful incidents that in particular showed how well prepared the banking sector was to withstand external shocks. Security measures worked well, and in the background, all banks were operating normally. As a whole, the baking industry has grown a resilience to external shocks and continued to develop measures to improve.
How do you assess Egypt’s banking sector in 2018?
From a regulatory perspective, the right measures have been taken. Even so, 2018 was a challenging year. A significant challenge followed the EGP’s devaluation. Clients with outstanding borrowings in external currencies overnight found they had doubled their debt. The Central Bank of Egypt and banks have handled the situation quite well. Banks have been able to settle these issues on a case by case basis.
From a corporate and individual retail perspective, the high-interest rates are a challenge.
In 2019 we see a rebound in the sector. We project interest rates will come down slightly, exports will continue to do well, and Egypt will perform even better than in 2018. Without undermining the challenges we are facing, I firmly believe Egypt will continue to be of great importance for the development of the region. Its strategic location, human capital, and vast natural resources can be developed further, and the baking sector is supporting these developments.
How do you assess the potential of growing Egyptian exports?
Exports are the backbone of any economy and heavily rely on the development of industry and manufacturing. Egypt has excellent manufacturing capabilities in textile, cotton, agriculture, pharmaceutical, engineering, and chemical fertilizers amongst other sectors. A diversified economy that is not relying on oil and gas excessively. Growing exports further will significantly improve national development.
We especially see potential in growing service exports. Egypt’s private sector has the necessary skillsets to export competitive services like offshoring, construction services, healthcare, and education amongst others.
What is the role of African trade?
European and American markets are saturated while opportunities within the African continent are set to double by 2030. In addition, there is a strong political will headed by African heads of state to develop it faster. President Sisi is chairing the African Union in 2019 and will help shape this agenda. Egypt gained expertise through the execution of massive national mega infrastructure projects in partnership with leading global corporations. Egypt can export these services to the region. Africa will develop large-scale infrastructure projects over the next few decades resembling those Egypt has undertaken in the past few years.
How is EBE working to support the export sector?
EBE is very focused on encouraging manufacturers and facilitating their ability to increase their exports. We have 66% of our portfolio focused on the industrial sector. We have 70% of our facilities given to exporters with the 30% remainder support entities working in the export value chain or import substitution. We increasingly support SME’s and they make up 28% of our portfolio. This strategy has worked well for the bank. In the past two years, we have doubled our portfolio, revenues, and bottom line profits.
EBE opened a new department for “export promotion and finance.” It leverages EBE’s knowledge and supports companies that export, or could begin exporting. This department goes beyond Cairo to identify and support the development of potential exporters, whether it is a large industry or small handicrafts.
We firmly believe that to foster exports we must support our clients with the best services possible. Digitization is not an option. If banks continue to function in the same traditional way, they will be wiped out in 10 years. Therefore, digitization is a core pillar within EBE’s transformation.
EBE has improved its website, added new features, launched mobile banking and introduced e-wallet. Smartphones today are a moving bank and allow us to penetrate even remote regions. We are enhancing our ATM network, and upgrading ATM’s to offer foreign exchange and deposits. We are in the nascent stages of digitization and will continue to incorporate new technologies to better serve clients with quicker, and a more efficient network.
It leverages EBE’s knowledge and supports companies large or small that export, or could begin exporting.
This department goes beyond Cairo to identify and support the development of potential exporters, whether it is a large industry or small handicrafts.
It leverages EBE’s knowledge and goes beyond Cairo to support the development of large or small potential exporters.