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Egypt Economy, Banking Sector And Opportunities In SMES.

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Presentation on theme: "Egypt Economy, Banking Sector And Opportunities In SMES."— Presentation transcript:

1 Egypt Economy, Banking Sector And Opportunities In SMES

2 EGYPT MAIN ECONOMIC INDICATORS 1

3 2 Real GDP Growth 3,2% Jun-03 7,2% Jun-08 4,7% Jun-09 5,1% Jun-10 1,9% Jun-11 2,2% Jun-12 Source: CBE,, EIU WHILE ECONOMIC GROWTH IS 2.2% IN FY 2012, ITS EXPECTED TO RAMP UP TO 5% BY YEAR 2016

4 3 USD Million Trade Balance Dec-11 *Jun-12Jun-11Jun-10Jun-09Jun-08Jun-03Dec-12 * Source: CBE * 6 months Jul/Dec TRADE BALANCE DEFICIT INCREASED NOTICEABLY AFFECTED MAINLY BY A SURGE IN IMPORTS

5 4 Export Proceeds Dec-12 * 13,448 7,015 6,433 Jun-12 26,977 Jun-11 26,993 13,847 12,136 14,857 13,130 Jun-08Jun-09Jun-10 29,356 14,473 14,883 25,169 11,005 14,164 23,874 10,259 13,615 Non-Petroleum ExportsNon-Petroleum ExportsNon-Petroleum ExportsNon-Petroleum Exports Petroleum ExportsPetroleum ExportsPetroleum ExportsPetroleum Exports Dec-11 * 13,589 6,739 6,850 Source: CBE, EIU * 6 months Jul/Dec USD Million EXPORT PROCEEDS MAINTAINED THE SAME LEVELS AS 2011, AND EXPECTED TO REACH USD 27.9 BN IN FY 2013

6 5 Import Payments Source: CBE * 6 months Jul/Dec USD Million WHILE GOVERNMENT ARE TAKING MEASURES TO CURB IMPORTS ON UNNECESSARY GOODS -7,032 -43,310 -48,993 -5,161 -43,832 -23,802 -29,187 Jun-08Jun-09 -11,775 Jun-11 -54,096 -44,834 -9,262 Non-Petroleum ImportsNon-Petroleum ImportsNon-Petroleum ImportsNon-Petroleum Imports Petroleum ImportsPetroleum ImportsPetroleum ImportsPetroleum Imports Dec-12 * -30,236 Jun-10 -52,771 -9,561 -43,210 -50,342 -23,533 -6,703 Jun-12 -58,674 -46,899 Dec-11 * -5,385

7 6 Current Account Balance Source: CBE * 6 months Jul/Dec USD Million CURRENT ACCOUNT LARGELY IMPACTED BY TRADE BALANCE WHILE SERVICES SECTORS AND REMITTANCES ARE MAKING NEW HIGHS Jun-10Jun-11Jun-09Jun-08Dec-12 *Dec-11 *Jun-12

8 7 Suez Canal Revenues Dec-12 *Jun-03Jun-08Jun-09Jun-10Jun-11Jun-12Dec-11 * Source: CBE * 6 months Jul/Dec USD Million SUEZ CANAL REVENUES CONTINUES NOT TO BE IMPACTED AND TO MAKE NEW HIGHS IN YEAR 2013

9 8 Tourism Revenues Dec-12 *Jun-03Jun-08Jun-09Jun-10Jun-11Jun-12Dec-11 * Source: CBE * 6 months Jul/Dec USD Million TOURISM REVENUES IMPROVING, AND EXPECTED TO RECORD USD 11.2 BN IN FY 2013, UP 20% FROM LAST YEAR AND TO REACH PRE-CRISIS LEVELS

10 9 Remittances of Egyptians Working Abroad Dec-12 *Jun-03Jun-08Jun-09Jun-10Jun-11Jun-12Dec-11 * Source: CBE * 6 months Jul/Dec USD Million REMITTANCES OF EGYPTIAN WORKING ABROAD MAKING NEW HIGHS, AND EXPECTED TO RECORD USD 21 BN IN FY 2013

11 10 Overall Balance Of Payment Source: CBE * 6 months Jul/Dec USD Million AS A RESULT, OVERALL BALANCE OF PAYMENTS REDUCED SIGNIFICANTLY TO JUST 0.5 BN IN DECEMBER 2012 IN COMPARISON WITH 8 BN IN DECEMBER 2011 AND 11 BN IN JUNE 2012 Jun-10Jun-11Jun-09Jun-08Dec-12 *Dec-11 *Jun-12

12 11 Net International Reserves Mar-13 13,4 Jun-12 15,2 Jun-11 26,6 Jun-10 35,2 Jun-09 31,3 Jun-08 34,6 Jun-03 14,8 Apr-13 14,4 Source: CBE USD Million … STOPPING DRAINAGE ON RESERVES WHICH STARTED TO RISE AGAIN IN APRIL 2013

13 12 Total Debt % of GDP External debt to GDP factoring in the informal sector (around 50% of GDP) can be as low as 10% of GDP Source: Ministry of Finance AND WITH LOW FOREIGN DEBT AS LOW AS 16% OF GDP ALLOWS EGYPT TO WEATHER THROUGH ANY CRISIS External Debt To GDPExternal Debt To GDPExternal Debt To GDPExternal Debt To GDP 2009 84,5% 17,4% 2008 86,0% 19,0% 70,6% 67,1% 67,0% Internal Debt To GDPInternal Debt To GDPInternal Debt To GDPInternal Debt To GDP 67,0% 2012 90,5% 15,6% 2011 85,0% 14,4% 2010 83,4% 16,4% 74,9%

14 BANKING SECTOR INDICATORS 13

15 14 Aggregate Deposits 278,179 124,965 403,144 Jun-03 552,079 195,120 747,199 Jun-08 598,587 211,107 809,694 Jun-09 686,052 206,440 892,492 726,940 230,097 957,037 Jun-11 778,476 245,041 1,023,517 279,857 1,110,610 Jun-12 830,753 Jan-13 LCY FCY +8% Jun-10 A VERY RESILIENT BANKING SECTOR, DEPOSITS CAGR REPORTED 8% NOT AFFECTED BY ANY CRISIS Source: CBE EGP Million

16 15 +6% Jan-13Jun-12Jun-11Jun-10Jun-09Jun-08Jun-03 Gross Loans LOANS REPRESENT ONLY 33% OF GDP, WITH AMPLE OPPORTUNITIES TO GROW Source: CBE EGP Million

17 16 Total Assets +6% Jun-03Jun-08Jun-09Jun-10Jun-11Jun-12Dec-12 ASSETS GROWTH OF 6% CAGR MIRRORING GROWTH IN LOANS Source: CBE EGP Billion

18 17 Jun-11 10,5% Jun-10 13,6% Jun-09 13,4% Jun-08 14,8% Jun-12 9,9% NPLs / Gross Loans NPLs ON A DECLINE DUE TO RIGOROUS RISK MANAGEMENT CONTROLS Source: CBE

19 18 95,7% Sep-12 92,1% Jun-08 100,4% Jun-09 92,5% Jun-10 94,5% Jun-11 95,4% Jun-12 Loan Provisions / NPLs PROVISIONING GAP COMPLETELY CLOSED, ESTIMATED TO BE AROUND EGP 102 BN BEFORE THE BANKING SECTOR REFORM (2000- 2003) Source: CBE

20 19 82,4% Sep-12 82,4% Jun-03 83,9% Jun-08 81,0% Jun-09 80,5% Jun-10 81,0% Jun-11 82,2% Jun-12 Loans to Private Sector / Total Loans to Customers PRIVATE SECTOR LOANS CONSTITUTE MOST OF THE LENDING Source: CBE

21 20 Jun-09Jun-08Jun-11Jun-10Jun-12Dec-12Sep-12 OVER THE PAST FEW YEARS BANKS HAVE DOUBLED THEIR CAPITAL EGP Billion Source: MOF Capital of banking Sector

22 21 13,9% Sep-12 10,0% Jun-03 11,5% Jun-08 12,0% Jun-09 12,7% Jun-10 13,3% Jun-11 13,6% Jun-12 Tier 1 Capital / Risk-Weighted Assets RESULTING IN A WELL CAPITALIZED BANKING SECTOR, TIER 1 CAPITAL TO RISK WEIGHTED ASSETS WAS 13.9% IN SEPTEMBER 2012, ESTIMATED TO BE 15% ON TIER 2 CAPITAL Source: CBE

23 22 57,7% Sep-12 31,0% Jun-03 34,5% Jun-08 43,4% Jun-09 44,7% Jun-10 55,6% Jun-11 56,0% Jun-12 Liquidity Ratio (Local Currency) A VERY LIQUID BANKING SECTOR ON LCY Source: CBE Liquidity ratio is calculated by dividing (cash, surplus in reserves balance held at CBE, cheques, T-bills and bonds and CP) by (due cheques, deposits, due to banks) Minimum liquidity ratio of LCY is 20%

24 23 55,4% Sep-12 48,1% Jun-03 46,8% Jun-08 41,0% Jun-09 40,6% Jun-10 51,8% Jun-11 53,9% Jun-12 … AND IN FCY Source: CBE Liquidity ratio is calculated by dividing (cash, balance held at CBE, cheques, due from banks, T-bills and bonds issued by FI) by (due cheques, deposits, due to banks) Minimum liquidity ratio of FCY is 25% Liquidity Ratio (Foreign Currency)

25 NBE PERFORMANCE - SNAPSHOT ON 2012 FIGUERS 24

26 25 NBE MADE REMARKABLE ACHIEVMENTS IN JUNE 2012, PBT INCREASED BY 46% TO EGP 6.1 BN Dec-12 * Dec-11 * Jun-08Jun-09Jun-10Jun-11Jun-12 +90% +46% Profit Before Taxes EGP Million * 6 months Jul/Dec

27 26 Dec-12 *Dec-11 *Jun-08Jun-09Jun-10Jun-11Jun-12 +35% +82% SUPPORTED BY 82% GROWTH IN NET INTEREST INCOME Net Interest Income EGP Million * 6 months Jul/Dec

28 27 340,7 Dec-12 225,1 Jun-09 300,0 Jun-10 306,4 Jun-11Jun-12 +9% 321,5 259,1 Jun-08 +5% TOTAL ASSETS INCRESED BY EGP 96.4 BN SINCE 2008 TO REACH EGP 321.5 BN IN JUNE 2012 Total Assets EGP Billion

29 28 Customer Deposits 286,0 Dec-12 50،950،950،9 235،1235،1235،1 131,8 41,8 173,6 Jun-08 170,5 48,4 218,9 Jun-09 196,3 48,4 244,7 Jun-09 210,8 50,3 261,1 Jun-11 226,9 52,0 278,8 Jun-12 Local Foreign +13% NBE DEPOSITS INCREASED BY EGP 105.2 BN FROM 2008 UNTIL JUNE 2012 IN COMPARISON WITH EGP 276.3 BN INCREASE IN THE BANKING SECTOR, CAPTURING 38% OF THE GROWTH IN THE MARKET EGP Billion

30 29 23,2 Dec-12 4,9 Jun-08 11,5 Jun-09 16,0 Jun-10 18,2 Jun-11 21,2% Jun-12 +44% Settlements for NPL NBE MADE SETTLEMENTS FOR NON PERFORMING LOANS, WHICH HAVE HAD A NEGATIVE IMPACT ON CAPITAL EGP Billion Cumulative

31 30 NPL 6,7 Dec-12 23,4 June 2008 21,1 June 2009 19,9 June 2010 8,4 June 2011 6,5 Jun-12 -27% AND DECREASED NON PERFORMING LOANS TO EGP 6.5 BN IN JUNE 2012 COMPARED WITH EGP 23.4 BN IN 2008 EGP Billion

32 31 19,1 Dec-12 7,7 Jun-08 10,5 Jun-09 13,9 Jun-10 13,0 Jun-11 13,6 Jun-12 +15% Equity NBE SUCCEDED IN INCREASING EQUITY TO EGP 13.6 BN IN JUNE 2012 COMPARED WITH EGP 7.7 BN IN 2008 EGP Billion

33 32 NBE MODERNIZED THE LOOK AND FEEL OF ITS BRANCH NETWORK

34 33 Dec-12Jun-08Jun-09Jun-10Jun-11Jun-12 +25% ATMs AND INCREASED THE NUMBER OF ATMS TO REACH 1,496 MACHINES IN DECEMBER 2012 CAPTURING MORE THAN THIRD OF THE MARKET

35 THE DEVELOPMENT OF SMES IN EGYPT 34

36 35 FACTS AND FIGURES (1/2) SMES IN EGYPT As per latest statistics, SMEs are employing 7.5 mn people representing 33.7% of the employed workforce Increased in GDP contribution over the last ten years from 40% to 70% of GDP Estimated gap in financing for SMEs around EGP 30 bn in FY 2012

37 36 FACTS AND FIGURES (2/2) SMEs in Egypt Served by Banks 60% Unserved Clients 40% NBE 22% Other Banks 78% Served by NGOs 49% Unserved Clients 51% Formal Sector 10% Informal Sector 90% SMEs MarketFormal Sector Informal SectorSMEs Clients Served by Banks

38 37 STRATEGIC IMPORTANCE OF SMES IN EGYPT Providing new job opportunities to reduce the unemployment rate Raising social welfare to reduce poverty Contribution to social, economic and political stability Supporting innovation and creativity Providing feeding industries Promoting real economic growth Improving countrys trade balance

39 38 NBE INITIATIVES TO PROMOTE SMES Providing more delegation to branches and regions to ensure efficient and timely processes Providing different products (e.g. Leasing, Factoring, Islamic Finance, Equity Finance) Launching consultancy and advisory department and call center Cooperation with donors and external funds in different fields like: Manufacturing, Services and Agriculture (operating 13 fund programs providing about EGP 5 bn)

40 39 ACCORDINGLY PORTFOLIO DOUBLED IN LESS THAN 3 YEARS NBEs SMEs Portfolio of Performing Direct Loans EGP Billion Dec-12 7,70 Jun-12 6,50 Jun-11 5,00 Jun-10 4,50 Mar-13 8,40

41 40 AND CAPTURED 40% OF DIRECT FINANCING NEEDS NBE 40% Other Banks 60% NBEs Client Share in Terms of Direct Finance

42 41 AS CLIENTS ACQUISITIONS GREW TO 13.7K IN MARCH 2013 +36% 8.700 Mar-13 6.400 13.733 Dec-12 9.728 Jun-12Jun-11 NBEs SMEs Client Acquisition

43 42 VISION FOR SMES FUTURE Providing USD 500 mn annually to finance new startups and mature enterprises promoting the creation of 315 k new job opportunities Establishing an SME council for all parties operating in the field Unifying SMEs definition across the country Assisting in the conversion from the informal sector to the formal sector through creation of strong incentive schemes Developing industrial and rural clusters in addition to incubators and industrial malls Expanding in Venture Capital Expanding in credit guarantee schemes Expanding in technical assistance support programs

44 Thank You


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