By: Ahmed Yacoub
AIB has allocated 1 billion EGP for Suez Canal Region Development Projects, 500 million EGP for financing the youth small and medium projects in the region and the other 500 million for financing mega projects, the Chairman of the Arab Investment Bank Hany Seif al-Nasr told Youm7 in an interview.
Banks have the needed liquidity to fund projects of all types and volumes, he said,noting the importance of the role played by the banks in collecting 64 billion EGP in 8 working days through tendering Suez Canal investment certificates.
He stressed that there is a study undertaken by banking alliances, including AIB, to finance Suez Canal Region Development Projects.
AIB is working on increasing its branches to 35 by the end of 2015, by adding 17 new branches that include 12 branches for the small and medium projects, he told Youm7.
Seif al-Nasr said the volume of the deposits portfolio hiked to 8.6 billion EGP at the end of June, while the loan portfolio recorded 4 billion EGP at the end of the first half of 2015.
The full text of the interview:
How do you see the role of the Egyptian Banking sector during the coming period in terms of financing Suez Canal Region Development projects?
Digging the New Suez Canal in one year through exclusively Egyptian funding, with a total of 64 billion EGP collected in just eight working days, reflects the strong will of the Egyptian people, and shows how they support a president with a vision in pushing forward the growth of the Egyptian economy through mega national projects; a historical epic assuring that Egypt is on the right path.
The other challenge is the financing role of the banks regarding the Suez Canal Region Development projects in the coming period; the Egyptian banking sector has the needed liquidity to fund all the projects planned to be implemented in the Suez Canal region with all its types and volumes.
The banks will participate in banking alliances to pump the necessary funds for these projects that will contribute to the growth of Egypt’s gross domestic product and motivate direct foreign investment to enter Egyptian markets, through a vision for the mortgage and touristic development.
Also, there are other national projects in need of financing, such as the 4-million acres project, North Coast development and others.
What about the role of the AIB in financing the national projects and others?
AIB has allocated 1 billion EGP to finance the Suez Canal Region Development Projects in the coming period, 500 million EGP for financing youth-led small and medium projects in the region and the other 500 million for financing mega projects, among banking alliances in energy, logistics, freight, discharging and other sectors.
We have already begun pumping the 1 billion EGP allocated for the projects in two projects and will keep on pumping until the end of 2015.
As for the bank’s branches in the Suez Canal region governorates, we are working on renovating the Port Said branch and the Egyptian Central Bank approved the inauguration of two new branches in New Suez and New Ismailia cities.
What about the volume of the deposit and loan portfolios of the AIB at the end of the first half of the current year?
We achieved very good results; the volume of the deposit portfolio increased from 2.2 billion EGP at the end of December 2011 to 8.6 billion EGP at the end of June 2015. Moreover, the loan portfolio surged from 2 to 4 billion EGP at the end of the first half of the current year.
We are working on transferring the AIB to an instrument working on trade and investment development in the Arab region and we have the needed liquidity to participate in the mega project; capital will increase to 1 billion EGP by the end of 2015.
What about the bank’s plan to increase its branches’ network?
AIB has possessed 12 branches for 30 years and during 2014 we added six new branches, for a total of 18. Moreover, there is a plan to expand the network by establish new branches during the current year; the Egyptian Central Bank approved the inauguration of 17 new branches that include 12 branches for small and medium projects and five for mega projects. Through this, the bank’s branches will be doubled to cover all the important areas in the country with the best customer service provided.
Tell us about AIB’s expansion plan and business development during the coming period.
AIB is working via two main axes: the first through providing and developing the banking business, which is to be improved through teamwork.
The second axis involves updating the bank’s infrastructure to ensure enhancing the daily business service and facilitating the procedures to raising customer service standards.
We are also concerned about the small projects sector and the role it plays in development and offering successful and stable jobs that lead to mobilizing the national economy effectively and rapidly.
The bank is also improving and updating banking retail products, such as various personal loans; car loans; debit, credit and installment cards, and saving certificates in EGP and foreign currencies. We aim to duplicate the personal finance portfolio through suitable distribution channels.
What about the profits and the business results of the last fiscal year of the AIB?
Last July, AIB held ordinary and extra-ordinary general meetings; financial statements revealed profits of about 177 million EGP, before discounting taxes and allocations. Moreover, the total budget reached 8 billion EGP at the end of 2014, with a 2-million increase compared to the previous year and a growth rate of 33 percent.
Also, customers’ deposits rose by 1.5 billion EGP compared to the last year and a growth rate of 30 percent, with an enhancement in the cost, quality and duration of the deposits according to the bank’s policy in supporting the growth and the increasing revenues.
Loans and facilities achieved 3.2 billion EGP, with a 500 million EGP increase compared to the previous year and a growth rate of 18.5 percent, after discounting the allocations.
The total new loans and facilities offered in 2014 reached 1 billion EGP; 660 million EGP were used until the end of the last year, in addition to the enhancement of the quality and degree of customers’ classification and the variation of activities along with working on reducing the portfolio’s risks.
The net income recorded 277 million EGP with an increase by 73 million EGP compared to the previous year and a growth rate of 36 percent. Capital adequacy rate reached 17 percent as per the best application of the credit policies.