Non-performing loans at banks operating in the Egyptian market fell to approximately 7.2% of their total loans portfolios at the end of September 2015 compared to 7.6% in June 2015, according to the Central Bank of Egypt (CBE).
In a recent report issued by the CBE, banks operating in Egypt allocated provisions amounting to approximately 99% of total non-performing loans in September compared to 98.7% in June.
The report indicated that the private sector obtained 75.9% of the total loans granted by banks to their customers at the end of September compared to 80.5% at the end of June.
According to CBE, the Return on Average Assets of banks operating in the Egyptian market stabilised at approximately 1.3% in September 2015, unchanged from June. Return on Average Equity remained at 18.9% while the Net Interest Margin remained unchanged as well at 3.7%.
“The liquidity ratio in local currency recorded 59.6% in September compared to 63.1% in June, while the average liquidity in foreign currency fell to 48.9% in September from 49.7% in June,” the CBE reported.
The CBE’s report pointed out that the total loans-to-deposits ratio was 42% in September compared to 41.4% in June, whereby the loans-to-deposits ratio in local currency increased slightly to 35.2% in September compared to 34.8% in June. The loans-to-deposits ratio in foreign currencies was 69.1% in September compared to 66.1% in June.
In September, the deposits-to-assets ratio amounted to 76.7%, versus 79.2% in June. The securities-to-assets portfolio recorded 23% in September compared to 24.3% in June.
With regards to capital adequacy, the CBE revealed that the ratio of capital base to risk-weighted assets decreased to 13.2% in September compared to 13.5% in June. The ratio of tier 1 capital to risk-weighted assets decreased to 11% in September compared to 11.5% in June.
The common equity to risk-weighted assets ratio amounted to 11% in September compared to 11.2% in June. The leverage ratio in banks, which has been used since September 2015, was 5.2%.
The CBE also revealed that the leverage ratio is used as a guidance ratio from September 2015 until 2017, and will compulsory beginning in 2018 with minimum requirement ratio of 3%.