Banks increase bad debt allocations by EGP 27.2bn due to flotation

Hossam Mounir
3 Min Read

The total financial position of banks jumped to EGP 3.99tn at the end of November 2016, compared to EGP 3.133tn at the end of October, marking an increase of EGP 857.2bn, according to the Central Bank of Egypt (CBE).

The bank said in a recent report that the increase came supported by the increase in the financial position components following the flotation of the pound on 3 November 2016.

According to the CBE, banks have raised the size of their bad debt allocations by EGP 27.2bn in November, reaching EGP 98.603bn, up from EGP 71.357bn at the end of October. The increase came after re-evaluating the size of loans granted in foreign currencies.

The CBE had noted that the size of loans granted to non-government bodies in hard cash increased from EGP 199.533bn in October to about EGP 394.396bn in November, an increase of EGP 194.863bn.

The size of loans granted to the government in foreign currencies also increased from EGP 87.2bn in October to EGP 178.57bn in November, an increase of EGP 91.3bn.

In the same context, banks supported the size of the reserves allocated to face emergencies by EGP 29.57bn in November, settling at EGP 119.07bn, up from EGP 89.49bn in October.

In another matter, the CBE had also stated that the net foreign assets of the banking sector encountered a record deficit in November 2016, estimated at EGP 191.386bn, up from EGP 121.937bn in October.

Net foreign assets of the CBE also recorded a deficit of EGP 82.343bn at the end of November compared to EGP 59.468bn at the end of October.

The total volume of foreign assets at the CBE amounted to EGP 381.711bn, while the size of its liabilities is at EGP 464.054bn.

In addition, foreign assets at banks rose from EGP 79.387bn in October to EGP 174.862bn in November; foreign liabilities also rose by almost 100% to record EGP 283.905bn. This put the net foreign assets deficit of banks at EGP 109.043bn, up by 74.5% in October.

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