Crédit Agricole Egypt primarily aims to achieve sustainability, innovation: managing director

Hossam Mounir
7 Min Read

Crédit Agricole says its main goal is to achieve sustainability and innovation, as well as supporting the state in digital transformation, encouraging electronic payments, and financial inclusion.

Pierre Finas, managing director of Crédit Agricole Egypt, said in a press conference last week, that the bank is keen on participating in the Central Bank of Egypt’s (CBE) industry support and middle-income housing initiatives. However, the bank will not take part in the initiative of exempting financially troubled factories from accumulated interests on their loans because this situation does not apply on any of the bank’s clients.

Crédit Agricole discussed with the CBE the required share of SMEs financing in a bank’s loan portfolio, which was set at 20% by the CBE, Finas pointed out.

The bank has not achieved this percentage so far, especially as it is linked to the growth of the bank’s loan portfolio, so the larger the loan portfolio gets, the more serious challenges the bank faces to achieve this ratio, he added.

Finas said the bank has 7,000 SMEs clients, and offers them a package of financial and non-financial banking services. He emphasised that the bank is working on the digital transformation of all its services, with the aim of creating an integrated base of digital services for its clients, whether individuals or companies. One of every three customers in the bank has been registered in digital services, Finas noted, and about 1m digital banking transactions were made this year.

According to the bank’s managing director, the bank’s priorities in the coming period are to increase the bank’s activities, and to present distinguished banking services with added-value, alongside corporate social responsibility.

The bank’s 2020 business strategy focuses on expanding its branch network, developing its infrastructure, increasing efficiency, and introducing new products, all with the aim to achieve customer satisfaction.

On the other hand, Finas stressed that Credit Agricole is one of the largest French banks, and its market share in some regions of France reaches 50%, and 25% in the whole country, while its market share in Egypt is 1.22%. However, the bank does not aim to increase its market share as much as it wants to strengthen its presence in Egypt, Finas added.

With regard to increasing the bank’s capital, in line with Egypt’s new Banking Law, he asserted that the bank is fully prepared to comply with the law, and has enough assets to increase its capital to the required limit in the law.

Moreover, Walie El-Din Lotfy, deputy managing director of the bank, said Credit Agricole Egypt aims to increase its electronic transactions to about 50% by 2021, noting that one of every three clients in the bank uses electronic products. The past period witnessed a 25% increase in the bank’s total transactions and a 10% decrease in traditional transactions at branches, which indicates the growing dependence on electronic channels, he added.

He pointed out that the bank’s new cashless branch in Dandy Mall is still facing some difficulties as the clients are not fully familiar with cashless technology, but the bank is determined to develop the financial culture of its clients.

Credit Agricole Egypt serves 400,000 clients through 80 branches, as well as electronic channels, and aims to increase them to 85 branches by the end of 2020, Lotfy said. In addition, the bank plans to launch 130 new automated teller machines at tourist destinations to serve the tourism sector.

On a different note, Finas said that the growth of the bank’s commercial activities in 2019 reflects its balanced business model which is based on diversity of services, and balancing between various lines of business, which contributed to achieving the bank’s results.

He added that the increase in the bank’s profitability is mainly due to the bank’s keenness to meet the needs of its clients and support them in their projects and investments.

Credit Agricole Egypt’s net profit has increased to about EGP 1.868bn at the end of September 2019, compared to about EGP 1.675bn at the end of September 2018, a growth of 11.5%.

Finas stressed that the bank always adhere to its real role, which is lending not investment in debt instruments, pointing out that the loan-to-deposit ratio in the bank reached about 57% in general, and this percentage rises to 67% in the local currency.

He added that the bank’s loan portfolio increased by 11% to EGP 23.487bn at the end of September 2019, compared to EGP 21.158bn at the end of September 2018.

This development was mainly driven by a 13.6% increase in corporate loans to EGP 15.997bn, compared to EGP 14.088bn in the comparison period, as well as a 7.6% increase in individual loans, recording EGP 7.478bn against EGP 6.952bn.

With regard to the bank’s deposit portfolio, Finas said it recorded EGP 41.134bn at the end of September 2019, compared to EGP 43.484bn at the end of September 2018, a decrease of 5.4%. Moreover, the bank saw a decline in its term deposits and savings certificates by 8.8% to EGP 22.222bn until September 2019, compared to EGP 24.365bn in the same period last year. Other deposits also decreased by 1.1% to reach EGP 18.912bn, compared to EGP 19.119bn in the comparison period.

Finas also highlighted the decrease in irregular loans to 3.11% of the bank’s loans portfolio in September 2019, compared to 3.27% in December 2018, pointing out that the bank covered these loans with provisions of 140% of the total of these loans.

The bank’s capital adequacy ratio reached 19.36% at the end of September 2019, which exceeds the prescribed ratio by the CBE, which is 12.5%.

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