CBE reveals most prominent indicators of banks’ deposits and investments in 1Q 2022

Hossam Mounir
9 Min Read

The Central Bank of Egypt (CBE) revealed at the end of last week the most prominent indicators for deposits of banks operating in the local market and their investments by the end of the first quarter (1Q) of 2022.

According to the CBE, customer deposits in the banking system increased by the end of March 2022 by about EGP 334bn to record EGP 6.980 trillion, compared to February’s EGP 6.646 trillion.

The CBE explained in its monthly report that government deposits also rose to EGP 1.377 trillion at the end of March, compared to EGP 1.373 trillion at the end of February, including EGP 1.2 trillion in local currency and the equivalent of EGP 177.209bn in foreign currencies.

This comes as the volume of non-governmental deposits in banks reached EGP 5.602 trillion, compared to EGP 5.272 trillion, of which about EGP 4.770 trillion are in the local currency and the equivalent of about EGP 832.3bn in foreign currencies.

According to the CBE, the public business sector’s share of non-governmental deposits in local currency amounted to about EGP 89.58bn, the private business sector about EGP 684.2bn, and the household sector about EGP 3.981 trillion, while the share of other sectors — including non-residents — amounted to about EGP 16bn.

Furthermore, the public business sector’s share of non-governmental deposits in foreign currencies amounted to about EGP 43.077bn, while the private business sector recorded the equivalent of about EGP 251.8bn, and the household sector the equivalent of about EGP 513.7bn, while the remaining sectors — including non-residents — recorded an equivalent of about EGP 23.8bn.

The CBE also indicated that the household sector accounted for 80.8% of the total deposits in banks operating in the Egyptian market until the end of March 2022.

Furthermore, it explained that the household sector accounted for about 83.7% of the total deposits in local currency, while its share of deposits in foreign currencies amounted to about 63.5%.

It added that the growth rate in the total deposits in banks amounted to about 23.49% during March 2022, compared to 19% during February 2022, pointing out that the growth rate in deposits in local currency recorded 23.2%, compared to 21.3%, while the growth rate of deposits in foreign currencies was 25.3%, compared to 5.4%.

Additionally, the share of deposits in foreign currencies increased to 14.54% of the total deposits in banks, compared to 12.96%.

In a related context, the CBE revealed that the volume of domestic liquidity from July 2021 to March 2022 increased by EGP 923.8bn — or 17.2% — to reach about EGP 6.280 trillion.

It also explained that the increase in domestic liquidity was reflected in the growth of quasi-money by EGP 709.6bn at a rate of 17.3% and the money supply by EGP 214.2bn at a rate of 17.1%.

This increase in quasi-money came as a result of an increase in non-current deposits in local currency by EGP 551.1bn at a rate of 16% and deposits in foreign currencies equivalent to EGP 158.5bn at a rate of 24.4%.

As for the increase in the money supply, it came as a result of an increase in current deposits in local currency by about EGP 170.4bn — or 29.3% — and an increase in cash in circulation outside the banking system by EGP 43.8bn at a rate of 6.5%.

Furthermore, the increase in domestic liquidity from July 2021 to March 2022 came as a result of the increase in net domestic assets and the decline in net foreign assets of the banking system.

The bank explained that the net domestic assets of the system rose during that period by EGP 1.394 trillion — or 27.3% — as a result of the rise in domestic credit by about EGP 980.8bn at a rate of 18.1% and the increase in net budget items by EGP 414.1bn.

Moreover, the volume of domestic credit increased as a result of the increase in net liabilities from the government by EGP 650.7bn from the private business sector by EGP 206.4bn, from the household sector by EGP 109.3bn, and from the public business sector by EGP 14.4bn.

On the other hand, the net foreign assets of the Egyptian banking sector declined by the equivalent of EGP 471.1bn during the same period as a result of the decrease in the net foreign assets of the banks by the equivalent of EGP 318.7bn and the net foreign assets of the CBE by the equivalent of EGP 318.7bn.

With regard to bank employment, the CBE revealed an increase in credit facilities granted by banks by the end of 1Q 2022 to about EGP 3.420 trillion — an increase of EGP 515.5bn.

Credit facilities mean the loans granted by banks to their customers, along with documentary credits and letters of guarantee that they open for them to cover import operations.

The CBE attributed this rise to an increase in credit facilities granted by non-government banks by EGP 307.1bn at a rate of 17.1% and credit facilities granted to the government by EGP 208.4bn at a rate of 18.9%.

The increase in the balances granted to the government came as a result of an increase in balances in foreign currencies equivalent to EGP 115.4bn and balances in local currency by EGP 93bn.

It added, according to the relative distribution of credit facilities for non-governmental organisations, that the private business sector obtained 60.3% of the total balances at the end of last January.

According to the sectors of economic activity, the industrial sector obtained 27.9% of these loans, the services sector accounted for 26.8%, then the trade sector by 10.9%, the agriculture sector 2.5%, and the undistributed sectors got 31.9%, of which 31.6% belonged to the household sector.

With regard to the loan portfolio with banks, the CBE revealed that it increased by about EGP 172bn to record EGP 3.348 trillion, compared to February’s EGP 3.176 trillion.

It also pointed out that the volume of loans granted to the government increased by about EGP 69bn to reach EGP 1.262 trillion, of which EGP 862bn are in local currency and EGP 400.4bn are in foreign currencies; while total non-governmental loans rose to EGP 2.085 trillion, including EGP 1.820 trillion in local currency and the equivalent of about EGP 265.3bn in foreign currencies.

The bank explained that the agriculture sector acquired loans in the local currency worth EGP 47.9bn, the industrial sector EGP 452.4bn, the commercial sector EGP 211.2bn, and services sector EGP 454.5bn, while the rest of the undistributed sectors — which included the household sector, natural individuals, local non-profit organisations, and foreign bodies operating in Egypt — acquired EGP 654.1bn.

The agricultural sector accounted for the equivalent of about EGP 3.9bn of total foreign currency loans, the industrial sector the equivalent of EGP 127.1bn, the commercial sector the equivalent of EGP 15.2bn, the service sector the equivalent of EGP 106.9bn, while the rest of the undistributed sectors acquired the equivalent of EGP 12bn.

In the context of bank investments, the CBE also indicated an increase in the total volume of the securities portfolio of banks — other than the CBE — which is the banks’ investments in stocks, bonds, and investment fund documents to reach EGP 3.549 trillion, compared to EGP 3.350 trillion.

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