Move puts banking sector on sound footing

China Daily | Updated: 2016-06-03 07:29

Competitive climate in diversified economy means financial operators face a golden future

Egypt's banking and financial services sectors have undergone a period of consolidation over the past decade. Mergers and acquisitions have reduced the number of operators by around a third to less than 40. The industry is now leaner and private and State-owned institutions have been a major beneficiary of the foreign direct investment that continues to flow into various sectors from multiple sources.

Dubai-based bank Emirates NBD, having extended its reach from the United Arab Emirates to Egypt in 2013, has demonstrated remarkable growth, and now employs more than 1,500 people and runs over 70 branches in Egypt.

"Egypt is a market with massive business opportunities, including tourism which has various challenges in the short term, but massive opportunities in the long term," said Giel-Jan M. Van Der Tol, CEO of Emirates NBD.

"This market is under-banked and under-housed, so there are massive opportunities in infrastructure, telecoms and industrial expansion. The government is taking the right steps and you see improvements in fiscal deficits and the introduction of new investment law. There is a set of comprehensive measures that is generating a master plan.

"Emirates NBD is a leading bank in the Middle East and a top, pivotal player in Egypt. We can assist companies from China with projects and give advice with our connections to these large projects. We are very keen to help finance these Chinese companies."

Another example is Bank Audi, founded in 1830 in Lebanon and which has a range of products and services for corporate, commercial and individual clients. It has more than 1.2 million customers and nearly 6,000 employees.

"We have many sectors and contacts where Chinese technical assistance, partnerships and investment would be of mutual interest, like in telecommunications, power - especially electricity - transportation, and infrastructure," said Hatem, Sadek, chairman and managing director of Bank Audi.

"We are an innovative and dynamic financial services partner looking to share our local expertise for project financing and syndication and provide tailored services for the potential Chinese business community in Egypt. Bank Audi is the financial services partner to facilitate investment requirements."

Banque du Caire blends its heritage of more than half a century with Egyptian banking expertise and modern practices and technology.

The group has 1.9 million customers and 229 branches.

"The involvement of key players from China, whether in terms of risk sharing arrangements or co-financing larger transactions, would be beneficial to everyone," said Mounir El Zahid, chairman and CEO of the bank.

"We are very pleased to establish closer relationships with Chinese corporations and increase the utilization of Chinese technology. China always has been a good friend of Egypt. Chinese technology is also affordable and cost-efficient. We are happy to work with any Chinese people as they are serious and reliable - our relationship with them have been always stable. They are good partners."

Foreign and domestic banks are not the only financial service companies benefiting from Egypt's resurgent economy, with overseas insurance companies, international investment groups and investment funds also reaping rich rewards.

Headquartered in New York, Concord International Investments Group is an investment management company and a leading fund manager of Egyptian securities in the world. The group possesses widely recognized expertise in portfolio management, investment strategy, corporate finance and strategic planning. Concord currently has approximately $1.34 billion invested in Egyptian equities.

"Our role is to understand Egypt, how to do business in Egypt, so as to help foreign companies," said Concord Group Chairman Mohamed S. Younes.

"The very important role we play is as adviser to international companies on how to do business here, because it is not easy. There is no sense in investing money without proper intelligence, we do our own research. When we build a portfolio, we have to follow our own rules on how much risk we take and where to take it. We are following this system very systematically and it is working very well.

"Our interest lays in creating long-term relationships with companies. To do so, we need to know these companies well. We try to establish long-term relationships with a limited amount of companies and build upon that. For Concord, we are looking for partners in a long-term relationship and are not interested only in a few deals. We want ongoing investments to help each other out in the most possible ways."

InFocus provided this story.