Gulf – Egypt connection
In September, the chief executive of Mashreq of Dubai, Aziz Al Ghurair, revealed that his company was interested in expanding the scale of its Egyptian operations, which already include 10 branches. He said: “Egypt has a big population, there is potential there. We see a lot of Gulf banks have gone there: they’ve done very well.”
There are now 51 lenders operating in the United Arab Emirates, where competition is becoming more intense. As a result, many local banks are looking overseas for expansion opportunities. Qatar National Bank has bought Société Générale’s operations, while Emirates NBD has acquired the Egyptian subsidiary of French bank BNP Paribas.
The health of the Egyptian banking sector is connected to the state of the Gulf economy in another way. Much of the money deposited in Egyptian banks is earned by Egyptians working in the Gulf states. The decision by some Gulf banks to operate in Egypt may be designed to tap into this connection.
As ever, much depends on the political future of the country. President Abdul Fattah al-Sisi’s election as president in May could seems like a throwback, with yet another military man taking the country’s top job, but his ability to at least stabilise the country could be seen as a step in the right direction by many Egyptians.
Roberto Vercelli, the managing director and chief executive of the Bank of Alexandria, said: “The banking sector has maintained a strong position. We were not at risk of collapse or of a disruption of the value of the country because Egypt has a very strong liquidity position. The loan deposit ratio in Egypt is more or less 40%: there is a lot of money available.”