The Central Bank of Egypt (CBE) has disclosed the principal financial soundness indicators for banks within the Egyptian market as of year-end 2023.
According to a recent report, CBE noted a decrease in the ratio of non-performing loans to 3% at the close of 2023, down from 3.3% in the preceding two quarters and 3.5% in the initial quarter.
For the 10 largest banks in Egypt, non-performing loans constituted 2.4% of total lending, while the top five banks reported a lower figure of 2.2%.
The report further highlighted that banks set aside provisions covering 88.7% of their total non-performing loans by December 2023, a marginal increase from 88.6% at September’s end. The coverage ratio was higher among the 10 largest banks at 95.2%, reaching 100% within the five largest banks.
CBE stated: “Banks allocated EGP 346.922bn for potential loan losses by year’s end, with the 10 largest banks accounting for EGP 264.464bn of this amount. The five largest banks set aside EGP 231.231bn.”
Additionally, banks have built up reserves totaling EGP 476.473bn. The top 10 banks hold EGP 376.826bn of these reserves, while the five largest banks have amassed EGP 324.416bn.
Private Sector Loans
CBE reports that the private sector held 51.9% of the total loans provided by banks up to the end of 2023, a slight decrease from 52.2% at the end of September. The private sector’s share of loans at the 10 largest banks was 44.5%, and 41% at the top five banks.
The loan-to-deposit ratio in banks rose marginally to 52.4% at the close of December, consistent with the end of September. This ratio was higher at the largest banks, reaching 55.6% at the 10 largest and 57.6% at the top five.
For loans in local currency, the ratio to deposits increased to 47.1% from 46.1%. At the 10 largest banks, this ratio was 47.7%, and at the top five, it was 48.4%.
The loan-to-deposit ratio for foreign currencies climbed to 84% from 78.3%. Among the largest banks, this ratio was 91% at the 10 largest and exceeded 100% at 102.1% in the top five.