Agricultural Bank of Egypt (ABE) is in talks with international institutions and the Ministry of Finance (MoF) over financings in foreign and local currencies to bolster the lender’s banking activities and infrastructure, the banks’ vice chairman said.
The Egyptian bank has obtained EGP 10 billion zero-interest financing from the Central Bank of Egypt (CBE) for 20 years, Tamer Salah Gomaa told Mubasher in an interview.
The ABE is currently negotiating with overseas entities to get a foreign-currency loan, Gomaa revealed.
He also revealed that both the Egyptian agriculture and finance ministries have in talks to provide EGP 200 million out of total EGP 300 million for the ABE.
This sum of money will be re-invested in the national project of veal, the bank’s chairman said.
He indicated that the bank previously received around EGP 100 million from the finance ministry and around EGP 400 million from the CBE for the veal project.
The ABE had invested nearly EGP 500 million in fiscal year 2017/2018 and about EGP 100 million during the period from July to mid-November into the veal project.
Gomaa also unveiled that the ABE’s agricultural production portfolio stood at EGP 7 billion until mid-November, while its livestock portfolio amounted to EGP 8 billion.
Both production portfolios account for approximately 70% of the bank’s total credit portfolio reaching EGP 26.6 billion, he noted.
The bank has allocated around EGP 3 billion to develop its Technology infrastructure in collaboration with Dutch banking giant Rabobank, one of Australia’s largest agricultural lenders, he said.
The ABE has 1,210 branches across the country and is working on restructuring and developing them in several phases, Gomaa said.
Almost 243 branches will be developed as part of the first phase, he explained, adding that the Egyptian lender will merge a number of branches existing in same buildings and establish new branches in other locations.
The bank is looking to reach 1,200 automated teller machines (ATMs) by adding 74 ATMs within three years at an average cost between EGP 250 million and EGP 300 million, he unveiled.
He also added that the bank will pump about EGP 100 million into supplying around 300 to 400 ATMs in 2019 as an initial phase.
Gomaa also said that the bank’s small- and medium-sized enterprises’ (SMEs) portfolio made up 80% of its total credit portfolio with EGP 18 billion.
He added that the bank is still taking part in financing “Mashroak” initiative with EGP 300 million now.
The bank’s chairman man said that ABE’s retail banking portfolio reached EGP 4 billion at the end of June and targets a 15% to 20% increase during FY 18/19.
The bank’s deposits portfolio stood at EGP 53 billion until mid-November and is targeting a 15% to 20% growth during this fiscal year, he added, pointing out that it reached EGP 50 billion at the end of June, versus EGP 45 billion in the same month last year.
ABE’s loans portfolio rose as well by nearly EGP 600 million during the period from June to mid-November, standing at EGP 26.6 billion, versus EGP 26 billion at the end of June, Gomma revealed.
He indicated that the bank is aiming to achieve a 20% growth in loans portfolio and is seeking to surpass this percentage to hit 30%.
The ABE is currently considering launching the Agri Card, upon which customers will be able to obtain loans and reimburse installments, he highlighted.
The bank will release around three million cards in phases in coordination with Visa Inc., he remarked.
Gomaa projected the ABE to achieve over EGP 400 million in profits by the end of FY17/18.
The bank aims to close its allowances gap of EGP 6 billion within seven to ten years, he added.
The ABE signed EGP 1.5 billion settlement so far to narrow down its risk portfolio from EGP 5 billion to EGP 3.5 billion, Gomaa said.