Egyptian banks performance reactivate the market
Egypt, Economics, 5/15/2000

The international financial institutions laid confidence in Egypt's economy and hailed the efforts exerted by the government in boosting investment and pursuing economic reform programs.

Egypt's Prime Minister Atef Ebeid said that such confidence does not come out of a vacuum, ascribing it to the laborious efforts exerted by the Egyptian people under the leadership of President Hosni Mubarak.

Ebeid presided over a meeting attended by the Minister of Economy and the Governor of the Central Bank, together with the chairmen of 19 Egyptian banks. The meeting highlighted that banks were playing their role in full in reactivating the market through continuing to offer credit strongly to serious customers.

Ebeid said banks continue to grant credit, to serious clients. No credit request will be turned down because without credit there will be no movement in the economy, he said.

Speaking to reporters Sunday after meeting with chairmen of Egyptian banks, Ebeid said that banks will start a program to modernize the banking management in line with the latest trends in the world.

The prime minister said the government was ready to cooperate with banks to set up a national fund to finance development and modernization and enlist expertise from any part of the world.

The meeting was attended by 19 chairmen representing 22 banks which handle 60 per cent of the activity of the banking sector.

The meeting reviewed the trends of the banking sector and mechanisms to activate the market.

Ebeid said he will meet with banks chairmen next month to discuss setting up organizations to serve banks such as information organizations which prepare and publish statements.

The government was following up the drafting of bills to activate the market including a real estate mortgage bill, a money market bill and a bill on leasing.

Asked on debts due to banks, the prime minister said that any bank in the world has performing as well as non-performing borrowers who default because of reasons beyond their control or because of negligence. Every bank adapts its conditions and makes provisions to cover credit risks.

There is not a single loss- making bank in Egypt, the Prime Minister stressed. And there is no single bank with no provisions to cover risks. It is the government's task to recycle wealth and pay debts, the Prime Minister said.

Chairman of the Banks Union, Mahmoud Abdel Salam, said the Governor of the Central Bank of Egypt presented a review of loans advanced by banks to the private sector. These loans registered an increase of 5.9 billion pounds in the first quarter of 2000.

During the same period, there was an increase of 4.7 billion pounds in deposits in the local and foreign currencies.

Abdel Salam said banks continue to pump more credit facilities to activate the market, help their serious clients and provide the necessary finance for them according to sound credit guidelines.

He said that bank credit facilities amounted to 219.7 billion pounds at the end of January 2000 against 191.1 billion pounds at the end of January 1999, an increase of 28.6 billion pounds in 1999.

The Chairman of the Banks Union said privatization of Public Sector banks is not being considered at present. But there are some ideas for voluntary merger of banks.

"Banks funds are derived from real savings rather than by printing banknotes," he said. The government will pay all its debts to banks according to programs to be laid down by the government.

Abdel Salam said that the Banks Union has been asked to draw up studies to activate the role of banks in the present stage

The Chairman of the Union of banks said the Prime Minister would hold another meeting with chairmen of banks to review banking performance until the end of May 2000. He said banks would serve the interests of both sides. On merger of some banks, the Chairman of the Banks Union said ideas have been offered in this regard adding we encourage selective merger.

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