Chairman of

Board of Directors &

Managing Director Message

Esteemed Shareholders,

It is my great pleasure and I am highly honored to have the opportunity of presenting the Annual Report of our Bank for the year 2016 and highlighting our remarkable achievements throughout the entire year. These achievements were attained despite the numerous and extraordinary challenges encountered by the Bank within the framework of the State Economic Reform Plan, which ultimately led to a harsh and extreme impact on the Egyptian banking sector in general.

The following is a brief summary of the most significant international and domestic economic developments and the most prominent key performance indicators of the Bank during the financial year ended as at December 31, 2016.

Hisham Ramez Abdel Hafez


First: The Global Economy


Upon wrapping up the year 2016 that was attributed by fragile and weak global economic activity level, it is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies.

However, there is a wide dispersion of possible outcomes around the projections of the more advanced markets in the United States and Europe due to the uncertainty surrounding the policy stance of the incoming U.S. administration and its variables ramifications, global political events and their direct impact on the markets like the financial markets disruption caused by the sudden withdrawal of the United Kingdom from the European Union (Brexit).

It is worth mentioning that the Global Output Growth is estimated at about 3 percent for the third quarter of 2016. Among the advanced economies, activity rebounded strongly in the United States and the economy is approaching full employment. Meanwhile, the Global Output Growth remains below potential in a number of other advanced economies, notably in the euro area.

The growth rate in China was a bit stronger than expected, while the activity was weaker than expected in some Latin American countries currently in recession.


Second: The Economy of the Host Country


The year 2016 had been a transitional year, during which the monetary and financial authorities adopted a package of diverse policies and measures within the framework of rebalancing the State Economic Policy to move forward toward a growth booming phase that is gaining more momentum, stability and sustainability coinciding with the completion of the IMF agreement with Egypt, the commencement of implementing structural reforms to mitigate State’s General Budget Deficit, increasing the growth rates and attracting investments.

The closing results of the State’s General Budget performance for the fiscal year 2015/2016 revealed that the overall deficit of the State’s General Budget amounted to 12.5% of the GDP, compared to 11.4% in FY2014/2015. The annual inflation rates maintained having persistent high rates of inflation that reached the rate of 23.3% during the month of December 2016 compared to 11.1% during the month of December 2015. It is noteworthy that Total Public Debt (domestic & foreign) amounted to 89.7% of the GDP at the end of September 2016.

During the period of July-September 2016, the overall Balance Of Payments Surplus amounted to US$ 1.9 billion compared to the overall deficit of US$ 3.7 billion during the same period of the previous fiscal year.

The foreign currency reserve balance at the Central Bank of Egypt (CBE) amounted to US$ 26.4 billion at the end of January 2017 compared to US$ 24.3 billion at the end of the preceding month.

In November 2016, Standard and Poor’s (S&P) revised Egypt’s sovereign long -term credit outlook from “negative” to “stable” and it stated that Egypt’s economy will start recovering in 2018 and 2019.


Third: The Bank


The balanced growth attained by the Bank proves the booming success accomplished in consolidating its high standing in the banking market despite the challenges that have been witnessed in the domestic money markets thanks to the wise and prudent policy adopted by the Management of the Bank that is constantly keen and eager to provide the best finance solutions and seek diverse sources of income.

The Bank is targeting the establishment of a new institutional image in the market and augmenting the growth rates in a manner that reflects its optimistic vision for the future of the Egyptian economy particularly in the light of the framework of the State Economic Reform Plan and the stability of the political conditions.

The bank is also planning to achieve its targets through increasing the portfolio of loans and credit facilities in Egyptian Pound and accomplishing the goal of making the credit portfolio used to finance small and medium enterprises (SME) in order to reach 20% of the overall credit portfolio by the end of 2019 in addition to increasing the Bank’s share of deposits in the market, achieving annual growth rate that is not less than 10% of the total assets, recycling direct investments portfolio and using the state of the art technology to modernize the entire information technology system of the Bank.

Among the most prominent outcomes accomplished by the Bank during the year 2016, the increase of customers’ deposits in Egyptian Pound from EGP 1.756 billion to be EGP 21.378 billion and multiplying the annual revenues at a percentage of 101% to amount to US$ 280 million compared to US$ 139 million in the previous year. In addition, the increase in profits before the exchange differences losses of the monetary balances resulting from the liberalization of the exchange rate that was US$ 59.4 million and turned out to be US$ 70.6 million which represents a growth rate of 19%. However, the exchange differences losses of the monetary balances resulting from the liberalization of the exchange rate in November 2016 negatively affected the net profit with an amount of US$ 31.7 million to become US$ 38.9 million.

Taking into account the significance of increasing the capital base of the Bank, a resolution was made to the effect of not having dividends appropriation this year based on the shareholders’ desire to expand and strengthen the standing of the Bank in the Egyptian market.

Accordingly, the Management of the Bank reaffirms its strong and sincere commitment to implementing the ambitious expansion strategy to benefit from the advantageous opportunities of growth in the Egyptian market while being supported by the efficiency of its professional team, the shareholders’ confidence in their Bank Management and their strong desire to overcome the challenges of the present time and their swift response to the requirements of the future.


Hisham Ramez Abdel Hafez