Arab Finance: Contact Financial Holding is a leading provider of diverse financial solutions and services in Egypt. With a focus on innovation, sustainability, and customer value, Contact is playing a pivotal role in shaping the future of the country's financial landscape.

In this exclusive interview, we sit down with Said Zater, CEO of Contact Financial Holding, to discuss Contact's journey, its commitment to green products and sustainability, its plans for geographical expansion, and its adaptation to the ever-changing digital landscape.

1- Can you give us a brief overview of Contact Financial Holding and its core businesses?

Contact Financial Holding is a leading provider of diverse financing solutions and services, encompassing auto finance, consumer finance, mortgage finance, insurance, green finance, Contact Pay, and other offerings tailored to a broad customer base.

Additionally, the company plays a pivotal role in Egypt's evolving debt markets, overseeing the structuring, organizing, and underwriting of debt issuances for companies seeking to fuel growth plans, manage risks, enhance their financial positions, and improve liquidity levels.

Leveraging our extensive experience in investment management and provisioning, we consistently endeavor to craft advanced financial solutions aligned with the unique needs of our clients. Our commitment extends to identifying opportunities in promising financial sectors, thereby contributing to heightened levels of financial inclusion in the market.

Our financing solutions are diverse, catering to the needs of both individual and corporate customers. Provided under the Contact Financial Holding umbrella or through specialized brands, we offer a spectrum of financing products tailored to meet the requirements of major companies and business partners.

At the heart of Contact Financial Holding's success is a team of over 2,700 industry leaders. Recognizing the integral role played by our team in sustaining the company's leadership and excellence, we invest in our employees and spare no effort in supporting them. We firmly believe that the company's success is intricately tied to the success of its employees.

Contact distinguishes itself by adopting an integrated business model that revolves around collaboration and synergy between business partners and all relevant stakeholders. This approach enables us to develop and deliver a distinguished package of high-quality services and products that address market needs and align with customer aspirations.

Our financing solutions are characterized by efficiency, simplicity, and extreme ease. With 77 main branches strategically located across the country and a network of over 10,000 service centers in car showrooms, real estate development companies, consumer durables dealers, and sports clubs, Contact is well-positioned to provide comprehensive services to our diverse clientele.

2- What is Contact's commitment to green products and sustainability?

Contact Financial Holding Group places a significant emphasis on embracing green products and fostering sustainability. Recognizing the paramount importance of environmental protection and the transition to a more sustainable economy, the group is committed to championing sustainable practices across all facets of its operations.

The group's strategy is underpinned by the principles of sustainable development, which are systematically integrated into its activities. One of the notable initiatives involves the introduction of a green finance product aimed at supporting projects and initiatives that advance environmental sustainability. This includes financing renewable energy projects such as solar and wind, enhancing energy efficiency in industries and buildings, and facilitating the development of green transportation, as exemplified by the introduction of the Electric Vehicle Finance Product.

Furthermore, the Group actively implements sustainable business practices internally, focusing on reducing waste, curbing resource overconsumption, and minimizing harmful emissions. Encouraging active participation in sustainability efforts, the Group extends its commitment to employees and business partners, offering training and awareness programs.

Notably, Contact Financial Holding as a prominent non-banking financial services company participated in the Forbes Middle East Sustainability Leaders’ Summit 2023. This event, held in Abu Dhabi from November 2^nd to 3^rd, 2023, brought together international leaders in sustainability, technology, finance, and policy. Contact received recognition as one of the Middle East's sustainability leaders, underscoring its substantial role in promoting sustainability and environmental values within the region and beyond.

3- How does the company plan to capitalize on the growing market for electric cars?

Contact is strategically positioning itself to capitalize on the burgeoning market for electric cars. With the introduction of the electric vehicle product, we are aligning with current market trends and developments geared towards green transformation. Our focus extends beyond product offerings to actively educate customers about the myriad benefits associated with electric vehicles, aiming to incentivize a transition from traditional to electric cars.

As a company deeply committed to sustainability, we are dedicated to providing systems and facilities that adhere to stringent environmental and sustainability standards. This commitment underscores our holistic approach to supporting eco-friendly initiatives and fostering a positive impact on the environment through our products and services.

4- Can you walk us through Contact's results for the third quarter (Q3) of 2023? And what were the key drivers of Contact's performance?

In Q3 2023, Contact Financial Holding recorded impressive financial results, achieving an adjusted net profit of EGP 158 million, marking a remarkable annual growth rate of 58%. The total financing portfolio for Contact surged to EGP 19.7 billion during the same period, reflecting a substantial growth rate of 44%. Notably, new financing reached $12.1 billion in the nine months, showcasing a notable year-on-year
(YoY) increase of 45%.

This outstanding performance is attributed to the robust contributions from consumer finance, passenger vehicles, and truck financing products. The insurance sector also experienced significant growth, with total premiums soaring by 62% annually to reach EGP 1.2 billion in the first nine months of 2023. The auto finance sector witnessed an exceptional 97% growth in new financing volume.

These stellar financial outcomes underscore the effectiveness of our strategic initiatives and our steadfast commitment to sustainable growth, consistently delivering tangible value to our customers. As we celebrate these achievements, we are resolute in our commitment to fortify our position as a leading financial services provider in Egypt. Our evolving financing portfolio and flourishing insurance sector exemplify our dedication to excellence.

Looking forward, we are optimistic about the future and anticipate further successes. Our commitment to sustainable growth and maximizing value for our customers remains unwavering. To achieve this, our strategic focus includes expanding our business in both the Egyptian and regional markets, introducing new and innovative products tailored to diverse customer needs, and leveraging modern technology to enhance the delivery of financial and insurance services. This tech-driven approach has not only improved the customer experience but has also elevated operational efficiency.

I express my gratitude to our dedicated employees, loyal customers, and supportive shareholders for their continued collaboration and support. Together, I am confident that we will realize our strategic goals and unlock even greater successes in the future.

5- What are Contact's plans for geographical expansion? And are there any challenges the company faces in expanding geographically?

Contact is actively pursuing geographical expansion to broaden its reach and cater to areas lacking quality financial services. As a significant step towards this goal, the group has recently inaugurated a new branch in Agami, Alexandria, and another in Sharm El Sheikh. This strategic move underscores Contact Financial Holding's dedication to delivering comprehensive financial solutions to individuals and businesses nationwide, including locations where financial access might be challenging.

With an extensive network comprising over 77 branches throughout Egypt, Contact has successfully extended financial services to everyone across most Egyptian governorates. The company is resolute in its commitment to geographical expansion, and currently, there are no identified obstacles or challenges hindering this strategic initiative.

6- How is digital transformation shaping the future of the financial industry, and how is Contact adapting to these changes?

Digital transformation is a pivotal force shaping the future of the financial industry. Technological advancements and digital innovation are exerting a profound impact on various facets of financial services, spanning banking, insurance, and investment management. In response to these changes, Contact has strategically embraced digital transformation, implementing key initiatives to stay at the forefront of industry trends.

Contact's adaptation to digital transformation is marked by the development of robust digital strategies and the establishment of cutting-edge technology and infrastructure. Notably, the company has introduced multiple payment methods through Contact Pay, providing customers with convenient and efficient payment options. The launch of the ContactNow app further exemplifies Contact's commitment to enhancing the customer experience, simplifying payment processes, and leveraging big data analysis and artificial intelligence applications.

A critical aspect of Contact's approach involves investing in a skilled workforce equipped with digital expertise. This investment ensures effective communication and interaction with customers through various digital channels, fostering a seamless transition into the era of digital finance. As the financial industry continues to evolve in the digital landscape, Contact Financial Holding remains dedicated to staying agile and innovative to meet the dynamic needs of its customers.

7- What role does data analytics play in the company's digital transformation strategy? And how does it help in making informed business decisions?

Data analytics serves as a cornerstone in Contact Financial Holding's digital transformation strategy, playing a pivotal role in shaping informed business decisions. The strategic utilization of data analytics enables the company to glean valuable insights across various dimensions, contributing to a deeper understanding of customer behaviors, enhancing internal processes, and facilitating a comprehensive analysis of risks and market expectations.

As the Chairman of the Egyptian Federation for Consumer Finance, I have championed an approach that harnesses the power of data analytics to drive innovation within the finance sector. By leveraging data-driven insights, Contact Financial Holding has been able to refine its services and propel the development of advanced products. The continuous monitoring of market dynamics and emerging trends has led to the introduction of innovative offerings such as green finance and electric car financing, aligning with the contemporary preferences and needs of consumers.

In essence, our commitment to data analytics empowers us at Contact to stay at the forefront of industry evolution. By making informed business decisions rooted in comprehensive data analysis, the company ensures its ability to adapt to changing landscapes, meet customer expectations, and foster sustained growth in a dynamic financial environment.

8- How does the company ensure that its technology infrastructure is secure and up-to-date, especially with the increasing reliance on digital services?

Since our establishment in 2002, Contact Financial Holding has prioritized the development of a robust technological infrastructure aligned with the demands of the evolving work environment and regulatory standards. Regular updates to the software and systems are diligently implemented to address known security vulnerabilities, ensuring compliance with the latest security standards and regulatory directives, including those set forth by the Financial Regulatory Authority (FRA) and the Central Bank of Egypt (CBE).

To fortify our cybersecurity posture, we have assembled a specialized information security team responsible for conducting thorough penetration tests. These tests assess the system's resilience against hacking attacks, identify potential security vulnerabilities, and guide the implementation of necessary improvements. Additionally, we have implemented a comprehensive backup strategy to safeguard against data loss or corruption.

Recognizing the importance of cybersecurity awareness, we invest in training our staff on security best practices and equip them to navigate modern cyber threats effectively. This multi-faceted approach underscores our commitment to maintaining a secure and up-to-date technology infrastructure, especially considering the increasing reliance on digital services.

9- Finally, how do you evaluate the financial sector in Egypt in 2023?

In 2023, the financial sector in Egypt navigated through various economic fluctuations. Despite facing considerable challenges and the global economic crises impacting many nations, the financial sector demonstrated resilience. Rather than succumbing to crises, the sector, including Contact Financial Holding, not only weathered the challenges but also achieved significant and advanced results.

It is important to note that success and outcomes in the financial sector vary among companies, depending on factors such as the competency of the workforce, technological infrastructure, employee training, and customer base. As a leading player in the financial industry, we at Contact Financial Holding attribute our success in 2023 to a combination of these factors, positioning ourselves favorably amid the dynamic economic landscape.

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