An Eye on Egypt’s Banking Sector

Updated 6/24/2023 9:00:00 AM

The banking sector is considered as an engine of the Egyptian economy; it has shown resilience in the face of various political and economic issues, achieving a growth rate of more than 110% over the past five years.

In this Factsheet, Arab Finance represents the latest updates on the financial position of banks in Egypt while shedding light on the key banking indicators.

At the end of 2022, Egypt had a total of 37 operational banks; both local and foreign banks had a total of 4,360 branches and 21,975 ATMs across the state. Hence, the Egyptian banking sector provided jobs for 136,273 employees, which represented 0.5% of employed individuals in Egypt.
In 2022, the Egyptian banking sector acquired around 13% of the total banking assets among Arab banking systems. This share led the Egyptian banking system to rank as the third-best Arab banking system after the United Arab Emirates and Saudi Arabia.
The financial position of banks in Egypt, except for the Central Bank of Egypt (CBE), increased by 14% to EGP 13 trillion in the first quarter (Q1) of 2023 from EGP 11.4 trillion in Q42022. In this regard, the banking sector’s assets consisted of EGP 4.8 trillion as securities and investments in T-bills, EGP 4.48 trillion as loans and discounts, EGP 2.2 trillion as balance with banks, and EGP 1 trillion as other assets.
The domestic liquidity in Egypt’s banking sector increased by 18.3% year-on-year (YoY) during the first eight months of fiscal year (FY) 2022/23 to EGP 7.82 trillion. This increase was reflected in the growth of both money supply and quasi-money.
From July 2022 to February 2023, the money supply, including currency in circulation outside the banking system and demand deposits in local currency, increased by 20.9% compared to the same period a year earlier. On the other hand, quasi money, including local currency time and saving deposits, and foreign currency deposits, hiked by EGP 150 billion or 9.7% YoY.
At the end of February 2023, the total deposits in Egypt increased by 33.8% YoY to EGP 9.1 trillion, of which EGP 2.1 trillion were government deposits and EGP 7.1 trillion were non-government deposits.
The local currency deposits reached EGP 7.3 trillion during the first eight months of FY 2022/23, representing 80.2% of total deposits. These deposits witnessed a YoY growth rate of 21.6%. On the other hand, foreign currency deposits reached EGP 1.8 trillion, with a YoY growth rate of 115.3%.
Notably, the household sector dominated deposits in the Egyptian banking system that reached a total of EGP 5.4 trillion in both local and foreign currencies, accounting for8% of non-government deposits.
At the end of February 2023, the domestic credit provided by banks in Egypt hit EGP 2 trillion, of which EGP 6.2 trillion in local currency and EGP 2 trillion in foreign currency.
The government had the lion’s share of the domestic credit, as the claims on government hit EGP 5.4 trillion. Claims on private businesses, households, and public businesses reached EGP 1.8 trillion, EGP 0.8 trillion, and EGP 0.17 trillion,