Egypt: Waiting on the state’s delays
The development of banking in Egypt depends heavily on government action. Privatization is moving slowly, important legislation has been delayed and there are no signs that the overvalued Egyptian pound will be devalued. The equity market is also stagnant, with few private companies making new listings.
|Cairo: Egyptian banks are hoping to entice back
expatriates in foreign banks
Because of the dominant position of the four state-owned banks - they hold about 50% of assets - private banks in Egypt are still quite small by international standards.
Commercial International Bank (CIB), for example, the country's largest private bank, had assets of just $3.9 billion at the end of 1998. With the exception of EFG Hermes in equity capital markets, not one of the private banks has managed to secure more than a 4% share in any major product.
Historically, private banks have followed conservative lending and investment strategies. Most only lent to multinationals and a small group of Egyptian blue chips such as conglomerate Orascom. Surplus capital was invested in treasury bills and leading equities such as mobile phone operator MobiNil. Some set up mutual funds, but this was considered rather daring.