|
Banking Sector Developments in Egypt 
An overview of Egypt ’s banking system with focus on recent reforms and the factors currently affecting the system.
(July 2005)
Members: LE250, Non-members: LE350, Int'l Price: $350, Students: LE250
(Report Cover in PDF)
(Summary in PDF)
(Download
Acrobat Reader)
Summary A country’s financial system plays a central role in the process of economic development, as the banking system is one of the major contributors to the strength of that development. Investing in IT, resource optimization, information security and Basel II are among the new concerns that have recently emerged for banks globally.
In Egypt , the banking sector has gone through many stages since the establishment of the first bank in 1856, followed by the emergence of private sector and joint venture banks during the period of the Open Door Policy in the 1970s. Moreover, the Egyptian banking sector has been undergoing reforms, privatization, and mergers and acquisitions from 1991 up to today.
This study provides an overview of the main developments of Egypt ’s banking system to date. Currently, the banking industry is seeing the advent of new products with the boom in retail banking. E-banking is also flourishing, and investing in IT and Human Resources is the path that most banks are taking.
The Egyptian banking sector has been experiencing annual growth in assets, deposits and liabilities than reached an average of 11.5%, 13.5% and 9.4%, respectively. In addition, the ROA for Egyptian banks reached 0.5% and ROE reached 9.8% as of June 2004.
The legal environment is changing to meet the developmental needs of the banking sector. The new Unified Banking Law No. 88/2003 has definitely given rise to mergers and acquisitions so that banks would be able to meet the new minimum capital requirements before July 2005, which would indirectly enhance competition. Moreover, the new law abolishes the old ‘artificial’ distinction between commercial, business, and specialized banks.
Finally, this study provides a SWOT analysis that gives further insight into the current strengths and weaknesses of the sector and highlights the opportunities and threats that must be taken into consideration in the future.
Table of content
Top |
