22 Egyptian banks lend under 60% of deposits, will rate cuts change that?

The loan-to-deposit ratio is a key measure of deposit deployment, reflecting the proportion of customer deposits allocated to lending. It also provides insight into a bank’s asset composition and funding structure.

Against this backdrop, First Bank examined loan-to-deposit ratios across 28 banks operating in Egypt, based on financial data available at end-June 2026, to assess differences in deposit deployment across the banking sector.

The analysis revealed substantial disparities, with loan-to-deposit ratios ranging from 10.45 per cent to 80.24 per cent at end-June 2026.

Three segments reveal the spread in deployment rates

Banks were divided into three segments by deposit deployment rate in loans, the first with rates of 70 per cent or more, the second from 60 per cent to below 70 per cent, and the third below 60 per cent.

The first segment comprised only 3 banks, namely National Bank of Egypt (NBE), Kuwait Finance House bank– Egypt (KFH– Egypt), and National Bank of Kuwait – Egypt (NBK– Egypt).

The second segment comprised 3 banks, namely BANK NXT, Al Baraka Bank – Egypt, and the Export Development Bank of Egypt (EBank).

The third segment was the largest, comprising 22 banks, or approximately 78.57 per cent of those reviewed.

These included Attijariwaf Egypt, ADIB– Egypt, saib, Emirates NBD Egypt, Suez Canal Bank, Banque du Caire, EGBANK, Crédit Agricole Egypt, QNB Egypt, Bank ABC Egypt and FABMISR.

The segment also included Banque Misr, Agricultural Bank of Egypt, ABK– Egypt, The United Bank, ADCB Egypt, CIB, Alexbank, Housing and Development Bank, Arab African International Bank, HSBC Egypt and Faisal Islamic Bank of Egypt.

Most banks deploy less than 60% of deposits in loans

Most of the Egyptian banks reviewed recorded deployment rates below 60 per cent, while only 3 banks reached 70 per cent or more.

This points to a low ratio of loans to customer deposits at most banks, though it does not on its own indicate how conservative a bank is in lending, since it may stem from deposits growing faster than loans, from differing business models, or from a greater weight of financial investments and other assets.

The finding carries more weight against the Egyptian banking sector’s average of 68.9 per cent at end-June 2026, when most of the banks reviewed sit below 60 per cent.

The difference arises because the sector-wide ratio is shaped by the size of each bank’s loan portfolio and deposits, rather than being a simple arithmetic average of individual rates, and so it does not necessarily reflect the level at which most banks operate by number.

Regional market gap, accounting for differences in comparison

The gap is clear against regional markets, where the loan-to-deposit ratio stood at around 79.68 per cent in Saudi Arabia and 79.5 per cent in the UAE at end-June 2026, compared with 68.9 per cent in Egypt, a difference of 10.78 percentage points from Saudi Arabia and 10.6 percentage points from the UAE.

These ratios point to a lower loan-to-deposit ratio in Egypt than in the Saudi and Emirati markets, raising questions about how banking resources are deployed across the three.

The comparison remains indicative, however, as an accurate assessment must allow for differences in calculation methodologies, including the use of gross or net loans and the scope of deposits counted, as well as differences in regulatory frameworks, funding structures and market characteristics.

Lower rates may boost lending, but deposit growth shapes deployment

Interest rate trends are among the factors that may reshape how banks deploy resources, as a decline over the medium term could shift the trade-off between extending loans and investing in financial instruments, particularly if yields on new investments fall while credit demand improves.

Some banks may then expand their loan portfolios, raising the relative weight of lending in their asset structures, possibly at the expense of part of their financial investments, if loans become more attractive on a risk-adjusted basis.

Higher loan volumes do not necessarily mean higher deployment rates, however, because that requires loans to grow faster than customer deposits.

The shift remains contingent on how credit demand responds to lower rates, on banks’ ability to price loans in line with their risks, and on funding costs and liquidity requirements.

Lower rates may therefore open the way to a redistribution of resources between loans and financial investments, with the scale of the shift varying by bank according to strategy, asset profile, and funding sources.