Retail Index: AAIB strengthens retail banking in H1 2026, What do figures reveal?

Retail banking developments reflect an important aspect of banks’ efforts to expand lending activity and strengthen their funding base.

Assessing the sector’s performance goes beyond loan and deposit growth rates to include changes in their respective shares of total banking activity and the balance between credit expansion and deposit mobilisation.

In this context, Arab African International Bank (AAIB) recorded notable growth in its retail loan portfolio during H1 2026, alongside an increase in retail deposits, although growth rates differed between the two segments, according to the bank’s financial statements as of end-June 2026.

Retail loans rise 20.1 per cent in six months, led by discounted commercial papers

AAIB’s retail loan portfolio rose to EGP 37.18 bn at the end of June 2026, compared to EGP 30.96 bn at year-end 2025, marking a growth rate of 20.1 per cent and an increase of EGP 6.22 bn.

The increase was driven by growth across several credit products, led by discounted commercial papers, whose balances rose to EGP 16.14 bn at end-June 2026, compared to EGP 11.93 bn at year-end 2025, recording a growth rate of 35.3 per cent and an increase of EGP 4.21 bn.

Personal loans also recorded notable growth, with balances increasing to EGP 13.85 bn at end-June 2026, compared to EGP 11.92 bn at year-end 2025, representing a growth rate of 16.2 per cent and an increase of EGP 1.93 bn.

Meanwhile, retail overdrafts recorded modest growth of 2.4 per cent, reaching EGP 2.80 bn at end-June 2026, compared to EGP 2.73 bn at year-end 2025.

Credit card balances also increased by 1.7 per cent during H1 2026, reaching EGP 1.69 bn at the end of June, compared to EGP 1.66 bn at year-end 2025.

On the other hand, mortgage loans stood at EGP 2.68 bn at end-June 2026, while other loans amounted to EGP 30.8 mn at the end of the same period.

These developments indicate that growth in AAIB’s retail loan portfolio was largely driven by discounted commercial papers and personal loans, while retail overdrafts and credit cards made more limited contributions to the overall increase.

Alongside this growth, the bank’s total customer loans rose to EGP 287.50 bn at end-June 2026, compared to EGP 240.67 bn at year-end 2025, recording a growth rate of 19.5 per cent and an increase of EGP 46.82 bn.

As retail loans grew at a slightly faster pace than total customer loans, their share of the bank’s total loan portfolio increased to 12.93 per cent at end-June 2026, compared to 12.86 per cent at year-end 2025, an increase of 0.07 percentage points.

Retail deposits rise 9.3 per cent, accounting for over 43 per cent of total deposits

On the funding side, AAIB’s retail deposits increased to EGP 324.49 bn at end-June 2026, compared to EGP 296.89 bn at year-end 2025, marking a growth rate of 9.3 per cent and an increase of EGP 27.60 bn.

This increase coincided with a 7.7 per cent rise in total customer deposits, which reached EGP 739.98 bn at end-June 2026, compared to EGP 687.08 bn at year-end 2025, representing an increase of EGP 52.90 bn.

Accordingly, retail deposits’ share of total customer deposits rose to 43.85 per cent at end-June 2026, compared to 43.21 per cent at year-end 2025, an increase of 0.64 percentage points. This reflects faster growth in retail deposits relative to total deposits and their increasing weight within the bank’s funding base.

The comparison shows that the more pronounced impact of retail banking activity emerged on the deposit side.

Despite faster growth in retail loans, their share of total loans remained broadly stable, while retail deposits increased their relative weight within the bank’s total customer deposits.

This highlights the continued importance of retail banking as a source of funding, alongside the expansion of retail lending during H1 2026.