Banking sector Investment Strategies by April-2023 end: Financial Investments Lead, Loans Follow Closely

The monthly statistical bulletin of the Central Bank of Egypt revealed a 16.47% increase in the banking sector's assets, reaching approximately EGP13.28 tn by the end of April 2023, compared to EGP 11.4 tn by the end of December 2022.

First Bank's highlights the investment trends in the banking sector in the first 4 months of 2023. Banks focused on investing the majority of their funds in securities and treasury bonds, prioritizing them over lending and customer discounts.

Financial Investments and T-Bonds

Despite a slight decline, financial investments and t-bonds still accounted for the largest share of Egyptian banks' investment trends, making up 35.55% of the total banking sector assets by the end of April 2023, compared to 38.84% by the end of December 2022. The volume of financial investments and t-bonds grew by 6.60%, reaching around EGP 4.72 tn by the end of April 2023, compared to EGP4.43 tn by the end of December 2022.

Lending and Customer Discounts

Lending and customer discount portfolios experienced a minor decrease but remained the second leading investment trend for banks, comprising 34.04% of the total banking sector assets by the end of April 2023, compared to 35.91% by the end of December 2022.

 The lending and customer discount balances grew by 10.39%, reaching EGP4.52 tn by the end of April 2023, compared to EGP4.10 tn by the end of December 2022.

Banks' Balances in Egypt

Banks' balances in Egypt ranked third in the investment trends for the banking sector, constituting 18.11% of the total banking sector assets by the end of April 2023. Their volume grew by 26.15%, reaching EGP2.40 tn by the end of April 2023, compared to EGP1.91 tn by the end of December 2022.

Other Assets

Other assets accounted for 8.87% of the total assets of Egyptian banks by the end of April, showing significant growth of 109.73%. Their value increased by EGP616.27 bn, reaching about EGP1.178 tn, compared to EGP561.60 bn by the end of December 2022, during the first 4 months of this year.

Banks' Balances Abroad

Banks' balances abroad in the banking sector represented 2.69% of the total assets of Egyptian banks by the end of April 2023. These balances reached around EGP357 bn, growing by 8.31% and increasing by EGP27.40 bn during the first 4 months of this year, compared to EGO329.7 bn by the end of December 2022.