Banking sector investment outlook by H1-2023 end

The latest monthly statistical bulletin from the Central Bank of Egypt revealed a 21.04% increase in the assets of the banking sector, amounting to EGP 2.40 tn by the end of the first half of the current year, reaching about EGP13.80 tn by the end of June 2023, compared to EGP11.4 tn by the end of December 2022.

First Bank's website highlights the investment trends in the banking sector by the end of June 2023.

The banking sector shifted towards investing the majority of its funds in securities and treasury bonds, at the expense of lending balances to customers. This difference is evident through the relative weight of both portfolios at the end of the second quarter of 2023.

Financial investments and t-bonds:

The relative weight of the financial investments and t-bonds portfolio declined during the first 6 months of 2023. However, it continued to dominate the investment trends of Egyptian banks, accounting for a relative weight of 35.19% of the total assets of the banking sector by the end of June 2023, compared to 38.84% by the end of December 2022.

The volume of financial investments and t-bonds increased by 9.66%, with an increase of EGP427.63 bn during the first 6 months of the current year, reaching EGP4.86 tn by the end of June 2023, compared to EGP4.43 tn at the end of the previous year.

Lending balances to customers:

The relative weight of the lending balances to customers portfolio in the banking sector experienced a slight decline, yet it secured the second position in the investment trends of Egyptian banks, accounting for 34.78% of the total assets of the banking sector by the end of the first half of 2023, compared to 35.91% of the total assets by the end of December 2022.

Lending balances to customers in the Egyptian banking sector witnessed a growth of 17.23%, with an increase of EGP705.26 bn from January to June of the current year, reaching EGP 4.80 tn by the end of June 2023, compared to EGP 4.09 tn by the end of December 2022.

Banks' balances in Egypt:

Banks' balances in Egypt within the banking sector ranked third in the investment trends, accounting for a relative weight of 16.86% of the total assets of the banking sector by the end of the second quarter of 2023.

The volume of these balances within the banking sector grew by 22.04%, with an increase of EGP420.17 bn during the first 6 months of the current year, rising to EGP 2.33 tn by the end of June 2023, compared to EGP1.91 tn by the end of December 2022.

Other assets:

The relative weight of the portfolio of other assets increased to 10.16% of the total assets of Egyptian banks by the end of June last year, jumping by a growth rate of 149.68% and an increase of EGP840.60 bn, making it the fastest-growing, reaching about EGP1.40 tn, compared to EGP561.60 bn by the end of December 2022, during the first 6 months of the current year.

Banks' balances abroad:

The size of banks' balances abroad within the banking sector accounted for a relative weight of about 2.24% of the total assets of Egyptian banks by the end of June 2023, declining by about 6.40% during the first half of the current year and recording EGP 308.62 bn by the end of the second quarter of 2023, compared to EGP329.7 bn by the end of December 2022.