Banks change direction of their investment compass in 2023, Lending balances at the front

Banks operating in the Egyptian banking market have achieved strong and exceptional performance during this year, in almost all indicators, and by monitoring their investment trends in the first 9 months of 2023, they have resorted to a significant modification of their policy.

It resorted to a reduction in its trends towards investing in securities and treasury bills, as reflected in the decline in its relative weight, making up the total portfolio about 34.04% of the total assets of banks operating in the Egyptian banking sector by the end of September 2023, compared with 38.84% by the end of 2022.

Banks operating in the sector have also marginally reduced their trend towards investing in customer lending and debit balances, registering 34.58% of total banking assets (other than the Central Bank) by the third quarter of 2023, compared to 35.91% by the end of 2022, despite this becoming the first destination for bank investments while securities and Treasury bills to second place.

Banks in-house balances accounted for the third largest component of the Egyptian banking sector asset portfolio by the third quarter of 2023, with a relative weight of 17.14% of the sector's total assets by the end of September, compared to 16.72% by the end of 2022, while the remaining percentage was concentrated in other miscellaneous assets.

As a result of bank policies during the period under analysis, strong growth rates were achieved, with Egyptian banks' net profits (other than the Central Bank) rising by 127.6%, registering EGP 212.6 bn during the first 9 months of 2023, compared to EGP 93.4 bn during the same period in 2022, an increase of EGP 119.2 bn.

The net return of banks operating in the sector jumped to EGP 412 bn during the first 9 months of this year, compared to EGP 225.8 bn during the same period in 2022, with a growth of 82.4% and an increase of EGP 186.1 bn.

Total bank assets rose to EGP 14.7 tn by the third quarter of 2023, compared to EGP 11.4 tn by the end of 2022, with growth of 29.3% and with an increase of EGP 3.3 tn.

Customer lending and discount balances rose to EGP 5.1 tn by the end of the third quarter, compared to EGP 4.1 tn by the end of 2022, with growth of 24 .5% and an increase of EGP 1 tn.

The growth of securities and investments in Treasury bills rose to EGP 5 tn by the end of September, compared to EGP 4.4 bn by the end of 2022, a growth of 13.3% and an increase of EGP 590.3 bn.

Banks' balances in Egypt rose by 32.5% in the first 9 months of this year, registering EGP 2.5 bn by the end of September 2023, compared with EGP 1.9 bn by the end of 2022, with an increase of EGP 619.8 bn.

Total customer deposits jumped from EGP 8.6 tn by the end of 2022, to EGP 9.8 tn by the end of September 2023, with a growth of 14.1% and an increase of EGP 1.2 tn.