Great support from AAIB for contracting sector, Its Loans jump 201.7% in 9M

The AAIB increased its loans of the contracting sector remarkably over the past year, believing in the importance of the construction sector.

This sector is one of the main sectors in Egypt. It is the State's hand in implementing national projects, as well as private sector projects. It also represents the soft forces that improve relations between countries and each other. In addition, it was the real tool in overcoming the increase in unemployment, especially following the return of Egyptian employers from Arab countries following the Arab Spring revolutions.

The construction sector contributes more than 18.7% to GDP. This large proportion is due to the boom happened in this sector in recent years in the accelerated implementation of national road and bridges projects and the participation of many companies in Egypt's Haya Karima initiative to improve the standard of living in villages.

This sector is expected to show significant growth and progress over the coming years, as revealed in a previous report by Fitch as it indicated positive indicators of Egypt's medium and long-term construction sector.

The Agency expected that the construction sector in Egypt by 6.8% year-on-year during 2023, followed by an annual growth average of 7.4% between 2024 and 2027.

The Arab African International Bank pays special attention to the construction sector, as reflected in the figures, where the Bank's loans for this sector jumped by about 201.72%, registering EGP 15.29 bn by Q3 of 2023, compared to EGP 5.07 bn by the end of 2022, with an increase of EGP 10.22 bn.

AAIB boosted its direct loans to the contracting sector as it was the fastest growing sector, after rising by 369.5%, to reach EGP 1.70 bn by the end of September 2023, compared to EGP 362.85 mn by the end of 2022, with an increase of EGP 1.34 bn.

Direct loans to this sector accounted for about 11.14% of the Bank's total loans for the contracting sector by the first 9M of 2023.

Current account balances for the contracting sector jumped to EGP 10.88 bn by the end of Q3 of 2023, from EGP 3.31 bn by the end of 2022, with a growth of 228.47% and an increase of EGP 7.57 bn.

Debit Current account balances of Corporates were the major contributors to the growth of the Bank's loans to the contracting sector, with a share of about 71.15% by the end of September 2023.

The growth of the Bank's co-financing of the contracting sector increased by EGP 1.31 bn, reaching EGP 2.71 bn by the end of September 2023, compared to EGP 1.39 bn by the end of 2022, with a growth rate of 94.44% during the period from early 2023 to the end of September.

The syndicated loans for this sector accounted for about 17.70% of the Bank's total loans for the contracting sector by Q3 of 2023.

The contribution of the contracting sector was about 11.21% to the total corporate loans of the AAIB by the end of September 2023, while its contribution was about 9.82% to the bank's total customer loans by the end of the same period.

It is worth mentioning that the Bank's corporate loans rose by EGP 27.26 bn, with a growth rate of 24.97%, to register EGP 136.44 bn by the end of Q3 of this year, compared to EGP 109.18 bn by the end of 2022.

Total bank customer loans grew from EGP 126.13 bn by the end of 2022, to EGP 155.68 bn by the end of September 2023, with a growth of 23.42% and an increase of EGP 29.54 bn.