NBE – Egypt changes its investment plans in 2023, Loans at the top of the list

Global events prompted many banks to make changes in their investment thinking in 2023, as economic crises continued to worsen, and the global economy has taken one blow after another over the past three years from the devastating coronavirus pandemic, confusion in energy and grain markets as a result of Russia's war in Ukraine, inflation and rising interest rates.

Egyptian banks were among the banks that resorted to changing their investment destination. In particular, NBE has adopted its strategy to maximize its profits primarily on loans and injecting more loans into the various economic sectors of all large, medium, small and micro enterprises. Especially productive projects that achieve value added to local economy and requires intensive employment, This is in addition to promoting retail banking products such as personal loans, credit cards and others.

This was revealed by the latest separate financial statements of the National Bank of Egypt for the financial period ended September 30, 2023, where the Bank resorted to amending its investment policy during the first 9M of last year. The Bank has moved to significantly strengthen its approach to investing in loans. It will concentrate about 43.53% of the bank's total assets by the end of Q3 of 2023, compared to 38.11% by the end of 2022, making it the first destination to employ its funds, instead of financial investments.

It reduced its trend towards investing its money in financial investments, as evidenced by its relatively low weight, registering 40.58% of the bank's total assets by the third quarter of 2023, compared with 43% by the end of 2022.

The bank's internal balances accounted for the third largest component of the bank's asset portfolio, with a relative weight of 10.03% of the total assets of NBE by the end of September 2023, compared to 6.43% by the end of 2022, and the remaining percentage was concentrated in other miscellaneous assets.

NBE's policies during the period under analysis resulted in strong growth rates, with net profits jumping by 119.55%, reaching EGP 50 bn in the first 9M of 2023, compared to EGP 22.8 bn in the same period of 2022, with an increase of EGP 27.2 bn.

NBE's net interest income increased by 82.2% and an increase of EGP 56.9 bn, registering EGP 126 bn in the first 9M of 2023, compared to EGP 69.2 bn in the same period in 2022.

The bank's net fee and commission income jumped by 50.3% and an increase of EGP 4.33 bn, reaching EGP 12.9 bn during the first 9M of 2023, compared to EGP 8.6 bn during the same period in 2022.

In terms of its financial position, the asset portfolio rose by 14.76%, registering EGP 5 tn by the end of September 2023, compared to EGP 4.4 tn by the end of December 2022.

The bank's net customer loans rose from EGP 1.7 tn by the end of 2022, to EGP 2.2 tn by the end of September 2023, with a growth of 31.1% and an increase of EGP 517.9 bn.

The Bank's total financial investment rose by 8.29% during the first 9M of last year, registering EGP 2 tn by the end of September 2023, compared to EGP 1.9 tn by the end of December 2022.

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