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Egypt: NBK-Egypt reports EGP 1.565 billion in net profit for 1H2023

National Bank of Kuwait - Egypt (NBK-Egypt) has announced net profits of EGP 1.565 billion for the six-month ended June 30, 2023. This marks a significant increase from the EGP 757 million recorded in the corresponding period of last year, representing an impressive annual growth of 106.7%.

In the first half of 2023, the Net Operating Income stood at EGP 3.9 billion, a substantial increase from the EGP 2 billion recorded in the corresponding period of 2022. In the meantime, Net Interest Income jumped by 88.2%, reaching EGP 3.2 billion compared to EGP 1.7 billion in the corresponding period of the previous year.

On the other hand, Net Operating Income (excluding interests) increased to EGP 711 million in 1H2023, compared to EGP 330 million in 1H2022, up by 115.5%, while Cost to Net Operating Income dropped from 39.7% in 1H2022 to 33.8% in 1H2023.

Total assets reached EGP 114.8 billion by the end of the first half, exhibiting a 9.2% increase compared to the year-end balance of EGP 105.1 billion in 2022. Furthermore, the net balance of loans and credit facilities expanded to EGP 68 billion by the end of June 2023, reflecting a growth rate of 23.6% compared to EGP 55 billion recorded at the end of 2022. Moreover, customer deposits continued to grow, rising by 6.4% to reach EGP 89.9 billion as of June 20, 2023, compared to EGP 84.5 billion by the end of 2022.

Commenting on the financial results announced by NBK-Egypt, Ms. Shaikha Al-Bahar, Deputy Group Chief Executive Officer, National Bank of Kuwait, and Chairman of NBK-Egypt, said: “The notable surge in NBK-Egypt's profits during the first half of 2023, alongside the consistent growth in profitability, highlights the strength of our financial standing and the resilience of our business model. This model has demonstrated its ability to generate profits even when confronted with operational challenges”.

Al-Bahar emphasized that the continued growth of NBK-Egypt’s balance sheet and the positive progress observed in various financial indicators is a testament to the success of the bank’s diversification strategy and the acceleration of its digital transformation. “Our goal is to enhance the bank's overall market share, particularly in retail services, within the region's largest market in terms of population. With Egypt’s sizable young population, we are focused on catering to their needs and expanding our reach”.

“We are focused on enhancing the quality of our services, broadening the array of NBK-Egypt’s digital services and advanced payment solutions, leveraging the Group’s extensive expertise in this domain. Furthermore, NBK-Egypt is actively expanding and diversifying its operations to encompass a broader geographic scope and cater to a more diverse range of customer segments.”

“Egypt's operating environment is currently going through an exceptional phase, comparable to that of other emerging markets that have faced consecutive economic shocks. However, we maintain an optimistic outlook for gradual improvement going forward. This optimism is rooted in the reform measures and exceptional actions implemented by the government and the Central Bank of Egypt.” 

“The sustained growth and success we have achieved in Egypt through our long-term investments affirm the Group's forward-thinking vision in choosing Egypt as a strategic investment destination. We are committed to further developing our presence in the country, driven by the rising demand for banking services and higher financial inclusion rates.” 

Meanwhile, Vice Chairman, CEO, and Managing Director of National Bank of Kuwait-Egypt, Mr. Yasser El-Tayeb, said: “NBK-Egypt's remarkable business performance has surpassed expectations, demonstrating its resilience and capacity for growth, even in the midst of various challenges present in both local and global markets.”

El-Tayeb emphasized that the bank’s growth is consistently balanced across all business activities while maintaining the highest adequacy rates and lowest risk ratios, positioning NBK-Egypt for sustained growth. This leadership position results from the Group's prudent policies and practical business model, better positioning NBK-Egypt to meet the shifting demands of its customers and diversify its revenue streams.

El-Tayeb added that NBK-Egypt’s revenue streams are appropriately balanced between corporate and retail credit segments, which have been consistently growing over the past few years, with a very diversified credit portfolio including a wide range of businesses across various sectors ranging from large scale corporations to SMEs. Meanwhile, the retail banking portfolio is also well diversified. This solid position reflects the Bank’s strength and the diversity of its revenue streams. He also highlighted that going forward, NBK-Egypt strives to further strengthen its position in retail banking by offering innovative services and products to its retail customers, in addition to continuing the horizontal growth plan by inaugurating new branches covering key locations throughout the Egyptian market.

Furthermore, El-Tayeb highlighted NBK-Egypt's commitment to align its strategies with the global movement towards sustainable finance and the transition to a green economy. The Bank aims to actively support environmentally friendly projects that promote sustainability and the utilization of renewable energy sources. Moreover, recognizing the significance of sustainable finance as an important tool in ensuring long-term financial stability, NBK-Egypt is dedicated to exploring viable solutions that mitigate the adverse impacts of climate change and reduce carbon emissions.

Underlining the significance of digitalization and the adoption of emerging technologies, El-Tayeb said: "We strongly acknowledge the pivotal role of digital solutions and alternative channels in the banking industry, as we understand their significance in preserving our competitive edge over our counterparts." He added that recognizing the importance of digitalization in strengthening banks' competitive advantages, NBK-Egypt has consistently pursued initiatives to bolster electronic services and promote wider adoption of digital payment transactions. This aligns with the national policy and the Central Bank of Egypt's efforts to foster financial inclusion and integrate new customer segments and merchants into the formal banking system, facilitating the transition towards a cashless society.

Egypt: NBK-Egypt reports EGP 4.021 billion (Equivalent to KWD 41.4 million) in net profit in FY2023

National Bank of Kuwait - Egypt (NBK-Egypt) has announced net profits of EGP 4.021 billion (Equivalent to KWD 41.4 million) for the financial year 2023, a significant increase from the EGP 1.826 billion (Equivalent to KWD 30.7 million) reported in 2022, showcasing an impressive annual growth rate of 120.21%.

Net Operating Income stood at EGP 8.66 billion, recording a substantial increase of 87.04% from the EGP 4.63 billion recorded in 2022. In the meantime, Net Interest Income jumped by 82.51%, reaching EGP 6.99 billion compared to EGP 3.83 billion in 2022.

On the other hand, Net Operating Income (excluding interests) increased to EGP 1.67 billion in 2023, compared to EGP 0.8 billion in 2022, up by 108.75%, while Cost to Net Operating Income dropped from 37.14% in 2022 to 28.02% in 2023.

Total assets reached EGP 130.61 billion in 2023, up by 24.22% compared to the year-end balance of EGP 105.14 billion in 2022. Furthermore, the net balance of loans and credit facilities expanded to EGP 76.06 billion 2023, reflecting a growth rate of 38.42% compared to EGP 54.95 billion recorded at the end of 2022. Moreover, customer deposits continued to grow, rising by 25.42% to reach EGP 105.93 billion in 2023, compared to EGP 84.46 billion by the end of 2022.

The Return on Average Assets (ROAA) surged from 2% at the end of 2022 to 3.4% at the end of 2023, while the Return on Average Equity (ROAE) increased from 16.9% at the end of 2022 to 30.7% by the end of 2023.

Commenting on the financial results announced by NBK-Egypt, Ms. Shaikha Al-Bahar, Deputy Group Chief Executive Officer, National Bank of Kuwait, and Chairman of NBK-Egypt, said: “In 2023, NBK- Egypt achieved its highest annual profits to date, accompanied by record growth rates. This success is credited to a strong operational performance, highlighting the resilience of our financial position and the flexibility of our business model, which allows for profit generation despite operational challenges.

“At NBK - Egypt, our objective is to enhance banking transactions and elevate their quality to meet growing market demand. We pursue this goal by focusing on the advancement of our digital services, leveraging the expertise and excellence of the Group in this domain. Additionally, we aim to expand our loan portfolio for SMEs, broaden the scope of our operations, and diversify them to encompass a wider geographical reach and cater to various customer segments,” Al-Bahar added.

Al-Bahar emphasized that Egypt stands as one of the key strategic markets for fostering the Group's business growth, consistently regarded as the second domestic market. Being the largest Kuwaiti investment in Egypt, the bank holds a significant presence in the Egyptian banking sector, evident in its rapid growth trajectory and strong financial performance. The Bank's positive momentum underscores its commitment to expanding further and strengthening its market position.

Al-Bahar also highlighted that the Group perceives the Egyptian market as a strategic long-term investment. Given that the Egyptian economy ranks among the largest in the region, it holds substantial growth potential once it regains momentum.

She further emphasized that Egypt represents a significant growth market, and that the Bank is committed to its continuous expansion. The operations in Egypt continue to be among the most profitable within the Group, boasting the highest rates of return on shareholders' equity and assets.

“As geopolitical tensions in the region subside, economic recovery efforts will receive a significant boost. By restoring confidence in the economy and currency, substantial opportunities will emerge. We maintain an optimistic outlook on future prospects, buoyed by the momentum generated from the Egyptian government and the Central Bank of Egypt's reform and exceptional measures,” Al-Bahar confirmed.

Meanwhile, Vice Chairman, CEO, and Managing Director of National Bank of Kuwait-Egypt, Mr. Yasser El-Tayeb, said: “The robust financial results and key indicators serve as the most compelling evidence, showcasing the Bank's capacity to maintain growth and attain favorable business outcomes throughout 2023, notwithstanding the unprecedented challenges faced both locally and globally. These challenges include the aftermath of the Russian-Ukrainian conflict, the Gaza war, import crises, and fluctuations in the foreign exchange rate against the Egyptian pound”.

El-Tayeb emphasized that NBK-Egypt maintains a well-balanced distribution of revenues across diverse business activities. This strategic approach is coupled with efficient operational rates and risk ratios, aligning with the dual objectives of achieving growth and ensuring business sustainability. Credit for this success is attributed to the Bank's prudent policies and a sound business model, demonstrating its capability to meet customer needs.

El-Tayeb further explained that the majority of NBK's income sources in Egypt are derived from credit operations in both the corporate sector and the rapidly expanding retail banking sector. The latter has notably increased in prominence, particularly in recent years, with a very diversified credit portfolio including a wide range of businesses across various sectors ranging from large scale corporations to SMEs. Meanwhile, the retail banking portfolio is also well diversified. This solid position reflects the Bank’s strength and the diversity of its revenue streams. He also highlighted that going forward, NBK-Egypt strives to further strengthen its position in retail banking by offering innovative services and products to its retail customers, in addition to continuing the horizontal growth plan by inaugurating new branches covering key locations throughout the Egyptian market.

Al-Tayeb also emphasized the Bank's firm belief in the pivotal role of technological advancements and electronic channels within the banking sector. Recognizing their significance in bolstering competitive advantages among banks, we, at NBK-Egypt have prioritized a robust expansion of our electronic banking services, making substantial investments in this area. Our ultimate goal is to provide customers with an exceptional banking experience, offering a unique facility that enables them to conduct the majority of their banking transactions conveniently, anywhere, anytime. Furthermore, we aim to encourage customers to utilize electronic means and channels for payments, aligning with the broader policy objectives of the state and the Central Bank of Egypt in this regard.

Furthermore, El-Tayeb highlighted NBK-Egypt's commitment to align its strategies with the global movement towards sustainable finance and the transition to a green economy. The Bank aims to actively support environmentally friendly projects that promote sustainability and the utilization of renewable energy sources to mitigate climate change, since sustainable financing has emerged as a fundamental mechanism and instrument for facilitating and maintaining enduring financial stability.

In terms of the bank's social responsibility, Al-Tayeb highlighted that since NBK Group entered the Egyptian market in 2007, NBK-Egypt has remained dedicated to serving the Egyptian community. This commitment is demonstrated through the support, donations, and contributions extended to numerous charitable organizations. Additionally, the Bank actively collaborates with reputable civil society institutions, establishing partnerships aimed at becoming the operational arm of the Bank's development initiatives.