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Egypt: NBK-Egypt reports EGP 2.6 billion in net profit by the end of 3Q 2023

National Bank of Kuwait - Egypt (NBK-Egypt) has announced net profits of EGP 2.6 billion at the end of the third quarter 2023. This marks a significant increase from the EGP 1.3 billion  recorded in the corresponding period of last year, representing an impressive annual growth of 100%.

Net Operating Income stood at EGP 6.1 billion, recording a substantial increase of 97% from the EGP 3.1 billion recorded in the corresponding period last year. In the meantime, Net Interest Income jumped by 89%, reaching EGP 4.9 billion compared to EGP 2.6 billion in the corresponding period of 2022.

On the other hand, Net Operating Income (excluding interests) increased to EGP 1.18 billion by the end of the third quarter, compared to EGP 508 million in the corresponding period of 2022, up by 132.3%, while Cost to Net Operating Income dropped from 37.9% in 3Q2023 to 31.9% in 3Q2023.

Total assets reached EGP 118.1 billion by the end of September 2023, up by 12.4% 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 68.6 billion by the end of September 2023, reflecting a growth rate of 25% compared to EGP 55 billion recorded at the end of 2022. Moreover, customer deposits continued to grow, rising by 12% to reach EGP 94.7 billion in 3Q2023, 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: “NBK- Egypt successfully managed to achieve its highest historical profitability growth by the end of the 3Q2023. This accomplishment highlights the bank's continuous accomplishments to strengthen its foothold in the Egyptian market, which is considered a key growth market for the Group. The Egyptian market is particularly significant due to its promising growth opportunities and favorable prospects.”

Al-Bahar emphasized that the continuous expansion of NBK-Egypt's balance sheet and the favorable progress evident in diverse financial indicators serve as a testament to the success of the bank's diversification strategy. This success is further underscored by the swift progress in its digital transformation initiatives, which aim to broaden the bank's overall market presence, especially in retail services. This strategic focus is particularly significant in the region's largest market, measured by population.

“Our efforts are directed towards enhancing the quality of our services, expanding our geographical reach, and engaging with a more diverse customer base, as we continue to leverage the notable progress the bank is undergoing in terms of advancing and modernizing our digital infrastructure, information technology, and electronic channels. These improvements mark a substantial leap forward, establishing the bank as a powerful competitor in the banking sector,” Al-Bahar added.

“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 that the recent monetary and financial reform measures implemented by the government and the Central Bank of Egypt will positively impact economic performance, contributing to overall growth,” She noted. 

“Egypt is a key growth market for the Group, serving as a strategic long-term investment. The current growth and success we are currently experiencing 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,” Al-Bahar concluded. 

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 and our targets for the year, demonstrating the resilience of our business model and its ability to grow, even in the midst of various challenges present in both local and global markets.”

El-Tayeb emphasized that NBK-Egypt maintains a well-balanced distribution of revenue 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 and diversify income sources effectively.

El-Tayeb further explained that the majority of NBK's income sources in Egypt are well-balanced, 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.

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.

Recognizing the pivotal role of technological tools and electronic channels in the banking sector and acknowledging their significance in bolstering competitive advantages among banks, NBK has persistently and decisively advanced its support for electronic services. It actively encourages customers to broaden their utilization for payments, aligning with the overall policy of the state and the Central Bank of Egypt. In this context, NBK-Egypt aims to foster financial inclusion, bringing new segments of customers into the official banking system to contribute to the evolution towards a society with reduced dependence on physical currency.

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.