How do you see the prospects for the Egyptian economy in the short, medium and long term?
The Covid-19 pandemic has been a test for the Egyptian economy, in particular due to the decline in foreign currency inflows into the country.
However, the impact was not as severe as everyone expected for a country as densely populated as Egypt, and we started to see signs of recovery in economic activity, and growth. economic growth is expected to reach 5.2% in fiscal year 2021/22. , according to the International Monetary Fund (IMF).
Therefore, the private sector will continue to grow and achieve its potential for job creation and sustainable market expansion.
In which sectors do you see the greatest potential for growth as a bank?
The e-commerce sector, associated with fintech, has been the engine of economic growth in recent years. E-commerce in the MENA region is expected to grow 35% year-on-year in 2021 to reach around $ 30 billion, or double its value in 2019.
Consumers have turned to online shopping more because of its ease and speed, and our services currently meet this need, enabling customers to conduct secure online banking transactions remotely.
In fiscal 2020, the number of retail customers subscribed to CIB’s online banking service increased by 35% year-on-year, while CIB’s Smart Wallet recorded a 107% increase in transactions.
Another growth leader is Fast Turnaround Commercial Goods (FMCG), driven by strong consumer spending and an increasingly formalized retail sector.
Total household spending will increase at a real rate of 3.7% over 2021, and on average 4.2% per year in local currency over 2021-25, making Egypt the second largest consumer market in the country. fastest growing in MENA region, creating greater purchasing power of consumer goods.
When it comes to your own banking services and operations, what will CIB pay the most attention to?
In line with the guidelines of the Central Bank of Egypt and the bank’s strategy to gain a greater share of the SME credit market, the merchant bank began to work on an “accelerated growth plan” by modifying our credit policies, an alternative score loan model, investing in people, premises, IT developments and wider dissemination across business lines.
To improve our service model and ensure comprehensive coverage, a “new service model” was launched in 2021, aimed at expanding coverage for small businesses. We have also mapped our branches into Households, Lighthouses and Businesses to provide tailor-made services to clients.
For consumer banking, we will continue to focus on strategic priorities such as the digitization of acquisition efforts, marketing activities and the service model to support our premium pricing strategy. We are also focused on upgrading our technologies and overhauling our customer experience by introducing transformation projects.
CIB implements digital transformation across all of its business, from product development to risk management and human capital management.
With digital banking shaping the future of businesses and the economy as a whole, big data has become an essential tool for creating structures for collecting and analyzing information and transforming quantitative knowledge into building blocks for future strategies.
CIB has made its voice heard to expand its presence in Africa and acquire new assets abroad. Is this still part of CIB’s strategy or has the pandemic changed priorities?
Diversifying our operations and expanding into other African countries is still part of our strategy for the years to come. Africa is home to some of the fastest growing economies in the world, representing a golden opportunity to develop and consolidate the continental footprint of the IPC as a trade finance hub.
We are currently in the process of identifying potential African trade finance opportunities as we continue to support the growth and development of our subsidiary in Kenya.
Is there room for bank consolidation?
Currently, the Egyptian banking sector is made up of 38 banks, where the level of activity – number of branches, number of customers, portfolios of assets and liabilities, etc. – is proportional to the size of equity.
This fragmentation is having a negative impact on the market, so we believe that the consolidation of some of these entities will create a more competitive banking system with increased customer satisfaction, and above all will further push financial inclusion efforts and more easily reach non-segments. banked and underbanked of the population.
Has the adoption of new technology resulted in the returns you envision?
Our effective digital banking solutions have helped expand our customer base in all segments. CIB’s digital platforms have become crucial for customers during the Covid-19 pandemic to conduct transparent and secure transactions. It also facilitated the migration of branch customers to the bank’s online services.
This has helped CIB maintain its dominant position in the payment acceptance industry in Egypt in 2020. Over the past year, the number of digital banking transactions made through the bank’s mobile banking service has more than doubled, leaping 118% year-on-year.
Enterprise digital services have also seen a leap forward, as customers now rely entirely on channels that offer alternatives to cash transactions and paperwork.
The percentage of business internet banking transactions increased 93% in one year, with the number of subscribers increasing by 45% in fiscal 2020.
CIB’s digital products include Zaki the Bot, an artificial intelligence chatbot, available on the bank’s website and official Facebook page. Zaki the Bot uses the latest AI technologies that allow CIB clients to easily navigate the bank’s products and services in Arabic and English.
CIB recently successfully raised a $ 100 million green bond. How and where are you going to deploy this capital?
The pipeline approved by the CIB Green Bonds currently has projects in various industrial sectors valued at around $ 70 million, including the CIB head office building in the new administrative capital, which is underway. to be certified as a green building.
Three projects in the banking and education sector and the food and beverage industry are also awaiting certification, with more promising projects underway. It is expected that certified green buildings will constitute a large part of the projects to be funded, as CIB has partnered with IFC for the development of the first line of green building finance in Egypt.
Industrial energy efficiency, the manufacture of energy efficient equipment and wastewater treatment projects will also be at the center of CIB’s financing under the green bond.