Egyptian Gulf Bk to Launch Microfinance, Mortgage Lending Firms

Apr 2009
Egypt, April, 26 2009 - Egyptian Gulf Bank (EGB) has finalized establishment procedures for an EGP 46 million microfinance firm (USD 8.2 ml), CEO Omar Alseesi stated, adding that Amr Abou El Eish will serve as CEO for the new venture.

“Through the new firm, the bank will be able to provide around EGP 400 million credit facilities, through offering loans at a minimum of EGP 4,000 and a maximum of EGP 35,000”, Alseesi said .

The CEO expects the new venture to have around 300 branches country-wide, enabling the lender to put its strategy into effect.

Moreover, the creditor has joined hands with Citadel Capital to set up an EGP 120 million mortgage lender, whose launching will be announced soon, Alseesi told Bunouk Al-Youm.

Launching these two new ventures marks the lender’s turnaround toward being an integrated financial institution, especially after acquiring 25% stake in Prime Holding. “Having that stake in Prime is considered one of EGB’s major expansions in the field of non-banking financial services and activities”, Aseesi said.

The Egypt-based lender mulls purchasing a GCC brokerage to provide Egyptian expatriates with money transfer services. However, no final decision has been reached in this regard, as the bank still has a small network that may not provide GCC-based Egyptian clients with fast money transfer services.

“The bank will take that step after increasing its network to 35 branches, with the help of its microfinance company outlets, estimated at around 300 branch”, Alseesi added.

The bank offered its 28% stake in Sheraton Al Montazah-based “Echo” for sale to a strategic investor, with Arab African International Bank (AAIB) advising on the sale, Alseesi stated, adding that the sale will be announced in May.

The CEO unveiled that the lender has completely covered the deficit in provisions, allocating EGP 30 million additional provisions to hedge against future circumstances.

At 2007-sart, the lender’s loan portfolio amounted to EGP 1,300 billion, 50% of which were uncovered bad debts that neared EGP 680 million. “Currently, the debt portfolio was raised to EGP 3.500 billion, bad debts represent only 16% of it , reaching EGP 560 million, totally covered by the provisions,” the CEO said, underlining that the lender has successfully undertaken around EGP 200 million settlements within the past 18 months, including the settlement with EGYGAS.

Source : Mubasher

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