By: Eslam Fadl
Cairo – Mubasher: Egyptian Arab Land Bank (EALB) has been able to attract 43 new clients with EGP 11 billion in financings a year after the new management took over.
The Egyptian lender also managed to turn its branches in Palestine to profitability and improve the profits of Jordan’s branches.
In an interview with Mubasher, the bank’s vice chairman Amr Gadallah unveiled the most remarkable financial indicators of 2018, the board’s goals by the end of its term in 2020, procedures for structuring the bank's assets, and settling the credit risk portfolio.
The Central Bank of Egypt (CBE) is willing to support EALB with a deposit, with some exceptions it imposes on all banks, Gadallah said.
EALB's management in Jordan is studying the launch of a service to transfer foreign exchange from workers in Jordan to Egypt, he added. Remittances from Jordan to the North African nation amount to $1.5 billion per annum.
EALB’s new strategy
The new strategy, being implemented since 2017 by the new management, focuses on the bank's business by providing all the available banking products in the market that are not limited to financing the real estate sector, Gadallah said.
He added that new management aims to trim accumulated losses and turn the bank to profitability in 2020, while settling a large sum of the non-performing loans (NPLs), in addition to getting rid of the assets of distressed customers.
The CBE’s deposit
The CBE has asked the new management of EALB to reconsider a deposit that supports the bank over the coming period after previous unsuccessful attempts, the vice chairman stressed.
The CBE’s support
The CBE excluded EALB from some of the requirements it imposes on banks operating in the market, such as exemption from statutory reserves estimated at 14%, which helped the bank’s cash flow to increase and be reinvested, Gadallah revealed.
Accordingly, the CBE let EALB participate in the industrial and agricultural projects financing initiative at an interest rate of 7%. However, the bank was excluded to participate in the small-sized projects financing initiative at an interest rate of 5%, he highlighted.
Non-performing assets
He revealed that the bank has disposed of an EGP 2 billion of non-performing assets estimated at EGP 4.6 billion.
EALB's plan to appoint new management for Long Beach Hotel was successful, generating revenue of EGP 90 million and a profit of EGP 30 million until November, he said.
The bank agreed with the Ministry of Tourism to return the side land plot of the hotel spanning 80,000 metres obtained by the ministry from the previous management for not being used.
An attached building to the hotel will be built over the side land next year, he added.
The bank received offers from local and foreign investors to buy the hotel over the past period, he indicated, pointing out that the bank aims to sell the hotel in 2020 by over EGP 2 billion to boost profits.
EALB, which holds a 60% stake in El Fairouz Hospital in Dokki, sold the hospital at a value of EGP 130 million, the bank’s vice chairman said.
The CBE initiative
The bank succeeded in settling debts of six clients at EGP 60 million within the CBE’s initiative to settle debts of defaulters, Gadallah said.
He indicated that the bank’s credit risk portfolio recorded EGP 6.1 billion when the new management took over.
He pointed out that the bank’s new management settled EGP 2.4 billion of credit risk to reach EGP 3.7 billion now.
2018 financial indicators
The new management of the bank was able to achieve over EGP 200 million in profits for fiscal year 2017/2018 and is targeting a profit of EGP 300 million by the end of June 2019, he said.
The bank attracted almost 43 new clients with around EGP 11 billion in financings from October 2017 to October 2018 at an interest rate of 18.2%, he added.
He also indicated that the bank used about 60% of its deposits portfolio valued at EGP 20 billion until November, and aims to reach 70% by the end of June 2019.
The bank’s management seeks to boost deposit portfolio to EGP 45 billion by the end of June 2019, up from EGP 35 billion by the end of November, as part of a plan to reach EGP 60 billion in October 2020, Gadallah said.
Loans portfolio
The bank's loan portfolio stood at EGP 18 billion until November, and targets to reach EGP 40 billion in October 2020, Gadallah highlighted.
He added that microfinance portfolio currently holds around EGP 100 million and targets EGP 300 million by the end of June 2019 and EGP 1 billion by the end of 2020.
The retail banking portfolio launched by the bank last August amounts to nearly EGP 5 million, and the bank aims to raise it to EGP 100 million in June 2019, he pointed out.
The bank's real estate finance portfolio hit EGP 350 million until the beginning of November, he said.
The loan portfolio dedicated to financing the small- and medium-sized enterprises (SMEs) reached EGP 200 million until the beginning of November and targets EGP 300 million by the end of June 2019, according to the bank’s vice chairman.
EALB is considering a contribution of $30 million in a syndicated loan in favor of one of the companies affiliated to the Ministry of Petroleum, he said, noting that the same sum of money was provided to a $700 billion loan obtained by the Egyptian General Petroleum Corporation (EGPC) last October.
He also revealed that the bank is considering arranging a new loan worth EGP 1 billion for one of the companies operating in fertiliser production field in collaboration of a number of lenders.
The bank is also considering financing the monorail project in the New Administrative Capital, he added.
The new management of the bank made investments of around EGP 5 billion until November, he said.
EALB’s overseas branches
He said that the new management succeeded in enhancing the bank’s branches in Jordan, logging a profit of JOD 1.2 million at the end of June, versus JOD 250,000 at the end of the same month last year.
EALB is looking to generate EGP 3 million in profits from its branches in Jordan by the end of December 2019, he added.
The bank’s branches in Palestine turned to profitability with $230,000, Gadallah said.
EALB has around 15 branches in Jordan and 5 branches in Palestine.
Translated by: Mai Ezz El-Din
