ICEC

Banque Du Caire H1 profits drop to $90.1 mln

Egypt’s Banque Du Caire recorded first half profits ranging between 700 and 800 million Egyptian pounds ($78.8 – 90.1 million), senior banking source told Amwal Al Ghad Sunday.

Egypt’s third biggest public lender is expecting lower profitability this year weighed by a decline in retail activity, the source said. That is why Banque Du Caire will work in the coming period on boosting its finances for small and medium-sized businesses to fill this gap.

The bank is likely to close the year with profits ranging between 1.8 and 1.9 billion pounds, down from 2.02 billion pounds posted in 2015, the source added.

Two main reasons are behind the drop in Banque Du Caire’s profits this year, sources with knowledge of the matter told Amwal Al Ghad. First, the bank’s retail banking portfolio shrank from 30 percent to around 5-10 percent this year following a new regulation issued earlier in January by the central bank regarding the debt burden ratio of banks’ retail portfolios.

Upon the new regulation, banks are no longer permitted to allow the monthly payments for certain consumer loans to exceed 35 percent of the client’s monthly income after taxes. Over the past few years, many private and retail banking consumers have requested and received significant loans from banks exceeding 50-60 percent of their income.

As for the second reason, the sources said it was due to the two savings certificates in Egyptian pounds issued by Banque Du Caire with an interest rate of 12.5 percent, which will as well affect the bank’s profits.

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