AlexBank Writes off NPLs worth EGP116 million in Q1

By Yomna Yasser On Jul 16, 2014

Bank of Alexandria has written off non-performing loans (NPLs) worth around EGP 116.7 million during the first three months of the current year.

The bank’s total written-off NPLs comprise of EGP 111.9 million related to companies and organizations in addition to EGP 4.789 million related to individuals.

This comes after the bank had failed to collect credit facilities and loans despite taking all the necessary procedures to ensure the recovery of those finances. Therefore, Bank of Alexandria was driven to write off EGP116.7 million NPLs, and made adequate provisions, which shall be debited to retained earnings and dedicated for the impairment of assets exposed to credit risk.

Bank of Alexandria – Intesa Sanpaolo’s NPLs ratio to total loans stands at around 7.45% at Q1-end, compared to 8.02% at December-end.

Meanwhile, the bank’s special follow-up loans to total loans hiked to 7.91% in Q1, opposed to 6.30% at December-end.

The bank divides its internal classifications to four levels for loans: (1) Performing Loans, (2) Regular Follow-up, (3) Special Follow-up, and (4) Non-Performing Loans.

The Central Bank of Egypt requires provisions’ ratio of 5% for the special follow-up loans (Watch list), and 20% for NPLs (Substandard) and 50% for NPLs (doubtful) and 100% of NPLs (bad debts).

Intesa Sanpaolo Group holds major shareholder in the Bank of Alexandria amounting to 70.25% of the bank shares. The International Finance Corporation (IFC) has 9.75% of the bank’s share; whereas the Egyptian Government holds 20%.