Egypt’s banking system resilient against shocks – CBE’s Aboulnaga

Rami Aboulnaga, deputy governor of the Central Bank of Egypt, said on Friday that the Egyptian financial system was capable of weathering the initial impact of unification and monetary tightening.

Addressing one of the sessions of the British Egyptian Business Association (BEBA) annual door-knock Mission to the UK, Aboulnaga said that the capital base to risk weighted assets in March 2024 reached 18.1 per cent compared to 18.6 in December 2023 and 17 per cent in March 2023.

Meanwhile, the ratio of nonperforming loans (NPL) to total loans in March 2024 reached 2.6 per cent, against 3.0 per cent in December 2023 and 3.5 per cent in March 2023.

The return on average assets (ROA) ratio improved significantly in March 2024 compared to the same month a year earlier. It reached 2 per cent in March 2024, up from 1.2 per cent in both December 2023 and March 2023.

A higher ROA means an entity is more efficient and productive at managing its balance sheet to generate profits. A lower ROA indicates there’s room for improvement.

On the other hand, return on average equity (ROE) picked up in March 2024, reaching 32.2 per cent compared to 17.7 per cent in December 2023 and 17.7 per cent in March 2023.