Maintaining Banks’ Strength An Urge To Limit Economic Deterioration: Yasser Hassan

Maintaining the strength of the banking sector to be able to continue its role without being exposed to large risks is crucial for saving Egypt’s economy from more deterioration, said Yasser Ismail Hassan, chairman of Al Watany Bank of Egypt (AWB).

During his address at “People and Banks” Conference, he added that the banking system has to shield itself against four kinds of risks, most notably credit risks which is currently a pressing problem as banks will not withstand the loss of the funds of depositors in the meantime.

Banks seek to achieve profit when offering credit to any customer, but their main target is to guarantee that these funds will return, he explained.

Liquidity risk is the second risk facing the banking sector as it was the main reason behind the latest global financial crisis as U.S. and European banks could not recover the funds of depositors, he added. The successful bank is the one that recover funds from borrowers, and when the defaulter’s assets are seized, it shall be quickly liquidated so as to avert a liquidity shortage crisis, he stressed.

Hassan emphasized that banks shall manage interest rates on savings well so as to avert the third risk that faces the sector. He added that security chaos and high crime rates also increase the risks of losing the banks’ funds.

Chairman of Al Watany Bank of Egypt called for setting a comprehensive economic vision to achieve sustainable growth on the long term as banks will not be able to provide more finances if economic growth has not been boosted.