NBK Capital issued a report on Egyptian monetary indicators, noting that figures from the Central Bank of Egypt (CBE) show loan growth in Egypt was nil in August, resulting in a seven per cent YTD increase.
Corporate loans were broadly flat in August (-0.1 per cent MoM), showing weakness for the second consecutive month, possibly reflecting seasonal effects. The growth momentum in retail lending slowed to +0.2 per cent MoM, which is the lowest rate of expansion since the beginning of the year.
Breaking down the loans in terms of currency, FX loans (+1.0 per cent MoM) had grown faster than EGP loans (-0.4 per cent MoM) in July, the latest month for which data is available. Additionally, FX corporate loans expanded by around EGP 2 billion in July, while EGP corporate loans declined by EGP 4 billion, thus resulting in YTD growth of eight per cent and seven per cent, respectively.
Deposit growth momentum slowed in August 2014. Deposits inched up by just 1.4 per cent in August, resulting in a 19 per cent YoY increase.
Corporate deposits rebounded in August while retail deposits slowed. Corporate deposits increased by 3.4 per cent in August; however, the growth in retail deposits slowed to 0.7 per cent from 1.4 per cent in July, thus narrowing the gap between the two from both YoY and YTD perspectives. FX deposit growth (-0.5 per cent MoM) stayed in negative territory for the third consecutive month. Growth in EGP deposits stood at 1.8 per cent, in August resulting in a 22 per cent YoY increase, significantly ahead of the increase in FX deposits (+7 per cent). As for retail deposits in particular, EGP-denominated deposits expanded, while FX-denominated deposits declined. On a different note, having been broadly on an upward trend, the investment-to-assets ratio declined in July to stand around 45 per cent. YTD, the investment-to-assets ratio has increased by 115 bps, while the loans-to-assets ratio has declined by 95 bps, according to the report.