Islamic banking assets in Egypt are expected to reach around EGP 128 billion (USD 18.4 billion) in 2014, realizing an average growth of 10% to 12%, the governor of Faisal Islamic Bank of Egypt, Abdel Hamid Abu Mousa, told Zawya.
Islamic banking assets were valued at EGP 114 billion in 2013, up 11% from the previous year, according to data from the Egyptian Islamic Finance Association. Islamic financing extended by banks rose 6% to EGP 76.4 billion in 2013 while deposits grew by 13% to EGP 103 billion in the same period.
"Islamic banking assets in Egypt are expected to realize growth of between 10% and 12% percent in 2014," Abu Mousa said.
The Islamic banking sector accounts for 7% of total banking assets in Egypt. There are 14 banks licensed to provide Sharia-compliant products - three full-fledged Islamic banks, including Faisal Bank, and 11 conventional banks with Islamic branches.
Abu Mousa said Faisal Islamic Bank focuses on investments in sectors that drive the economy, such as electricity and infrastructure and other low-risk sectors.
"Islamic banks want to invest in the alternative energy sector, but this has not been possible so far due to the high costs of production, since it costs between EGP 0.80 to EGP 0.90 to produce one unit of electricity while it is sold at a subsidized price of EGP 0.22," he said.
SAUDIS EYE EGYPT MARKET
Abu Mousa, who also heads the Egyptian-Saudi Business Council, said investors from Saudi Arabia were evaluating various investment opportunities in Egypt, including in the industrial and agricultural sectors, but were waiting for the political and security situation to stabilize before making a move.
"While the size of Saudi investments in the Egyptian market is large at USD 27 billion, there are some problems facing Saudi investors," he said. "The Egyptian government is trying to resolve these problems, even those in which there has been a legal ruling, by trying to find a middle ground."
Following the January 25, 2011 revolution, several lawsuits were filed against foreign buyers over land and property deals concluded under the previous government. In one such instance, Kingdom Agricultural Development Company, owned by Saudi Prince Alwaleed bin Talal, had to return part of land it owned in a region in southern Egypt under a settlement deal.
© Zawya 2014
