The Central Bank of Egypt (CBE) said that the nonperforming loan (NPL) ratio declined to 4.1% in the Egyptian banking sector in March 2020, compared to 4.2% in December 2019.

In its quarterly report on the financial soundness indicators of the Egyptian banking sector, the CBE said the NPL ratio amounted to 3.1% at the top 10 banks operating in Egypt, and 2.5% at the top 5 banks.

The CBE added that the ratio of loan provisions to NPLs in the banking sector stood at 97.2% in March 2020. The percentage reached 100% at both the top 10 and top 5 banks.

“The volume of loan provisions the banks provided to cover NPLs amounted to EGP 135.437bn in March 2020, with the share of the top 10 banks reaching EGP 90.321bn, while the volume in the top 5 banks reached EGP 73.329bn,” CBE said.

It stated that the banking sector’s reserves reached EGP 263.122bn in March 2020. The share at the top 10 banks amounted to EGP 199.07bn, while the volume of reserves at the top 5 banks amounted to EGP 161.944bn.

According to the CBE, the loans to deposits ratio in banks operating in Egypt increased to 45.9% in March 2020, compared to 44.8% in December 2019. The percentage reached 44.1% at the top 10 banks, and recorded 44.6% at the top 5 banks.

The CBE indicated that the loans to deposits ratio in local currency was 40.2% in March 2020, compared to 39.2% in December 2019. This ratio reached 38.4% with the top 10 banks, and recorded 38.1% at the top 5 banks.

The ratio of loans to deposits in foreign currencies declined to 69.6% in March, compared to 71.4% in December. This ratio came in at 73.6% in the top 10 banks, and 82.9% at the top 5 banks.

“The private sector acquired 62.7% of the total loans granted by banks to their customers until the end of March 2020, compared to 63.3% at the end of December 2019,” according to the CBE.

It added that the private sector acquired 55.5% of the total loans at the top 10 banks in Egypt, while it acquired 51.8% of the loans at the top 5 banks.

The CBE explained that the total deposits in banks reached about EGP 4.412trn in March 2020, with the 10 largest banks accounting for EGP 3.348trn. The volume of deposits at the five largest banks operating in Egypt reached about EGP 2.883trn.

It added that the deposits to assets ratio in banks amounted to 71.7% in March 2020, compared to 72.7% in December 2019. A total of 70.7% of this ratio was reported at the top 10 banks, and 70% at the top 5 in March.

The CBE noted that the liquidity ratio in the local currency at banks increased to 49.7% in March 2020, compared to 45.8% in December 2019. This ratio recorded 52.1% at the top 10 banks, and reached 52.5% at the top 5.

This comes at a time when the liquidity ratio in foreign currencies with banks declined to 71.2% in March, compared to 74% in December 2019. The ratio reached 71.5% with the top 10 banks, and 71.4% recorded in the top 5.

The CBE said the securities to assets ratio in banks, excluding treasury bills (T-Bills), reached about 23.2% in March 2020. This compared to the 20.5% reported at the end of December 2019. The percentage reached 25.8% at the top 10 banks, and 27.6% at the top 5 in March.

According to the CBE, the volume of bank investments in securities and T-Bills amounted to EGP 2.374trn in March 2020. These investments reached EGP 1.919trn with the top 10 banks, and recorded about EGP 1.686trn for the top 5 banks.

The CBE said that the total financial position of banks operating in the local market recorded EGP 6.156trn at the end of March 2020.

It said that the financial position of the 10 largest banks recorded about EGP 4.744trn, equivalent to about 76.95% of the total.