KUWAIT: National Bank of Kuwait-Egypt (NBK-Egypt) reported EGP 652.5 million (Equivalent to KD 6.9 million) in net profits in the three months ended March 31, 2023, compared to EGP 348.7 million (Equivalent to KD 6.7 million) for the same period of the year 2022, recording a growth of 87% YoY. In the first quarter of 2023, NBK-Egypt witnessed significant growth in key financial indicators. Net Interest Income recorded a remarkable increase of 100%, reaching EGP 1.54 billion compared to EGP 0.77 billion in the same period of the previous year.
Additionally, Net Operating Income experienced substantial growth of 99%, amounting to EGP 1.85 billion in 1Q2023 compared to EGP 0.93 billion in 1Q2022. Moreover, customer deposits saw a positive trend, rising by 4.50% to reach EGP 88.3 billion as of March 31, 2023, compared to EGP 84.5 billion by the end of 2022. NBK Egypt’s total assets reached EGP 109.3 billion by the end of the first quarter, exhibiting a 4% increase compared to the year-end balance of EGP 105.1 billion in 2022. Furthermore, the net balance of loans and credit facilities expanded to EGP 58.1 billion by the end of March 2023, reflecting a growth rate of 6.9% compared to EGP 54.3 billion recorded at the end of 2022.
Commenting on the financial results announced by NBK-Egypt, Shaikha Al-Bahar, Deputy Group Chief Officer, National Bank of Kuwait, and Chairman of NBK-Egypt, said: "The significant increase in NBK-Egypt’s profits reported in the first quarter, coupled with its sustained profitability growth, underscores the strength of our financial position and the resilience of our business model. Despite the escalating operational challenges, our flexible approach has enabled us to generate profits and maintain a solid performance.”
Al-Bahar emphasized that the continued growth of NBK-Egypt’s balance sheet and the positive progress observed in various financial indicators is a testament to the success of the bank’s diversification strategy and the acceleration of its digital transformation. "Our goal is to enhance the bank’s overall market share, particularly in retail services, within the region’s largest market in terms of population. With Egypt’s sizable young population, we are focused on catering to their needs and expanding our reach,” Al-Bahar confirmed.
"Egypt’s operating environment is currently going through an exceptional phase, comparable to that of other emerging markets that have faced consecutive economic shocks. However, we maintain an optimistic outlook for gradual improvement going forward. This optimism is rooted in the reform measures and exceptional actions implemented by the government and the Central Bank of Egypt,” Al-Bahar observed.
"We have strategically positioned ourselves to leverage the favorable opportunities that will arise as the operating environment improves after the conclusion of these exceptional circumstances. A number of factors including decreasing inflation rates, stable exchange rates, and growing foreign investment will contribute to a positive impact on our operations in Egypt, enabling greater alignment and synergy with the overall operations of our Group,” Al-Bahar noted.
"The sustained growth and success we have achieved in Egypt through our long-term investments affirm the Group’s forward-thinking vision in choosing Egypt as a strategic investment destination. We are committed to further developing our presence in the country, driven by the rising demand for banking services and the increasing rates of financial inclusion”, Al-Bahar noted, adding that the Bank’s focus is on enhancing the quality of its services, expanding the range of its digital services and advanced payment solutions, and expanding its SME loans portfolio. Additionally, NBK-Egypt is actively expanding and diversifying its operations to encompass a broader geographic scope and cater to a more diverse range of customer segments.
Meanwhile, Vice Chairman, CEO, and Managing Director of National Bank of Kuwait-Egypt, Yasser El-Tayeb, said: "NBK-Egypt’s exceptional business results showcase its resilience and growth potential, even in the face of numerous challenges in both local and global markets.” El-Tayeb emphasized that the Bank’s growth is consistently balanced across all business activities while maintaining the highest adequacy rates and lowest risk ratios, positioning NBK-Egypt for sustained growth. This leadership position results from the Group’s prudent policies and versatile business model, better positioning NBK-Egypt to meet the shifting demands of its customers and diversify its revenue streams.
El-Tayeb added that NBK-Egypt’s revenues are appropriately balanced between corporate and retail credit segments, which have been consistently growing over the past few years, with a very diversified credit portfolio including a wide range of businesses across various sectors ranging from large scale corporations to SMEs. Meanwhile, the retail banking portfolio is also well diversified.
This solid position reflects the Bank’s strength and the diversity of its revenue streams. He also highlighted that going forward, NBK-Egypt strives to further strengthen its position in retail banking through offering innovative services and products to its retail customers, in addition to ingraining the comprehensive concept of "inclusive banking” as the bank of choice that fulfills all their financial needs and requirements, in addition to continuing the horizontal growth plan by inaugurating new branches covering key locations throughout the Egyptian market.
Furthermore, El-Tayeb highlighted NBK-Egypt’s commitment to align its strategies with the global movement towards sustainable finance and the transition to a green economy. The Bank aims to actively support environmentally friendly projects that promote sustainability and the utilization of renewable energy sources. Moreover, recognizing the significance of sustainable finance in ensuring long-term financial stability, NBK-Egypt is dedicated to exploring viable solutions that mitigate the adverse impacts of climate change and reduce carbon emissions.
Underlining the significance of digitalization and the adoption of emerging technologies, El-Tayeb said: "We strongly acknowledge the pivotal role of digital solutions and alternative channels in the banking industry, as we understand their significance in preserving our competitive edge over our counterparts.” He added that recognizing the importance of digitalization in strengthening banks’ competitive advantages, NBK-Egypt has consistently pursued initiatives to bolster electronic services and promote wider adoption of digital payment transactions.
This aligns with the national policy and the Central Bank of Egypt’s efforts to foster financial inclusion and integrate new customer segments and merchants into the formal banking system, facilitating the transition towards a cashless society. As part of these endeavors, NBK-Egypt recently introduced the "InstaPay Application,” which offers customers convenient access to all their bank accounts and facilitates instant money transfers via their mobile phones 24/7.