CBE’s banking sector statistics for April show a 0.9% M-o-M increase in total loans, and a 5.5% increase year-to-date  (April 2017 compared to December 2016). Key drivers of loan growth YTD have been the  private corporate sector (up 4.6% YTD, accounting for 55% of new loans in April 2017-December 2016), and the public sector (16.9% increase YTD, and explaining 37% of new lending). Growth in the retail segment has been slow so far, up just 1.9% YTD.
 
Growth rates in total loans have been likely brought down by a decline in USD loans, as trade loans in USD to importers booked before the November 2016 devaluation are being settled or rescheduled in EGP. April banking sector statistics do not include a breakdown of local currency and foreign currency loans, but Egypt banks’ results for 1Q17 do show a very strong increase in local currency loans for most banks, driven mainly by working capital financing. Most banks have pointed out that 1Q17 EGP loan growth was exceptionally strong and follows several months where corporates were not able to complete their working capital cycles because of the shortage of USD.
 
Total deposits increased 6% YTD, with EGP deposits up 7% and FX deposits up 4%. 

Analysts: Elena Sanchez-Cabezudo, CFA.