Experts say the future looks bright for Egypt's banking sector Egyptian bankers feel that a number of Kuwaiti and Turkish companies will invest in Egypt this year, as Gulf banks continue to buy out French firms operating in Egypt, after Egypt’s Central Bank refused to grant licences to new financial institutions.In recent transactions, National Bank of Qatar and Emirates Bank of Dubai have purchased French banks in the Egyptian market. Emirates Bank bought BNB Paripa in Egypt for $500 million, while National Bank of Qatar reached an agreement with Societe Generale to buy its banking investments in Egypt.
Egyptian Central Bank sources told Arabstoday that Turkish institutions are keen to invest in the Egyptian market. Turkish Bank of Aish has already attempted to conclude a number of deals to buy several banks, but negotiations have failed.
Sources added that Qatari and Emirati banks are also keeping a close eye on Egypt with potential development in different sectors, including real estate, logistics and transportation services.
Chairperson of al-Mashoora Banking Services, Basant Fahmy told Arabstoday that French banks are facing huge problems after the European debt crisis. She added that a number of these banks decided to sell their branches and move abroad to provide the necessary liquidity. She said that the Gulf banks and financial institutions turned to invest in the Egyptian market because the foreign countries had been affected by the international financial crisis. Fahmy added that these banks take into account a number of factors before deciding to invest in any market, adding that they study the market and economic policies adopted there, in addition to the volume of investments. She predicted that the Egyptian market will see huge Arab and Gulf investment this year, adding that the current economic conditions and the future vision for the Egyptian market pushed the Gulf banking institutions to invest in the financial sector in Egypt.
Meanwhile, banking researcher Dr Hisham Ibrahim said that it is not the first time Emirati banks are working in Egypt’s market, while interest from Qatari banks is a new phenomenon.
He said that the Central Bank of Egypt refuses to provide licenses to establish new banks because it wants to support the banks that are already working in the local market.
He blamed the European financial crisis for the exit of the French banks from Egypt.