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Banque Misr Achieves Exponential Growth in all Business Sectors, Attains EGP 24 Billion in Pre-Tax Profits – at a growth rate of 40% - Affects EGP 13 Billion in Taxes, pushing Net Profits to EGP 11 Billion at a growth rate of 29% - and is Awarded 50 Accol
13/04/2021
 
Banque Misr Achieves Exponential Growth in all Business Sectors, Attains EGP 24 Billion in Pre-Tax Profits – at a growth rate of 40% - Affects EGP 13 Billion in Taxes, pushing Net Profits to EGP 11 Billion at a growth rate of 29% - and is Awarded 50 Accolades by Major Institutions

 
Banque Misr’s general assembly announced the approval of the Bank’s financial statements for the FY ending 30th June 2020; with initial financial performance indicators showing substantial growth across all sectors, in spite of the challenges brought about by the COVID-19 crisis and their repercussions on the banking landscape as a whole. Banque Misr witnessed an exponential increase in the volume of business activities in the current year. The overall financial position exceeded EGP 1 trillion to post EGP 1.2 trillion, compared to EGP 967 billion the previous year, at a growth rate of approximately 27%. Net customer loans increased to EGP 335 billion, compared to EGP 272 billion the previous year, at a growth rate of 23%, thanks to the growth of the retail and small enterprise portfolio by 59% and the growth of the large and medium enterprise portfolio by 18%. Settlements were reached with a large number of customers, amounting to EGP 2.4 billion and collections of irregular debts totaled EGP 1.1 billion at a coverage of 137.1%. On the other hand, the financial investments portfolio posted a growth rate of 45%, totaling EGP 556 billion, compared to EGP 385 billion the previous year. Customer deposits also rose by around EGP 182 billion, reaching EGP 928 billion, compared to EGP 746 billion as at 30/6/2019, at a growth rate of 24%, thanks to the growth in savings certificates by 47% and term deposits by 33%. The Bank’s pre-tax profits rose to EGP 24 billion, at a growth rate of 40%, while affecting EGP 13 billion in taxes, pushing total net profits to EGP 11 billion, i.e. posting a growth rate of 29%.
 
Banque Misr applied IFRS no. 9 – Financial Instruments – as at 1st July 2019, as required by the Central Bank of Egypt.

 The Bank’s retail portfolio – encompassing both conventional and Islamic business – recorded EGP 47.9 billion as at 30/6/2020, compared to EGP 31.5 billion in 6/2019, posting an increase of EGP 16.4 billion over and above the previous year, at a growth rate of 52.1%. The number of issued cards exceeded 9.43 million; the majority of which operate on a smart chip system, ranking the Bank in second place amongst its Egyptian counterparts for the number of issued electronic payment cards. Locations of vendors conducting business with the Bank numbered some 21,212 locations throughout the governorates of Egypt, with the total volume of transactions (devices, POS, e-commerce) exceeding EGP 21.8 billion per annum. The Bank provides the most up-to-date version 3.2.1 of POS devices at these locations, which are also compliant with global PCI DSS standards, as required by global institutions.

 
Banque Misr has also been focused on financial inclusion and has consistently operated in conformity with the strategy of the Central Bank of Egypt, in order to strengthen the efforts of financial inclusion; most important of which is the transformation from a cash society to a cashless society by endorsing and incentivizing the utilization of electronic payment methods. This is in line with the policies of the National Payments Council chaired by H.E. the President of Egypt, targeting the minimization of the use of banknotes outside the banking sector, while encouraging the use of electronic payment means and channels instead. In realizing this goal and in fulfillment of customers' needs, Banque Misr has offered various salary automation solutions targeting public and private sector companies by provisioning a variety of salary transfer products (salary cards – salary accounts). As such, the number of companies contracting with the bank has numbered 1,443 companies, at a total of 969.5 thousand cards and more than 62 thousand accounts. This is in addition to providing an electronic payment service for tax and customs. Insofar as electronic products, Banque Misr expanded the BM Wallet to include some 700 thousand wallets as at 6/2020; indicating reliance by more customers on this product for performing transfer operations and the payment of various bills.
 
Worth noting is that Banque Misr has ranked first for the fifteenth consecutive year – since the launch of the Ministry of Finance’s salary automation scheme in 2005 – amongst banks participating in the system – with a market share of 48% and a total of 2.64 million cards affiliated with 1,400 government entities contracting with the Bank. The value of salaries - of both the public and private sector - transferred through the Bank has exceeded EGP 98.5 billion per annum.
Within the framework of financial inclusion, the Bank has been keen on offering financial services to various social segments by way of geographical expansion. As such, Banque Misr seeks to expand its network of branches nationwide to be conveniently accessible by customers wherever they may be. In light of this, a number of branches have been recently inaugurated, making the Bank the owner of the largest network of branches, numbering more than 700 throughout the country. This is in addition to its regional and global presence in the United Arab Emirates, Lebanon, France, Germany, China, Russia, South Korea (Seoul) and Italy (Milan). Within the next five years, the Bank targets establishing a presence in Africa – whether through representation offices/branches or others – and specifically in Somalia (Mogadishu) and Kenya (Nairobi). This is while maintaining a large network of correspondents covering all countries of the world.

 
It is also worth noting that Banque Misr has been a forerunner of Islamic banking, being the first public sector bank to establish branches for conducting Islamic banking transactions (Kenana), numbering some 44 branches throughout the Arab Republic of Egypt. Moreover, the Bank possesses a developed network of technologically advanced Automated Teller Machines (ATMs), numbering more than 3,000 as at the end of December 2020. These ATMs provide withdrawal and deposit services, currency exchange, payment of bills and donations; in addition to cash transfer services. The Bank also renders other innovative services such as being the first bank in Egypt to offer withdrawal and deposit services for electronic mobile phone wallets via its network of ATMs.

 
Worth noting is that Banque Misr has taken numerous strides towards digital transformation; such as, for instance, updating and developing its internet banking service "BM Online” and offering a bundle of new banking services to customers. Banque Misr has also launched electronic banking services to customers via mobile phones through the mobile banking application, becoming one of the first amongst its counterparts to offer this service through “BM Wallet”. Banque Misr has also recently – and for the first time in Egypt – utilized artificial intelligence technologies to offer the “Automated Assistant Chat Bot” through its web portal, to serve customers around the clock.

 
The Bank has been the first to offer the technology that enables points of sale (POS) and electronic website purchases via QR Code for mobile wallet customers. The Bank has also automated the financing of micro enterprises, so as to provide the service instantly, for the first time in Egypt.

 
In the area of Islamic retail banking, all modern-day banking services are offered; including the issuance of all types of cards, in addition to a bundle of products developed to serve the customers of Islamic branches (Kenana). Such products include the multiple products of Murabaha; such as the Murabaha of Hajj and Umrah, Murabaha of durable goods, Murabaha of tourism trips, car purchase Murabaha as well as education Murabaha to finance the payment of tuition expenses and fees. Moreover, Banque Misr’s Islamic branches, Kenana, provide the service of "Takaful Banking Insurance" with the assistance of the Egyptian Takaful Life Insurance Company. The value of the Islamic banking portfolio totaled EGP 1.6 billion as at 6/2020, in comparison to EGP 0.9 billion in 6/2019, at an increase of EGP 0.7 billion compared to the previous year and a growth rate of almost 80%.

 
Banque Misr finances Micro, Small and Medium Enterprises (MSMEs) via branches located throughout the different Egyptian governorates, in various fields; such as industrial, agricultural and service-based projects. As of June 2019, the portfolio of MSMEs – both conventional and Islamic – increased to EGP 37.7 billion (of which EGP 30 billion are direct) from EGP 23.9 billion as at 6/2019, at an increase of EGP 13.8 billion and a growth rate of 57.6%. As of June 2020, the portfolio of MSMEs clients increased from 121 thousand clients in 6/2019 to 184 thousand clients; recording a rise of 63 thousand clients and a growth rate of 52%.

 
Banque Misr consistently strives to fulfil the needs of various social segments, in a manner that is conducive to development; by eradicating unemployment and contributing to the development of the community. Accordingly, the Bank has partnered with the Ministry of Local Development to launch “Mashrouak” (Your Project) program, with the objective of financing small and micro enterprises, via the “one-window” initiative within the local units throughout Egypt. Loans were issued to 99 thousand customers at a total value of EGP 9.9 billion as at 30/6/2020.
 
The Islamic banking’s direct and indirect MSMEs portfolio witnessed an increase, recording EGP 4 billion as at 6/2020; compared to EGP 1.6 billion as at 6/2019, at a rise of EGP 2.4 billion and a growth rate of 145.3%.
 
With regards to financing major corporations, Banque Misr is considered a national pioneer in financing projects of various sectors. The corporate credit and syndicated loans portfolio – both direct and indirect, conventional and Islamic – increased to EGP 179.3 billion (of which approximately EGP 133.2 billion are direct) as at 6/2020, compared to EGP 155.2 billion as at 6/2019, at an increase of some EGP 24.1 billion and a growth rate of 15.5%. During the period from 1/7/2019 to 30/6/2020, the Bank was able to successfully complete the arrangement, financing and participation in 9 operations, totaling EGP 81.33 billion in various sectors; including real estate investment, contracting, oil and gas, construction materials and financial services. The Bank’s guarantee coverage for said operations amounted to approximately EGP 32 billion. This is in addition to arranging, funding and partaking in Sharia-compliant financing totaling EGP 6.2 billion – in the contracting, oil and gas sectors – at a coverage of EGP 1.6 billion.
 
In light of the extensive marketing plans adopted by the Bank towards attracting new customers and new financing operations – coupled with the commitment to implement its strategic and development objectives that are geared towards supporting the national economy in various fields and sectors – the Bank currently seeks to complete a total of 25 major financing operations, both targeted and under consideration, in various sectors including real estate investment, land transportation, oil and gas, agricultural yields, fertilizers, petrochemicals, contracting, education and others. Said operations amount to approximately EGP 120.32 billion, at a coverage guarantee of EGP 28.21 billion; in addition to 7 Sharia-compliant operations that the Bank seeks to complete, in various sectors such as real estate investment, oil and gas, petrochemicals and contracting. Said operations amount to approximately EGP 17.6 billion, at a coverage guarantee of EGP 7.9 billion. This comes as an emphasis of both the Bank’s pivotal role and its status as a national pioneer of the Egyptian banking sector.
 
The Islamic banking portfolio – direct and indirect in the domain of corporate credit and syndicated loans – increased to EGP 10.8 as at 6/2020, compared to EGP 5.5 billion as at 6/2019, posting an increase of EGP 5.3 billion and a growth rate of 97.6%.
 
Banque Misr adopts a strategy for transforming itself from a conventional bank to one that drives digital transformation in the banking sector in Egypt, as it firmly believes that introducing the elements of digital transformation will further enhance the provisioning of banking and financial services. The Bank has recently inaugurated the Digital Transformation Division, which is considered the first integrated digital transformation division at Banque Misr; representing a resilient model that allows digital transformation in all banking operations. The first digital service was launched under this new digital transformation system through the “Express Loan Online for Small Projects”, whose credit portfolio includes 4,000 customers at a total of EGP 4.5 billion since its inception in October 2020.
Banque Misr also launched the first digital bank in Egypt, in collaboration with French Atos company, which is a leading corporation specialized in establishing digital banks.
 
Also worth noting is that Banque Misr is considered one of the largest and most experienced banks in the area of social responsibility; and the most environmentally aware and responsible, insofar as governance regulations, which complement its principles of long-term performance and sustainability. Banque Misr is the first state-owned bank to receive the approval of the General Reporting Initiative (GRI) and reports its business in accordance with the principles of sustainability; by taking into consideration such tenets as governance, human rights, anti-corruption, social participation and environmental safety standards. The bank also complies with UN Global Compact for Citizenship (Corporate Social Responsibility) standards; and has expended some EGP 1.5 billion on community development during the fiscal year 2019/2020.
 
Banque Misr plays a leading role in corporate social responsibility due to this being one of the main tenets in which the Bank strongly believes. This role is played both directly and indirectly through the Bank’s non-profit foundation "Banque Misr Foundation for Community Development", which holds registration number 7045/2007 and aims to develop and assist the Egyptian community by partaking in a number of activities and initiatives of a social nature, as well as to achieve the best for society in general. This is done in multiple fields including health, education, social solidarity and societal development – as exemplified by developing and improving the most deserving Egyptian villages via MSMEs and contributing to the provisioning of employment opportunities for youths and female breadwinners; in collaboration with Civil Society organizations. This is in addition to the development of slum areas and all that relates to the advancement of the “human” factor.
 
In the field of health and enhancing hospital efficiency, Banque Misr has carried out a number of significant contributions such as funding Shefaa Al-Orman Hospital an amount of EGP 300 million, whose phase three was recently inaugurated. This is in addition to supporting the new Magdi Yacoub Hospital in “October Gardens” at a sum of EGP 32 million;   the radiology center of Alnas Children’s Hospital at a sum of EGP 30 million – benefitting children with heart conditions – Ahl Masr Hospital – specifically, furnishing 14 rooms with the latest medical equipment and devices for treating burn patients. Moreover, the Bank supported Minya University Hospital for implementing phase one of the surgery unit annex; which comprises of two theaters, an intensive care unit, recovery rooms, a contact center, electromechanical supplies, gases and outpatient clinics. This is in addition to funding Baheya Foundation for the early detection and treatment of breast cancer.
 
Banque Misr also participated in President Abdel Fattah El-sisi's initiative to address avoidable blindness and promote quality eye health by channeling EGP 80 million to Tahya Misr Fund's Initiative, "Nour Haya", owing to the Bank's steadfast belief in each citizen's right to receive appropriate health care. Additionally, the Bank has channeled EGP 500 million to fund medical supplies needed by various hospitals throughout Egypt to combat the COVID-19 crisis, while supporting the Ministry of Health in providing MRI devices used in diagnosing COVID-19 and furnishing a designated field hospital. Also worth noting is that the Bank has donated a sum of EGP 80 million as part of the campaign spearheaded by the Federation of Egyptian Banks to support those affected by the pandemic.
 
Worth noting is that Banque Misr Foundation for Community Development has supported numerous university and government hospitals such as Abul Rish Japanese Specialized Children’s Hospital and the Fitness and Rehabilitation Unit and the Gastrointestinal Endoscopy and Liver Unit at Qasr Al-Aini – Cairo University Hospitals, the Surgery Hospital at Ain Shams University Hospitals, the Hospital of Cardiology and Cardiovascular Surgery, South Egypt Cancer Institute at Assiut University Hospitals, Neurosurgery Unit at Zagazig University Hospitals, the Burn Unit at the Emergency and Accidents Hospital at South Valley University Hospitals, Theodor Bilharz Institute, Sporting Health Insurance Hospital for Students – Alexandria, Sharqia Fever Hospital, Al-Ahrar Hospital – Zagazig and Luxor International Hospital.
 
Banque Misr has also contributed to subsidizing the costs of surgical procedures undergone by cardiovascular, burns and ophthalmology patients; as well as availing treatments to patients with virus C, supporting Magdi Yacoub Heart Foundation and has organized a number of medical convoys to various villages. Moreover, the bank has also supported Zewail City of Science and Technology and inaugurated the Banque Misr premises within the City as part of the protocol of cooperation concluded between the two parties, while offering scholarships to deserving students.
 
Bank Misr Foundation has also provided outstanding education opportunities to some 65 students through annual scholarships at the Nile University’s schools of Engineering and Business Management; while granting scholarships at developed technical education centers for 35 underprivileged students in Imbaba, Kafr Elzayat and Moharram Bek, in collaboration with Ghabbour Foundation; as well as scholarships to 16 students at Elsewedy Technical Academy. This is in addition to contributing to the development of Upper Egypt’s most deserving villages – 39 in total – at an average of 4 villages per year, with these being completed in November 2020 and work still in progress at 13 more villages across 5 governorates. The Bank has also been involved in improving the quality of life in slum areas (4 locations annually), with a focus on educational programs and human development for children and working mothers; coupled with health awareness, qualification training and supporting small projects for working mothers, youths, developing schools, health units and homes. In light of the COVID-19 crisis, these efforts never ceased but rather increased and were extended to alleviate health challenges and to providing a decent living for the residents of those villages.
 
The Banque also endorsed the police department’s initiative at the social security division of the Ministry of Interior, which offers microenterprises to the families of prisoners and released prisoners. This is in addition to annual communal functions and events; including Orphans Day and Warmth of Winter (providing winter clothes and blankets), Eid clothing campaign (providing Eid clothes) and Back to School (offering school uniforms, school bags, and scholarships).
 
The Bank has reaped some 50 awards and accolades in various business areas during the previous period, from several global organizations, in appreciation and recognition of its accomplishments and efforts in various sectors. Banque Misr’s acquisition of such an extensive list of awards and accolades comes as a certificate of entitlement to the trust and confidence of its customers, who are considered mainstays in its endeavors to provide all clients with innovative services and products that consistently fulfil their needs.