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Banque Misr Achieves Substantial Growth in All Business Sectors for FY 2018/2019, Increasing Gross Profits before Tax to EGP 17.3 Billion at a Growth Rate of 67%, paying EGP 8.7 billion in Taxes and Multiplying its Net Growth in Profits by 112% to EGP 8.6
Financial performance indicators have shown substantial growth across all sectors for FY 2018/2019, with the overall financial position increasing to EGP 967 billion as at 30/6/2019, compared to EGP 884 billion the previous year, at a growth rate of approximately 9.4%. Customer deposits also rose by around EGP 76.2 billion, reaching EGP 745.8 billion as at 30/6/2019, compared to EGP 669.6 billion as at 30/6/2018, at a growth rate of 11.4%. In this domain, Banque Misr’s market share amounted to 18.7% of the Egyptian deposits market. Gross profits this year jumped to EGP 17.3 billion before taxes, compared to EGP 10.4 billion the previous year, at a growth rate of 67%. Net profits as at 30/6/2019 amounted to EGP 8.6 billion, following payment of EGP 8.7 in taxes.
Similarly, financial indicators pointed to substantial growth in all sectors, whereby this year witnessed an exponential growth in the Bank’s business. Net direct customer loans increased to EGP 271.7 billion, compared to EGP 221 billion the previous year, increasing by some EGP 50.7 billion, at a growth rate of 23%. Non-performing loans to total loans amounted to a mere 2.08% at a coverage of 104.8%. This came as a result of settlements reached with a large number of customers, as well as concluding new settlements amounting to EGP 3.7 billion. Collection of irregular debts from clients amounted to approximately EGP 1.9 billion, despite the current economic challenges and their repercussions on the banking sector as a whole.
The Bank's retail portfolio recorded EGP 32.4 billion as at 30/6/2019, compared to EGP 22.9 billion in 6/2018, filing an increase of EGP 9.5 billion over and above the previous year, at a growth rate of 41%. The number of issued cards exceeded 8.7 million as at the closing of December 2019; 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 19,030 locations throughout the governorates of Egypt as at the closing of December 2019, with the total volume of transactions (devices, POS, e-commerce) exceeding EGP 22.5 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 reduction 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 1,320 companies, at a total of 930 thousand cards and 63,520 thousand accounts as at the closing of December 2019. This in addition to providing an electronic payment service for tax and customs via 406 branches – of which 401 are located within the Arab Republic of Egypt and 5 branches in the United Arab Emirates.
 Banque Misr currently tops the ranking of banks availing customs payment services to companies, which allows customers to pay taxes, customs duties and other governmental fees electronically from the comfort and convenience of their offices. More than EGP 28 billion were collected through this system during the current fiscal year as well as via the "BM Wallet" service. Moreover, Banque Misr has concluded a number of partnerships to provide access to electronic payment methods, with corporations such as Visa Inc., Exxon Mobil, Fawry and Egypt Post.
Worth noting is that Banque Misr has ranked first for the fourteenth 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 2.6 million cards affiliated with 1,395 government entities contracting with the Bank. The value of salaries - of both the public and private sector - transferred through the Bank has exceeded EGP 87 billion per annum.
Within the framework of financial inclusion, the Bank has been keen on availing 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 694 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). In the foreseeable future, the Bank targets establishing a presence in the Kingdom of Saudi Arabia, Kenya (Nairobi), Somalia and Djibouti; in addition to several other African states, while maintaining a large network of correspondents covering all countries of the world.
Moreover, the Bank possesses a developed network of technologically advanced Automated Teller Machines (ATM), numbering approximately 2,800 in total; providing withdrawal and deposit services, currency exchange, payment of bills and donations; in addition to cash transfer services. The Bank also provides 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 technology enabling points of sale 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.
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 increased from EGP 10.6 billion in June 2018 by EGP 12.7 billion, at a growth rate of 119.8%. As of June 2019, the portfolio of MSMEs clients increased from 85 thousand clients in June 2018 to 121 thousand clients; recording a rise of 35 thousand clients and a growth rate of 41%.
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 "Mashrooak" (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 78 thousand clients at a total value of EGP 6.4 billion between 26/3/2015 and 30/6/2019.
With regards to financing major corporations, Banque Misr is considered a national pioneer in financing projects in various sectors. During the period from 1/7/2018 to 30/6/2019, the Bank was able to successfully complete the arrangement, financing and participation in 8 operations, totaling EGP 20.45 billion at a share of EGP 10.1 billion; in various sectors including real estate investment, construction materials, petroleum and gas, financial services, contracting, general and specialized contracting and real estate financing.
The Bank currently seeks to complete a total of (20) major financing operations, both targeted and under consideration, at a total of EGP 49.2 billion and a guarantee coverage of EGP 16.7 billion in various sectors including real estate investment, textiles, land transportation and transport, petroleum and gas, agricultural yields, fertilizers, petrochemicals, financial services and education.
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. The Islamic banking credit portfolio witnessed an increase to record EGP 8.7 billion in 6/2019 insofar as joint facilities, corporate credit, micro, small and medium enterprises, in addition to retail banking; most of which were concentrated in the sectors of building and construction, sewage networks, food and beverage, real estate development, financial brokerage and insurance.
In the area of Islamic retail banking, Kenana branches provide all modern-day banking services; including the issuance of all types of cards, in addition to a bundle of products developed to serve the customers of Islamic branches. Such products include the multiple products of Murabaha; such as the Murabaha of Hajj and Umrah, Murabaha of durable goods, Murabaha of tourism trips, Murabaha of automotive purchases as well as education Murabaha to finance the payment of tuition expenses and fees. Moreover, Banque Misr's Islamic branches provide the service of "Takaful Banking Insurance" with the assistance of the Egyptian Takaful Life Insurance Company.
In the field of financial markets and investment, the sector manages a portfolio of direct investments t in various sectors including tourism, services, construction, housing, agriculture, food, information and communication technologies, etc., whereby the bank owns stakes in 157 companies. During the fiscal year 2018/2019 it succeeded in partaking in private equity activities and direct investment with an investment of EGP 4.4 billion in 13 companies with a total capital of approximately EGP 8.9 billion.
Banque Misr also holds a prominent position in Debt Capital Markets by maintaining its market share, as it has been a leader since 2014 to 2019 with a market share that exceeded 40% of the total market size, whereby the bank - through an integrated strategy for the financial markets and investment sector - expanded the activity of managing, arranging, promoting, and ensuring underwriting coverage in the local fixed income tools of the most important entities and companies for corporate bond issuance. Moreover, it increased the size of a quality portfolio of corporate bonds - both securitization and corporate bonds - which enabled Banque Misr to continue to maintain the largest market share, in addition to a high return on these bonds. since 2010, Banque Misr has started to play the role of arranging party, promoter and guarantor of coverage for 32 offerings, totaling more than EGP 30 billion. Portfolio size currently stands at EGP 5.5 billion.
The Bank has reaped 23 awards in various business areas in 2019, from several global organizations in appreciation and recognition of its accomplishments and efforts in various sectors, which come as a certificate of entitlement to the trust and confidence of its customers, who are considered mainstays in its successes. Banque Misr consistently seeks to provide all clients with innovative services and products that meet and fulfil their needs.