Egypt’s banking industry recorded a 26.9% increase in total deposits in the 2023-2024 fiscal year compared to the previous 12-month period.
2024 has given growing challenges to the Egyptian banking and financial market. Egypt faced an economic crisis for almost ten years due to the excessive reliance on imports, lack of exports, and excessive spending on significant megaprojects.
These numerous concerns in the banking and financial sectors have led to negative net foreign liabilities, rising inflation, and currency devaluation.
But, there is always light at the end of the tunnel since Egypt’s banking industry recorded a 26.9 percent increase in total deposits in the 2023-2024 fiscal year compared to the previous 12-month period.
The Central Agency for Public Mobilisation and Statistics reported that the total banking deposits were 11.99 trillion Egyptian pounds ($237 million), which showed an increase in banking activity across various economic sectors.
The fiscal year for Egypt begins on July 1 and ends on June 30 of the following year.
The growth came as inflation peaked in September 2023 at 38 percent, encouraging businesses and individuals to increase their savings in bank deposits as a hedge against currency devaluation.
The bank giving people attractive interest rates and financial inclusion programs under the country’s Vision 2030 project also contributed to the growth of bank deposits.
Central Agency for Public Mobilisation and Statistics (CAPMAS) data show that the housing sector was the reason for most of Egypt’s banking deposits, with the total balances reaching 7.03 trillion pounds, up 27.5 percent from the year before.
Individual depositors contributed 95.9 percent of household deposits, indicating a good trend of robust savings among Egyptian citizens. In total, the household sector controlled 59.6 percent of all bank deposits.
The business sector also observed significant growth, as deposits increased to 1.99 trillion pounds, a 37.6 percent increase from the previous fiscal year.
Organized private sector organizations held 78.7 percent of these deposits, demonstrating their growing economic influence. Businesses made their share of 16.6 percent of the total banking deposits.
The deposits from the public service sector increased to 1.6 trillion pounds, a 5 percent annual rise.
Treasury and government administration contributed 97.6 percent of the bank deposits, which shows that these administrations rely on banking institutions for financial management. The public services sector contributed 13.4 percent of the total deposits.
Credit facilities also saw robust growth, with total balances increasing to 50.2 percent yearly to 7.21 trillion pounds in 2023-2024. The chief source of the increase was the strong lending to the public and private business sectors.
The private business sector increased to 2.22 trillion pounds in credit, a 29.2 percent annual increase. The organized private sector contributed 1.79 trillion pounds, making up 80.9 percent of the total credit lent to private businesses.
The public business sector also saw a sharp increase in loan allocation, receiving 3.08 trillion pounds in 2023-2024, a 105 percent increase from the previous year.
This sector’s economic authorities owned 2.71 trillion pounds in credit, which accounted for 88 percent of the total public sector credit allocations. Thus, the public sector contributed 42.7 percent of Egypt’s total banking credit facilities.
The banking industry showed strong financial stability due to the liquidity surplus, which increased to 4.79 trillion pounds, a 2.8 percent increase from the previous year. The total volume of banking credit extended reached 39.8 percent of total deposits, which shows the industry’s robust lending activity.
Despite its financial difficulties over the years, Egypt was committed to resolving them to achieve monetary stability. Despite having high interest rates and strict banking regulations, the government has provided many non-banking financial solutions and funding sources to help reduce the overwhelming pressure on banks.
