Beltone Financial Holding predicted that the economic situation would put pressure on commercial banks listed on the Egyptian stock exchange during the year in course.
The company’s report said the 18% yield certificates issued by the National Bank and Banque Misr will put pressure on the ability of other banks – within the scope of research coverage – to expand their deposit base, as well as burden on profitability expectations.
Beltone predicted that the banks: Faisal Islamic, Commercial International, Credit Agricole, as well as Abu Dhabi Islamic Bank, would be the least affected in terms of growth and profitability of the financial center.
Abanob Magdy, analyst senior for Beltone’s banking and financial institutions sector, he predicted, in an interview with Al Arabiya, that there will be pressures on banks’ profitability rates on three axes in the next period, explaining that the expected growth in the size of the financial position of most covered banks will be adversely affected in terms of increasing the volume of deposits for high yield securities.
He added that net commission income will also be affected by the drop in import operations due to obstacles in foreign currency and that inflation rates will adversely affect banks’ operating expenses, as well as the impact of the Egyptian pound shift on the cost of risk, in particularly for banks that have exposure to loans in foreign currency.
On the other hand, he argued that the increase in the interest rate will have a positive effect on banks, but the price of the various vessels, be they assets or liabilities, has become difficult in light of the impact on deposits and the yield margin. net.
“Banks will eventually have to re-evaluate their deposits if the high-yield certificates last longer,” he said.
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