The British bank Standard Chartered announced last week that it had obtained the initial approval from the Central Bank of Egypt (CBE) to establish a branch in Egypt, replacing its current representative office.
This paves the way for the bank to significantly expand its business in one of the largest African countries and increase the spread of its financial and banking services there.
Standard Chartered stressed that this step reflects the bank’s confidence in the Egyptian economy’s solidity and resilience in the face of crises. It also highlights the stability of the Egyptian banking sector during the past years.
the Central Bank of Egypt (CBE) has been applying wise strategies to enhance the solvency of banks and reinforce managing all kinds of risks, in addition to taking appropriate precautionary measures. This led to maintaining financial support and high capital requirements that exceed the established minimum, as well as high liquidity ratios, whose positive impact is seen in the status of the economy as a whole.
Gamal Negm, the Deputy Governor of the CBE, said in his statements that the Board of Directors of the CBE issued its approval to grant a licence to Standard Chartered to operate in Egypt as a foreign bank branch, which shows the attractiveness of investing in the Egyptian banking system.
According to Negm, Standard Chartered will open its first branch in September in Cairo. It will also open a second branch in Alexandria in 2023.
Negm stressed that the bank paid all the fees required to open the branch and presented a strategy and action plan, pointing out that the bank will provide various banking services. The presence of a global bank in the Egyptian market will contribute to enriching the Egyptian banking system and adding new experiences.
Standard Chartered is the first foreign bank to obtain a licence to operate in Egypt after the CBE issued the New Banking Law that was ratified by President Abdel Fattah Al-Sisi in September 2020.
Banks operating in Egypt take business licences as Egyptian joint stock companies or foreign bank branches. The two licences allow banks to provide all kinds of banking services, with a few differences in terms of the minimum capital, the value of fees, and some other controls.
The banking system includes five banks that obtain a business licence as foreign bank branches, which are Citibank, Al-Mashreq, the National Bank of Greece (NBG), First Abu Dhabi Bank, and the Arab Bank.
Maged Fahmy, the former chairperson of the Industrial Development Bank (IDB), said that granting licences to branches of foreign banks is a positive decision and proves the attractiveness of the Egyptian market.
He added that the Egyptian market is seeing the presence of many foreign banks, which bolstered the Egyptian economy and contributed to creating many professionals in the market since the 1990s.
He explained that the success of the new banks in the market depends on their strategy and expansion plans, as well as the extent of their ability to pump funds into development projects.
