British lender Standard Chartered is poised to open its first fully fledged branch in Egypt later this year after securing an in-principle approval from the Central Bank of Egypt (CBE) on September 27, 2021.
The move is a part of the London-based bank's growth strategy in Africa.
Standard Chartered is currently complying with the Egypt banking regulator's requirements, which will allow it to secure the final approval required to open the branch, it said on Thursday.
“The move comes in light of the resilience and strength of the Egyptian economy,” the lender said. “The banking sector has experienced great stability during the past few years, which enabled it to seamlessly manage various challenges.”
The first branch is expected to opened in Cairo in September, the Middle East News Agency reported on January 24, quoting CBE deputy governor Gamal Negm.
Standard Chartered currently has a representative office in the North Africa's largest and the Arab world's third-biggest economy.
Egypt’s economy grew at a faster rate than expected during the 2020-2021 fiscal year that ended in June 2021, despite the Covid-19 pandemic.
This was as a result of strong consumption demand, higher remittances and relatively contained inflation, according to the World Bank's global economic outlook that was released this month.
Growth is expected to rebound to 5.5 per cent in the 2021-2022 fiscal year, the Washington-based multilateral lender said.
“CBE’s strategy established a successful framework focused on strengthening the sector’s financial solvency, ensuring effective governance, implementing precautionary measures that led to maintaining financial support and high capital requirements that [are] exceeding the established minimum, as well as high liquidity ratios,” Standard Chartered said. “This reflected positively on the overall Egyptian economy.”
The Middle East, where Standard Chartered currently has a presence in nine countries, is a core part of the bank’s footprint, along with Africa and Asia.
The lender's 2021 first-half operating income for the Middle East and Africa grew by more than 400 per cent, a five-year high, amid a “significant” drop in provisions for loan losses.
Its operating profit for the first six months to the end of June rose to $476 million, from the $91m reported at the end of the same period in 2020, it said in August.