Egypt is diligent in reviving the economy back on the right track. The Foreign Currency saga should dissolve progressively as Egypt proceeds with the ambitious economic reform plan published a few months ago. Offering shares in a chosen list of state companies for sale or strategic partnerships will be optimally integrated with another set of rigorous fiscal actions. In tandem with these measures, the CBE is fiercely working on restoring inflation to the tolerance area after reaching troublesome levels in February 2023 by adopting more aggressive tightening monetary policy actions.
Yet, QNB ALAHLI relied on its resilient business model to deliver a robust performance in the first quarter of the year. The balance sheet expanded by +9% YTD to reach 525 BEGP mainly driven by a gross loan increase of +8% YTD. Maintaining the asset quality was challenging given the market conditions, although QNB ALAHLI has managed to keep the NPL ratio at 4.67% buffered by a coverage ratio of 124.8% as of Mar-23. These metrics were supported by the sequential upswings in the deposits that grew by +9% YTD to 443 BEGP, to keep the LTD ratio at its place, 55.4% far above the latest market average of 47.7% in Dec-22.
The favorable financial position expansion was mirrored on a net profit lift of +114% YOY to reach 4,715 MEGP. The increase was made based upon the good management of the bank’s resources, supported by increasing asset’s yield, to conclude the NII at 6,629 MEGP, +56% YOY. The fees & commissions are making a statement performance shooting up to +77% YOY, to mark the NBI at 9,404 MEGP representing +68% growth YOY. These results were endorsed by a healthy efficiency reading of 18.5%, although the increase was restrained by the impact of the inflation and the FCY on the expenditure side, which was partially offset by the FX gains, allowing an increased provisioning, growing to 938 MEGP for 1Q23