British lender Standard Chartered is set to open its first fully-fledged branch in Egypt later this year after gaining approval in principle from the Central Bank of Egypt (CBE) on September 27, 2021.
This decision is part of the London-based bank’s growth strategy in Africa.
Standard Chartered is currently complying with the requirements of the Egyptian banking regulator, which will enable it to obtain the final approval required to open the branch, it said on Thursday.
“This decision comes in light of the resilience and strength of the Egyptian economy,” the lender said. “The banking sector has enjoyed great stability over the past few years, which has enabled it to seamlessly manage various challenges.”
The first branch is expected to open in Cairo in September, the Middle East News Agency reported on January 24, citing CBE Deputy Governor Gamal Negm.
Standard Chartered currently has a representative office in North Africa’s largest economy and the third largest in the Arab world.
The Egyptian economy grew at a faster than expected pace during the 2020-2021 financial year which ended in June 2021, despite the Covid-19 pandemic.
This is due to strong consumer demand, higher remittances and relatively contained inflation, according to the World Bank’s Global Economic Outlook released this month.
Growth is expected to rebound to 5.5% in fiscal year 2021-22, the Washington-based multilateral lender said.
“The CBE’s strategy established a successful framework focused on strengthening the financial solvency of the sector, ensuring effective governance, implementing precautionary measures that led to continued financial support and high capital requirements which [are] exceeding the established minimum, as well as high liquidity ratios,” Standard Chartered said. “This has had a positive impact on the whole Egyptian economy.”
The Middle East, where Standard Chartered currently has a presence in nine countries, is at the heart of the bank’s footprint, along with Africa and Asia.
The lender’s first-half 2021 operating profit for the Middle East and Africa rose more than 400%, a five-year high, amid “significant” declines in loan loss provisions.
Its operating profit for the first six months to the end of June rose to $476 million from $91 million at the end of the same period in 2020, it said in August.
Updated: January 27, 2022, 11:33 a.m.