Dubai: National Bank of Kuwait (NBK) wants to strengthen its Egyptian business on the back of the improving security and political environment, the Gulf state’s largest lender said yesterday as it reported a 9.9 per cent increase in second-quarter net profit.
Gulf banks have been targeting overseas expansion in recent years to maintain profitability in the face of high competition in their home markets, and Egypt has been a favoured destination – Qatar National Bank, Emirates NBD and Al Ahli Bank of Kuwait have all made acquisitions in the last two years.
Opportunities have been created by international banks pulling out due to market turbulence in Egypt and the need to enhance their capital positions, while Gulf governments have encouraged investment into the country by their corporates as a way to bolster the government of President Abdel Fattah Al Sisi, whom they have backed with billions of dollars and political support since he took power.
NBK originally bought into the North African country in 2007 and now has around 30 branches mostly in Cairo and Alexandria, according to its website.
“Other than the Gulf, the Egyptian market’s positive outlook presents growth potential for the group,” Isam Al Sager, NBK’s group chief executive officer, was quoted as saying in the bank’s earnings statement.
“NBK seeks to strengthen its position in the Egyptian market on the back of positive developments in terms of security level and political environment,” he added.
While security remains a concern, with the bombing of the Italian consulate in Cairo last week and continuing unrest in the Sinai peninsular, the economic picture has been improving – Egypt’s economy grew 3pc in the quarter ending in March.
NBK reported a 9.9pc increase in second-quarter net profit to 66.9 million dinars ($221.2 million).
While higher than the corresponding period of last year, that missed the average forecast of 76.8m dinars by four analysts polled by Reuters.
Although it did not provide a further quarterly breakdown, the bank said its performance in the first half of 2015, when net profit jumped 12.8pc year on year, was driven by growth in its core business.
Net interest income and fee income grew 12.6pc and 8.7pc respectively in the first half of the year, it said.
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