ATTIJARIWAFA BANK AIMS TO BE­COME ONE OF EGYPT’S 10 BIG­GEST BANKS IN 7 YEARS

Flota­tion does not worry us, as we ex­pected the move but did not pre­dict its size, El-Ket­tani states

The Daily News Egypt - - Front Page - By Hos­sam Mounir

The Moroc­can Attijariwafa Bank, which re­cently ac­quired Bar­clays Egypt, seeks to be­come one of the 10 largest banks in Egypt in the next seven years, ac­cord­ing to the chair­per­son and CEO of the group, Mo­hamed El-Ket­tani.

In a spe­cial in­ter­view last week, Daily News Egypt asked El-Ket­tani about his hopes for what the bank can achieve in Egypt af­ter ac­quir­ing Bar­clays Egypt. He an­swered that the group in­tends to be­come one of the 10 big­gest banks in Egypt within seven years across dif­fer­ent ac­tiv­i­ties, in­clud­ing de­posits, loans, prof­its, and all fi­nan­cial and bank­ing ac­tiv­i­ties.

In re­sponse to what new prod­ucts the group is bring­ing to the ta­ble in Egypt or what dis­tin­guishes it from com­peti­tors, El-Ket­tani said that, thanks to ex­per­tise in Africa and all other coun­tries, they have estab­lished an in­te­grated fi­nan­cial and bank­ing group with in­ter­est in the mid­dle class and with mi­cro and small en­ter­prises. “If we suc­ceed in this field within the next five years in Egypt, we will con­sider this an achieve­ment to our goal,” he added.

Attijariwafa Bank has signed an agree­ment to buy Bar­clays Egypt with Bar­clays In­ter­na­tional Group on 4 Oc­to­ber 2016, one month be­fore the flota­tion of the Egyp­tian pound.

When we asked El-Ket­tani if the flota­tion dis­turbed their plans, he said that they are not wor­ried about the pound flota­tion.“We stud­ied the Egyp­tian mar­ket and the na­tional econ­omy.We had ex­pec­ta­tions that the Cen­tral Bank of Egypt (CBE) would move the cur­rency but did not know to what ex­tent,” he said.

He noted that when the group en­tered the Egyp­tian mar­ket, it was aware of the coun­try’s eco­nomic and so­cial con­di­tions, as well as the in­tended re­forms that are now giv­ing some good in­di­ca­tors.

In re­sponse to another ques­tion about the growth rates tar­geted by the bank in var­i­ous sec­tors in the com­ing pe­riod, El-Ket­tani said that it will be hard to set a tar­get be­fore three months, which is when the group in­tends to com­plete putting to­gether a strat­egy for its work in Egypt.

Last Sun­day, the bank held a press con­fer­ence to dis­close the de­tails of its ac­qui­si­tion of Bar­clays Egypt and to out­line its plan of ac­tion in the Egyp­tian mar­ket in the com­ing pe­riod.

Dur­ing the con­fer­ence, El-Ket­tani said that the bank’s man­age­ment has drawn up a strate­gic plan for its work in the Egyp­tian mar­ket over the medium term.

He added that the group aims to con­sol­i­date the gains made by Bar­clays Egypt as a pri­vate bank for high­in­come clients.

He noted that the group aims to ben­e­fit from its vast ex­pe­ri­ence in the coun­tries in which it is present in the ser­vice of mid­dle and lim­ite­d­in­come cus­tomers, es­pe­cially in the coun­tries whose con­di­tions are sim­i­lar to Egypt’s, es­pe­cially in terms of the low de­mand for bank­ing prod­ucts.

The bank’s plan, ac­cord­ing to El-Ket­tani, also in­cludes ben­e­fit­ing from its ex­pe­ri­ence in Europe and the Mid­dle East to de­velop suit­able and distinct of­fers for remit­tances of Egyp­tians liv­ing abroad.

He said that the group will also make suit­able of­fers to in­clude the mi­cro, small, and medium en­ter­prises in the bank­ing sec­tor; de­sign a spe­cial model for their fi­nanc­ing, based on the prin­ci­ple of clas­si­fi­ca­tion and col­lec­tion of loans in­stal­ments in a suit­able man­ner; and es­tab­lish more rules that com­men­su­rate with the speci­fici­ties of this cat­e­gory.

El-Ket­tani noted that the bank also aims to work with ma­jor com­pa­nies in Egypt due to the group’s ex­pe­ri­ence in the field of project fi­nanc­ing, con­sult­ing, fi­nanc­ing of trade trans­ac­tions, and risk man­age­ment (es­pe­cially those re­lated to mar­ket ac­tiv­i­ties).

The plan also in­cludes the de­vel­op­ment of the pro­fes­sions re­lated to as­set man­age­ment, stock ex­change bro­ker­age, se­cu­ri­ties and cap­i­tal mar­ket ac­tiv­i­ties, as well as in­surance.

“The group has great in­ter­est in fi­nanc­ing in­fra­struc­ture projects in Egypt to help the coun­try with the ex­per­tise we have in this re­gard,” ElKet­tani said.

He ex­plained that the group has con­sid­er­able ex­pe­ri­ence in fi­nanc­ing in­fra­struc­ture projects in Morocco, es­pe­cially with re­gard to air­port fi­nanc­ing or en­ergy projects of var­i­ous kinds.

On the im­por­tance of the Egyp­tian mar­ket for the group, El-Ket­tani said that it in­tends to ben­e­fit from Egypt’s unique geo­graphic lo­ca­tion as a gate­way to the Mid­dle East and North Africa (MENA) and to con­trib­ute to the strong and con­tin­u­ous eco­nomic in­te­gra­tion of th­ese re­gions with other African coun­tries in which the group is present.

He added that the group has had great in­ter­est and de­sire to enter this mar­ket for years, and has the con­vic­tion that Egypt is eco­nom­i­cally and so­cially very promis­ing in the field of bank­ing.

El-Ket­tani noted that only 15% of Egypt’s pop­u­la­tion deals with banks, while coun­tries like Morocco reg­is­ter about 73%.

In a dif­fer­ent con­text, El-Ket­tani said that there will be a tran­si­tional pe­riod for the group’s work in Egypt in the near term. Dur­ing this phase, the brand will be changed from Bar­clays Egypt to Attijariwafa Bank to take ad­van­tage of this wide­spread brand in Africa.

He added that a com­pre­hen­sive re­struc­tur­ing of the bank’s in­for­ma­tion sys­tem will be car­ried out within a year from now in a way that serves the bank’s cus­tomers quickly and con­tin­u­ously and en­ables the bank to of­fer its ser­vices and de­velop new cus­tomer ser­vice chan­nels.

He noted that this will be done in par­al­lel with the se­lec­tion of an in­ter­na­tional con­sult­ing of­fice work­ing with an in­te­grated team of ex­perts from Egypt and Morocco to de­velop a strate­gic plan for the work of the bank dur­ing the next five years.

The group is now choos­ing be­tween three of­fices: McKin­sey, Oliver Wy­man, and BCG.

El-Ket­tani said that choos­ing the firm will be done in co­op­er­a­tion with the bank’s man­age­ment in Egypt within days to fin­ish pre­par­ing the strat­egy within three months.

The Egyp­tian Ex­change (EGX) had an­nounced ex­e­cut­ing a deal of sell­ing 9,951,000 shares of Bar­clays Bank of Egypt to Attijariwafa Bank for $494.997m.

El-Ket­tani said that the deal is worth twice the book value of Bar­clays Egypt in 2006 and seven times the ex­pected net prof­its this year, stress­ing that the value of the in­vest­ment will be re­cov­ered in five to seven years.

He added that the bank aims to in­crease its mar­ket share in Egypt from its cur­rent 1-1.5% to 5% in five years.

Asked if the group would in­ject new in­vest­ments into the bank’s cap­i­tal in Egypt, El-Ket­tani said this would hap­pen if needed, ac­cord­ing to the cri­te­ria set by the CBE.

He pointed out that the bank aims to boost the bank­ing in­surance ac­tiv­ity in Egypt through Wafa In­surance Com­pany and aims to ben­e­fit from its Wafa­cash Com­pany to at­tract remit­tances of Egyp­tians work­ing abroad, es­pe­cially in Europe and to cre­ate new prod­ucts and ser­vices for their ben­e­fit.

In re­sponse to a ques­tion about whether there is a plan to list the bank on the EGX, El-Ket­tani said this is an un­likely sce­nario.

Attijariwafa Bank is one of the old­est bank­ing groups in Morocco. The group is now cur­rently op­er­at­ing in 26 coun­tries.

Be­sides Egypt, the group is present in Tunisia, Mau­ri­ta­nia, Sene­gal, Burk­ina Faso, Guinea-Bis­sau, Mali, Côte d’Ivoire, Republic of the Congo, Gabon, Cameroon, Togo, Benin, and Niger.

Ac­cord­ing to El-Ket­tani, the bank will enter Rwanda within a few days af­ter tak­ing over the sec­ond largest bank there.The group is also present in France, Bel­gium, Ger­many, Italy, Spain, and the Nether­lands. It also has rep­re­sen­ta­tive of­fices in Lon­don, Geneva, Mon­treal ,Abu Dhabi, Dubai, Tripoli, and Riyadh.

El-Ket­tani noted that the bank has over 17,600 em­ploy­ees, 3,972 branches, and 8.4 mil­lion clients world­wide.

He added that the group re­alised prof­its of $1.951bn at the end of 2016, while net profit reached $560.687m.

The to­tal share­hold­ers’ eq­uity of the bank is ap­prox­i­mately $4.702bn, while the to­tal bud­get is about $42.525bn.

Bar­clays Bank in Egypt has ex­pe­ri­ence of over 150 years, with 56 branches across the republic, next to 72 ATMs.

About 1,500 em­ploy­ees are work­ing at Bar­clays Egypt and serve around 180,000 clients.

Ac­cord­ing to El-Ket­tani, none of the cur­rent em­ploy­ees will be dis­pensed, not­ing that the bank is ac­tu­ally keen on hir­ing more ex­perts to serve its ex­pan­sion plan in Egypt.

The man­ag­ing di­rec­tor of Attijariwafa Bank, Hala Sakr, said dur­ing the Sun­day con­fer­ence that the in­ter­est of the Moroc­can group in be­ing in Egypt is ev­i­dence of the im­por­tance of the Egyp­tian mar­ket, given the coun­try’s potentials, such as its strate­gic lo­ca­tion, the di­ver­si­fi­ca­tion of its econ­omy, and its large pop­u­la­tion.

She added that the Moroc­can group aims to be­come an ef­fec­tive player in Egypt through ap­ply­ing a new busi­ness model fo­cused mainly on pro­vid­ing ser­vices for the mid­dle class, fi­nance small and medium en­ter­prises, and im­ple­ment fi­nan­cial in­clu­sion.

Ac­cord­ing to Mo­hamed Sherif, a mem­ber of the board of di­rec­tors and chief fi­nan­cial of­fi­cer of the bank, by the end of 2016, the bank has grown by 9% in terms of net prof­its, af­ter ab­sorb­ing the shock caused by dif­fer­ences in the ex­change rates that were a re­sult of the pound’s flota­tion.

He added that the size of the bank’s bud­get in­creased by 22%, re­turn by 32%, loans by 19%, port­fo­lio of large projects by 49%, medium projects by 47%, and re­tail bank­ing by 14%.

Sherif noted that an amount of EGP 663m in prof­its was re­tained to sup­port the cap­i­tal base, ad­ding that cap­i­tal ad­e­quacy rates are cur­rently at 19%.

WITHIN A FEW DAYS, THE BANK WILL SE­LECT MA OR CON­SULT­ING OF­FICES TO DE­FINE ITS BUSI­NESS STRAT­EGY OVER THE NEXT FIVE YEARS

THE GROUP HAS GREAT IN­TER­EST IN FI­NANC­ING IN­FRA­STRUC­TURE PRO ECTS IN EGYPT

Mo­hamed El-Ket­tani, the chair­per­son and CEO of Moroc­can Attijariwafa Bank

Mo­hamed Sherif, the chief fi­nan­cial of­fi­cer of the bank

Hala Sakr, the man­ag­ing di­rec­tor of Attijariwafa Bank

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