After a year of strong financial results, Barclays Bank Egypt concentrates on an ambitious expansion plan to commemorate its 150th anniversary. Tarek Elrefai, Barclays Egypt's newly appointed General Manager, discusses the bank's new focuses
In October 2014, Moody’s upgraded Egypt’s outlook from negative to stable. Moody's decision was based on improved political stability, fiscal consolidation and signs of growth recovery, but limited by high fiscal deficits and government debt levels. How do you see the current state of Egypt’s economy in terms of stability and potential for growth?
The Egyptian economy is relatively stable. The government is currently working to develop infrastructure and new financing as well as promoting economic stimuli directed at leading production sectors such as telecommunications, manufacturing, tourism and housing. Additionally, it is working on major development projects such as the Suez Canal project and urbanization projects. This will be met with high demand from investors in the coming period, particularly in light of the Economic Summit held in Sharm ElSheikh, which is a great opportunity to attract investors to the Egyptian market.
The growth rate is expected to reach 4% to 5% over the next three years while the government maintains the deficit at 10% of GDP without a decrease due to increased spending on health and education in accordance with the Constitution, which obliges the state to raise allocated spending on these sectors.
How optimistic are you about Egypt’s current potential?
Over the last period, the government has focused on infrastructure projects such as the national roads network and energy projects, which is a move towards boosting production across various sectors within the Egyptian market. If we take into account legislative reform such as the unified investment law and incentives offered by the government to encourage investors, I am confident and optimistic about Egypt’s current potential, particularly as we approach the International Economic Summit. Perhaps the biggest challenge that the Egyptian market may face is security, which I am hopeful can be controlled in the foreseeable future.
Barclays recorded strong financial results last year, the highest in the lender’s history, despite the tough conditions in the country during this period. To what do you attribute such strong growth in 2014?
This growth is due to our successful strategy based on the precise study of the banking market. Our profits exceeded half a billion Egyptian Pounds after tax in 2014 (the figures are yet to be audited and ratified by our AGM in March 2015). This success was also driven by corporate credit facilities as well as strategically implementing electronic banking, particularly after the launch of our online banking service, which enables customers to transfer funds between their own accounts, in addition to a number of other leading services such as the launch of Prestige Banking and value added propositions in saving and transactional banking in addition to credit cards, etc.
In Egypt, Barclays has 150 years of world-class financial services and now operates through a wide network of 56 branches and 85 ATMs all over the country. 2015 will mark a year for expansion in Egypt, in what areas will Barclays focus its growth?
We have an ambitious expansion and growth plan in the Egyptian market for 2015, including growth opportunities in the large corporates and multinationals market, in addition to expansion in financing development projects, government institutions and greater focus on SME, Prestige customers and Premier customers. We will also focus on five key aspects of our strategy for 2015 including Large Corporate Deals, Corporate Finance and Corporate Development, Innovation and Digitisation, Value Added Products, Branch Opimisation and SME’s.
Do you plan to enter into the Islamic finance segment of the market?
Barclays Bank’s strategy in the market is based on studies done on the basis of which we identify the segments we need to enter. We have a highly specialized department to continuously monitor the market’s needs and changing customer needs. We are not hesitant to provide any new services that we see necessary in the market. Currently, entering into the Islamic finance segment is not part of our strategy in the short-term.
Barclays Egypt’s SME products are seen as the most suitable module in the market due to their holistic offerings ranging from finance to vocational training of management and specialized workshops by industry. How important is the SME portfolio for Barclays?
Barclays is highly focused on its SME portfolio, which represents a large segment of the customers, in addition to its vital role in stimulating the national economy. This sector provides many job opportunities that contribute to the capital cycle and decreases unemployment rates, particularly since the Egyptian economy is largely dependent on such projects, making it of utmost importance to finance this sector.
What is your strategy to build off of this and grow your SME penetration in Egypt?
Barclays’ strategy is based on the expansion of SME financing during the current and coming period. We’ve established a specialized department to manage SME to increase the financing of the sector and develop the required infrastructure to provide the necessary customer service to this segment.
Barclays Bank has an active CSR portfolio, especially concentrating on youth programs. Can you elaborate on some of these initiatives?
Barclays Bank is committed to supporting the communities in which we live and work. At the core of the community investment program is the desire to support Egyptian youth. Last year, Barclays launched the “Barclays accelerator”, a competition which focuses on technology startups with a passion for innovation from all over the world. The winner is granted tools and equipment, such as access to our technology platform and facilities, plus support for startups to get their products or services to market.
Barclays supported the “Enactus competition” which aims to enable youth to develop sustainable projects in their communities. Barclays additionally committed an additional EGP 150,000 special prize to the winning team in celebration of Barclays Egypt 150 years in Egypt. As part of our commitment to the Barclays founded CSR coalition with BEBA, Barclays took part in the “Support a Poor Village” initiative and the development of Saadna village in Beni Suef by financing 16 small projects for income generating activities for the residents of this village.
Through the community investment program, Barclays Bank continued and forged partnerships and financed a number of local organizations and foundations to help reach our goal of helping people achieve their ambitions in the right way. Barclays Bank continued to support the Nurses Training project to provide academic and practical training to 500 nurses in cooperation with Gozour Foundation and the Ministry of Health, where they will be employed by local hospitals upon their completion of the training.
At the heart of the community investment program is the desire to engage our employees in community development projects. In 2014, 785 employees volunteered over 3,000 hours of their time and skills in communities. Barclays employees reached out to families in need through the “A time to give” campaign during Ramadan where employees packaged and distributed 1,000 food packages and 1,000 fresh iftar meals.
As part of Make a Difference campaign, Barclays Egypt employees participated in numerous activities in their local communities. The campaign focused on building the skills of youth in public schools and universities and sick children in the Children’s Cancer Hospital.
Barclays also launched its Summer Internship Program (SIP) for the third consecutive year, providing university students a one-month training opportunity at Barclays to gain new experiences and prepare for work in the banking sector. Priority was given to third and fourth year students.