National Bank of Abu Dhabi expects Egypt to increase exports, adopt industrial policy of import substitution
National Bank of Abu Dhabi is expanding in Egypt to add export financing to its wholesale operations and introduce wealth management services for affluent Egyptians, the company's chief executive said.
The bank expects Egypt to increase exports and adopt an industrial policy of import substitution as it targets economic revival, Alex Thursby told Reuters at an investment conference in the Red Sea resort of Sharm El-Sheikh.
The weekend summit, where the government signed deals worth $36 billion, was aimed at restoring confidence after four years of political turmoil that began with the 2011 uprising which toppled autocrat Hosni Mubarak.
"We have the structuring capability, we have the mass and we have the risk appetite to lend dollars to that side of the market," Thursby said of exports. "It's also critical for the country."
A drop in foreign investment and tourism following the 2011 revolt saw Egypt's currency reserves plummet from $36 billion to critically low levels below the $15 billion needed to cover three months of imports for the most populous Arab country.
Reserves have stabilised above that level for the past 18 months, in large part due to billions of dollars deposited in Egypt's central bank by Gulf Arab allies, who supported the army's toppling of the Muslim Brotherhood in mid-2013 following mass protests.
Saudi Arabia and the United Arab Emirates pledged a combined $3 billion in central bank deposits on Friday, but investors agree a long-term strategy is needed.
"The scale of this thing is going to require a permanency of reform that I think is the next challenge for the central bank to participate in," said Thursby.
He praised economic reforms the government has taken in the last six months and the country's ability to expand into foreign markets, which he said could make it "the China of the Middle East".
Thursby said NBAD would not try to compete against local banks with hundreds of branches, but would target affluent and high net worth individuals.
"Having more of a limited branch, technology-led, good product, affluent customers on the asset side is another avenue that we can go into in our retail wealth base," he said.
In an interview earlier this month, Thursby told Reuters that NBAD did not intend to expand in Egypt through acquisitions - as Gulf rivals Emirates NBD and Qatar National Bank have done - but instead planned to grow organically in the country.