Ashraf El Kady- President of The United Bank • The Economic atmosphere requires innovating flexible finance mechanisms, that cope with the digital revolution. • Financial derivatives are among the corporate maximizing mechanisms.

04/12/2022

Web News 4122022 (1)

Ashraf El Kady- President of The United Bank

  • The Economic atmosphere requires innovating flexible finance mechanisms, that cope with the digital revolution.
  • Financial derivatives are among the corporate maximizing mechanisms.
  • The United Bank finance solutions for SMEs sector, guarantee a good cash management and minimizing risks.
  • Meticulous studies for clients’ needs, setting up scenarios, solutions and due dates suitable for their cash flows.
  • Egypt is the land of investment opportunities.

 

Cairo: 4th of December, 2022

Ashraf El Kady - Chairman of The United Bank, in his speech in the CEOs eighth edition conference, under the name of “Year of Major challenges”, stated that the simplicity of direct investment performance, either local or foreign investment is the more important alternative to attract new investment, reduce risks, and accomplish financial stability.

El Kady participated in the second session, among a constellation of CEOs in banking sector, to face crucial missions, with the participation of Tarek El Kholy- CEO and Managing Director of SAIB, Ghada El Bialy- CEO of IDB, Alaa Farouk – President of Agricultural Bank, Amr El Behy- CEO of El Mashreq, Hussien El Refaay – Chairman and CEO Canal El Swez Bank. The session was moderated by Dr. Bassel Roshdy- CEO of Nile Capital holding for financial investments, and the General Secretary of the Egyptian Association for direct investment.

In his opening speech, Al Kady mentioned that the current international economic atmosphere, forces the corporates and financial institutions to face many challenges, among them is the importance of innovating and creating more smart and flexible financing tools, that help the institutions to keep the pace with the challenges, and enhancing its capability to grow and make profits, amid the competitive international huge effects and digital revolution.

Innovation has become an inevitable need to increase credit portfolio and available finance, and providing a less- costed creative means to subscribe and trade in money market. Besides, providing bigger opportunities to shop from shopping entities through e- trade. Also, providing chances for banks and financial institutions to enhance their economic position through increasing their capital. The thing that contributes to sustainable both economic and social development.

Financial derivatives

They are regarded as important applications, provided by banks to their clients to adjust prices and taking pre- cautions for currency and commodity prices fluctuations.

The Central Bank of Egypt has adopted a plan, that let banks make future contracts concerning the financial derivatives, aiming to serve the clients in stabilizing foreign currency prices for limited periods, like: month, three months, up to year. The thing that simplifies their product pricing process, which is affected by foreign currency prices.

Those decisions protect the investors from currency rate fluctuations. They can be done to stabilize commodity and used material prices, such as: copper, wheat, corn and many more.

El Kady asserted that SWAPS, Currency options, commodity options or NDFs, are with higher prices that current prices. As they are bought with bonus, and give the client the choice to either use the price agreed upon or the market prices at the end of its time. This is called financial choices.

He added that future pound contracts are meant to purchase dollar today and sell it once again to the bank after 3, or 6 months up to a year, with a higher price, wishing that the client has been succeeded in selling his/ her products or has been provided with dollar to meet the due date. El Kady pointed out that may be the future pound contracts would have an indirect effect on inflation. As the client or the industrialist would be able to stabilize the price rate for a longer time, and as a result, s/he won’t need to overprice because they can’t expect prices in the future.

Many sessions have been held around SMEs initiatives and the kinds of services provided by banks, like: financial, technical and marketing consultations. El Kady said that the political leadership and CBE, along with the Ministry of Finance, have pumped 200 billion Egyptian pounds to support corporate sector and institutions to meet the pre requisites to give credit. There is also an initiative to increase the obligatory minimum to finance SMEs of bank portfolio from 20 % to be 25 %, and specialize 10 % as a minimum limit of banks portfolio for small enterprises for 2 years. The deadline has been postponed until December 2023 to achieve the target. The timing of the decision was suitable, in order to make the target chances for different productive sectors in national economy (service sector, industrial and agricultural sector), parallel to those procedures taken by the Egyptian State to face the consequences of Russian- Ukrainian war, and corona epidemic, those procedures were made to reduce the negative effects in the Egyptian economy.

The CBE called all banks, also the foreign banks to participate in sustainable development projects, that aim to qualify and support youth. CBE also called to specialize a good percentage of credit portfolio to serve the SMEs in far geographical regions, like: in Upper Egypt governorates. As well as, support activities of the corporate working in IT field, to make the aimed development into digital transformation, in the framework of financial inclusion.

The UB provides a package of solutions, that working on maximizing the role of small and medium enterprises, to different economic sectors, especially industry. As well as, innovating a number of green finance solutions, through 5 technical and banking tools:

  • The creative and different finance solutions, that suit industrialists and investors as per to CBE terms and conditions.
  • Digital services package, like: corporate digital services, that provide many advantages for corporates, such as: make all internal transfers, issuance of letters of guarantee, payment to all governmental bills, taxes, insurances, customs, cash management, and opening letters of credit, with the latest investment means, that insure corporate and institutions profit maximizing. As well as, statement of the corporate account.
  • Specialized finance solutions for quick micro finance, through UB digital wallet and the ability to pay through it. That is to develop the value chains. The thing that contribute to eliminate many social and economic problems, such as: unemployment, crime and corruption. As well as, its vital role in merging the informal economy with the formal one, and enhancing the life style of the citizen, and changing the culture of consumption into clean energy.
  • A package of technical support services: working on developing the digital banking solutions, for integrated development purposes, especially micro- funded projects and expanding the base of financial inclusion.
  • Support creation and young Egyptian minds in banking and non- banking fields, especially those fields that figuring out economic solution and maximizing local production in important sectors. The thing that contributes to increasing the Egyptian export volume, that is through the Nile Pioneers initiative and supporting the start- ups and entrepreneurships.

Egypt is the land of opportunities for investors

In his conclusion, El Kady pointed out that Egypt is the land of promising opportunities. The Egyptian state has set an ambitious economic and regulatory programs, that reflect how serious Egypt is to attract new investments in industry, infra structure and new industrial communities. Besides, the green finance with creative means and the thing that serve local industry and qualify the “made in Egypt” products to be internationally exported. The banking and financial institutions have a vital role in maximizing the Egyptian state efforts to increase the volume of trade in order to accomplish sustainable development on all economic, cultural, and social levels.

 

End.