Influenced by the crisis of non-repaid loans fOR Egyptian banks, participants in the 9th Arab financing forum organized by Euromoney Institution discussed the developments in the Egyptian banking system.

At the session held under the theme "The Egyptian banks: The new guidelines", Mahmoud Sayed Abdel Latif, CEO of "Egyptian American Bank and Bank of Alexandria", said that in the past, public banks had controlled between 70 and 80% of loans and savings in Egypt. "But their current quota does not exceed 50%", he said.

He added that this quota was due to the efforts of banks and not because they were the only "players" in the market. "This shows a healthy phenomenon on the Egyptian market", he resumed.

An idea shared by the CEO of "Banque Misr", Mohamad Kamal Eddin Barakat, who added that it is a matter of time that the competition will be fierce between the public and private banks to have a quota on Egyptian market.

But the CEO of Commercial International Bank (CIB-Egypt), Hisham Ezz el-Arab, sees things differently. He believes that these percentages are not correct. According to him, adding the contributions of public banks in the "Joint ventures, the quota of the public banks will still be between 75 and 80%. "No change has occurred in the Egyptian market", he said.

And Mr. Ezz el-Arab to ask if it's of justice that public banks acquire the savings and borrowing of public sector ? Mr. Abdel Latif said that "historically, public funds were saved in public banks, the public sector could not take any different decision". According to him, the current situation is different. "The private banks lend only to companies which realize success", he added.

About the question of debts and the volume of non-repaid loans, executive director of the "HSBC Egypt" bank, Mounir Abdel Wahab, said that the volume of these loans was within the secure limits. For his part, Mr. Abdel Latif stressed that some loans were repaid and others were restructured.

When asked why shareholders, specially in banks, are not participating in decisions regarding loans, Mr. Barakat said that there was currently a law controlling loans. "The funds of diposits and shareholders are protected by the government who is responsible to cover any credit", he said.

Regarding credit policies, Mr. Abdel Latif said that the existence of liquidity does not mean to waste it by granting loans, as was the case in the 90. "Banks have become more sensitive and selective in giving loans", he added.

About the effect of reducing tariffs on imports, Mr. Ezz el-Arab stressed that banks had benefited from the lessons of the past. "Banks give credit to importers of investment goods.