| Cairo: Egyptian banks are hoping to entice back expatriates in foreign banks |
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Because of the dominant position of the four state-owned banks - they hold about 50% of assets - private banks in Egypt are still quite small by international standards.
Commercial International Bank (CIB), for example, the country's largest private bank, had assets of just $3.9 billion at the end of 1998. With the exception of EFG Hermes in equity capital markets, not one of the private banks has managed to secure more than a 4% share in any major product.
Historically, private banks have followed conservative lending and investment strategies. Most only lent to multinationals and a small group of Egyptian blue chips such as conglomerate Orascom. Surplus capital was invested in treasury bills and leading equities such as mobile phone operator MobiNil. Some set up mutual funds, but this was considered rather daring.
Until 1997, this strategy served private banks well, not least because they could offset loans taken out to buy T-bills against tax.