Bank Audi to Double Its Presence in Egypt

Interview with Mohamed Abbas Fayed, Deputy Chairman & MD of Bank Audi (Egypt)

What is your assessment of the banking sector? Are you a private bank mainly?

No, we are a full-fledged bank working a bit on the retail side and a bit on the corporate side, in private banking, in affluence in SMEs. We are in all lines of business.

How many branches do you have here?

34 branches, covering most of the areas.

What can the banking sector bring at this point in time? Specifically after the Sharm el-Sheikh conference, a lot of investors have come here and some of them have completely signed agreements. What can the banking sector do at this point now?

The banking sector believes that it’s the main engine to drive the economy now. Everything is dependent on this sector. It can provide finance for any projects, financing for the requirements of any investor. Mostly equity, contribution. The banks are ready to take a share in that. Because without banks, none of these projects can be successfully launched. Investors mostly look at the competence of the existing banks in the country they would like to invest in. In the last 10 years, the Egyptian banks have introduced a lot of reforms and have lead the banks to a very good position. They are now stable. It is one of the few sectors with a lot of opportunities. After this reform, all banks are ready to take up any challenges. There is a lot of liquidity in the Egyptian banks and so they are ready to finance any kind of projects. As you see, the economy has witnessed a lot of setbacks and slowdowns. But the Egyptian banks continue to remain strong despite everything. We have passed through a very difficult period, starting with the financial crisis in 2008, which continued after the revolution in 2011. Now in 2015, after 4 years of turmoil and instability, the Egyptian banks have a good standing and are in a good financial position. So, the banks are in a very strong position now to share and contribute in the potential growth of the Egyptian economy.

What will be the role of Bank Audi in this sector? Now that the banks are stabilized what is your role here?

Bank Audi is now enjoying a good position in the different departments. We have a good technical team in all the corporate business activities, including project finance. We know the proper layout of the finance projects, as a green field. We have a very strong team in finance structure, in corporate finance. We have also built a good team in the small and medium enterprises. So, the bank is in a good position. It is ready to capture a lot of opportunities in the market. As you know that banks depend on people. Bank Audi is ready for any kind of financing, for sharing business with all the investors. It is ready to work as financial advisors on how to structure deals, how to collect funds, or how to avail finance for any kind of projects. Most of the people have a lot of experience in financing a lot of projects in diversified sectors, be it oil and gas or petrochemicals, infrastructure, building materials, transportation. People are now ready for this opportunity and to offer a good financial structure to their clients.

Among the different areas that you already mentioned, which one is the one that you would like to push more?

The Egyptian economy requires all sectors to be moved. Infrastructure, power and energy. Most of the deals have now been launched in the energy sector in particular. Because you cannot boost any industrial sector or manufacturing factories without power. The government understands this and is trying to boost a lot power projects within a short period to save and access power for all industries that are gearing up to launch themselves.

Can you give us an example of where Bank Audi is present in one projects?

Yes, we are arranging a good financing proposal for an Egyptian holding company for electricity, in order to rehabilitate a lot of power stations working under their capacity. Bank Audi is the lead arranger for one of these transactions worth around 520 million US dollars. Bank Audi is the Mandated Lead Arranger for these transactions and has a share in the 100 million US dollars involved here. It is coordinating with other local banks.

You not only use the influence of Bank Audi here, but also in the region.

Yes, we coordinate very well with the team in Lebanon. We offer them to participate in a lot of transactions that are in the pipeline. We have a lot of projects in the pipeline coming from the power sector, building material, transportation and logistics. They are very interested in participating in projects that enjoy good returns, good feasibility options. I think it will be a good opportunity for them to invest their money there.

Can you give us another example of such companies, say construction etc.? What is the biggest project that you are involved in right now? Or some project that you just finished recently?

We attended the Egyptian Economic Conference. Many investors have a lot of ambitious plans and aspirations. They want to invest and have a manufacturing presence in the country. But I think that we have to take things step up step. Now, we cannot guarantee power or gas as a raw material. Right now, the country is experiencing a shortfall in power and gas. There are no industries. They can only be built when there is enough supply of power and gas. There are a lot of projects for developing the gas sector. A lot of big investors like Apache and British Petroleum are taking the lead to produce gas in the new fields and power. Once we secure the production of power and gas, a lot of projects will come into force after that, because everything is based on power and gas as a fuel supplying energy. Once we succeed in launching a lot of power plants, whether by rehabilitating the existing power stations or adding new power stations to the national grid or the company. This will give a very powerful boost to the government. On the other hand, we see a lot of prospects in the real estate sector. Now that it has been announced that Cairo is the new capital city built across 705 kilometers. I feel that this will boost all the economic sectors, be it in building materials, steel or cement. It will create a lot of demands for these products and definitely investors will be much more interested in having these factories to meet their demands. We see a lot of developments in transportation. A lot of roads are being built to facilitate transportation between the new destinations and the old ones. So, now, we are prioritizing our funding approach. We are now convinced that we have to pick out the power sector and increase power generation. That will bring about very good results for all projects. Without power, there will be no industry.  

If you have a magic wand and you have achieved everything that you and Bank Audi wanted to achieve, what would it be? Where would you like to see Bank Audi in two to three years’ time?

I am dreaming of doubling the size of Bank Audi here in Egypt. This is my main objective, as well as my entire team. We are trying to double the branches and everything else in the bank. This is the ambitious aspiration of the Group. We have all the infrastructure to make this dream a reality. It is now doable, because we are in a position to double our assets, our positioning. We can avail of all the opportunities available in the market. We have all suffered from the setbacks faced by the economy. This is the reason for the liquidity in the banks, because there are no projects to finance. But now all the businesses can get back on their feet. So we have to be ready to make use of these opportunities and fulfil our dream.