4:05 pm
Tuesday 03 January 2023
I wrote – Manal Al-Masry:
The maturities of the 18% high-yield savings bonds on client accounts at Al-Ahly and Egypt Banks run from next March 22 until the latest deadline of May 31, when work on the certificate was suspended, which may require one re-introducing it again to boost customers’ savings, according to bankers who spoke to them about Masrawy.
The issuance of the National Bank of Egypt and the two largest government banks – a high-yield certificate at 18% interest for one year, with a monthly trading period, March 21, which coincided with the first major move in the exchange rate of sterling against foreign currencies (in a float-like movement).
The Central Bank usually enlists the help of the National Bank of Egypt and the National Bank of Egypt in issuing high certificates to clients, as they are the two arms of the Central Bank in implementing its monetary policy to absorb the pressures inflationary (increase in prices) .
However, the two banks abruptly halted the sale of the certificate on May 30, after collecting the expected savings proceeds of £750bn within 71 days of its issuance.
Muhammad Badra, a banking expert, believes that it is necessary to offer the 18% certificate at least one more time in case it is difficult to offer another 20% certificate in order to favor the reinvestment of the savings of the certificate holders in the two banks , as well as the existence of a positive real yield which compensates them for the high inflation.
The real return on customer savings – despite high interest – was a negative number compared to the core inflation rate, which registered 21.5% last November, when measured by the highest return a customer receives on 17, 25% on triple certificate.
Badra called for issuing certificates with a real yield above inflation, explaining that this improves the continuity of customers’ savings in banks, as well as protects them from attempts to fall into fraud cases by some of the so-called (relatives) .
The term “restless” has recently reappeared in Egyptian society after repeated incidents related to the looting of some simple people’s money by a series of fraudsters, especially in the regions, under the temptation of obtaining a high return that exceeds that applied in official investments channels.
Hisham Okasha, president of the National Bank of Egypt, previously said in televised statements that the bank’s tendency to issue certificates with a high interest rate of 20% is fake news.
On the other hand, Mohamed El-Etreby, chairman of Banque Misr, said the bank would study the position of raising the interest on its certificates, after recently raising the interest rate at the central bank by 3%, according to the cost of funds in the bank.
The triple certificate of fixed yield is 17.25%, disbursed annually, with the highest yield currently presented by the National Bank of Egypt and Egypt and several other banks, but has not received the same demand from customers as the his predecessors received due to their money being held in the 18% certificate, as well as waiting for some of them to get a higher interest certificate.
A private bank board member told Masrawy that the introduction of a new high-yield certificate by the National Bank of Egypt, with 18% certification fees, is needed to compensate customers for the increase in the inflation rate.
He added that the high-interest certificates place a huge burden on the two banks in terms of employing them through loans, debt instruments, etc., but reintroducing them could be an expected measure to provide a psychological feel for customers.
