1- Covid-19 pandemic has caused an unprecedented and unexpected hit to the global and local economies. What are the facilities taken by Banque du Caire to ease the pressures on clients affected by the pandemic economic repercussions?
Banks around the globe are and will play a critical role in these unprecedented and unexpected circumstances as systemic stabilizers for their customers, their employees, and for their economies at large. Cash and deposit services, credit extension and payment facilitation are all essential services these days.
Among businesses, the impact will vary significantly by sector and by company. It seems quite likely at this point that travel and tourism, entertainment, automotive, oil and gas, and healthcare industries will be most affected due to disruptions in supply and demand. Within these sectors, smaller businesses, such as those that cannot shift to remote work and online delivery and those catering to the most vulnerable segments, are likely to be more affected.
From a credit perspective, Banque du Caire is always working on identifying the most affected sectors and customers to understand how it can be most supportive to its clients and community. In line with the Central Bank of Egypt initiatives, Banque du Caire is already considering relaxed payment schedules and availability of credit. This will include proactively engaging with clients to understand their situation, segmenting portfolios based on expected needs, developing an internal view of where support measures will be the most effective, and adjusting risk-mitigation actions for early delinquencies and for nonperforming exposures. Supporting clients in these critical times will deepen customer relationships and reaffirm the role of Banque du Caire as key enabler of the economy. In this respect, regulators around the globe perfectly understand the challenge and are already relaxing rules for banks and customers.
The Central Bank of Egypt has already reduced the policy rate by 300 bps. The preferential interest rate has been reduced from 10% to 8% on loans to tourism, industry, agriculture and construction sectors. A government guarantee of EGP 3 B. on low-interest loans by the Central Bank of Egypt has been announced for the tourism industry soft loans. The Central Bank of Egypt has also approved an EGP 100 B. guarantee to cover lending at preferential rates to the manufacturing, agriculture and contracting loans. Loans with a two-year grace period will be made available to aviation sector firms. Support has been announced for small projects harmed by COVID-19, especially in the industrial and labor-intensive sectors, through the availability of short-term loans of up to a year, to secure the necessary liquidity for operational expenses until the crisis is over. The regulations issued last year requiring banks to obtain detailed information of borrowers have been relaxed. Suspension of credit score blacklists for irregular clients and waiver of court cases for defaulted customers have been announced.
Since the start of the Covid-19 outbreak, Banque du Caire’s focus has been on ensuring that the bank will continue to render consistent, competitive financing and transaction banking services to its customers. Banque du Caire’s Corporate Banking team is regularly contacting the clients to provide support whenever needed. Banque du Caire continues to launch relief packages for businesses impacted by the Covid-19. These packages are designed to suit market conditions. In addition, Banque du Caire is always supporting the Central Bank of Egypt’s initiatives, helping its customers that are running into short-term financial difficulty as well as offering preferential loan rates and terms for the affected industries.
Banque du Caire is always playing a vital role in the functioning of the Egyptian economy and is not simply a commercial enterprise but provides important services to individuals, businesses and to the community. Workplace dynamics and talent management, already evolving in a digitizing world, may be durably changed after an extended period of remote working. As it settles into its new routine over the next weeks or months, Banque du Caire may consider this as a testing ground for what does and does not work and draw implications for its organizational and culture transformations.
In amalgamation with the Central Bank of Egypt’s initiatives, both on the Corporate & Retail platforms, that BdC encouraged and adhered by since the beginning of the pandemic… From waiving fees on all transfers, to encouraging digitalization and easing borrowing client’s burdens, through offering premium holidays and reducing borrowing rates on corporate clients applying for the CBE initiative. BdC’s main objective was to support the economy & the people, in such difficult circumstances, on the means to go cash-less through introducing innovative digital solutions, which is the essential for Financial Inclusion.
BdC launched BdC’s Retail Online Banking, a full-fledged platform that enables clients to carry all their transactions without the need to visit a branch. The aim was to help contain the spread of COVID-19. BdC also encouraged clients to join Qahera Cash, BdC’s Wallet, for digital payments & collection, including the newly featured QR Code application that BdC was among the first to apply in the Egyptian Market.
Also on the Institutional Platform, the launch of Merchant Wallets and application of QR Codes, facilitated Corporates’ collections and payments, through an online platform that is available around the clock, with customizable features to cater for different business needs. BdC also introduced a new concept for Supply Chain Finance that releases working capital, through a product that both benefits the buyers and suppliers on both ends of the Cash cycle. These have been also enabled through the newly introduced Corporate Internet Banking ‘BDCbusiness’.
BdC also directed their Advertising & Marketing Funds for the Year 2020 to the higher cause, of helping the community battle this pandemic, by joining forces with reputable charitable organizations in establishing a number of buildings that were converted into medical isolation centers to serve the infected patients by COVID-19. BdC also managed to supply and distribute Food Supplies, 10,000 boxes for the families that lost their income and were affected by COVID-19.
BdC’s own employees felt the need to contribute back to the community, by fundraising and supporting a CSR initiative in buying and restoring ventilators, distributing food supplies to the less fortunate families that lost their income and were affected by COVID-19.
We are still working on a number of solutions for the corporate segment, launching BdC Business, which is the full-fledged Corporate Online Platform, Host to Host Integration for Corporate clients, again to cater towards Digitalization.
- No cash withdrawal fees when withdrawing cash from any local ATM for 6 months starting 15th of March for debit and prepaid cards
- No cash withdrawal fees when withdrawing cash from any local ATM / BDC ATMs for 6 months starting 15th of March for credit cards
- Credit cards payments postponement for 6 months starting 15th of March with no fees incurred.
- Increased the cards contactless transactions with no pin
- Free prepaid cards issuance for 6 months starting 15th of March
- Increased cards daily and monthly limits.
- Loans installment postponed: Banque due Caire Postponed all loans installment for c individuals for a period of 6 month with no additional returns or fees would be applied for late payments only same interest rate for the 6 month is applied.
- Reducing loans interest rate for new customers: Banque due Caire had decrees loans interest rate for loans products for the new to bank clients to allow much more financials capacity for the customer in the Covid- 19 situation
- Promotion for doctors to waive the loans admin fees
- Waive all transfer fees.
- We start working from three premises instead of two to avoid any stopping of our service.
- We prepared our call scripts to motivate our customers to using all bank channels instead of going to branches ex (Internet banking/ Mobile wallet/ Facebook) in order to reduce the pressure in branches.
- We changing our normal working hours to matching with curfew in order to keep our services running 24×7 as usually to meet our customer satisfaction as we can.
- We reduce our manpower according to banks rules and government rules even with increasing of daily calls more than twice of the normal daily calls.
- We focused more on agents care and safety by made suitable distance between all agents to avoid any infection.
2- As businesses are returning to work after the total lockdown, social distancing and health procedures became part of the new normal post Corona pandemic, and institutions are accordingly adopting measures to protect both employees and clients. What are the actions taken by Banque du Caire in this regard?
BdC is working in diverse directions towards managing Covid-19 crisis
- Strategic planning and Governance
- Health and safety – Prevention and precaution measures
- Suspected and Positive cases handling.
- Business continuity.
In strategic planning we ensure that
- Crisis and business continuity committee is responsible for overseeing the development of the pandemic plan and ensure senior management invests sufficient resources into developing and testing the plan.
- All reports and updates to be presented to Risk, Audit and Board of directors committees.
- Succession plan to key management staff including delegations and authorities to be in place and activated once needed.
- Activate the BCP across all functions.
In Health and safety we are working in 3 simultaneous pillars
- Social distancing and Reduce gathering
- Communication, awareness and education
- Enhance bank health and hygiene
In Social Distancing and Gathering Reduction
- Staff reduction percentage in head office and branches
- 50% of BdC clients are allowed only to be inside branches using queue system.
- Chronic disease and pregnancy to have special vacation due to their low immunity
- Reduce internal meetings / outsource vendors and activate Video / Call conference
- Postpone all sports and social activities of the personnel services association and travel for training.
- Keep the social distance in all head office premises work place.
In Communication, awareness and education
- Design short videos and medical tips and Email campaign to all staff and on Bank’s website / ATMs Screens, our social media accounts to provide updates and awareness to COVID-19.
- Banners and advertisements kits across head office and other buildings.
In Enhance bank health and hygiene
- Provide hygiene tools for branches and head office such as (Hand sanitizers, masks, Gloves etc…)
- Increase frequency of cleaning / decontamination cycles.
- Deep sanitization to any location suspected or positive cases.
- Sterilization of all public transportation (Employee’s buses) / All floors bathrooms / elevators and desks on a daily basis.
In suspected and positive case
- Provide contact numbers / Email address of all doctors and medical team to report any suspected / positive cases.
- Provide Private Medical provider with large number of medical coverage hospitals and laps.
- Provide gates for temperature detection at all head office entrances.
- In case of positive Case/s to be reported CBE and Ministry of health and population.
- All staff were in contact in the Area / Floor with the positive case should be isolated.
- Area / Floor closed for deep cleaning and vacuum to restore working again.
- Database of all suspected / positive cases and monitoring the status updates.
In Business continuity plans
- Design 5 scenarios (for positive case at branches, Head office, other bank’s premises, partial and complete curfew.
- All critical function to be divided into 2 to 5 teams, in different locations.
- Other function to be divided into 2 different teams in different locations.
- Activate the VPNs and Working from home methodology.
- Regular staff rotation / On office / Work from home / BC sites / vacation
3- How can the Egyptian banking sector and specifically Banque du Caire assist in reviving the local economy?
The Egyptian banking sector is the nexus of its financial system. The banking sector plays an instrumental role in the economic growth of the country. The economic growth over the past three years could not have been achieved without the continuous investments across the country and the miraculous home-grown economic reform program that was undertaken by the central bank and the government. On the institutional front and owing to the significant investments in people. Infrastructure and technology undertaken by the bank over the past two years, BdC is well serving the economy with an array of products that cater for the financial needs of all participants in the economy, whether retail, small & micro-borrowers or large institutions. The growth and the composition of BdC’s loan book over the past two years is a clear evidence of the improved product-accessibility, which comes in line with the government’s financial inclusion initiatives. *Over 2017-2019, BdC grew its gross loan book at a CAGR of 33%, its LTD to 53% vs. 36%, and was able to increase the portion dedicated to MSMEs to 20% of total portfolio, up from 8.1% in 2017. Growth has also been robust for the corporate and retail segments, with a 41% CAGR in corporate loans and 11% CAGR for retail over 2017-2019.*
4- How do you evaluate the performance of Banque du Caire, what where the main challenges, major achievements and accordingly plans for the near future?
- Performance over the past several years saw the bank awarded various prestigious accolades from the most reputable financial entities such as The Global Economics Awards, International Finance Magazine, & Global Finance Magazine for achievements in Retail banking, Corporate banking, Treasury activities, and more. An acknowledgment of BdC position as one of the pioneering banks in Egypt.
- At Banque du Caire we recognized that adapting to the ever-changing dynamics of the macroeconomic and the banking industry realm is a cornerstone for our growth story. Accordingly, in 2018 we formulated a comprehensive five-year strategy aiming at redefining BdC’s approach to the business, while in the meantime emphasizing the importance of people and infrastructure.
The year 2019 witnessed a second episode of business revamp strategy, which covered all of our business lines. We primed our Corporate Banking Division not only to benefit from corporate lending growth triggered by lower interest rates, but also to improve our share of wallet. Our strategy which introduced the product-based approach allowed BdC to outpace market growth, with our corporate loan portfolio growing at a *CAGR of 41% over 2017-2019 vs. 10% for market average. Secondly, underpinned by key government initiatives, BdC participated effectively in empowering the SMEs segment of the economy, leveraging its established reputation in the banking sector to capture a growing market share.*
In the corporate banking space, we continued to deepen our presence through revamping our Debt & Structured Finance Division, allowing us to take a leading role in syndication instead of our traditional participatory role. This followed the successful launch of the Global Transaction Banking (“GTB”) division, which uses the portfolio management approach to offer advanced diversified product suite through offering; Cash Management & liquidity products, Trade Finance & Working Capital, and Securities & Custody Services.
In the meantime, we introduced new hedging and derivative solutions to our Treasury and Capital Markets department with the aim of fostering cross selling initiatives. In order to support our regional presence and cement our trade activities with Africa, we were successful in the acquisition of a fully-fledged bank in Uganda, Cairo International Bank, making us the first Egyptian bank to fully own a bank in sub-Saharan Africa. This attests to the bank’s vision and is central to deepening our network and trade relations across the continent. Another great achievement this year was the successful launch of our representative office in the UAE, which is geared towards increasing activities between Egypt & GCC across different fronts, including the trade corridor, home remittances, retail, and business referrals.
During 2019, our approach to the retail business remained a key area of development with a customer-centric segmentation strategy aiming at shifting the business mix away from products related to government employees and towards more lucrative retail products. The array of retail products and services expanded during the year to include Qahera Cash, QR Code acceptance as well as a wide range of Visa and MasterCard (Classic, Gold, Titanium, etc.), in addition to the launch of the retail internet banking services. Our strategy for the SMEs business involved launching multiple business hubs with the aim of expediting the credit origination, underwriting, and approval procedures. Meanwhile, we continued to capitalize on our leading position in Microfinance, through growing our service offering which helped increase our portfolio by almost 3 times over 2017-2019.
5- BdC is an active member at the Union of Arab Banks (UAB) and the World Union of Arab Bankers (WUAB), how can UAB and WUAB further cooperate with BdC and other member banks meet the strategic roles of the Arab Banking sector locally and internationally?
The Union of Arab Banks (UAB) and World Union of Arab Bankers (WUAB) have adopted steady steps and reached tangible results in delivering a successful and bright picture for the Arab Banking sector and its potentials at international decision-making destinations such as the IMF and World Bank, therefore reducing the consequences that may affect our region and specifically the banking sector. At BDC we will continue our strong support to UAB and WUAB and assist in promoting their role.