The financial soundness indicators for Egypt’s banking sector have underscored its resilience

highlighting the key role banks play in supporting the nation’s economic stability These indicators

reflect the sector’s strong capacity to provide financing to various industries, contributing significantly

to Gross Domestic Product (GDP) growth, fostering job creation, and attracting higher investment rates

As of Q4 2025, Egypt’s banking sector has shown impressive financial performance, with a capital adequacy

ratio standing at 19.6%, surpassing the regulatory requirement of 12.5% by a margin of 0.4% This increase

signals improved capital strength and stability, reinforcing the sector’s ability to weather economic fluctuations

Improving Asset Quality and Reducing Non-Performing Loans (NPLs)

The asset quality of Egypt’s banks has continued to strengthen The Non-Performing Loans (NPL)

ratio decreased to just 1.9% of total loans by the end of Q4 2025, a sign of effective risk management

and solid lending practices Furthermore, the provisions’ coverage ratio for NPLs reached an impressive

90.2%, reinforcing the banking sector’s ability to absorb potential losses and maintain financial health

Strong Liquidity and Loan-to-Deposit Ratios

Liquidity remains a cornerstone of Egypt’s banking sector, with banks maintaining robust

liquidity rates In local currencies, liquidity was recorded at 40.3%, while the foreign currency

liquidity stood at 79.5%, far exceeding the regulatory requirements of 20% and 25%, respectively

This solid liquidity foundation provides Egypt’s banks with the flexibility to manage economic

challenges and sustain growth In terms of lending, the loan-to-deposit ratio was recorded

at 66.4% by the end of Q4 2025, indicating a well-balanced and sustainable approach to

credit distribution

Central Bank: High Profitability and Return on Equity

Central Bank The banking sector’s profitability remains strong, with the return on equity (ROE)

reaching 39.0% by the end of FY2024 This high profitability is a testament to the

sector’s efficient operations, prudent risk management strategies, and favorable

economic conditions

Regulatory Oversight by the Central Bank of Egypt

The financial resilience of Egypt’s banking sector is further supported by the Central Bank of Egypt

(CBE), which plays a critical role in overseeing the performance of all banks The CBE ensures that banks

adhere to international best practices, fostering financial stability and ensuring that banks can continue

to serve as a pillar of support for the Egyptian economy In conclusion, the banking sector in Egypt

continues to show impressive strength and stability, underpinned by solid financial soundness indicators

With strong capital adequacy, improved asset quality, high liquidity, and strong profitability, Egypt’s

banks are well-positioned to continue supporting the country’s economic growth and financial stability

in the coming years