CBE reports first profit in seven years

The Central Bank of Egypt (CBE) has announced a net profit of EGP 22.834bn in June 2024, marking a significant turnaround from the EGP 86.283bn loss recorded in June 2023. This achievement represents the first time the CBE has reported profitability in seven years.

The CBE has ceased supporting interest rates for five key initiatives since November 2022: low- and middle-income housing, industry, tourism, dual-fuel vehicle conversion, and more. The responsibility for these subsidies was transferred to the Ministry of Finance under the directive of Prime Minister Mostafa Madbouly. This decision followed significant financial strain on the CBE from covering subsidized interest rate differentials on behalf of the Ministry of Finance, aligning with the International Monetary Fund’s economic reform programme.

The CBE’s financial statements reveal a profit of EGP 7.052bn from its investments in subsidiary companies in June 2024, up from EGP 2.990bn in June 2023. Contributions to these profits include EGP 4.301bn from the Arab African International Bank, EGP 1.672bn from the Arab International Bank, EGP 19m from the Egyptian Mortgage Refinance Company, EGP 464m from Misr for Central Clearing, Depository and Registry (MCDR), and EGP 29m from the Credit Guarantee Company. Additionally, the Digital Financial Identity Company contributed EGP 26m, MCDR added EGP 483m, EgyCash for technological cash solutions provided EGP 45m, and Tiera Finance contributed EGP 14m.

The CBE also reported a rise in total assets, reaching EGP 6.057trn in June 2024, compared to EGP 4.480trn in June 2023, an increase of EGP 1.6trn.

Moreover, the CBE’s investments in the capital of international financial institutions increased to EGP 22.641bn in June 2024, up from EGP 19.378bn in June 2023. Specifically, the CBE raised its stake in the Islamic Development Bank to EGP 7.071bn in June 2024, up from EGP 5.310bn in June 2023. The Central Bank also increased its investment in the African Export-Import Bank to EGP 9.334bn by mid-2024, up from EGP 8.515bn in June of the previous year. Additionally, its contribution to the Africa Finance Corporation rose to EGP 3.121bn in June, compared to EGP 2.438bn in June 2023.

The CBE’s investments in the capital of subsidiaries and associated companies also increased to EGP 75.844bn in June 2024, up from EGP 45.644bn in June 2023.

Furthermore, the CBE’s gold reserves rose to EGP 454.925bn in the first half of 2024, compared to EGP 238.6bn in June 2023.