• To ease this pressure on the businesses, the lender is looking to enable seamless transactions between its Egyptian and Kenyan operations.
• The new trend is a shift away from the bank's initial interaction, which was majorly expansion into the middle east states.
Egypt's largest private lender Commercial International Bank (CIB) is looking to expand operations in Kenya, in a bid to tap into the growing trade between Kenyan enterprises and the North African state.
The lender has announced plans to grow its Kenyan footprint through solutions targeted towards businesses in cross-border trade.
With Kenya and several countries in the continent, and other regions, facing a dollar shortage, the lender is looking at this as an opportunity to enable cross-border trade between Kenya and Egypt with little demand for the dollar.
Both Egypt and Kenya have in the past year been grappling with a shortage of US dollars, which has heightened inflationary pressures and strained their economies, impacting trade.
This forced the two countries last year to explore alternative trade arrangements, such as barter systems, to sustain vital trade relationships.
To ease this pressure on the businesses, the lender is looking to enable seamless transactions between its Egyptian and Kenyan operations.
CIB managing director and CEO Hussein Abaza says that part of the banks' strength comes from its corporate and SME trade finance capabilities, which together, with a comprehensive set of banking services, create a strong proposition.
The lender says the growing political integration in the continent brings massive opportunities for growth within the continent.
"Egypt is the second leading importer of Kenya’s tea in the world, that’s a great corridor to start with. Traders will also benefit from the prospects available to them from being Common Market for Eastern and Southern Africa (COMESA) members, and from the recent African Continental Free Trade Agreement (AfCTA)," said Abaza.
Abaza said that CIB's expansion strategy in Africa, and particularly East Africa, is designed to build a bridge for Egyptian customers so that they can benefit from regional integration efforts across the continent.
Official government trade data shows a steady increase in trade volumes between Egypt and Kenya, reaching $663.6 million (Sh106 billion) in 2022, which the lender will be looking to tap into.
In January 2023, CIB, completed the acquisition of Kenya's Mayfair CIB Bank (MCIB) after acquiring the remaining 51 percent stake - it originally bought 49 percent in 2020, marking the completion of CIB's first cross-border acquisition.
Similarly, CIB had already begun expanding in African markets since 2019, by establishing a commercial representative office in Addis Ababa, Ethiopia.
Licensed in 1975, CIB Bank is considered a leading lender in Egypt with a balance sheet size of more than $25 billion and listed on the Egyptian Stock Exchange, London Stock Exchange, and trades over the counter at the New York Stock Exchange.
Egypt's banks are not alone in North Africa in seeking diversification and growth outside of their domestic market, but the trend is one of the most pronounced in the continent's banking industry. So what's going on?
The CIB managing director told The Star that there are a couple of key reasons why the bank is looking beyond the country's borders.
“Why do you try to export to Switzerland when you have a market with a similar taste only a couple of distances away with a rich heritage? Of course, East Africa makes more sense than West because of proximity, and looking at EA we cannot look beyond Kenya,” said Abaza.
He added that the lender aims to support and facilitate the robust economic growth and development in the region, an ambition it wants to fulfill by operating as a business hub for the East Africa region.
The new trend is a shift away from the banks' initial interaction, which was majorly expansion into the Middle East.
“Egypt is a big market. With the number of bilateral and multilateral agreements that we have, we should open our economy more to neighboring African markets,” said Egypt’s Deputy Minister of Supply and Internal Trade, Ibrahim Ashmawy, noting that the country is committed to expanding trade with Kenya.
Currently operating six branches in Kenya and over 200 in Egypt, the bank is planning to tap into the business community as its market penetration strategy.
Abaza said 59, 000 businesses are currently banking on its platforms.