Briefs

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QIZ eligibility

The Egyptian-Israeli joint committee are scheduled to meet next week to look into the first group of applications by companies wishing to export to the US within the framework of the Qualified Industrial Zones (QIZ) protocol. The deadline for companies to apply for eligibility was 14 February for the first wave of applications.

Companies may register with the QIZ Unit at the Ministry of Foreign Trade and Industry throughout the year, while the joint committee is scheduled to meet every three months to review new applications.

The protocol establishing QIZs in Egypt was signed last December by Egyptian Foreign Trade and Industry Minister Rasheed Mohamed Rasheed, Israeli Vice Prime Minister Ehud Olmert and US Trade Representative Robert Zoellick.

The protocol provides for three QIZs in Egypt -- one in Greater Cairo; another in Alexandria; and a third in the Suez Canal Zone. All the industrial areas within these three zones will eventually be able to make use of the agreement. In the Suez Canal Zone, only the industrial area of Port Said has thus far been approved.

The QIZ scheme is part of an initiative launched in 1996 by the US Congress to encourage regional cooperation. The protocol allows Egypt to export products to the US duty free, as long as these products contain 11.7 per cent input from Israel.

In order for a QIZ commodity to gain duty-free entry, QIZ factories must add at least 35 per cent to the commodity's value. This 35 per cent figure can include value added in Israel, Egypt, or the US. The agreement gives Egypt a competitive edge in the US market, which currently absorbs 40 per cent of Egyptian exports.

CIB profits up 23 per cent

EGYPT'S largest private sector bank, Commercial International Bank (CIB), recorded a 23 per cent increase in its net income during 2004. The bank's net income reached LE506 million compared to LE413 million at the end of 2003. The increase was matched by a 23 per cent rise in the bank's net interest income.

Also, recurring non-interest income, including fees, commissions, and gains from dealing in foreign currencies, grew by a hefty 43 per cent. Costs also rose, largely due to an expensive upgrading of the bank's IT platform. The year has witnessed the bank's listing in both the Kuwaiti Stock Exchange and the Abu Dhabi financial market. Shares of CIB rose to LE45.23 in reaction to the news.

Housing banks merger

IN A MOVE aiming at boosting the local real estate and mortgage markets, the Housing and Development Bank's (HDB) extraordinary General Assembly has approved a suggestion from the board of directors to merge with the Egyptian-Arab Land Bank. The new entity will have a paid-in capital of LE1.3 billion.

Fathi El-Sebaai, the board chairman of the would-be merged bank and current chairman of HDB said the move will allow coordination of policies in the financing sector. However, he said that finalising relevant procedures will take at least 16 months to evaluate the assets of both banks and restructure the proposed ownership.

Some 22.5 per cent of HDB is owned by the Urban Communities Authority, which finances housing and urban projects for lower-income citizens. It has a paid-in capital of LE102 million and is listed in the Egyptian stock market. The Egyptian Arab Land Bank was established in 1887 and is fully state-owned.

Getting smart

IN A PRESS conference last week, Network International, a Dubai-based certified payment card solutions provider, announced its intent to expand its presence in the Egyptian banking sector.

Among Network International's most advanced products is the personalised smart card, which functions through a computer chip instead of the less secure magnetic strip.

The computer chip within a smart card enables the storage of huge amounts of information, while significantly reducing the risk of fraud.

Chairman of Network International Abdullah Qassem, speaking at the press conference, was optimistic about the potential for his company's services within the Egyptian banking sector, stating "there is a very small number of card holders in this part of the world."

He pointed out that in Egypt, out of a population of 70 million there are only 2.5 million card holders. Qassem praised France's move to prohibit the use of magnetic cards, moving to the more secure personalised smart cards, thus making their credit card sector among the most secure in the world.

Qassem also proposed outsourcing as an easy way for other companies doing business in Egypt to reduce costs. "We already have the infrastructure, which costs millions of dollars, for that reason it might make economic sense to save some money and make use of our services," he said.