Public sector banks not up for sale

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CENTRAL Bank of Egypt (CBE) Governor Farouk El-Okda denied his previous statements made to Arab bankers in Washington in which he mentioned the government's plan to sell all public sector banks, taking the entire financial sector by surprise.

Although the privatisation of the four public banks has often been prescribed as a means of boosting the competitiveness of the financial sector, it was never actually seen as imminent.

In a statement released last week by the CBE, El-Okda explained that the main issues he touched upon in his speech revolved around Egypt's financial reform agenda, the financial and administrative restructuring of public sector banks as well as the techniques implemented to solve the loan defaulters' crisis.

El-Okda said in his statement that the Egyptian financial reform programme is based upon several pillars. The programme will be carried out over a period of four years and aims to create stronger financial entities through the merging of small banks, the privatisation of public sector shares in joint venture banks and the privatisation of one of the public sector banks, namely the Bank of Alexandria. Moreover, it seeks administrative and financial restructuring of public sector banks.