NBE targets EGP 1.1 billion reduction in bad debts portfolio.
"NBE targets to reduce bad debts portfolio to reach to EGP 5 billion by the end of the current fiscal year 2012-2013," head of bad debts department, Yehya Abou El Foutoh, said yesterday.
Four years ago, bad debts portfolio represented 30 per cent of the total credit portfolio, which the bank successfully reduced to 5 per cent during the previous fiscal year that ended in 30 June 2012.
"NBE applies various techniques to reduce the bad debts portfolio including; debt rescheduling, increasing the bank's stake in defaulting companies' capital and floating defaulting clients," Abou El-Fotouh said.
The bank agreed to settle the debts of The Arab Company for Special Steel's (ACRO), which stood at EGP 1.6 billion through increasing NBE's share in the company's capital, which amounted to 7 percent, Al-Watan newspaper reported 23 October.
"We're ready to increase its capital shares as long as it is for the benefit of all parties," Abou el-Fotouh added.
ACRO steel obtained the EGP 1.6 billion loan from NBE eight years ago, which was to be settled over a 10-year period, though the company defaulted.
NBE's bad debts portfolio shrank during fiscal year 2011-2012,amounting to approximately EGP 6.1 billion after the bank settled EGP 1.7 billion bad debts, Abou El-Fotouh said.
Egypt's largest bank, with a credit portfolio of EGP 110 billion, succeeded in tackling EGP 22 billion in bad debts within a three year period; from fiscal year 2007-2008 to 2010-2011, Egyptian press reported. NBE's bad debts portfolio equated EGP 8 billion during fiscal year 2010-2011, as opposed to to EGP 30 billion during fiscal year 2007-2008.
Daily NewsEgypt 2012
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