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Frequently Asked Questions

EFG Hermes Asset Management is the fund manager for Credit Agricole I, Credit Agricole II equity funds and Credit Agricole III money market fund. With over 25 years of experience in the Egyptian market, the fund manager makes investment decisions on behalf of the investors based on through research and close monitoring of market conditions. EFG Hermes Asset Management is responsible for the performance of the funds under its management, as they handle the investment part of the fund.

Mutual funds and Certificates of Deposit (CDs) are two distinct investment options that differ in several key aspects, including structure, risk, returns, diversification and liquidity. below is a comparison:
  1. Investment Type
  • Mutual Funds: Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, treasury bonds, or other securities. The value of your investment fluctuates based on the performance of the underlying assets.
  • CDs: A CD is a fixed-term deposit offered by banks and credit unions. You deposit money for a set period (e.g., 1 year, 3 years, etc.), and the bank pays you a fixed interest rate over that term. The principal is guaranteed, and the interest is usually fixed.
  1. Return and Risk
  • Mutual Funds: These carry market risk because the value of the underlying securities can rise and fall. As a result, returns are variable and depend on the performance of the assets within the fund. Equity mutual funds tend to have higher potential returns, but with greater risk, whereas bond funds offer more stable, albeit lower, returns.
  • CDs: Generally considered low risk because your principal and interest are guaranteed by the issuing bank. However, CDs face interest rate risk- if interest rates rise during the CD term, your fixed rate become less attractive. The return is fixed and predictable, but it is typically lower than the potential mutual fund earnings, especially in a low-interest-rate environment.
  1. Liquidity
  • Mutual Funds: Generally liquid, allowing investors to buy or sell shares daily. Some funds may offer weekly liquidity for entry and exit.
  • CDs: Funds are locked in until the maturity date. Early withdrawals may result in penalties, such as losing some of the accrued interest, and withdrawals are usually not allowed within the first six months.
  1. Diversification
  • Mutual Funds: Provide built-in diversification since the fund invests in a variety of securities, helping to spread risk across multiple assets.
  • CDs: offer no diversification, as the investment is concentrated in a single, fixed-income product.

Redemption orders can be signed at any of the bank’s branches across Egypt. Redemption frequency varies depending on the fund. Some funds offer daily redemption, while others provide weekly redemption. However, in all cases, orders must be submitted before 12:00 pm on any applicable day.

Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of capital market instruments, including equities listed on the stock exchange, treasury bills, treasury bonds, or other securities. Each investor in a mutual fund owns shares of the fund, representing a portion of the overall holdings. These shares are referred to as Investment Certificates, symbolizing the investor’s ownership in the mutual funds. The primary objective of mutual funds is to provide investors with access to a diversified portfolio managed by professional fund managers, reducing risk compared to investing in individual securities. Investors benefit from the collective buying power, professional management, and diversification of the fund, which can be difficult to achieve on their own.

All mutual funds announce the Investment Certificate price on a weekly basis, allowing investors to track their performance. Additionally, the fund manager publishes quarterly fact sheets that provide insights into the fund’s performance.
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PRESS RELEASE – Q1 - 2017 RESULTS

Credit Agricole Egypt reports Q1 2017 Net Income of EGP 475.1 million
François Drion: “The bank’s strategy “Interconnect” of sustainable growth based on quality of service and innovation, delivers strong results
with a rise of +51.6% of net profit in Q1 2017”

 

 Highlights on Q1 2017 results:

  • Strong growth in net Income at +51.6% compared to Q12016, reaching EGP 475,1 million
  • Buoyant business momentum in On-balance sheet deposits up by +43.3% compared to Q1-2016 (+9.8% without EGP devaluation effect) reaching EGP 39,3 billion
  • Sharp growth in lending, +24.7% compared to Q1-2016 (+4.2% without EGP devaluation effect) reaching EGP 18,7 billion

 

A sustainable commercial development:
The bank’s global performance is positive with strong contribution from all activities. A fair evolution has been recorded among different business lines in respect to the current market trends and customers’ needs.  Number of customers registered a net growth of more than 3% over Q1-2016.

Customers’ deposits recorded a rise of +43.3% over March 2016 (+9.8% without devaluation effect), with strong contribution of current account deposits. While total loans are up by +24.7% (+4.2% without devaluation effect) thanks to sizeable growth of local currency Corporate loans (+26.9%) and Retail loans (+13.3%), reversing the decrease of foreign currency corporate loans, engaged beginning of 2016.

Deposits – EGP Million Mar-17 Mar-16 Δ
Q1-17
Q1-16
 High Cost  23,944.7 16,601.6 44.2%
 Low Cost  15,310 10,795 41.8%
Total 39,254.7 27,396.6 43.3%

 

Loans – EGP Million Mar-17 Mar-16 Δ
Q1-17
Q1-16
 Corporate  12,985.20 9,867.60 31.60%
 Retail  5,572.90 4,917.70 13.30%
Total 18,786.30 15,059.30 24.70%


A Strong profitability Maintained:
The Q1-2017 recorded a robust rise of results evidencing ongoing efficient and focused banking operations. The Net Banking Income reached EGP 957.1 million, increasing by +57.0% over Q1-2016. The Net interest income also increased by +47.8% year-on-year, driven by both volumes and higher margins. As for the net commissions and fees, an increase of +52.9% over Q12016 has been recorded driven by all activities, Trade Finance as well as Retail commissions. The Net Trading Income (mainly foreign exchange commissions) achieved a growth of +99.2% over Q1-2016 at EGP 98.0 million.

Steady efforts are deployed to keep expenses under control despite much higher inflation. Yet, an increase of +24.6% occurred, justified mainly by salary increase, as well as continuous investments to support the very active digital transformation of the bank. Credit Agricole is launching in May 2017 a version 2.0 of its state-of-the-art mobile application offering advanced features for customers’ convenience.

Credit Agricole Egypt continued improving its efficiency, with a Cost to Income Ratio of 26.7% in Q1-2017 Vs 33.7% in Q1-2016, positioning well Credit Agricole Egypt among its peer banks.

Q1-2017 Net income reached EGP 475.1 million, up by +51.6% compared to Q1-2016.

EGP Million Q1-2017 Q4-16 Δ
Q1-17
Q1-16		 Q1-16 Δ
Q1-17
Q1-16
Net Interest Income 654 638.1 2.50% 442.4 47.80%
Net Fees & Commission Income 176 106.2 65.80% 115.1 52.90%
Net Trading Income 98 120.2 -18.50% 49.2 99.20%
Other Operating Income 29.1 17.3 67.70% 2.9 891.10%
Net Banking Income 957.1 881.9 8.50% 609.6 57.00%
Total Expenses -255.7 -241.5 5.90% -205.2 24.60%
Gross Operating Profit 701.3 640.4 9.50% 404.4 73.40%
Other Income (Expenses) 6.6 30.4 -78.10% 8.5 -22.20%
Income Before Impairment &Tax  708 670.7 5.60% 412.9 71.40%
Impairment -88.2 -149.2 -40.90% -5.8 –
Net Income Before Tax 619.8 521.5 18.80% 407.2 52.20%
Tax -144.7 -130.4 11.00% -93.8 54.40%
Net Income 475.1 391.2 21.40% 313.4 51.60%
Cost / Income Ratio 26.70% 27.40%   33.70%  

 

Strong Quality of Assets and Solvency:
Non-Performing Loans remain almost flat at 4.20% of total exposure in Q1- 2017 compared to 4.16% end of 2016. The bank has pursued its risk conservative management by increasing provisions by EGP 88,2 million in the quarter allowing a coverage of NPL by provisions of 205% vs 198% in Q1 – 2016.
Capital Adequacy Ratio reached 15.14%, well above regulatory threshold (11.25% in 2017), increasing by +357 basis points over December 2016 as a result of 2016 and interim Q1 2017 profit retention.
It is worth to be mentioned that during April 2017, Credit Agricole Egypt issued USD 10 Million out of    USD 30 Million related to the subordinated loan approved by the Ordinary General Assembly held on the 22nd of December 2016. This USD subordinated loan will contribute to reinforce again the Capital Adequacy Ratio (higher level and less volatile)

Ratios Q12017 Q42016 Δ
Q1-17
Q1-16		 Q12016 Δ
Q1-17
Q1-16
Profitability          
Return on equity 56.40% 58.40% -3.50% 45.70% 23.40%
Return on assets 4.10% 3.40% 20.40% 3.80% 7.60%
Efficiency          
Cost – to – Income 26.70% 27.40% -2.40% 33.70% -20.60%
Liquidity          
Loans – to – Deposits 47.90% 49.00% -2.40% 55.00% -12.90%
Assets Quality          
Capital adequacy ratio 15.14% 11.57% 30.86% 14.39% 5.21%
Non-performing loans ratio  4.20% 4.16% 0.96% 3.05% 37.55%
Provision Coverage 205% 186% 10.22% 198% 4%

Conclusion:
Credit Agricole Egypt managed a solid and sustainable growth, based on quality of service provided to its clients. The Bank’s profitability has been still strengthened, with satisfactory, quality and robust solvency in a market that is showing signs of positive evolution.

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