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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 – Q2 - 2016 RESULTS

Continuous Sustainable Growth Achieved

Strong Investment in Innovation and Digital Transformation

Crédit Agricole Egypt achieves an increase of 31% of its net income after tax for 1st half 2016, at EGP632 million, in comparison to EGP483 million in 1st half 2015.

Commercial development driven by all activities:

During the 1st half of 2016, Crédit Agricole Egypt has pursued its growth path according to the set strategy putting customers at the top of the bank’s priorities. The global performance of the different lines of business was progressive, realizing a satisfactory growth in the overall balance sheet. Over December 2015, the clients’ deposits have developed by +4.4%, out of which low cost deposits that increased by 10.9%. Client loans improved by 2.4% driven by retail activities. Corporates and enterprises’ weaker demand during the 1st half was noticed due to the general slowdown of the market.

The number of customers has witnessed a growth of 6.5%, in comparison to the 1st half of 2015, in parallel to the development of the bank’s network to reach today 79 branches.

Loans:

EGP Million Jun-16 Dec-15 Change %
 Corporate 9,720.50 9,807.20 -0.90%
 Retail 5,073.90 4,706.90 7.80%
 Banks 235.2 167.5 40.50%
Total 15,029.60 14,681.60 2.40%

 

Deposits

EGP Million Jun-16 Dec-15 Change %
 High Cost 16,764.30 16,682.20 0.50%
 Low Cost 11,064.00 9,981.00 10.90%
Total 27,828.30 26,663.20 4.40%

 

A Sustainable growth in profitability again in H1 2016….

EGP Million Q22016 Q12016 Q22015 H1-2016 H1-2015 Change %
Net Interest Income 476.2 442.4 390.4 918.7 756 21.50%
Net Fees & Commission Income 120.9 115.1 124.9 236 243.7 -3.20%
Net Trading Income 45.4 45.4 36.2 94.6 92.5 2.30%
Other Operating Income 7.1 2.9 12.9 10 18.9 -47.00%
Net Banking Income 649.7 605.8 564.3 1,259.30 1,111.10 13.30%
Total Expenses -208.1 -205.2 -189.9 -414.9 -384.5 7.90%
Gross Operating Profit 441.5 400.6 374.5 844.5 726.6 16.20%
Other Income (Expenses) -5.7 12.3 7.2 4.3 17.1 -74.80%
Income Before Impairment &Tax  435.8 412.9 381.7 848.8 743.7 14.10%
Impairment -18.5 -5.8 -25.6 -24.2 -51.1 -52.50%
Net Income Before Tax 417.4 407.2 356.1 824.5 692.6 19.00%
Tax -98.5 -93.8 -106.8 -192.3 -209.6 -8.30%
Net Income 318.8 313.4 249.2 632.3 483 30.90%
Cost / Income Ratio 32.00% 33.90% 33.60% 32.90% 34.60%  

The growth of the NBI (net banking income) reached a satisfactory level of 13.3% over the 1st half of 2015, triggered by the increase of the net interest income by 21.5% driven by both higher margins and volumes; especially in retail, FCY (foreign currency) corporate loans and low cost deposits. On the other end, the net commissions and fees have decreased by 3.2%, mainly in Trade Finance and FX (foreign exchange) commissions impacted by the foreign currency scarcity.

The expenses increased by 7.9% over the 1st half of 2015, mainly triggered by HR costs and significantly increased investments on new digital projects (Mobile banking services, Mobile wallet, …) as part of the Omni Channel development strategy of the bank in Egypt.

The operating profit before provisions and taxation reached EGP 848.8 million, increasing by 14.1% over the 1st half of 2015. The cost of risks recorded a low level due to higher selectivity on granting loans and good recovery results. The tax rate decreased from 30% to 22.5% contributing positively to tax expenses for the 1st half of 2016. Consequently, the net income after tax grew by 30.9% to reach EGP 632.3 million.

….With Good Quality of Assets and Strong Solvency:

Ratio Jun-16 Dec-15 Jun-15
Non-Performing Loan / Total Loans 3.03% 3.05% 3.12%
Provision Coverage 199% 198% 182%
Capital Adequacy Ratio 15.24% 14.39% 14.99%

Non-Performing Loan outstanding remains almost stable at a low level with higher coverage by risk provisions.

Capital Adequacy Ratio is maintained significantly above regulatory threshold and allows CAE to continue to develop actively its activities in Egypt.

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