Profits fall for Egyptian bank

5 March 2007

Egyptian bank National Societe Generale Bank (NSGB) has announced its annual year-on-year net profits have fallen by more than 50 per cent.

NSGB has reported profits of $26 million, which was down from its 2005 figure $86.5 million, and well below below analysts' predictions of $82.6 million.

The bank's figures are the first since last year's merger with Misr International Bank (MIbank) and come after a year marked by a series of heavy investments pushed the bank's operating costs up 34 per cent.

In particular, the report drew attention to goodwill amortisation amounting to $63.5 million and a further $87.3 million of debt inherited from MIBank's pension fund, which acted to hamper the bank's chances achieving its expectations.

Commenting on the figures, banking analyst Elena Sanchez said: "If we exclude the negative impact from the pension fund charge, net profit would have been 646 million pounds ($113 million), well above our estimates,"

The merger of the NSGB and MIBank in November 2006 is thought to have created Egypt's second-largest private sector bank.

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