How are our top lenders recycling maturity proceeds into the real economy? Local banks are preparing for a massive structural shift in liquidity as an estimated EGP 1.3-1.5 tn in high-yield certificates reach maturity in early January 2026. Industry leaders see this influx as a “healthy economic phenomenon” marking the transition from a period of emergency monetary tightening to a new era of growth and production.

How will these banks retain this massive liquidity? As these certificates expire, the banking sector faces the critical challenge of managing a surge of disposable capital. Specialized asset-liability committees within the National Bank of Egypt (NBE) and Banque Misr — the two largest state-owned lenders — evaluated their product portfolios to prevent “liquidity leakage.”

Pricing adjustments: The two banks reduced yields on several local currency three-year saving certificates by 1 bp to 16% starting today, following the Central Bank of Egypt's (CBE) decision to cut rates 100 bps last week.

The macro picture: With its last rate cut of the year, the CBE signaled that it is pivoting to a growth-stimulating strategy walking into 2026. The central bank slashed rates by a total of 725 bps in 2025, marking the end of its restrictive monetary cycle that followed the March 2024 currency float. Consequently, interest rates are now at their lowest level since early 2024.

By the numbers: The committee set the overnight deposit rate at 20.00%, the overnight lending rate at 21.00%, and the main operation and disc. rates at 20.50%.

Positive real yields: Unlike 2024, when a 27% yield was negated by 35%+ inflation, the current environment — with inflation at 12.3% and certificates at 17-18% — offers savers a real profit of 6-7% for the first time in years. “CD holders must recognize and seek out the real return rather than being deceived by the nominal return. With the significant drop in inflation levels the real return on savings vessels is currently higher than ever before,” Sahar El Damaty, banking expert and former Banque Misr deputy chairperson, tells us.

Savers are advised to lock in last chance yield: “We advise customers to lock their savings into existing certificates at current rates,” EG Bank Board Member Mohamed Abdel Aal tells us. As the yield curve trends downward, today's 17% is projected to fall closer to 13%, 12%, or even 9% in 2026, he added.

Banks should be transitioning from “piggy banks” to “engines of growth,” economist Hany Abou El Fotouh tells us. Banks should innovate investment vehicles that link savings to productive activity, rather than tying them solely to the state treasury,” Abou El Fotouh suggested.

Expanding the credit reach: With the loan-to-deposit ratio reaching 64.3% by the end of September, banks must shift focus from government debt to financing the industrial and agricultural sectors, Abou El Fotouh said. Our largest 10 banks recorded an even higher LDR of 65.1% at the end of September.

Stabilizing the net interest margin: Banks are working to strike a balance between interest paid to depositors and interest earned from loans while closely monitoring monetary policy requirements and inflation constraints to avoid losses as the cost of capital declines.

Our take: The upcoming “tsunami” is the ultimate test of the Egyptian banking sector's maturity. With EGP 15.3 tn in total deposits and a robust liquidity buffer, the sector's success will be measured by its ability to recycle these tns into the real economy rather than just acting as a “money box.”

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