SPOTLIGHT- Amr El Bahey, CEO and Egypt country head at Mashreq Bank: Since launching here more than 50 years ago, Egypt has become a key market for Mashreq Bank. The Dubai-headquartered lender now derives 10% of its global revenues from Egypt, and it wants to maintain its upward trajectory. We recently sat down with Amr El Bahey (LinkedIn), the CEO and country head of Mashreq Egypt, to find out more about the bank’s growth strategy, why SMEs and exporters are among its key clients, and his outlook on the Egyptian economy.

Edited excerpts of our conversation:

ENTERPRISE: Where does Egypt fall within Mashreq’s global growth strategy?

El Bahey: Egypt is one of the top priorities for the Mashreq Group and that’s across multiple lines of business including corporate banking, retail banking, SMEs, and our strategy for financial inclusion. Mashreq has been making powerful strides and we’ve spotted growth potential in all of these areas in the local market and that has put Egypt top of the bank’s priority markets. In fact, Egypt constitutes 10% of the Mashreq Group’s global revenues, which is huge bearing in mind that we operate in multiple markets including Qatar, Bahrain, UK, United States, India, and Hong Kong, and we’ve just acquired a license in Oman and a digital banking license in Pakistan.

ENTERPRISE: How do you plan to keep that growth momentum going in the local market?

El Bahey: It is obviously the strategy of the group to increase the growth momentum in the local market and see Mashreq Egypt acquire a bigger share of the pie. I have such strong confidence in the Egyptian economy that I'm sure in the next few years the bank will continue to deliver high financial performance, proving our views in the group about Egypt’s high potential.

Our pipeline investments in the local market are very indicative of how Mashreq Egypt is taking a long position on the local market given that we are expecting Egypt’s share of the Group’s Capex to grow 4x in 2023 as compared to the previous year. We are really bullish on Egypt and that can be seen through growth in our investments and expansion plans.

We are planning to grow in sectors across the board. We are still going to grow our SMEs portfolio and our corporate portfolio is also top of the agenda. We are also looking at continued growth in retail and financial inclusion.

ENTERPRISE: How does Egypt compare against Mashreq’s regional markets, for example the UAE? Where and in what sectors are you seeing the majority of your business being done?

El Bahey: Egypt and the UAE are two very different markets, each with their own dynamics, population mix, and makeup of industries. The retail sector is more or less focused on the expat community in the UAE, whereas in Egypt, that’s not the case at all.

The sectors we’re more focused on in Egypt this year are telecoms, IT, F&B, pharma and SMEs, while in the UAE that would naturally be something along the lines of oil & gas, contracting, and finance, and in Dubai particularly, hospitality and leisure.

ENTERPRISE: SMEs are a cornerstone for the national strategy to develop the economy. How does Mashreq accommodate SMEs and contribute to the ecosystem’s growth?

El Bahey: We have an intense focus on SMEs and that has yielded very high results. Our engagements with the local SMEs ecosystem grew almost 4x since 2018. We have managed to deliver on the regulator’s quota that commits banks to allocating at least 25% of their loans portfolio to MSMEs during Q1 2023.

We believe that with the right tools and support, including banking services, the SMEs ecosystem could really take off and shine and hopefully help skew the country’s trade balance more in favor of exports.

ENTERPRISE: Which sectors within the SMEs ecosystem are of particular interest to Mashreq Egypt?

El Bahey: We really like manufacturers, including small-scale manufacturers. Exporters are also a top priority. You don’t have to own a fertilizers plant to grab our attention — you can export small spare parts or widgets and still receive a lot of support from Mashreq Egypt. Other sectors of interest include agrifood and pharma, of course.

ENTERPRISE: How’s Mashreq navigating the emerging fintech industry in the local market?

El Bahey: Mashreq Egypt is very open to investments in fintech and we collaborate with many fintech companies and startups by providing them with banking services. We’ve also made big contributions to the push for more card issuances, including the prepaid Meeza card. We are really progressive and excited about development in that area. It’s something we are actively pursuing and it ultimately feeds into our goal of expanding on financial inclusion.

We’re very excited to see a lot of innovation and talent through some of our engagements brewing in the local SMEs ecosystem, especially in fintech, and that’s inspiring us to explore more room for growth in that area.

ENTERPRISE: How are you positioning Mashreq to make strides in digitalization?

El Bahey: We have a lot of digital propositions in the pipeline for this year that will take our SME clients to the next level. We are certainly putting less emphasis on brick and mortar and more on digital tools and solutions. We believe that the proliferation of banking tools and services pave the way for and make financial inclusion an easier task.

ENTERPRISE: How has the rise of non-banking financial services (NBFS) and the emergence of startups offering services like buy-now-pay-later (BNPL) impacted your business and the industry at large? Do you consider them competition?

El Bahey: We all see these services popping up. Let me say that they can be considered competition only in the short term, because there's a certain pie and suddenly someone is chipping a portion of that. But the reality is you need to reimagine the pie and you need to reimagine the market with the full realization that that's going to be an ongoing part of the landscape. So the key differentiator is how you are going to adapt your products and propositions to flourish in this new landscape because they're not going away and they're only going to get better.

We are adapting by preparing to launch products and propositions that compete head-to-head in 2023, and we are optimizing existing products by offering them through a digital lens to appeal to the consumer who is attracted by fast, timely and simplified offerings.

ENTERPRISE: Who is your ideal client in today’s environment?

El Bahey: Again, we love exporters. They're our ideal clients because of their systemic importance to the economy. We are working with people who have critical success factors in their sector — people with a certain innovative edge. That could be a technology, a distribution network that works well, or even close proximity to the source material or an exporting hub. It really varies from one industry to another. We’re leaning towards sectors that have proven to be survivors of global economic crises rather than excluding any particular sector.

Enterprise: How has the bank adapted to the current macro environment?

El Bahey: The biggest thing that has allowed us to deal with the challenges is really knowing our customer. We take client selection very seriously and we onboard and work with people who are of added value and whose creditworthiness and financial capacity has been proven.

I'm not exaggerating when I say that we are highly confident that Egypt is capable of weathering the challenges triggered by global events. The makeup of the current local situation is largely a ripple effect of the global situation. And we are optimistic that the government and the central bank are addressing it the right way and are taking measures that will bear fruit. I'm also very optimistic about the privatization program and we're all hoping that it gets fast-tracked.