{"id":607815,"date":"2023-10-10T00:00:00","date_gmt":"2023-10-10T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/10\/10\/what-do-companies-want-from-their-banks\/"},"modified":"2023-10-10T00:00:00","modified_gmt":"2023-10-10T00:00:00","slug":"what-do-companies-want-from-their-banks","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/10\/10\/what-do-companies-want-from-their-banks\/","title":{"rendered":"What do companies want from their banks?"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <strong> In an environment of higher interest rates, heightened infla <\/strong><strong> tion, and <\/strong><strong> FX <\/strong><strong> shortages, businesses across different sectors are demanding more from their banks: <\/strong>They want more innovation, more diversification in products and services, and more digitization. While the regulatory environment plays a significant role in the types of products and services banks can deliver, there are still some things that banks can do to make businesses\u2019 lives easier. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> That was the key takeaway from our panel at the Enterprise Finance Forum<\/strong>, which featured<strong> Ibrahim El Missiri<\/strong>, CEO of Somabay, <strong> Pakinam Kafafi<\/strong>, CEO of Taqa Arabia, and <strong> Tarek Abdel Rahman<\/strong>, managing partner at Compass Capital. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> First thing\u2019s first \u2014 speed and adaptability are key when it comes to dealing with banks: <\/strong>\u201cIt\u2019s all about making the process easier \u2014 we are working with banks on a daily basis and as long as they are focused on our business and are able to deliver the services we need promptly, then we will definitely engage with them,\u201d El Missiri said, pointing to the necessity of finding a bank that is able to find creative solutions to navigate its way around bank regulations. Abdel Rahman also emphasized the importance of the team\u2019s expertise and its problem solving ability, as well as its balance sheet and pricing. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> Reputation, industry knowledge, and network are also important: <\/strong> Kafafi cited industry knowledge, expertise, and size as among the most sought after qualities in a bank. \u201cTaqa thinks of banks as more like partners and advisors,\u201d she said. Kafafi went on to explain that \u201cWe want a bank that has a regional and global network to be able to help us grow regionally and in Africa\u201d and added that \u201cit is very, very important to have a bank that embraces technology developments, digital solutions, and online trading.\u201d <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> The same applies to investment banks: <\/strong> Compass Capital uses both corporate and investment banks to manage their funds and exits. Their track record, team members, and global reach is extremely important, Abdel Rahman explained. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> Businesses also want more than just transactional advice from their investment banks: <\/strong>\u201cWe do have conversations with them pretty often [seeking] general advice, but the interaction becomes much more intense during the transaction,\u201d Abdel Rahman explained.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> When it comes to commercial banks, digital services are important: <\/strong>There\u2019s a need for digital services like cash management and cash pooling, Kafafi said, especially for companies of Taqa\u2019s size that have several subsidiaries and require the company to see the numbers clearly. Other digital services like online trading and integration with ERP systems are also important, she added. El Missiri voiced his hopes for a digital solution that can replace cheques, especially considering real estate developers process \u201ctruckloads\u201d of cheques on a regular basis. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> Digitization will also help streamline processing times<\/strong>, which Kafafi says can sometimes be too long and can slow down projects that need them to act fast. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> They also want more diverse offerings: <\/strong> \u201cWe are constantly on the lookout for new products and innovative products because we\u2019re on an acquisition spree, so we\u2019re looking for different sources of finance that are priced well that give us the right tenors, the right structure, and allow us the most flexibility,\u201d Abdel Rahman said. One such product is a mezzanine loan, which is a debt and equity hybrid that allows companies to convert debt to equity in case of a default, and which is not offered by banks in Egypt. Compass Capital <a target=\"_blank\" href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/ef0acbeb-ac05-48aa-9657-b30ef822dd6f\" style=\"\" rel=\"noopener\">secured<\/a> a mezzanine loan from South African fund manager Vantage Capital in 2022. Another product Abdel Rahman looks for is more bridge or miscellaneous facilities that sit between debt and equity to allow them more leeway when navigating between different investments and exits, he explained.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> And more flexible and long-term loan structures and tenors<\/strong>, Kafafi added, especially when it\u2019s an industry \u2014 like oil and gas \u2014 that by nature has long-term horizons of 20-25 years.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> Part of the problem is regulatory: <\/strong> Both Kafafi and El Missiri agreed that businesses need more diverse products, with El Missiri pointing to current regulations preventing foreign residency holders who own property from opening up bank accounts.\u201cWe are always in discussions with the banks and we find the banks extremely receptive to that, but the regulation sometimes doesn\u2019t allow them to be as bullish or as flexible as they would want to be,\u201d Abdel Rahman agreed.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> Regulations are too restrictive: \u201c <\/strong>These regulations have helped the banks during hard times, making them extremely safe \u2026 but they are also stifling their ability to extend more innovative products and helping their clients more,\u201d Abdel Rahman said.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> But some of it is also risk aversion from banks: <\/strong>In challenging times, it\u2019s important that different stakeholders in the ecosystem take an equal amount of risk, Kafafi explained. While businesses are taking risk, she thinks banks need to take some risk as well. El Missiri agreed, noting that when it comes to real estate, banks leave most of the financing and credit offerings to the developers, while avoiding the risk. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> When do businesses seek out NBFIs, instead of banks? <\/strong>For Abdel Rahman, it\u2019s when they\u2019re looking for speed. \u201cThe only reason we use NBFIs is because they\u2019re quicker than banks \u2026 seeing that banks have more committees involved in the process,\u201d Abdel Rahman said. \u201cThe flip side is that they\u2019re much more expensive [than banks], so a lot of the time you would use them for a while and then if we can\u2019t get them to lower their interest rates to reasonable prices then we\u2019ll have to refinance from the bank,\u201d he continued. NBFIs also fill a gap in the market for SME finance, Abdel Rahman added.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/ent.news\/ads\/imgs\/44.jpg?ssl=1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Businesses want banks to take on more risk and offer more diverse products in challenging times<\/p>\n","protected":false},"author":1,"featured_media":607816,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7318],"tags":[204,7106,155,7317,72,343],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-607815","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-enterprise-finance-forum","tag-banking","tag-debt","tag-digitization","tag-enterprise-finance-forum","tag-enterpriseam","tag-regulation","wpautop","entry"],"acf":{"mongo_id":"43d9cc18-7c40-499b-aac4-98cb49a0d11b","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2023\/10\/499.jpg","photo_position":"above","homepage_title":"","full_issue_title":"What do Egyptian companies want from their banks?","related_issue":[607804],"teaser":"Businesses want banks to take on more risk and offer more diverse products in challenging times","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2023\/10\/.0d1d80a7-0313-4564-b114-a0a154b5756c.mp3"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What do companies want from their banks? 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Are you? We\u2019re delighted that Todd will be taking part in a discussion of how banks and corporates are tackling financing for the most compelling industry of our generation.\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":603741,"url":"https:\/\/enterpriseam.com\/egypt\/2023\/08\/20\/this-evening-three-banks-are-reportedly-eyeing-a-stake-in-united-bank\/","url_meta":{"origin":607815,"position":3},"title":"THIS EVENING: Three banks are reportedly eyeing a stake in United Bank","author":"enterpriseam admin","date":"20 August 2023","format":false,"excerpt":"Good afternoon, wonderful people, and welcome back to the grind after what we hope was a restful weekend. We\u2019re starting off the week with a surprisingly brisk news cycle here at home, starting with murmurs of renewed privatization interest. THE BIG STORY TODAY New suitors for United Bank? Credit Agricole\u2026","rel":"","context":"In &quot;WHAT WE\u2019RE TRACKING TONIGHT&quot;","block_context":{"text":"WHAT WE\u2019RE TRACKING TONIGHT","link":"https:\/\/enterpriseam.com\/egypt\/category\/what-were-tracking-tonight\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2023\/8\/913.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":608958,"url":"https:\/\/enterpriseam.com\/egypt\/2023\/10\/29\/nbfi-players-say-theres-no-bubble-about-to-burst\/","url_meta":{"origin":607815,"position":4},"title":"NBFI players say there\u2019s no bubble about to burst","author":"enterpriseam admin","date":"29 October 2023","format":false,"excerpt":"Our panel of experts discuss consolidation, risk and what\u2019s next for the local NBFI industry","rel":"","context":"In &quot;ENTERPRISE FINANCE FORUM&quot;","block_context":{"text":"ENTERPRISE FINANCE FORUM","link":"https:\/\/enterpriseam.com\/egypt\/category\/enterprise-finance-forum\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2023\/10\/960.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":590047,"url":"https:\/\/enterpriseam.com\/egypt\/2023\/07\/12\/this-evening-ebrd-earmarks-usd-532-mn-for-egyptian-banks-to-on-lend-to-the-private-sector\/","url_meta":{"origin":607815,"position":5},"title":"THIS EVENING: EBRD earmarks USD 532 mn for Egyptian banks to on-lend to the private sector","author":"enterpriseam admin","date":"12 July 2023","format":false,"excerpt":"Good afternoon, wonderful people. As we have our eyes set on the weekend just around the corner, we are also happily surprised with a four-day weekend coming up: Thursday, 20 July and Sunday, 23 July will be national holidays for the public sector to mark the Islamic New Year and\u2026","rel":"","context":"In &quot;WHAT WE\u2019RE TRACKING TONIGHT&quot;","block_context":{"text":"WHAT WE\u2019RE TRACKING TONIGHT","link":"https:\/\/enterpriseam.com\/egypt\/category\/what-were-tracking-tonight\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2021\/5\/401.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/607815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/comments?post=607815"}],"version-history":[{"count":0,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/607815\/revisions"}],"acf:post":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/issue\/607804"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media\/607816"}],"wp:attachment":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media?parent=607815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/categories?post=607815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/tags?post=607815"},{"taxonomy":"brand","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/brand?post=607815"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=607815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}