Egypt: Interview with Gamal Moharam

Gamal Moharam

Chairman & CEO (Piraeus Bank Egypt)

Gamal Moharam

I understand you were with Egyptian Commercial Bank previously. Can you give us a brief background of what you have been doing up until now?

I began my banking career with Citibank, in 1979. After that I was with Fleet National Bank – an American Bank as well. Then I was with Irving Trust, followed by a takeover from Bank of New York in 1985, and then World Bank of New York. So all of my career was with the American banks up until the last four years, during which I was hired by the bank here to restructure the bank and to sell the bank which is exactly what happened and we went through the process internally; we didn’t use any investment banks to do the job - we did it ourselves. We prepared the information and data and we received six bidders. The finalists were Piraeus Bank and another, and Piraeus got the deal. Our market price at the time was 6.5 pounds, our par value is 16, and it was sold for 20 and is today 21 pounds per share.

And with Piraeus Bank coming on, what changes have you seen with the philosophy and mentality of the organization?

Well there is no change in management in as far as Piraeus Egypt is concerned; however we have to adopt the new culture and product of Piraeus Bank as well as the policies and procedures into Piraeus Bank Egypt. We have been doing this in the last six months we have finished most of the policies and procedures - now it’s really the time to introduce the bank to the market which we started with the corporate campaign in Egypt and we will start our product campaign by 1 April in order to introduce new products. Piraeus Bank Egypt is very strong in mortgages and electronic banking (e-banking) and this is what we are going to concentrate on in 2006: to introduce these services in addition to microfinance and mortgages. From the corporate side we increased our portfolio by 40% since the takeover. We have a good appetite for project finance and we’ve been involved in oil and gas project finance field, plus the normal trade finance business between Egypt and mainly Europe.

Do you plan to expand your services further than that in the coming years?

Yes, we will be looking into acquiring other banks in Egypt. We will also look into the region, and Piraeus Bank Egypt will be the arm for Piraeus Bank Group to look into other opportunities in the Middle East - mainly in Lebanon, Jordan, Yemen, Algeria, and at a later stage also Iraq or Syria.

As Piraeus Bank Egypt how much autonomy are you given from Piraeus Bank Group?

Full Autonomy – complete autonomy. We have to go back over a certain amount of credit because it is the board level approval. Since the board is in Athens we have to report to Athens for credit higher than certain amounts, but we do have our own limits and full autonomy as well which is something that is appreciated by everyone. They didn’t send anyone to the bank from Greece – they are relying on our capability and local management; however we might call for their expertise in a few areas.

How many staff members do you have?

As of today, about 620.

I’ve heard from some other members of the financial sector that it’s a bit of a challenge finding technically trained banking staff. What’s your opinion on that?

That’s true. The only way to really overcome this problem is by what we’ve done - we’ve established our own training center. We are training the new graduates in order to induct them into the banking world. We are giving them the culture, we are giving them the basics in banking, and then they do on-the-job training, and then they go back for a full course in credit or operation. Of course it is very difficult to find experienced people. This is why the acquisition of other banks is a good opportunity these days.

How is PB positioned within the sector in Egypt?

Right now our market share is about 1%, across the board – deposits, loans, assets.

The recent visit of the governor of the European Central Bank resulted in an international agreement with the Central Bank of Egypt – only the second of this type of agreement. How do you think this is going to impact the banking sector here?

I think it’s very important because it will help the Central Bank, especially in the banks provision area. The Greek Central Bank is the one getting the advisory work for the Central Bank of Egypt so definitely it will add to the capability that the Central Bank of Egypt has. Again, the training that the bank in Germany will give is very important. The cp of Egypt will sent people to be trained again from the banking supervision unit of Egypt. I think it is a very positive initiative because a strong CB and an efficient CB will help the banks go and move forward.

This of course is very relevant to the Partnership between the European Union and Egypt as it develops the business opportunities in the area. Have you seen any other opportunities between Europe and Egypt to enhance that cooperation financially?

Of course signing a FTA with the European community or some of the European countries will help a lot, or for instance Turkey who is not yet a part of the European community. A Free Trade Agreement is important and essential, as is taxation and double taxation treaties for the flow of investments from Europe to Egypt, as an opportunity for export to Europe for Egyptian companies.

The changing banking sector of Egypt – the merging, acquisitions, the downsizing – what will this mean for the Egyptian economy in the long run?

Stronger economy, stronger banks, but more importantly it will remove the fear from the Egyptian citizens. The number of bank isn’t important – the Egyptians don’t like to go to banks; it’s like going to the police station for them. So we have to change this view by introducing new products – simple products – and we have to talk their language and be as friendly as possible. We are a cash society and we have to change and we will change to plastics and to checks. I think the Central Bank and the banks and the Egyptian Banking Association are all working to change the culture of the Egyptians, especially the new generation of internet users. This is our target and this is what we are going to start to focus on.

Any other thoughts or opinions about what Egypt has to offer, especially to our readers in France and the European community?

Well Egypt is the center of the universe, for us anyway. It is a central location with 70 million people, of which 50% are younger than 25 years old, so the potential is there. We have skilled labors, from farmers all the way up to Nobel prize winners – a huge variety. Whatever industry and expertise is needed you can find here. And it’s a friendly country, with friendly people. And again the size is important, the location is important, the economic stability is important, and hopefully the political stability will come sooner or later - we’ve already begun this process and nobody can stop this process. I think the future will rely here. The growth is there; we’re looking for a 6.1% growth. It’s a good market and a close market to Europe. You know the Europeans they went to the Balkans and to other countries and now they’re looking at Northern Africa as the closest area and allies to Europe.

If I may ask a more personal question: what do you enjoy about working here at Piraeus Bank Egypt?

I really enjoy being with Piraeus – I got my training in 1980 with Citibank at Athens for six months. So I started my banking career in Greece and I will probably end it with Greece. They are very kind people; they are very close to us in tradition and mentality. It’s true that you put 10 Egyptians and 10 Greeks in one room you’ll end up with 40 opinions. Each one has 2 opinions. Another thing is that neither Greeks nor Eyptians have good imaginations because we are each only using five names: for us it’s Mohamed, Mahmoud and Ahmed; for them its Yannis, Nicolas and Georgios. There are many similarities between the Egyptians and the Greeks. The history and the roots are there – we like them, they like us. I really enjoy working with them. They are very professional in their thinking. A lot of people think that Greece means shipping but it’s more than that now. They have a good banking system, and Piraeus is a good, efficient bank – and really a very ambitious bank which is very good.

I would like you to send a final message to our readers as Chairman of a prominent bank in Egypt – not only to the readers of L’Express, but also to the viewers of the internet report, who are mostly from the United States and from many of the nearby African markets.

Well if you decide to invest in Egypt, you are welcome to do so in the only Egyptian-Greek bank!