Coffee with Banque du Caire Chairman and CEO Tarek Fayed: If there’s one transaction in the reborn state privatization program to which market watchers are looking forward, it is the initial public offering of the (rebranded this week) Banque du Caire. BdC is led by Tarek Fayed as chairman and CEO, who recently sat down with us for the latest installment in our Coffee With… series. The most latest on that transaction: It will likely happen this year and see the bank offer 20-30% of its equity for sale, CBE Governor Tarek Amer said earlier this week.

Who is Tarek Fayed? Prior to joining Banque du Caire in January 2018, Fayed held posts in Egypt and abroad with Citibank, the Egyptian American Bank, and Samba, where he worked in areas including corporate and investment banking, risk management and audit. Fayed also had a distinguished career in public service, having served as sub-governor of the Central Bank of Egypt, where he oversaw the development of a number of regulatory guidelines and mechanisms. He also represented the CBE on the boards of banks including the Agriculture Bank, United Bank, and Arab International Bank.

BdC has embarked on an ambitious turnaround, reporting a 207% jump in net profit after tax to EGP 2.5 bn in 2018, up from EGP 808 mn a year earlier, while undertaking an expansion in the region and services.

Key takeaways from our conversation:

• Fayed’s turnaround strategy rested on building staff capabilities, technology infrastructure, and adopting a customer-centric approach;
• The bank's corporate banking portfolio grew 80% y-o-y on the back of a restructured department, while total customer loans grew 50% y-o-y;
• Financial inclusion has become a major focus at the bank through SME and microfinance lending;
• The bank is looking to expand regionally in East Africa and the GCC through offices and subsidiaries in Uganda and the UAE;
• BdC is internally ready for the IPO and is awaiting a decision by stakeholders and regulators;
• The market is awaiting single digit inflation before CAPEX comes back.

Enterprise: Let’s start with the bank’s performance based on the recent release of your financial results. How did this unfold?

Tarek Fayed: We first had to formulate a very clear strategy for the bank and a strong growth map to achieve our objectives. We strongly believe that the two pillars that we needed to work on were people and infrastructure, including restructuring within existing departments across the bank. We hired a very strong caliber of people to fill in the gaps and our focus on the rest of the employees was to set clear objectives and focus on training and capacity building.

We rebuilt our corporate banking division and we’ve added new departments including the wholesale banking side’s global transaction banking department, which takes care of our product offering for corporates, financial institutions and non-banking financial institutions — services ranging from cash management solutions and trade finance to customized business solutions. We also restructured our corporate finance and investment banking department by bringing in a high-caliber team. And we’ve totally revamped our retail banking business and added new talent across the board, with a focus on introducing products and services tailored to a wide spectrum of retail customers and focusing on ancillary business and cross-selling opportunities.

We’re not there yet, we have lots of plans in terms of capacity building. We have more than 7,500 employees, and we have to work hard at developing their skills. That’s why we significantly increased our training budget in 2018 and increased the number of training hours for employees. Our main objective is to keep our people updated with the best international banking practice worldwide.

On the technology front, we want to be at the forefront of digital banking, and we have taken the time to build infrastructure and our core banking system, including signing last year with Temenos — one of the top global core banking system providers — to roll out their T24 system within 24-36 months. But we’re not waiting until we finish our core banking system upgrade to introduce digital banking solutions.

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