Intesa Sanpaolo Group, the leading European bank and owner of 80% stake in ALEXBANK in Egypt, has confirmed its appetite for the segment of small and medium-sized enterprises in Egypt. The group praised its investments in ALEXBANK, describing it as one of the best among its investments worldwide, which explains the confirmed interest of the Group in the Egyptian market. The announcement was made during a press conference held in Milan, Italy, attended by group leaders and international branch managers.

According to the recent statement by Mr. Marco Rottigni, the Head of International Subsidiary Banks at Intesa Sanpaolo, he stated that in Egypt, where the group owns an 80% stake in ALEXBANK, Intesa has started preliminary talks with the government for a possible purchase of the remaining stake, which is owned by the state.

Andrea Fazzolari, Head of Governance Systems and Strategic Initiatives Department in the International Subsidiary Banks Divisions, said, "The group is the largest in the Italian market, and it has a strong presence abroad, covering all continents with various operations. The International Subsidiary Banks Division is part of the department responsible for nurturing and managing the owned foreign commercial banks present in 11 countries."

Fazzolari continued, "We have many opportunities that contribute to enhancing the bank's presence in Egypt and the region, supporting the economy by serving our clients. Especially since, we operate in many countries such as Slovakia, Croatia, Serbia, Egypt, Hungary, Slovenia, Albania, Romania, Bosnia and Ukraine. We have numerous activities in the countries where we operate, with a large number of customers and branches, accompanied by a high market share in many of them. We also enjoy a distinguished position in the markets in which we operate, regardless of their sizes, and we follow a unified business model and operational risk management in these markets."

He further explained, "ALEXBANK is a recent good example of investing in changing the core banking system, which was a successful and highly complex project. The bank has proven to be highly efficient and professional. We are working on digitization at the forefront With the rapid pace we are going, we will reach a unique platform that will bring many benefits."

He added, "We continue our efforts continuously to maintain our leadership, and there are several axes that help us prepare for and face future challenges. The first of these axes is to accelerate performance growth, and the purpose is to increase the strength and resilience of our presence in different markets, even with the unification of our model or framework, we must always increase its strength and development to cover a larger range of different sectors. The second axis is related to digital transformation, which is of great importance. We are keen to increase our investments in it during the current period, and Egypt is considered a model that allows the coexistence of physical and digital elements together. Therefore, we strive to improve our branches presence along with increasing the solutions provided to customers to continuously meet their needs."

On the same note, Dante Campioni, the CEO and Managing Director of ALEXBANK, said that his bank has achieved positive performance in the Egyptian market, and the performance of the banking sector as a whole in the last period has been notably positive. This is supported by the high interest rates environment that favors banks. He confirmed that ALEXBANK primarily relies on financing retail sectors and small and medium-sized projects, as these sectors are the most important. The bank seeks to keep up with new trends in the banking sector, particularly the digital transformation.

He added, "Digital transformation in Egypt is somewhat different from Europe, which the group always takes into consideration. In Egypt, we are in a development stage where the density of the branch network is not very high. Digitization can meet the growing needs of the Egyptian market which in turn will help us reach a larger customer base, without wasting resources.

He pointed out that it is observed that the banking system in Europe had invested excessively in branches, and many banks have been forced to close a large part of their branches, which is a tremendous waste of resources. He said, "That’s why it is important that we are able to develop and review our network, make it more efficient, while focus heavily on digital services to improve our customers’ outreach. If you experience our digital application, I believe you will discover that it is one of the best applications in our country. As a group, we are aware of the strength of our application and the services we provide through it because we know where we stand in other markets, and we constantly work to significantly improve our services."

He mentioned that ALEXBANK is one of the first three banks in Egypt that integrated its application with the Instant Payment Network (IPN). Last year, the bank upgraded its core banking system, and there are many investments being made by the bank to make this application faster.

He added, "We also invest a lot in cyber security under the guidance and supervision of the Central Bank because it is of utmost importance. Recently, we launched an educational program for customers about what they should and should not do, and we provided security tips on how to avoid customer data breaches."

Speaking about small and medium-sized enterprises, he said, "We are definitely committed to them, and they can also benefit from digital transformation in the future. Recently, we appointed the new Head of Corporate Banking, Tamim Al-Saadi, and our goal is to support integration and support foreign investors, as well as support Egyptian companies that wish to expand abroad, relying on our presence in Italy or Central Europe." He emphasized that the bank is seriously engaged in Microfinance activities, being one of the few private sector banks that directly operate in this field.

He added, "The bank offers loans to finance small projects at a lower interest rate for subjects that take part in our corporate social responsibility initiatives like Ebda3 Men Masr. We continue to invest in micro activities, with a strong focus on rural areas. In particular, we have launched several products in the field of agriculture. We have a full range of products to support farmers."

Regarding ALEXBANK’s intention to launch its own digital bank, he answered, "Currently, we are focusing on improving ALEXBANK’s digital transactions. We do not have any plans for a separate digital bank at the moment. Our focus is to enhance digital services and transactions and the dedicated digital platform for the future."

Regarding the challenges faced by the small and medium-sized enterprise sector and the sectors of interest to ALEXBANK, he explained, "Micro, small, and medium-sized enterprises are the backbone of the Egyptian economy. Small and medium-sized enterprises are also the backbone of the Italian economy and most European countries. We were one of the first private sector banks to start investing in this sector. What we are doing is trying to improve our operations, one of the features being speed in responding to requests. One characteristic of this sector in Egypt is that very few small and medium-sized companies rely on banks for their financing and growth."

He added, "There is another phenomenon, which is the fact that there are many small and medium-sized enterprises that do not want to deal with banks because there is still a significant problem related to transparency. There is also a large part of the Egyptian economy called the grey economy. In this area, authorities and banks also need to find a way to attract enterprises to find a reason to communicate with banks and accelerate their growth. As I mentioned, the important thing from our side is to carry out quick operations and simplify the necessary documents for obtaining credit."

He continued, "There are sectors that we focus on more, such as agricultural businesses. We emphasize them not only to follow our group's strategy but also because Egypt needs to reduce its reliance on foreign countries for food production. If we can support agriculture and industrial transformation, I believe it would be extremely beneficial for the country. Certainly, we are here to support this. We have significant expertise because the agricultural industry in Italy is very strong."

He further elaborated, "We have a dedicated department for agricultural businesses in Italy, so we have strong expertise we can bring to Egypt. Recently, in March, there was also a mission of Italian companies to Egypt in this field. Definitely, as a bank and as a group, we are very interested in supporting this."

He said, "From the challenges posed by the COVID-19 pandemic and the current situation between Russia and Ukraine, Egypt and Italy are countries with opportunities and pivotal roles to play in the Mediterranean region, and the Suez Canal, of course, has strategic importance that cannot be ignored."

He continued, "Our collaboration with the SRM Economic Research Center started in 2015 because we recognize the significant efforts made by the Egyptian government to elevate the Suez Canal in a short period of time. During this time, we saw the importance of improving navigation operations in the Mediterranean region."

He added, "The canal holds great significance for giant ships as it allows their passage, while they can’t pass through the Panama Canal. This, for example, even somehow changed the traffic on the eastern coasts of the Americas. The Egyptian government is still working on expanding the canal to allow the passage of a larger number of ships, and this is extremely important for our economy as the numbers have already shown an increase in the revenue of the Suez Canal this year, surpassing $9 billion."

He pointed out that after returning to Cairo, he would meet with a startup that produces tomato sauce. The company's owner had contacted him and requested assistance in finding potential importers in Italy, as it is one of the best markets for this type of product. He assured the owner that he would follow up on this matter, stating, "This is our role: connecting Egyptian exporters with Italian importers, which serves our clients in both countries. This confirms that we are working to strengthen the economic relationships between Egypt, Italy, and other markets where we operate."

In response to a question about his optimism regarding the global economy and the current situation, Mr. Alessandro Lolli, Head of Group Treasury & Finance of Intesa Sanpaolo replied, "Central banks and governments have faced difficult and unprecedented situations in the past twenty years. Examples include the global financial crisis and the COVID-19 pandemic. They had the time and opportunity to train themselves to deal with difficulties, which is a general rule. Hence, they were trained first, and this is the first point."

He continued, "The second point relates to the COVID-19 pandemic. We have seen that during a real crisis, common ground can be found. The crisis has also been a real test for governments. If we look at the numbers we see in the United States, things are going well. Easy lending seems possible. Europe is retracting slightly, but it is not heading towards a major recession. Therefore, it is evident that the overall economy will experience a slowdown in growth, but we do not see signs of a real collapse. China is retracting slightly, and India is catching up.

Dante Campioni, CEO and Managing Director of ALEXBANK, responding to a question regarding the possibility to have solutions like Isybank in Egypt, said: It must be highlighted that the technology behind Isybank, is cloud-based, and no regulation has yet been issued in Egypt with regards to the use of such cloud-based platforms. So, from the regulatory standpoint, this could not currently be technically implemented in Egypt, but certainly, these regulations will be issued in the future, allowing the adoption in Egypt of solutions similar to what was applied by Isybank.