French, U.K. Banks Have the Most at Risk in Egypt

International banks have lent $49.3 billion to Egyptian borrowers, with French and U.K. banks having the most exposure to the country torn by anti-government protests, data from the Bank for International Settlements show.

French banks’ claims on Egyptian borrowers stood at $17.6 billion at the end of September, BIS statistics released Jan. 27 show. U.K. banks’ exposure was $10.7 billion and Italian banks had $6.3 billion in claims, the data show. European banks’ total claims amounted to $40.3 billion.

Societe Generale’s Egypt subsidiary, National Societe Generale Bank, had 4.1 billion euros ($5.6 billion) in loans and 6.2 billion euros of deposits in the country, according to the Paris-based bank’s third-quarter results presentation. Societe Generale took “appropriate measures” to protect its 3,700 staff in the country, it said on Jan. 28.

Egypt’s banks and markets stayed shut today after a week of clashes in the most populous Arab country that left as many as 150 people dead. Tanks are guarding banks and government buildings in Cairo that are vulnerable to looting, state television said. The EGX 30 stock index had a two-day drop of 16 percent through Jan. 27.

Profit Impact

For Societe Generale, Egypt represents about 3 percent of annual net profit, compared with 1.5 percent for Credit Agricole SA, France’s third-largest bank, and 0.2 percent for BNP Paribas, Keefe, Bruyette & Woods Ltd.’s London-based analyst Jean Pierre Lambert estimated in a Jan. 28 note to investors.

Societe Generale fell as much as 3.7 percent in Paris trading today, and was down 40 cents, or 0.8 percent, to 47.92 euros by 2:26 p.m. Credit Agricole declined as much as 2.4 percent, before rebounding to rise 0.6 percent.

Intesa Sanpaolo owns about 70 percent of Bank of Alexandria SAE, Egypt’s fifth-biggest bank by assets with about 200 branches and 2.3 billion euros in loans, according to a spokeswoman of the Milan-based bank.

Societe Generale owns 77 percent of Cairo-based NSGB, according to the bank’s website, and operates 139 branches. Credit Agricole Egypt, also based in Cairo, had a staff of about 1,950 people and 70 branches at the end of 2009. Credit Agricole Egypt’s 10 expatriate staff remain in the country, while their families have left by plane, a Paris-based spokeswoman said by phone today. Credit Agricole is monitoring “carefully” unfolding events in Egypt, she said.

Intesa, Barclays

Intesa Sanpaolo, which has brought back six employees from Egypt, isn’t concerned about the safety of its unit in Cairo, Chief Executive Officer Corrado Passera told reporters in Rome. Intesa advanced 1.5 percent in Milan trading.

Barclays Plc said it has shut its network of 65 branches following advice from the Central Bank of Egypt. “We are monitoring the situation,” said London-based spokesman Perry Jones by phone. The bank has 2,100 employees in the country.

The BIS consolidated banking statistics are based on reporting by central banks in 30 countries. It records lending to public and private borrowers by both headquarters and local subsidiaries, and assigns the claims to countries based on the nationality of the lender’s owner.

Following is a breakdown of the Egyptian exposure as of the end of September, based on the BIS data:

Nationality              Consolidated
Of Lender                Claims on Egypt
                         ($ million)

Total foreign claims     49,275

European Banks           40,300

France                   17,573
United Kingdom           10,655
Italy                     6,293
United States             5,350
Germany                   2,478
Switzerland               1,148

To contact the reporters on this story: Boris Groendahl in Vienna bgroendahl@bloomberg.net; Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net.

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

Enlarge image

French, U.K. Banks Have Most at Risk in Egypt, BIS Data Show

Jean-Claude Coutausse/Bloomberg

Societe Generale fell as much as 3.4 percent in Paris trading today.

Societe Generale fell as much as 3.4 percent in Paris trading today. Photographer: Jean-Claude Coutausse/Bloomberg

Jan. 31 (Bloomberg) -- Bloomberg's Manus Cranny reports on the increase in the cost of insuring Egyptian debt as protesters defied a curfew to press forward with a week-long uprising against President Hosni Mubarak. Maryam Nemazee also speaks on Bloomberg Television's "Countdown." (Source: Bloomberg)