Cairo-based Arab African International Bank (AAIB) had an unspectacular year in 1998, full financial statements released in early June show. But with the divestment of Egyptian Arab African Bank (EAAB) imminent and plans for growth in place, the bank is set for more productive times ahead.

AAIB's net profits declined by 12 per cent to $12.2 million from 1997 levels, which were boosted by $2.3 million worth of gains from the sale of investments. In 1998, net interest income improved and costs were controlled. 'AAIB had a good year in 1998,' says general manager Hany Hassan. 'We targeted the loan portfolio and, although it didn't grow significantly, the focus on medium-sized clients led to improved quality.'

Hassan says that AAIB has invested heavily for future growth. New staff have been hired for the credit department and sophisticated training programmes introduced as preparation for expanding operations. '1998 was a year of re-engineering inside the bank,' says Hassan. 'We took on new staff, trained them and prepared for growth.'

'We are over-capitalised at present and there is room for expansion,' says Hassan. 'AAIB's Egyptian branch network is set to grow in the coming months.' He says that a new branch is due to be opened in 10 Ramadan City towards the end of 1999 and another in 6 October City in early 2000. However, despite moves by a number of financial institutions to develop retail operations in Egypt, AAIB's focus is to remain on wholesale banking. 'We have no plans to be aggressive in the retail market. It's not our strategy,' says Hassan. The sale of EAAB has entered its final phase. 'We are down to the last four banks, which have been given until the end of July to table their best offers,' Hassan says. 'The winner of the controlling stake in EAAB will be announced in early August' (see Egypt).

AAIB itself is owned by the Central Bank of Egypt, the Kuwait Finance Ministry and other Arab financial institutions.