Cairo-based Arab African International Bank (AAIB) has announced a 20 per rise in profits to $12.1 million in 1995, the first full year since it cleared its balance sheet of a substantial burden of nonperforming syndicated loans. General manager Mohsen Khaled says the bank made no additional specific loan loss provisions in 1995, and is confident it will hit its profit target of $16 million-17 million in 1996. Shareholders are to receive cash dividends totalling $5 million from the 1995 profits.

The bank’s total assets rose by 15 per cent in 1995 to reach $822 million. A particular feature was the 37 per cent rise in total loans to $245 million. This means the bank’s loan portfolio has recovered to 1993 levels after the write-offs of the bad debts. Customer deposits rose by 14 per cent to $507 million.

Khaled says the bank had a strong performance in the UAE in 1995, and was more active in the domestic Egyptian market.

AAIB has branches in the UAE, the UK and Lebanon, in addition to its Egyptian base, where it has six branches operational and three more due to open this year.

One of the priorities for the coming period will be to develop the investment banking side of AAIB, Khaled says. He envisages AAIB approaching this side of the business as a specialist intermediary, rather than as a source of direct investment. The bank has secured a licence to set up a mutual fund in Egypt, and has identified a leading US firm to act as fund manager.

However, Khaled says the bank has decided the time is not yet right to go ahead with the fund. ‘We took a prudent decision to postpone the launching of our local fund due to the lack of evident breadth in the local equity market,’ the chairman’s statement explains.

AAIB has also been discussing with an international investment bank the formation of a joint-venture portfolio management company, targeted at the Egyptian market.

The bank is owned by the Central Bank of Egypt, the Kuwaiti Finance Ministry (49.37 per cent each) and other Arab interests. It was founded in 1964 according to a special Egyptian law.