Net profits were flat in the first quarter of 2000 at Egyptian American Bank (EAB) and Al-Watany Bank of Egypt, compared with the performance in January-March 1999.

EAB’s total income rose by 24 per cent, but this was offset by a 29 per cent rise in costs, mainly associated with rising interest expenses. This is consistent with the rise in interbank rates in early 2000. EFG-Hermes notes in its analysis of the results that EAB transformed £E 5.3 million ($1.5 million) of general to specific loan loss provisions. Thissuggests some of the bank’s borrowers may be facing difficulties, EFG- Hermes says.

Al-Watany’s results also show the effect of the high interbank rates at the start of this year. The bank is studying a number of options for a capital increase, including the sale of shares to an international bank (MEED 14:4:00).