Egyptian banks are intensifying competition for Egyptian pound deposits as strengthening demand for local-currency lending prompts lenders to secure additional funding to support expanding credit activity.
Several state-owned and private banks have recently increased returns on selected savings products, with some deposit rates reaching 19.5%, reflecting stronger competition for stable funding despite the Central Bank of Egypt’s monetary easing cycle. The trend follows the Central Bank’s cumulative 500-basis-point reduction in key policy interest rates during 2025 as inflation moderated and economic conditions improved.
The shift comes as economic activity accelerates, foreign currency liquidity strengthens and private-sector borrowing gains momentum. Banks are increasingly expanding lending to businesses and households after years in which a significant share of their liquidity was directed towards financing government debt.
According to bankers cited by Asharq Bloomberg, the banking sector’s loan-to-deposit ratio has risen in recent years as credit growth outpaces deposit mobilisation, although official Central Bank of Egypt data indicate that the sector remains well capitalised and maintains comfortable liquidity buffers.
Competition for deposits has also intensified as Egypt’s domestic savings rate remains subdued. The National Planning Institute estimates that gross domestic savings fell to 1.2% of GDP during the 2024/25 fiscal year, limiting the pace at which banks can expand their funding base.
The increased competition for deposits reflects a broader structural shift within Egypt’s banking sector, where renewed private-sector lending is gradually becoming a more important driver of balance-sheet growth alongside traditional investments in government securities. While higher deposit rates strengthen banks’ capacity to finance credit expansion, they also raise funding costs, requiring lenders to balance loan growth with profitability as the country’s financial sector enters a more credit-driven phase of economic recovery.
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