Egypt says 90% of state bank’s debt is settled

Egypt has settled nearly 90 percent of the debt owed to its ailing state investment bank, allowing it to recover and return to profit after years of heavy losses.

The settlements cover nearly EGP299 billion ($6 billion) owed largely by state-controlled entities, including the General Authority for Reconstruction Projects and Agricultural Development and the National Media Authority.

Planning and economic development minister Ahmed Rustom, who heads the National Investment Bank (NIB), announced the agreements after a board meeting attended by other ministers and officials.

“These settlements involved vital public establishments, closing this complex financial file, which had remained open for decades,” he said.

He added that the deals mark “a real starting point” for correcting NIB’s financial position and restoring its strategic role in supporting the state’s development efforts.

A cabinet statement said the board discussed NIB’s future vision, including ways to maximise returns from the bank’s resources.

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NIB said in August it had returned to profit after years of heavy losses caused by a build-up of bad and non-performing loans.

The bank recorded net profit of EGP6 billion ($120 million) during the fiscal year to June 30, 2025, compared with a loss of EGP31.7 billion the previous fiscal year, a board statement said.

“This represents an unprecedented financial breakthrough and a strong recovery in the bank’s financial position,” the statement said.

NIB was set up in 1980 to fund domestic development and infrastructure projects.

It has suffered deep financial strains and large portfolio deficits over the past three decades due to heavy exposure to non-performing debt from ailing state-owned enterprises and legacy administrative entanglements, officials have said.

These losses prompted the government to restructure the bank, fuelling speculation that liquidation might follow.

As far back as 2021, however, NIB’s deputy chairman Ashraf Negm said the government had no plans to liquidate the bank.

He said at the time that the restructuring would include a clear timetable for rescheduling the repayment of outstanding loans to government institutions.