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Egypt’s AlexBank says 1st day smooth, no run on cash

Companies needed to deposit cash after days of unrest; Bank had 20 branches open, aiming for 30 on Monday; Maximum EGP withdrawal was below cbank's limit

February 6, 2011 4:01 by

Egypt’s AlexBank said on Sunday it had ended its first open day after a week-long bank closure caused by political unrest with a net cash surplus of 4 million Egyptian pounds ($674,000).

Bankers had been bracing for chaos at the counters as panicky Egyptians withdrew cash on concern access to their deposits could be restricted again after street protests paralysed much of the economy.

“I will tell you something I think you will not believe. Net, we have a surplus of 4 million at the head office. I don’t know about the rest of the branches yet. But net, net, we have a positive balance,” AlexBank Chairman Mahmoud Abdel Latif said by telephone. He said his bank, which is controlled by Italy’s Intesa Sanpaolo SpA, had unofficially opened for companies for several days during the bank closure to provide salaries and accept deposits.

“Because there are plenty of companies, especially in the food business, that have been making tonnes of money and, as you know, everything has been in cash in the last few days, people were flooded with cash and they were depositing,” he said.

He said his bank had provided about 14 million pounds for salaries, but had received about 19 million pounds of cash.

Abdel Latif, who spent the day focused on the counters in the lobby of his bank’s head branch, said that at least at his bank the feared run on cash had not materialised.

“It went extremely well, and I mean it. We had more than 3,000 clients. The queues were very well organised, the people were coooperating and our people were kind of speedy Gonzalez delivery.”

The maximum withdrawal at his branch was 32,000 Egyptian pounds, below the maximum withdrawal limit of 50,000 pounds set by the central bank, he said.

About 90 percent of the dollar withdrawals were for settlements under letters of credit in the normal course of business, and 10 percent were a few individuals taking out somewhere between $5,000 to $10,000, he said.

The central bank had set a limit of the equivalent of $10,000 for foreign currency cash withdrawals.

“I personally was downstairs, and the people who want the dollars are all travelling. So they genuinely need the dollars or the foreign currency for their trips,” he said.

He said the bank only opened about 20 branches as part of an agreement with the central bank to move gradually and because banks were having logistical problems getting employees to their offices.

By Patrick Werr

(Editing by David Holmes) ($1=5.932 Egyptian Pound)

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