More than a fifth of Egyptian banks will be forced to change their top executive over the next 12 months after the central bank issued a nine-year term limit described as an effort to revitalize the industry.
The lenders include Commercial International Bank Egypt and Qatar National Bank Alahly, the country’s biggest private banks, said Hisham Ezz Al Arab, CIB’s chairman since 2002 and the head of the Federation of Egyptian Banks.
Lenders required to make the change may wait until their shareholders meet to review 2016 results to comply and are required to obtain central bank approval for the delay, according to the regulations issued on Thursday.
The decision comes less than two weeks after the nation undertook the biggest currency devaluation in 13 years, seeking to attract foreign investment to alleviate a shortage of dollars and revive economic growth.
Central Bank Governor Tarek Amer said he wants to push industry reform by giving leadership opportunities to younger bankers, according to comments published by Egypt’s official Middle East News Agency.
Other banks that will be affected are Housing & Development, Arab African International, National Bank of Kuwait, Societe Arabe Internationale de Banque, Misr Iran Development, Faisal Islamic and Al Baraka, according to Ezz Al Arab. The country has 40 banks, central bank data show.
CIB shares slumped 1.3 percent in London, the most in almost six weeks, and 2.6 percent in London. That bucks a 0.7 percent increase for Egypt’s benchmark EGX 30 Index.