Strategic Management

1. Strategic
Management
Project
ANALYSIS OF NATIONAL BANK OF
EGYPT STRATEGIC MANAGEMENT
PERFORMANCE

2. NBE Current Performance
During FY 2019/2020, NBE managed to
achieve unprecedented performance
indicators.
Total deposits reached EGP 1.6 trillion as
at end-June 2020, with a growth rate of
36% yoy, accounting for 34% of total
banks' deposits. Such a leap was driven
by the introduction of a diversified
package of deposits in local and
foreign currencies at competitively
lucrative rates.
NBE's deposits approached EGP 2 trillion
as at end-March 2021, which highlights
the customers' confidence in our Bank.

3. NBE Mission & Vision
To remain the leading entity in
the Egyptian banking sector,
NBE aims to maximize the
efficiency of financial
intermediation and promote
financial inclusion, while
safeguarding depositors' funds
and maximizing returns to
shareholders. This in return
supports the development of
the national economy and
enhances the stability of the
financial system.
The NBE has the top spot for
customer satisfaction, thanks to
its large number of corporate
clients and spending on
technological infrastructure
and its geographic presence,
especially its ATM network,
which is the biggest in
Egyptian’s banking sector.

4. NBE Strategic “corporate”
objectives
➔ The Bank's strategic objective is to be the best commercial bank locally and
regionally through its spread and its reach to the largest number of customers
through the diversification of its banking services and the opening of many
branches inside and outside the country.
➔ In the framework of supporting and developing performance to maintain this
distinguished status, many development programs are being implemented in
cooperation with major international institutions.
➔ Improve the flexibility and ability to adapt to internal and external environmental
variables by 33%
➔ Developing methods and methods of obtaining information to increase opportunities
by 25%
➔ Reducing admin centralization & improving organizational structure by 66%
➔ work to increase the satisfaction of individuals and develop methods of work in the
spirit of one team by.

5. Situational Analysis
SWOT Analysis:
Strengths Weaknesses
 Strong Reputation and brand presence
 Considerable international presence
 Large organizational size and scale,
 Wide scope of financial services
 Business leadership across financial segments
 The importance of the bank for the Egyptian
economy and the banking sector in particular,
 holds a relatively high NPL ratio.
 Technical outages
 It has some risky portfolios
 Due to increased number of competition
networks, the company has experienced drop
in SME loans market share in recent time.
Opportunities Threats
 the possibilities of technical assistance from
the international institutions
 the gradual transition to paperless money
 Activate many promising economic fields
 The Bank's vital role in financing foreign trade
 State interest in modernizing the banking
system.
 Presence of high geographic risk
 As a lender, it is exposed to credit risk as
deteriorating credit quality
 It must also look into the threats posed to its
IT infrastructure

6. NBE Opportunities & threats
Table
Task Environment: (Industry analysis)
Factors Opportunities Threats
Customers  Enhancing Products &
Services with Mobile App
Data
 Automated Onboarding
 Far-reaching digital
transformation is needed –
now.
Suppliers  Move to in house
operations
 Attract new depositors
 Tech Suppliers do long-term
contracts, obscure the pricing,
& charging costly fees to
change platforms.
Competitors  With new laws aiming for
bank consolidation, NBE
can merge with struggling
institutions to further
enlarge their assets
 new entrants are able to be
nimbler than NBE since they
are unencumbered by legacy
infrastructure or business
models.
Retailers/Distributors - -
Government New Regulations
Economic growth
 Higher interest rates
Others  Recession

7. NBE Opportunities & threats
Table
General Environment: (STEEP Analysis)
Factors Opportunities Threats
Socio-cultural  Digital area
 Globalization
 Shifting away from traditional
banks
Economic  Growth  Recession
 Higher Interest Rates
 Higher National Debt
 Lack of foreign Liquidity
Political/Legal  Stability
 New laws strengthen the
market & benefit big banks
 Political Instability
 Public unrest
 Foreign sanctions
Technological  Blockchain
 E-payment
 Mobile services
 Security
 Loss of data
 3rd party dependency
Ecological - -

8. NBE Issues Priority Matrix
Probable Impact on Corporation
Probability of
Occurrence
High Medium Low
High High Probability:
 Higher Interest
Rates
 foreign-
currency
liquidity
High Probability
 Local-Currency
Sovereign Debt
 Asset-Quality
Medium
Probability:
 Failure of
tech
infrastructure
Medium High Probability:
 Recession
Medium Probability:
 Regulation &
Compliance
Low Probability:
 Fraud
Low Medium
Probability:
 Foreign
Sanctions
Low Probability:
 Cyber Security
Low Probability:

9. EFAS
Factors Weight
Impact
(1-5)
Weighted
Average
Comment
Opportunities
 Making use of the possibilities of technical
assistance
0.05 1 0.05
 The gradual transition to paperless money 0.2 2 0.4
 Activate many promising economic fields 0.4 2 0.8
 Significant growth is person-to-person (P2P)
Payment
0.1 4 0.4
 State interest in modernizing the banking system 0.03 1 0.03
Threats
 Presence of high geographic risk due to the
political instability in Egypt
0.3 4 1.2
 As a lender, it is exposed to credit risk as
deteriorating credit quality
0.1 2 0.2
 The threats posed to its IT infrastructure as more
competitors are moving towards becoming
complete internet facilities.
0.17 1 0.17
Total 1,00 3.25

10. Description of the Company
Established on June 25,
1898, the National Bank of
Egypt is the first and
largest commercial bank
in the Egyptian banking
sector with a paid-up
capital of EGP 50 bn. The
bank has the largest
widespread network of
branches and outlets with
584 branches and
captures the largest 24/7
ATM network.

11. Analysis of NBE Organization
Structure:
The U-Form Structure

12. NBE Organizational Analysis
“Strengths & Weaknesses Table”
Factors Strengths Weaknesses
Organizational
Culture
 Keeping the customer front and center
 The proposed introduction of the (IAF) Framework
 NBE has the task type culture which supports its size
Post-Covid work environment
Employee voice gets lost
Culture change is not being measured
Organizational
Structure
Productivity. Functional specialization increases productivity through
effective division of labor.
Cost savings. Compared to other configurations, the costs of staffing
each department in a U-form structure are significantly lower.
Progressive reduction in the ability of
management to control its size.
Narrow focus. of senior managers.
Product Mix:
Product
Price
Place
Promotion
 Strong Promotional Prescence
 Cheapest prices due to economics of scale
 Widest network of branches & partners
 Sell all types of financial products sold in the market
Not enough promotion directed into
corporate banking
Operations  Largest network of operations personal
 Largest Database
 Strong ties with the governmental organizations
Data fragmented across many divisions
Bureaucracy and slow flow
Research &
Development
 Innovative new campaigns
 Law cost compared to competition
No new innovative products
Financial Strong financial position
buffer that absorbs losses & reduces the probability of failure.
Compat unpredictable Market forces
The steady-state costs of higher capital
requirements
HR facilitate new collaborations
foster new skills
Not a catalyst for change
Adopt a traditional mindset and
accountability toward their people,
their business
Information System Strong Team through alliance and spin offs
Large strong infrastructure
New services offered
Not on global standard

13. NBE Internal Factors Analysis
Table “IFAS”
Factors Weight Impact
(1-5)
Weighted
Average
Comment
Strengths:
 Strong Reputation and brand presence 0.3 4 1.2
 Considerable international presence 0.05 1 0.05
 Large organizational size and scale, including multinational
business operations
0.2 4 0.8
 Wide scope of financial services 0.1 3 0.3
 Business leadership across financial services segments 0.05 2 0.1
Weaknesses:
 Holds a relatively high NPL ratio. 0.1 2 0.2
 Technical outages impacting customer experiences 0.05 1 0.05
 It has some risky portfolios which have generated losses in
the past
0.1 2 0.2
 Total liabilities of the bank have increased over the past
years and as a result of this it faces more cash outflows in
the form of interest payments
0.05 2 0.1
Total 1.00 3

14. VRIO Analysis of Competencies &
Competitive Advantage:
Resource/ competency Valuable Rare Costly to imitate Ready classification
Number of Branches Sustained advantage
ATM Network ✔ ✔ Sustained advantage
Skilled Labor ✔ � Competitive Parity
Strong Brand Name ✔ Sustained advantage
Strong Client Base ✔ ✔ Sustained advantage
IT Infrastructure ✔ � Competitive Parity
Global Reach � Competitive Parity

15. NBE Value Chain:

16. NBE Mission Review:
When Reviewing the NBE mission for the
successful mission characteristics as the
mission contains all successful characteristics
like being feasible it’s also precise and very
broad with a single goal that was stated in
the very beginning of the mission which is
remaining the leading entity in the Egyptian
banking sector. NBE’s mission is very clear and
highly emphasize on efficiency which makes it
very motivating for members of the
organization and of society.

17. NBE Objectives Review:

18. Internal Environment
Analysis

19. Strategic Sweet Spot

20. NBE TWOS Analysis
External
Internal
Opportunities:
The possibilities of technical assistance from
international institutions
The gradual transition to paperless money
Many promising economic fields.
State interest in modernizing the system.
Significant growth is person-to-person Payment
Threats
Presence of high geographic risk
deteriorating credit quality.
Competitors are moving towards becoming
complete internet banking facilities.
Strengths:
Strong Reputation
International presence
Large organizational size
Variety of services
Business leadership
OS Strategies:
 Financial inclusion
 Target the unbanked
 Introduce new products & service
 Simplify work procedures
 Diversify delivery channels
 Support CBE & government initiatives
 SMEs Initiatives
 Mortgages Initiative
TS Strategies:
 Improve margins
 Increase low-cost deposits
 Concentrate on highly profitable
products
 Maximize non-interest income
 Revisit fees & commissions
 Increase cross selling activities
 Sale of asset
 Divestment from non-strategic
Weakness:
high NPL ratio.
Technical outages
Risky portfolios
drop in efficiency
Inability to utilize its brand
name effectively
OW Strategies:
 Digital banking
 Develop & deliver new products
 Expand on Mobile Banking services
 Introduce Smart Branches
TW Strategies:
 Reduce concentration risk
 Decrease loans portfolio concentration
 Seek new facilities in Foreign Countries

21. NBE Generic strategy
“Cost Leadership Strategy”

22. NBE cooperation agreements
& entry modes in foreign
countries
NBE enters all types of
cooperative agreements
with all sorts of
organizations to
undertake a project under
which joint action or
collaboration between
the NBE and the
collaborator during
project performance is
considered necessary or
desirable to achieve
successful project
implementation.
greenfield strategy

23. NBE Corporative Strategies
Joint Venture
Equity Strategic
Alliance
Non-equity
Strategic
Alliance

24. NBE Corporate Strategies:

25. NBE strategy implementation
problems
 Top-down or laissez-faire senior
management style
 Conflicting priorities
 Poor vertical communication,
 Poor coordination across functions,
businesses or borders,
 Inadequate down-the-line leadership
skills and development.

26. NBE Structure Compatibility to
the Strategy
This study established that in NBE, the organization structure
aligns with strategic objectives and has high effect on the
service delivery to customers. Another finding was that the
organization structure had a very high effect on compliance
with regulations and a high effect on the attainment of the
expectations of NBE community. It’s also worth indicating that
the organization structure had a high effect on the growth of
investments at NBE. Another finding indicated that the
organization structure had a high effect on the response rate
to competition, technological changes, economical changes
and socio-cultural changes at NBE. Lastly, the findings also
indicated that the organization structure had a moderate
effect on the response rate to political changes and natural
factors.

27. Samples of NBE strategy
implementation actions plan
Action plan
Objective (1): financial inclusion
Actions Due date By Comment
Better understanding of the barriers
to financial inclusion & resilience 1st Mar 2018
Change Management &
Technology Committees
Staff better able to identify &
support vulnerable groups 1st June 2018
HR Committees & HR
Department
Targeted & scalable resources to
build financial knowledge skills 1st August 2018 HR Department
improved support for "at-risk"
customers, staff, suppliers and
community
1st September 2018
Control Committees / Credit &
Settlement Committees
Appropriate financial services are
available, accessible & known 1st December 2018
Change Management &
Technology Committees

28. Evaluation & Control
Goals Status Corrective Actions
FINANCIAL INCLUSION
Target the unbanked 
Introduce new products & services 
Simplify work procedures x Staff Training
Diversify delivery channels 
IMPROVE MARGINS
Increase low-cost deposits 
Concentrate on highly profitable products x Develop Better tactics
DIGITAL BANKING
Develop & deliver new products 
Expand on Mobile Banking services 
Introduce Smart Branches x Investigate reasons of the delay
SUPPORT CBE & GOVERNMENT INITIATIVES
SMEs Initiatives 
Mortgages Initiative 
MAXIMIZE NON-INTERST INCOME
Revisit fees & commissions x
Changing Control committee
priorities
Increase cross selling activities 
Sale of asset 
Divestment from non-strategic investments 
REDUCE CONCENTRATION RISK
Decrease loans portfolio concentration x Nothing for now
Seek new facilities in FC 

29. Corrective Actions:
Adjusting the
formulation (design)
Adjusting the
implementation

30. SWOT Analysis

31. Summary & Conclusion
The National Bank of Egypt is the first and largest
commercial bank in the Egyptian banking
sector with a paid-up capital of EGP 50 bn. NBE
activities focus on sustainable development. It
aims to reach a balance between economic,
social, and environmental considerations. It
pumped around 20 billion investments in Egypt
during 2020. It develops and upgrades
infrastructure all over the country.
Environmental analysis of NBE concluded many
changes in Egyptian market.

32. THANK YOU