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The Business and Management Review Volume 7 Number 2February 2016Measuring the impact of personal selling on building bank brandequity: Egypt caseHeba SadekPassent TantawiArab Academy for Science, Technology and Maritime Transport, EgyptPeter ReddingMarymount University, Arlington, VA, USAKeywordsOverall brand equity, CBBE dimensions, personal selling, and Egyptian banking sectorAbstractThe purpose of this study is to measure the impact of the personal selling on building overallbrand equity in the Egyptian banking sector through 5 customer-based brand equity (CBBE) dimensions(brand awareness, brand associations, brand perceived quality, brand loyalty and brand trust).This study used quantitative approach, which consists of self-administrated questionnairesdistributed on a quota sample. Data were collected from 465 bank customers and analysed by usingStructural Equation Modelling (SEM). The findings of this study showed that personal selling has asignificant positive direct effect on building bank brand equity via the 5 CBBE dimensions. Given the factthat all the CBBE dimensions are important on building bank brand equity, it has been found that onlybrand loyalty and brand perceived quality have a significant positive direct effect on building bank brandequity.This study has unique value to the service branding particularly in the Egyptian banking sector.This study closes the gap in the area of service brand equity by combining the most important marketingcommunication tool in the banking sector “the personal selling”, 5 CBBE dimensions and overall brandequity in a single study. It also provides directions to the service provider and particularly the bankmanagers on providing brand-building activities, and evaluating the marketing strategies andprogrammes effectively.1. IntroductionIn our competitive business environment, the size of the service sector is increasing allover the world, in both developed and emerging countries (Lovelock and Wirtz, 2010). Thissector constitutes 40% of gross domestic product (GDP) in some emerging countries to morethan 70% in some developed countries (Ghoneim, 2007). In Egypt, the service sector is thelargest and fastest-growing economic sector and accounts for almost 51% of GDP (Encyclopediaof the Nations, 2012). The banking sector constitutes one of the core sources of service sectorrevenue in Egypt (Encyclopedia of the Nations, 2012). Therefore, it represents a cornerstone ofEgypt’s financial architecture and plays a vital role in overall economic development andgrowth (American Chamber of Commerce Egypt, 2008).Over the recent years, the Egyptian banking sector has perceived vital changes, such as:privatization, bank mergers and acquisitions. Therefore, these changes provide a goldenopportunity for the entry of more foreign banks that have perceived Egypt as a lucrative market(American Chamber of Commerce Egypt, 2008). The appearance of new leading partners (forexample from bank mergers) and the globalization of international markets are both the resultof technological developments and the loosening of administrative and monetary interventionsthat have led to the severe market competition and the risk of declining market shares for eachbanking institution (Kokkomelis, 1995). This competitive and global banking era hasInternational Conference on Globalisation, Entrepreneurship & Emerging Economies, Egypt76

The Business and Management Review Volume 7 Number 2February 2016encouraged institutions to focus on branding strategies (Lambkin and Muzellec, 2008).Branding allows institutions to compete on features other than price alone (Aaker, 1991).Branding is crucial when taking the service marketing into consideration due to the uniquefeatures of services like perishability, inseparability, intangibility and heterogeneity (Kapferer,2004). Especially in financial services where there is little opportunity to differentiate betweenbanking offers (Knisely, 1979; Berry et al., 1988; Dobree and Page, 1990; Balmer, 1995; Peklo,1995; Berry, 2000). Thus, bank brand is considered to be a strategic tool that banks can practiceto attract new customers, develop strong relationships and achieve competitive advantage (DeChernatony and McDonald, 2003; Devlin, 2004; O’Loughlin and Szmigin, 2005; De Chernatonyand Cottam, 2006). Hence, building, using and maintaining brands is of high importance inorder to achieve a sustainable competitive advantage in the market place and to stand high inthe crowd (Kim et al., 2003).Subsequently, the emergence of brand equity has risen in importance for both academicsand practitioners (Keller, 2003). Brand equity has been defined in different ways and fordifferent purposes, yet till now no common agreement has emerged (Vazquez et al., 2002;Keller, 2003; Davcick et al., 2015). For example, from the financial perspective, brand equity hasbeen defined as the incremental cash flows, which accrue to branded products over unbrandedproducts (Simon and Sullivan, 1993); as the total value of a brand, which is a separable assetwhen sold or included in a balance sheet (Feldwick, 1996). Additionally, from the marketingperspective, brand equity has been defined as “customer-based brand equity” (CBBE). Thisperspective has many definitions relying on different dimensions. In this study, the brandequity is perceived based on the marketing perspective but as a separate construct. It is definedas the value added to a product (goods or services) virtue by its brand name (Farquhar et al.,1991). Setting a separate brand equity construct (separate from its dimensions) will help torecognize the contribution and the importance of each CBBE dimension in the overall brandequity assessment (Yoo et al., 2000). Understanding the dimensions of CBBE, then investing togrow these dimensions will lead to high brand equity (Yoo et al., 2000; Yacout and Elsahn,2011). Over the years, a range of CBBE dimensions that can be linked to a brand have beenidentified. However, the common dimensions in all models are the use of one or moredimensions of the Aaker model (1991). The present study examines the effect of these commondimensions, which include (brand awareness, brand perceived quality, brand associations andbrand loyalty) in addition to the brand trust on overall brand equity. Brand trust has beenconceptualized as a dimension of CBBE due to the high-perceived risk associated in the servicesector. Brand trust is a part of customers’ relationship with the brand (Blackston, 1992; Lassar etal., 1995; Chaudhuri and Holbrook, 2001; Rios and Riquelme, 2008; Atilgan et al., 2009; Burmannet al., 2009; Rauyruen et al., 2009). Additionally, the impact of the personal selling as one of themajor bank marketing communication tools as mentioned by Sadek et al. (2015) is examined onbuilding the overall brand equity via the 5 CBBE dimensions.The following sections will provide literature review leading to the development ofhypotheses; research methods, population and sampling, results and analysis and finallylimitations and future research.2. Literature review2.1 Customer-based brand equity (CBBE) dimensionsIn this study, the CBBE dimensions include brand awareness, brand perceived quality,brand associations, brand loyalty and brand trust. According to the previous studies ofZeithaml (1988); Aaker (1991); Oliver (1997); Yoo et al. (2000); Pappu et al. (2006); and Tong andHawley (2009); Kumar et al. (2013) the CBBE dimensions have been found to have an impact onInternational Conference on Globalisation, Entrepreneurship & Emerging Economies, Egypt77

The Business and Management Review Volume 7 Number 2February 2016building brand equity. In more details, brand awareness is one of the important facets whenfocusing on brand equity (Atilgan et al., 2005). Being aware of a brand refers to customers’ability to recognize or recall the brand (Hoyer and Brown, 1990; Franzen and Bouwman, 2001).Thus, a product or a service with strong brand remembrance influences customer choicetowards a specific notion (Kimpakorn and Tocquer, 2010). Therefore, brand equity increaseswhen the customer has a high level of brand awareness and familiarity with the brand (Atilganet al., 2005). For the brand perceived quality, Zeithaml (1988) identifies that the perceivedquality is considered as a component of brand value. Perceived quality is based on thecustomer’s personal judgment about a product or services’ overall performance (Yoo andDonthu, 2001). Thus, high perceived quality refers to the superiority of the brand fromcustomer’ point of view through the long-term experience related to the brand. Thus, perceivedquality creates value to customers by supporting them with a reason to buy and bydifferentiating the brand from other competing brands (Kayaman and Arasli, 2007). The thirdfacet that creates brand equity is brand association. Brand association refers to all the traitsassociated to a brand that is stored in the consumers’ mind (Aaker, 1991). It is composed ofmultiple ideas, episodes, instances and facts that build a strong network of brand knowledge(Keller, 1993).Aaker (1991) mentioned that brand association is formed through many experiences andexposures to the product or service (reflecting the product features and aspects). It creates valueto the firm and to the customers (Atilgan et al., 2005). Brand association helps to process andretrieve information, distinguishing the brand, generating a reason to buy, creating positiveattitudes and presenting a basis for extensions (Aaker, 1991). Rio et al. (2001) suggests thatbrand associations represent a key element in brand equity creation and management. Hence,brand equity reveals that customers have positive associations to the brand. The fourth facetthat creates brand equity is brand loyalty. Brand loyalty leads to brand equity. The attachmentthat a customer has to a brand allows them to feel a sense of devotion to the company (Yoo etal., 2000). Brand loyalty is the commitment to rebuy or support a product or service consistentlyin the future. Loyal customers show positive responses to a brand than non-loyal customers do(Grover and Srinivasan, 1992). Brand loyalty is a main dimension of brand equity (Aaker, 1991).It is a key variable for management interested in the value of brand equity when measured fromcustomers’ point of view (Keller, 2001). As for the fifth facet, which is the brand trust, it isviewed as one component of customers’ relationships with brands (Blackston, 1992). Brand trustis measured by the brand ability to deliver its promises. This variable can improve or destroy arelationship between brand and customers, therefore impacting brand equity (Keller, 2003).Based on Garbarino and Johnson (1999) brand trust evolves from past experience and previousinteraction. Therefore, the management of trust is a key to build a relationship with customersparticularly because customers buy a service before experiencing it (Kinard and Capella, 2006).Based on the above points, the following hypothesis is developed:H1: CBBE dimensions have a significant positive direct effect on overall brand equity.This hypothesis has been split into five sub-hypotheses as follows:H1a: Brand awareness has a significant positive direct effect on overall brand equityH1b: Brand perceived quality has a significant positive direct effect on overall brand equityH1c: Brand associations have a significant positive direct effect on overall brand equityH1d: Brand loyalty has a significant positive direct effect on overall brand equityH1e: Brand trust has a significant positive direct effect on overall brand equity2.2 Marketing communication toolsInternational Conference on Globalisation, Entrepreneurship & Emerging Economies, Egypt78

The Business and Management Review Volume 7 Number 2February 2016Marketing communication tools play a vital role in the development of brands. They arethe means by which products become brands (Kotler and Keller, 2012). These tools helpcustomers to understand what a brand stands for and what its value (Fill, 2002). De Chernatonyand Dall’Olmo Riley (1999) argue that marketing communication tools can play several roles inbrand development. For example, during brand extensions the role of marketingcommunication tools is to show buyers how the benefits from the existing brand have beentransferred or extended to the new brand. Other roles might be to remind buyers and reinforcetheir perceptions in order to protect market share. The following part will focus on the impactof personal selling on building bank brand equity based on the study conducted by Sadek et al.(2015), in which it has been found that the personal selling represents the most importantmarketing communication tools that help build bank brand equity. Based on Sadek et al. (2015),the personal selling has been defined as all the staff with the desired attitudes, knowledge andrelational skills to ensure that the customers will receive the service for which they are payingas mentioned by Dmour et al. (2013). In more details, it has been found that personal selling isan influential factor in shaping customers’ perceptions towards brands (Berry and Lampo,2004). Particularly, in financial services where bank customers prefer face-to-face interactionsespecially when perceived risk is high (Page and Luding, 2003).Firstly, it has been found that personal selling affect positively the brand awareness byinforming or reminding people of the brand (Fill, 2002). Secondly, Personal selling contributesto the development of customers’ perceptions of service quality through their attitude,behaviour and knowledge (Bowen and Schneider, 1985; Zeithaml et al., 1993; Bitner et al., 1994;Wall and Berry, 2007). Thirdly, personal selling attitude, behaviour and knowledge play acrucial role in the service brand image development (Schneider and Bowen, 1993; Gronroos,1994; Ind, 1997; De Chernatony and Dall’Olmo Riely, 1999; De Chernatony and Harris, 2000; DeChernatony et al., 2003; Rajh and Dosen, 2009; Kimpakorn and Tocquer, 2010). Thus, personalselling became a very important tool in shaping opinions and in determining brand associations(Berry, 2000). Fourthly, customers’ evaluation of personal selling efforts and serviceperformance has been found to have a strong effect on customers’ satisfaction and loyalty(Keaveney, 1995; Mohr and Bitner, 1995; Evans et al., 2002). Fifthly, personal selling plays anessential role in delivering the promise through the service provider’s performance (Wall andBerry, 2007). Therefore, personal selling should play their appropriate roles in delivering whatthe brand stands for, its abilities and promises to reach customer trust towards the brand(Schneider and Bowen, 1993; De Chernatony and Dall’Olmo Riely, 1999; De Chernatony andHarris, 2000; Evans et al., 2002; De Chernatony et al., 2003; Kimpakorn and Tocquer, 2010).Based on the above points, the following hypothesis was developed:H2: Personal selling has a significant positive direct effect on CBBE dimensions.This hypothesis has been split into five sub-hypotheses as follows:H2a: personal selling has a significant positive direct effect on brand awarenessH2b: Personal selling has a significant positive direct effect on brand perceived qualityH2c: personal selling has a significant positive direct effect on brand associationsH2d: personal selling has a significant positive direct effect on brand loyaltyH2e: personal selling has a significant positive direct effect on brand trustFigure (1): Proposed modelInternational Conference on Globalisation, Entrepreneurship & Emerging Economies, Egypt79

The Business and Management Review Volume 7 Number 2February 20163. Research MethodsA quantitative approach was conducted to test the research hypotheses. A list of multipleitem scales for each variable was adopted from the literature. A ten- item scale for personalselling was adapted from Lee and Back, (2007), Rajh and Dosen, (2009). Regarding the CBBEdimensions (brand awareness, brand perceived quality, brand associations, brand loyalty andbrand trust). A six-item scale for brand awareness was adapted from Srull, (1984), Alba andHutchinson, (1987), Rossiter and Percy, (1987), Yoo et al. (2000), Yoo and Donthu, (2001),Netemeyer et al. (2004). A nine-item scale for brand perceived quality was adapted from Yoo etal. (2000), Netemeyer et al. (2004), Pappu et al. (2005, 2006), Dagger et al. (2007). A ten-item scalefor brand associations was adapted from Aaker and Blanco, (1995), Lassar et al. (1995), Yoo et al.(2000), Netemeyer et al. (2004), Pappu et al. (2005,2006), Tong and Hawley, (2009). A nine-itemscale for brand loyalty was adapted from Beatty and Kahle, (1988), Yoo et al. (2000), Yoo andDonthu, (2001), Lewis and Soureli, (2006), Sichtmann, (2007), Pinar et al. (2012). A thirteen-itemscale for brand trust was adapted from Dimitriadis and Kyrezis, (2008). The items for theoverall brand equity (four items) were derived from Yoo et al. (2000), Yoo and Donthu, (2001).While the items for each variable were drawn from the above-mentioned research, they weremodified to fit the objectives of this study.4. Population and SamplingA quota sampling technique was used, which is a type of non-probability sampling. Thismethod is the best technique in the non-probability sampling, and is generally used when thereis no sampling frame (Saunders et al., 2012). This study was not able to gain hold of a samplingframe (list of bank customers). Given the fact that banks did not agree to provide the researcherwith this information because such information was confidential. In this study, the quotasampling contains two main steps. The first step was to select the banks to be surveyed.According to the Central Bank of Egypt (2012), there are a total of eight major banks that cover70 % of the total Egyptian banking sector in terms of customers’ deposits. These banks are frompublic and private sectors. The public sector contained three banks: National Bank of Egypt(NBE); Banque du Caire and Bank Misr. The private sector included five banks, CommercialInternational Bank (CIB); Qatar National Bank (QNB); Hong Kong and Shanghai BankingCorporation (HSBC); Arab African International Bank (AAIB) and Barclays. Once the selectionof banks was established, the researcher conducted the second step, which was to choose therespondents proportionately to the actual market share in terms of customer deposits found inthe focused banks. Although a quota sample is not considered a probability sample, theresearcher was careful to reduce bias in order to increase the representativeness of the sample.International Conference on Globalisation, Entrepreneurship & Emerging Economies, Egypt80

The Business and Management Review Volume 7 Number 2February 2016The following table illustrates the amount of total customer deposits in each of the focusedbanks and also presents these banks in ratios to the customer deposits out of 70%. These ratioswere then computed to be equivalent to 100 % in order to begin the selection of customers fromeach bank.Table (1): Banks’ market share in terms of customers’ depositsBanksNBEBank MisrBanque du CaireCIBQNBHSBCTotal Deposits(Billion)27916347735345Market Share urce: Central Bank of Egypt and the financial statements of the individual banks 2012The researcher needed to determine an accurate sample size in order to make validconclusions. According to Creswell (2009), a sample size of 384 or above is adequate for apopulation of 100,000 or more. Conversely, Roscoe (1975) stated that a sample size above 500would lead to incorrect analysis and data error. Thus, the researcher chose a sample size foundin the range between these two numbers. The researcher chose to assemble 465 respondentsfrom the selected banks. In order for the research sample to be generalized, the researchersought to identify the actual percentage of the banks’ market share in terms of customerdeposits and selected the numerous respondents equivalent and balanced to the market sharepercentage.The following table illustrates the selected banks, their market share and the number ofrespondents and its percentage in each bank. The researcher visited these banks and began toapproach the customers. Respondents were approached and asked if they would like toparticipate in a research project. Those who agreed were given a questionnaire to fill out.Table (2): The sample compositionTargeted BanksNBEBank MisrBank du .7%7.1%5.2%1.9%100%5. Results and analysisBefore testing the hypotheses, several analyses were conducted such as: convergentvalidity, discriminant validity, reliability of research variables and model fit indices.5.1 Convergent validityInternational Conference on Globalisation, Entrepreneurship & Emerging Economies, Egypt81

The Business and Management Review Volume 7 Number 2February 2016Confirmatory factor analysis was used to assess the convergent validity of differentvariables. The rotation method used was Varimax with Kaiser Normalization. Factor analysisusing the principal component method was used to examine the convergent validity of thepersonal selling, CBBE dimensions (brand awareness, brand perceived quality, brandassociations, brand loyalty and brand trust) and the overall brand equity (as a separateconstruct). For researchers using factor analysis, consider loadings of 0.30 or more significantfor sample sizes of 350 or greater will be appropriate. This guideline should be used as astarting point in factor loadings interpretation (Hair et al., 2010). In this study, the factor loadingfor each item of the research variables values were above the recommended level (Hair et al.,2010) demonstrating the significant contribution of the items in measuring their variable.5.2 Reliability of research variablesTesting the reliability of the research variables is very crucial as it shows the extent to which ascale produces consistent result if measurements are made repeatedly.The following table (3) summarizes the results of Cronbach’s alpha coefficientTable (3) Reliability of Research VariablesVariablesPersonal sellingBrand awarenessBrand perceived qualityBrand associationsBrand loyaltyBrand trustOverall brand .8850.8880.815alphaFrom the above table, Cronbach’s alphas values ranged between 0.795 and 0.974, whichindicate an acceptable level of scale reliability for theory testing research (Nunnally andBernstein, 1994). This means that each scale will produce consistent result if measurements aremade repeatedly.5.3 Model Fit IndicesGoodness-of-fit-statistics indicating the overall acceptability of structural modelanalysed. GFI is based on a ratio of the sum of the squared differences between the observedand reproduced matrices, while Adjusted Goodness of Fit Index (AGFI) adjusts for the numberof degrees of freedom of a model relative to the number of variables and the number ofobservations (Hair et al., 2010). Moreover, they indicated that the acceptable fit standards forGFI and AGFI should be greater than 0.9, with values close to 1.00 indicating good fit. Anotherindex, Root Mean Square Error of Approximation (RMSEA), which is recommended to be 0.05or less that indicate a close fit of the model. The following table (4) presents the GFI, AGFI andthe RMSEA for the proposed model and the modified model.Table (4): Model Fit IndicesThemeasureGFIAGFIThe best result accordingto Hair et al., (1998)Range from 0 to 1 (closer to1 is better)Range from 0 to 1 (closer toThe results of the 0International Conference on Globalisation, Entrepreneurship & Emerging Economies, Egypt82

The Business and Management Review Volume 7 Number 2RMSEA1 is better)Less than 0.05 is betterFebruary 20160.1160.030From the above table, it has been showed that the GFI, AGFI and RMSEA for theproposed model were 0.408, 0.373 and 0.116 respectively. It has been found that in order toenhance the GFI, the AGFI and the RMSEA, covariance should be taken into considerationamong the five CBBE dimensions (brand awareness, brand perceived quality, brandassociations, brand loyalty and brand trust). After taking the covariance into consideration, theGFI, AGFI and RMSEA become 0.998, 0.970 and 0.030 accordingly, which indicates the good fitof the modified model. After modifying the model, the hypotheses have been tested.5.4 Testing hypothesesThe AMOS output for the model parameter estimates is presented in table (5). In orderto determine if the effect is statistically significant, the unstandardized estimate is divided by itsstandard error (SE) and yields the critical ratio (CR), which can be interpreted as a t-value. tvalue of 1.96 translates to a 0.5 significance level P-value. Therefore, any number of a criticalratio above 1.96 or P-value less than or equal 0.5 is considered to be significant in the model(Hair et al., 2010).Table (5): the Unstandardized Estimate, Standardized Estimate, SE, CR,P-value and the result of the direct effectsUnstandardizedEstimateA --- PS.295Q --- PS.360ASS --- PS.177L --- PS.389T --- PS.301OV --- A.042OV --- Q.174OV --- ASS .055OV --- L.446OV --- ***.187ResultsSSSSSN.SSN.SSN.SNotes: *** is significant at 0.01S: Supported hypotheses and N.S: Not supportedhypothesesThe obtained statistics indicate that all path coefficients results appeared to be significantexcept the following paths: the path coefficient from brand awareness to overall brand equity,brand associations to overall brand equity and brand trust to overall brand equity. All thesepaths were found insignificant as the CR are 0.779, 0.589 and 1.318, respectively. These figuresare less than 1.96 and the P-values are 0.436, 0.556 and 0.187, respectively. Their P-values aregreater than 0.5, which indicates the insignificant paths.The first hypothesis, which generally stated that:“ CBBE dimensions have a significantpositive direct effect on the overall brand equity”, was partially supported. It was found thatonly brand perceived quality and brand loyalty have a significant positive direct effect on theoverall brand equity. Brand awareness, association, and trust do not impact directly the overallbrand equity. However, there are interrelationships that exist among the five CBBE dimensions.Therefore, they are all important. The brand loyalty has been found to have the strongest effecton the overall brand equity. Since loyalty is “the overall attachment that a customer has to abrand”, customers must develop loyalty, and devotion with the institutions they deal withbecause their finances and money matters are crucial to them. For this reason, banks must focusInternational Conference on Globalisation, Entrepreneurship & Emerging Economies, Egypt83

The Business and Management Review Volume 7 Number 2February 2016more on building brand loyalty. It should be developed through the personal selling.Furthermore, brand quality affects the overall brand equity because it takes into considerationthe whole performance and excellence of the bank. Since brand loyalty and brand perceivedquality have a significant positive direct effect on overall brand equity, it is better to focus onpersonal selling to reflect good quality and build customer’s loyalty towards the bank.The second hypothesis, which generally stated that: “Personal selling has a significantpositive direct effect on CBBE dimensions”, was supported. It has been found that personalselling has a significant positive direct effect on brand awareness, brand perceived quality,brand associations, brand loyalty and brand trust. This result indicated the importance of thepersonal selling in creating awareness; in reflecting good quality and constructive features; inbuilding long-term and trustworthy relationships with the customer through the face-to-facecommunication; and through the interactions that help create a communication channel richwith information.To conclude, it has been shown that personal selling has a significant positive directimpact on all the 5 CBBE dimensions (brand awareness, brand perceived quality, brandassociations, brand loyalty and brand trust). Given the fact that all CBBE dimensions areinterrelated, not all of them impact directly the overall brand equity. There are only two ofCBBE dimensions that affect directly the overall brand equity. These two dimensions consist ofbrand perceived quality and brand loyalty, which were found to have a significant positivedirect effect on the overall brand equity in the Egyptian market. Thus, any bank committed tobuild brand equity must focus on the personal selling and direct it to influence directly on thebank quality and the bank loyalty because high brand equity is the main competitive advantageparticularly to a bank.Figure (2): The final model6. Limitations and future researchInternational Conference on Globalisation, Entrepreneurship & Emerging Economies, Egypt84

The Business and Management Review Volume 7 Number 2February 2016Since this study was conducted in the Egyptian banking sector, the replication can bedone within other services (e.g., insurance company, hospitals, airlines, hotels and universities)because the factors that contribute in building the overall brand equity may vary from oneservice to another. Second, cross-cultural research may reveal different processes of brandequity formation in different cultures. Third, this research focuses on the most importantmarketing communication tools used in the Egyptian banking sector. Future research mightinclude some other

According to the Central Bank of Egypt (2012), there are a total of eight major banks that cover 70 % of the total Egyptian banking sector in terms of customers' deposits. These banks are from public and private sectors. The public sector contained three banks: National Bank of Egypt (NBE); Banque du Caire and Bank Misr.