Egypt's United Bank expected to be sold to US investment fund in 3 months: CBE governor

Ahram Online , Monday 29 Apr 2019

Today, the United Bank is the country's third largest bank, with a capital of about EGP 3.5 billion; the acquisition, if finalized, would contribute to strengthening the country's foreign reserves and banking system

United Bank (Al-Ahram)
United Bank (Al-Ahram)

The sale of United Bank to an unnamed US investment fund is expected to be finalised within three months, Tarek Amer, the governor of the Central Bank of Egypt, told MENA state agency on Monday.

"The US fund is one of the largest investment funds in the world, with a capital of about $104 billion," Tarek Amer said.

The CBE governor did not disclose the fund's name, since the potential US buyer is conducting an annonymous vetting process to assess the capital, financial deals and investments of United Bank.

The CBE owns about 99.9 percent of United Bank’s capital.

United Bank was created in 2006 when the CBE merged three banks facing bankruptcy at the time - the Islamic Bank for Development and Investment, the Nile Bank and the United Egyptian - in order to protect depositors.

The decision to create the United Bank was part of implementing the CBE's policy of reforming the banking system, which started in 2003, experts told Al-Ahram Arabic news website.

The banking reform policy succeeded in reducing of the number of banks operating in Egypt from 69 to 39, consolidating the sector.

Today, the United Bank is the country's third largest bank, with a capital of about EGP 3.5 billion, and 54 branches nationwide.

Rashad Abdo, a banking sector expert, explained that the potential acquisition of United Bank by a US find would both contribute to strengthening the country's foreign reserves, since the potential buyer is a US fund that deals in dollars, and also inject developed banking mangement expertise into Egypt's banking system.

Last week, Banque du Caire announced it will offer a portion of its shares for sale on the stock market before the end of the year.

Banque du Caire, owned by Banque Misr, the second-largest state-owned bank in Egypt, will offer 20 or 30 percent of its shares for private placement and public offering, but has yet to decide on the percentage of each.

The offering is expected to garner between $300 and $400 million.

However, the central bank has opted not to offer shares for the United Bank on the stock market per the CBE's policy of preventing individuals from owning banks and according to its preference of trusting the management of banks to experienced banking institutions.

Similarly, the CBE plans to keep the management of a privatised Banque du Caire to institutions not individuals based on its above-mentioned policy.

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