BLOM is also in advanced negotiations to acquire the stakes owned by two Romanian banks, which would give it control of about 80 per cent of the bank’s shares in addition to management control. ‘There is no danger of any sort of bidding war taking place when we submit our offer, because CBE [Central Bank of Egypt] approval is needed before any bank can acquire 10 per cent or more of an existing bank, and our technical proposal has already been approved,’ says a BLOM official.
BLOM is considering staging its second global depositary receipt (GDR) issue to help fund the purchase. Credit Suisse First Boston
has the mandate to arrange the issue (MEED 11:11:05). ‘Banque Misr is not a particularly attractive asset but the acquisition of any local bank is a means of gaining a licence to operate in the very promising Egyptian market, since the central bank wants to encourage consolidation rather than allowing new banks to enter,’ says a Cairo-based analyst.
‘Going for Misr Romanian makes sense for BLOM given our size,’ says the BLOM official. ‘The bank has five branches in Romania – a number not likely to be expanded but which will be able to capture the niche business generated by expatriate Arabs in the country – and eight in Egypt, which will be increased and will focus mainly on the retail market.’
BLOM is undertaking a broader regional expansion, which has seen it take a stake in one of the first private banks to open its doors in Syria and enhance its branch network in Jordan.
A wider sale of government holdings in the Egyptian banking sector is under way, including the divestment of Egyptian American Bank
by Bank of Alexandria
and American Express
, and the acquisition by National Societe General Bank
of Misr International Bank (MIBank)
in August (MEED 26:8:05).