Faisal Islamic Bank of Egypt (FIBE) is planning to raise its capital by $50 million to $150 million and allow foreign investors to take a majority shareholding. The move may result in Geneva-based Dar al-Maal al-Islami Group (DMI) increasing its existing minority stake in FIBE.
The bank will hold an extraordinary general meeting on 14 November to approve the capital increase, which has been under consideration since 1994. The meeting would also allow a change in the bank’s statutes, which currently require Egyptian shareholders to hold at least 51 per cent of its equity. The bank’s largest Egyptian shareholder is the Waqf Authority.
Such a change would echo developments elsewhere in the Egyptian banking sector, where state-owned local banks are reducing their shareholdings in joint venture banks, allowing their foreign bank partners to increase their ownership.
DMI, which controls a worldwide network of Islamic financial institutions, currently owns 12.8 per cent of FIBE. A spokesperson for the group told MEED that no decision had been taken on whether or not to increase DMI’s stake, but the question is to be put before the group’s board.
FIBE reported gross profits, before cost of funds, of £E 303 million (then $89 million) for the year to May 1995, on assets of
£E 6,373 million ($1,880 million). The bank lost money in the collapse of the Bank of Credit & Commerce International (BCCI) in 1991 and recently failed in a legal bid to claim priority in repayments from the liquidated bank’s assets. Arabic press reports say FIBE is claiming $362 million in compensation (MEED 26:7:96).