Egypt will sell a 40 per cent stake in Arab African International Bank (AAIB) and a 20 per cent share of Banque Du Caire in public flotations on the stock exchange by the end of 2016, central bank governor Tarek Amer has said.
We want to strengthen the bourse to make Egypt attractive, Amer said in a television interview. In January, the governor said the central bank was considering initial public offerings (IPOs), without naming the banks at that time.
The government will increase Banque du Caires capital through the share sale. The 40 per cent stake of AAIB would be offered in the same way, with half of the shares to be sold by the government and the other half by the banks Kuwaiti investors, as reported by UK news agency Reuters.
The government owns three of Egypts largest banks National Bank of Egypt, Banque Misr and Banque du Caire. It holds a 50 per cent stake in AAIB, which it jointly owns with Kuwaiti investors.
Cairo also plans to sell a stake in United Bank of Egypt, which is 99 per cent owned by the central bank, to a strategic investor this year, according to Amer. Egypt last privatised a bank in 2006, when it sold 80 per cent of Bank of Alexandria to Italys Intesa Sanpaolo for $1.6bn.
The Egyptian economy has struggled since the 2011 popular uprising that ousted long-term President Hosni Mubarak. The security concerns since have affected foreign investments and has driven tourists away, the countrys main source of foreign exchange. Political instability has hit growth and more than halved its foreign currency reserves.
The last time state-owned companies were listed on the exchange was in 2005, when shares were floated in Telecom Egypt, the states landline monopoly, as well as oil company Sidi Kerir Petrochemicals.