Misr-Misr merger approved

24 September 2004
The Central Bank of Egypt has approved the merger of Misr Exterior Bankwith state-owned Banque Misr, making it the first of six local state-affiliated banks to be folded back into their parent companies. The decision, which takes effect from 26 September, comes a week after the announcement of a five-point strategy for reform of the local banking sector, which will also see the sale of minority government stakes and the creation of a central body to oversee the settlement of non-performing loan (NPL) cases. The five other banks slated for merger are Commerce & Development Bank, El-Mohandes, Islamic International Bank for Investment, Nile Bankand United Bank of Egypt (MEED 17:9:04).

Cairo has also revived long-delayed privatisation plans for the sector. International banks are preparing for the anticipated offer of minority stakes in a number of local banks, including Misr International Bank (MIBank), in which Banque Misr has a stake, and Egyptian American Bank.

However, local analysts warn that it may be some time before any sales are concluded. 'The government has said there will be a sales process, but at the moment we are waiting for them to clarify it,' says an international banker based in Cairo. 'Also, it's a hugely speculative market at the moment and share prices have been rocketing in the last couple of months. Not many of the [government stakes] on offer look terribly attractive at these prices.'

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