The international banks queuing up to enter the Egyptian market will be mulling over good and less good news. On the positive side, Al- Watany Bank of Egypt is considering plans to sell a majority stake to a strategic investor. However, the planned sale of Misr America International Bank (MAIB), in which a number of institutions have expressed an interest, has run into difficulties during the due diligence process.
Flemings CIIC has been appointed as adviser to Al-Watany as it considers its options. ‘We are certainly looking to stage a capital increase in the near term,’ says Fatma Lotfy, Al-Watany’s recently-appointed general manager and board member. ‘But it would be premature to say which path we will go down; the matter will be put to the bank’s general assembly in late February or early March.’ She says the options include offering a majority stake to a strategic investor, local or domestic, or the issue of global depositary receipts (GDRs). ‘This could happen as early as the first or second quarter this year,’ says Lotfy, who previously worked at Egyptian American Bank.
Al-Watany is one of the fastest growing banks in Egypt and at the end of September last year it had assets of £E 3,477 million ($1,020 million). It is probable that the sale of a stake in Al-Watany would attract the interest of the banks involved in the bidding for Egypt Arab African Bank last year, and those interested in the current offering of MAIB. Among these are Standard Chartered Bank, National Bank of Kuwait, Credit Agricole Indosuez (CAI) and ABN AMRO (MEED 5:11:99).
‘We are aware that a 51 per cent stake in Al-Watany Bank might be available, and we would look into the opportunity closely,’ says Henri Guillemin, senior vice-president, Middle East division, of CAI. ‘But we have not been directly approached at this stage.’
The proposed sale of a controlling stake in MAIB is reported to be in trouble. It is understood that access to details of the bank’s loan portfolio has been denied. ‘We have had a problem with the due diligence process,’ says Guillemin. ‘This is proving to be a major obstacle for us and I imagine it is for the other banks involved.’