Verbal negotiations were taking place between Central Bank of Egypt (CBE) and a Qatari sovereign fund over acquiring 99% of CBE’s United Bank, official sources said.
Sources added in an interview with Amwal Al Ghad that CBE is waiting the fund’s official request to approve the deal.
CBE will approve the deal as United Bank will be sold in dollar and that will stop the sharp decline in Egypt’s foreign reserves as it fell US$ 22 billion since 2011’s revolution.
CBE earlier announced that it will sell its stakes in banks such as United Bank and Arab African International Bank, so there will be no conflict between the regulator’s role as a supervisor and its role as an owner. However, Egypt’s stock market is not currently able to process new IPOs.
Sources confirmed that Qatar’s state-owned sovereign fund chose United Bank because it is an Islamic bank.
As CBE disapproves licensing more banks, Qatar’s sovereign fund was directed towards acquiring an already-licensed bank.
Qatar’s fund has adequate financial and investment power that will benefit Egypt’s market, if the acquisition deal were agreed on.
The current political and economic turmoil does not affect the fund’s decision to offer a robust deal to enter Egypt’s banking market.