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United Bank in Egypt to be sold late 2016, early 2017: chairperson

The actual procedures of offering the United Bank for sale may start in late 2016 or early 2017, according to Ashraf El-Kady, chairperson of the bank.

The Central Bank of Egypt (CBE) decided in late March to offer the bank for sale to a strategic investor before the next year.

According to El-Kady, the bank is now ready for sale and the CBE has already received requests from a large number of international financial institutions willing to acquire the bank. However, it did not grant approval to any of these institutions to conduct the technical due diligence of the bank.

“The CBE will not accept the offers of all the institutions that ask to acquire the bank, but will choose the best and strongest of them in terms of creditworthiness. After that, it shortlist the institutions that will conduct the technical due diligence of the bank,” according to El-Kady.

In an interview to Daily News Egypt in June, El-Kady noted that the bank’s administration was completing the restructuring of the bank and preparing it for sale, and at the same time executing an expansion plan in the different sectors and activities.

El-Kady said that the bank has attracted Gulf and international financial institutions to acquire it, thanks to its branch network, business value, professional staff, and sound infrastructure, in addition to its diversity of products and Islamic banking licence.

In a press conference held by the bank on Monday, El-Kady said that all scenarios are on the table with regards to selling the bank, including offering it in the stock market. However, he considered that selling it to a strategic investor is a greater possibility so as to provide foreign liquidity that would help alleviate the severity of the crisis the Egyptian market is going through and support its foreign exchange reserves.

The United Bank was established in 2006 with the aim of merging the Nile Bank, the Egyptian United Bank, and the Islamic Bank for Development and Investment. The bank’s capital now amounts to EGP 1bn, while the equity amounts to EGP 1.7bn.

The CBE granted the bank a EGP 4bn subordinated loan, all of which is to be repaid to the CBE upon finalising the selling process.

The bank inherited defaulting debts worth about EGP 6bn from the three banks merged in it. It succeeded in collecting about EGP 3bn of this, while collection of the remaining debt is underway.

The bank now has 47 branches and three other banking units—21 branches of which are for Islamic banking. The bank plans to open five new branches before 2017.

According to El-Kady, the bank’s financing portfolio reaches about EGP 5.8bn including small- and medium-sized enterprises, real estate financing, and retail banking. The bank is aiming to increase that number to about EGP 6.2bn by the end of 2016.

The deposits at the bank amount to about EGP 22bn, and it intends to increase them to EGP 25bn by the end of this year.

source: Daily News Egypt

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