United Bank of Egypt and Arab Investment Bank are likely the two state banks which the central bank plans to offer their shares in initial public offering, sources familiar with the matter told Amwal Al Ghad.
On Tuesday, central bank governor Tarek Amer announced that his bank is studying the possibility of offering shares in two state banks in IPOs. He did not specify which banks would be offered, yet he excluded state bank giants National Bank of Egypt and Banque Misr from the offering plans.
“We are studying taking a couple of banks to the stock market for capital increases, diluting around 20 percent,” he said.
The central bank is also considering “offering a stake in one of its ventures to a strategic investor”, Amer added.
Meanwhile, the sources explained that the central bank had recently announced plans to offer part of its stakes in the United Bank of Egypt in an IPO after an anticipated restructuring move. This gives a strong indication that United Bank is included in the central bank’s plans to list its shares on Cairo bourse.
As for the Arab Investment bank, it is one of most successful state banks but it currently needs a financial support, that is why it might be included as well in the listing plans, the sources added.
Moreover, the sources stated that Banque Du Caire might be also on the listing plans. However, the bank enjoys a significant financial liquidity and considerable size of deposits in addition to profits recently exceeded two billion pounds that make it able to finance any capital increase plans through several options other than offering an IPO.
Earlier, the presidency said last Saturday Egypt plans to list shares in state-owned banks and companies on the stock market, in a move aimed at jump-starting investment and boosting economic growth.
“The coming period will witness offerings of parts of the capital of successful Egyptian companies and banks on the bourse,” said presidential spokesman Alaa Youssef.
The statement follows a meeting between President Abdel Fattah al-Sisi and ministers to discuss the stock market’s decline.
The statement did not specify which banks or sectors would be offered.
The last time state-owned companies were listed on the exchange was in 2005 when shares of Telecom Egypt, the state’s landline monopoly, and oil companies Sidi Kerir Petrochemicals and AMOC were floated.
Last year three major companies floated on the exchange — cake and biscuit maker EDITA, real estate firm Emaar Misr and Orascom Construction.
There are around 270 companies listed on the bourse and about 500,000 investors, of which between 80,000 and 100,000 are active. Documents seen by Reuters earlier showed there were 15 companies waiting to sell shares.