Lebanon’s Bank Audi mulls sale of Egyptian unit with right offer – CFO

Lebanon’s Bank Audi is studying the sale of its Egyptian unit after receiving interest from lenders, its chief financial officer told Reuters in an interview late on Monday.

The move indicates a possible strategy rethink by Bank Audi as Lebanon grapples with an ongoing financial crisis.

“For us, we would not have considered thinking of it if the situation was different in Lebanon. We have our own ambition and expansion plan in Egypt,” Tamer Ghazaleh

Egypt’s central bank denied in a statement on Monday receiving a request from Lebanon’s Bank Audi to sell its Egyptian unit.

Bank Audi is also proceeding with an equity increase as it will call for a shareholder meeting by the second week of February for a vote, Tamer Ghazaleh said, expressing confidence in securing shareholder support.

The equity raising step came as Lebanon’s central bank has instructed all Lebanese banks to implement to help weather the crisis, the country’s worst in decades.

In November, Lebanon’s central bank instructed banks to raise their Common Equity Tier 1 capital, a key measure of financial strength, by 10 percent through cash injections by the end of the year and a further 10 percent by June 30 this year.

Bank Audi is “doing the equity increase and independently considering discussing with parties selling Bank Audi Egypt at the right price”, Ghazaleh further told Reuters.

“For us, we would not have considered thinking of it if the situation was different in Lebanon. We have our own ambition and expansion plan in Egypt,” he added, referring to a potential selling of Bank Audi Egypt.

When Lebanon’s crisis erupted, Bank Audi has received several calls from investment bankers “trying to support us if we want to sell foreign assets as a way of increasing the capitalisation and liquidity of the Lebanese operation”, Ghazaleh explained.

“The appetite of investors was higher for Egypt. We did not reach any agreement with any party to do a transaction but we are considering this – if we get the right offer,” he added.

Bank Audi Egypt has grown from a three-branch operation acquired by Bank Audi in 2005 to 50 branches to date with total assets of $4.4 billion by the end of September, Ghazaleh said, describing it as “a very profitable operation”.

“For us, we would not have considered thinking of it if the situation was different in Lebanon. We have our own ambition and expansion plan in Egypt,” he added.

If Bank Audi decided to sell, it would still require board and regulatory approval, he said.