June 24, 2020 / 3:04 PM / 2 months ago

Egypt looking to sell majority stake in Arab Investment Bank, potential buyers say

CAIRO, June 24 (Reuters) - Egypt is looking to sell a majority stake in state-controlled Arab Investment Bank (aiBank), with the central bank granting EFG Hermes and the country’s sovereign wealth fund access to the lender’s financials, the potential buyers said on Wednesday.

The government and central bank are looking to privatise several lenders, extending a withdrawal from the sector which began in the 2000s before being suspended for at least a decade.

Investment bank EFG Hermes Holding and the Sovereign Fund of Egypt would acquire 76% of aiBank, mainly by increasing its capital, although they could also purchase some of the current owners’ shares, they said in a statement.

Established in 1974, aiBank is 91.42% owned by the state National Investment Bank and 8.58% by an organisation called the Federal Arab Republic.

EFG Hermes, which said the deal would allow it to offer a wider range of services, would own at least 51% of aiBank with the Sovereign Fund taking least 25%, according to the statement.

“I look forward to the successful completion of this transaction in the coming few months,” it quoted the fund’s CEO Ayman Soliman as saying.

The central bank did not immediately respond to a request for comment.

According to the most recently available financial information on aiBank’s website, at the end of 2017 it had assets of 23.85 billion Egyptian pounds ($1.47 billion) and paid-up capital of 1 billion pounds, while its net profit for the year was 154.1 million pounds.

Egypt postponed the sale of a $500 million minority stake in Banque du Caire scheduled for April due to the coronavirus pandemic. It has also announced plans to sell stakes in the United Bank of Egypt and Arab African International Bank IPO-AAIB.CA.

$1 = 16.1975 Egyptian pounds Reporting by Patrick Werr; Editing by Kirsten Donovan

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