Egypt’s banks brace for change

As Gulf banks grapple with squeezed margins, low interest rates and over-banking, Egypt offers the opposite: high interest rates, low lending penetration and a largely unbanked population. It is no surprise that domestic and regional buyers are now circling.

In September, EFG Hermes and the Sovereign Fund of Egypt received approval from the central bank of Egypt to begin due diligence to acquire 76% of the capital of Arab Investment Bank (AIB), a small state-run bank, from National Investment Bank.

EFG Hermes has been looking for an acquisition that would allow it to transform itself from pure play investment banking business into a universal bank – and here was that opportunity.

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