Egypt: Government to cash in on in-demand bank
The Egyptian government is about to part with one of its hottest assets. Bank of Alexandria, the country’s third-largest bank, with a balance sheet of $6.5 billion, will find itself in the hands of a strategic investor. And the government will find itself a good few Egyptian pounds richer.
Demand is strong; it is the first of the big Egyptian banks to come up for sale. And there will not be many more bank privatizations, with none proposed in the near future. Apart from the Bank of Alexandria, only three state-owned banks remain, two of which are soon to be merged with each other. Since it carries out central bank functions, the National Bank of Egypt is not in the picture, leaving the merged entity of Banque Misr and Banque du Caire as the sole item on the shelf.
According to a source at Citibank, the lead adviser in the deal, the government is likely to proceed with a sale of Banque Misr/ Banque du Caire modelled on the Bank of Alexandria privatization, but this will not be undertaken before the consolidation process is complete. Some observers estimate that this will take about three to four years.
Mahmoud Abdel Latif, chairman of Bank of Alexandria, gives an alternative explanation for why his bank will be the only one to be privatized in the near future. “Bank of Alexandria has been turned around by its management in the past four years,” he says. All public sector banks started restructuring at that time, but we are the only ones that have completed the process.