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French Version

Banque Audi eyes UBE to break into Egypt market

Cairo looking to sell some existing banks

Banque Audi, one of the leading banks in Lebanon in terms of assets and profits, plans to enter the Egyptian market through the acquisition of an existing bank, said the adviser to the chairman Fredi Baz. "The Egyptian market is very enticing especially after the government adopted new economic reforms," Baz told The Daily Star.

Egypt's Central Bank has already given Audi and three other banks permission to undertake due diligence on the United Bank of Egypt (UBE) which has assets of nearly $750 million.

Its main shareholders are state-owned Banque du Caire (21.8 percent), state-owned Misr Insurance (10.7 per-cent) and Suez Canal Bank. About 14 percent of the shares are freely floated on the Egyptian stock exchange but they have not traded for many months, according to stock exchange data.

"UBE is not the only bank in Egypt Audi is considering," Baz said, adding that Egypt wants to cut the number of banks operating in the country by selling existing ones.

Apart from Audi, the Suez Canal Bank, Commercial International Bank and Egyptian Gulf Bank have also shown interest in UBE.

Lebanon's BLOM bank has already established a foothold in Egypt after acquiring Misr Romanian Bank in a deal worth more than $97 million.

"The Egyptian market is very promising and especially if you consider that the country has a population of more than 70 million and a GDP of more than $100 billion," Baz said.

But Baz added that it is too early to set a price for UBE or any other Egyptian bank because it all depends on the bidding process.

The Egyptian government is offering some of the existing banks for sale to both local and foreign investors as part of the privatization program.

"Egypt does not want to give new licenses for banks because they already have too many. It prefers to sell some of the banks they have," Baz said.

Banks interested in operating in Egypt must have a minimum capital of 500 million Egyptian pounds (nearly $80 million).

"We are willing to pay what is required and we are not willing to pay more than it is required," Baz said.

He added that the banks Audi is looking at may not have an important size but rather the good will it willing to pay for a franchise.

Baz said that it was natural for Banque Audi and other Lebanese banks to look outside Lebanon because these banks have become too big for their countries.

Banque Audi is already operating in Syria and Jordan and is eying other markets in North Africa.

Baz said that Audi has already obtained a license to operate in Iraq which he believes has huge potential.

Audi recorded a net profit of more than $74 million in the third quarter of 2005 compared to $48 million in the same period of 2004.

Beirut 20-12-2005
Osama Habib
The Daily Star

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