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CHAMPION OF THE DAY
Sale of Bank Audi Egypt
to UAE Bank put on hold
Challenging economy in UAE
is the cause of halt
First Abu Dhabi Bank (FAB) has notified Bank Audi that it wants to put on hold talks to buy the Egyptian assets of the Lebanese lender, according to Reuters.
The deal has an estimated market value of $700 million.
Earlier this year, FAB said that a decision on the acquisition would be made before mid-year.
Bank Audi Egypt has grown from a three-branch operation acquired by Bank Audi in 2005 to 50 branches with total assets of $4.4 billion, but it was barely profitable. It grew organically and by acquisitions, the latest was that of the 17 local branches of the National Bank of Greece, announced in May 2019, for an estimated $120 million.
FAB’s decision comes as a result of economic pressures in its own home turf, due to the Covid-19 pandemic and a crash in oil prices. The Central Bank of the UAE has initiated capital and liquidity measures of more than $70 billion to support the economy during the crisis.
FAB has launched relief measures for its customers, including the postponement of loan repayments and the suspension or reduction of fees and charges across a wide range of financial products.
Reuters said that FAB’s halt to close the deal with Bank Audi follows the postponement of Kuwait Finance House’s acquisition of Bahrain’s Ahli United Bank, one of the biggest cross-border banking deals for years.
Bank Audi had named Egypt’s EFG Hermes as financial advisor and Zulficar & Partners Law Firm as legal advisor for the sale of its Egyptian unit.
“Since the beginning of the crisis in Lebanon, Bank Audi has received several inquiries from investment banks to gauge our interest in selling foreign assets as a way of increasing the capitalization and liquidity of the Lebanese operation,” said Tamer Ghazaleh, Bank Audi’s Group Chief Financial Officer, earlier this year.
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May 18, 2020
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