Saudi Arabia shelves plan to take over United Bank of Egypt over disagreement with Cairo

Saudi Arabia has put a plan by its sovereign wealth fund to acquire the United Bank of Egypt on hold because of a disagreement with the Egyptian authorities over its valuation, Reuters reports citing two sources familiar with the matter.

The pause is unprecedented in the spree of investments done by the Gulf country in the North African country.

It also marks the most recent stumble in vast investment program promised by Gulf states after Russia’s invasion of Ukraine prompted foreign investors to pull more than $20 billion out of Egyptian markets, throwing its economy into crisis.

Saudi Arabia, the UAE and Qatar last year all promised to make large investments to help Cairo shore up its finances. Saudi Arabia deposited $5 billion with Egypt’s central bank in March, and in June said it intended to lead $30 billion worth of investments. Saudi Arabia’s Public Investment Fund (PIF) began talks last year with Egyptian authorities about buying United Bank.

The two parties could not come to an agreement over how to value the government-owned lender due to the devaluation of the pound, and both parties are holding their positions, Reuters said.

Egypt has allowed its currency to depreciate by almost 50% since the outbreak of the Russia-Ukraine crisis.