Egypt moves forward with privatization as Emirates NBD eyes Banque du Caire

Emirates NBD, the largest bank in Dubai by assets, has commenced due diligence on a potential acquisition of a stake in Banque du Caire, Egypt’s sixth-largest commercial bank.

This acquisition is part of Egypt’s ongoing efforts to privatize state-owned businesses as the country seeks to raise up to $2.5 billion in its 2024-2025 fiscal year. The sale, reported by regional media, follows Egypt’s expanded $8 billion loan agreement with the International Monetary Fund (IMF) last year. And is seen as a key part of the nation’s strategy to reduce debt and revitalize its economy. However, the IMF has stressed that further reforms must be implemented decisively.

The transaction under consideration would involve Emirates NBD purchasing a 45% stake in Banque du Caire, a state-owned institution under Banque Misr. The deal, which could be completed within six weeks, is valued at approximately $1.2 billion. Banque du Caire’s assets total around $9.4 billion as of September 2024, while Emirates NBD Egypt, with assets of $3.1 billion, ranks as Egypt’s 20th-largest bank. Both banks have reported significant increases in profits, largely due to higher net interest income following recent rate hikes that have boosted lending margins.

While Banque du Caire is set to undergo this privatization, further measures may include listing additional shares on the Egyptian stock exchange. Fitch Ratings has recently upgraded the bank’s credit rating, reflecting optimism in Egypt’s economic recovery, with expectations of improved GDP growth and stable inflation. Despite this, the IMF continues to highlight the need for stronger reform implementation to ensure sustained economic stability.