Emirates NBD, Dubai’s leading bank by assets, is conducting due diligence for a potential acquisition of a significant stake in Banque du Caire. As Egypt’s sixth-largest bank by assets, Banque du Caire represents a pivotal component in the country’s privatization efforts aimed at revitalizing its economy and reducing national debt.
According to reports from Asharq Business, Emirates NBD’s acquisition could reach completion within six weeks, marking a substantial development in Egypt’s stalled privatization program. This move aligns with the government’s broader objective to raise approximately $2.5 billion from the privatization of state-owned entities within the 2024-2025 fiscal year, as part of an expanded $8 billion loan agreement with the International Monetary Fund (IMF).
Banque Misr, the state-owned parent company of Banque du Caire, is looking to divest 45% of the bank for up to $1.2 billion, with the possibility of further stakes being listed on the Egyptian bourse, as reported by EnterpriseAM. This strategic sale could catalyze further investments and support Egypt’s ongoing economic reforms.
Banque du Caire boasts substantial assets, amounting to EGP478 billion ($9.4 billion) as of September 30, showcasing robust growth with a net profit of EGP8.6 billion in the first nine months of the year. This is nearly double the profit of the same period last year, driven by heightened net interest income and favorable economic conditions. Emirates NBD Egypt, fully owned by its Dubai-based parent, reported a net profit increase of 64% in 2024, reaching EGP5.3 billion.
The financial landscape in Egypt is undergoing transformative changes, with the benchmark interest rate soaring from 19.25% at the end of 2023 to 27.25% currently. This increase has bolstered lending margins and profitability for both banks.
Fitch Ratings recently upgraded Banque du Caire’s credit rating from B- to B, following a similar upgrade of Egypt’s sovereign rating. The ratings agency anticipates a positive economic trajectory for Egypt, with real GDP growth expected to improve and inflation to decline over the next two years. Additionally, the Egyptian pound is projected to maintain stability by the end of 2025.
