First Abu Dhabi Bank, the UAE's largest lender by assets, received approval from regulators to transfer the shares of Bank Audi Egypt, the Lebanese lender's Egyptian arm that it agreed to acquire in January for an undisclosed sum.
Once the share transfer is complete, an integration of its assets and operations with FAB Egypt will get under way. This is likely to be concluded next year, the lender said.
“This acquisition represents an important strategic milestone for FAB’s international ambitions, accelerating FAB Group’s expansion in a high-potential market,” Hana Al Rostamani, FAB's recently appointed chief executive, said.
“It will significantly increase the size, scale and experience of FAB Egypt, adding greater depth and reach to the value we offer our customers both locally and globally.”
FAB reported a 16 per cent fall in net profit to Dh10.6 billion during 2020 as it increased net impairment charges by 42 per cent to make provisions for potential bad loans as a result of the pandemic. However, its performance strengthened as the year ended with a fourth quarter profit of Dh3.2bn, up 29 per cent on the prior quarter.
The integration of Bank Audi Egypt into FAB's Egyptian operations will make it one of the biggest foreign banks in the Arab world's most populous nation, with assets of 130bn Egyptian pounds ($8.5bn) as of the end of last year. The combined operation will be led by FAB Egypt's chief executive Mohamed Fayed, who joined the lender in 2019 after previously heading Bank Audi.
FAB was advised on the deal by UBS, Freshfields Bruckhaus Deringer and Matouk Bassiouny & Hennawy. Bank Audi was advised by EFG Hermes, JPMorgan and Broadgate Advisors.