The US financial group Citi said yesterday that it has sold its retail banking assets in Egypt to local lender Commercial International Bank (CIB) for an undisclosed sum.
The sale had also attracted interest from the UAE’s Abu Dhabi Islamic Bank, Emirates NBD and Mashreq but a person familiar with the situation said that CIB had not only offered the best price but made a guarantee to retain the 900 employees that work at Citi Egypt’s retail branches. CIB is Egypt’s biggest publicly traded bank.
Nadir Shaikh, the head of Citi in Egypt, said: “This decision is in line with Citi’s global strategy of focusing our resources on those sectors where we have a competitive advantage, including our institutional franchise in Egypt.”
The deal is subject to regulatory approval and is expected to close this year.
A spokesperson at Citi declined to elaborate on the deal.
Hisham Ezz Al Arab, CIB’s chairman and managing director, told Reuters that the acquisition would add 80,000 credit card holders to CIB’s existing 240,000 and grow the bank’s consumer lending business by 10 per cent.
Amid more restrictive regulation, Citi has been quitting its retail operations in countries including Turkey and Pakistan, where it no longer has a competitive edge, while UAE lenders are spreading their wings into nearby emerging markets such as Egypt to boost earnings amid slower growth at home.
“Both ADIB and ENBD already have a presence in Egypt,” said Shabbir Malik, a Dubai-based analyst with the Egyptian investment bank EFG-Hermes.
“Even if they did not win the bid for Citi’s assets, these banks would continue to focus on organic growth in Egypt.”
Egypt has become particularly attractive in the past year to foreign investors because the nation is coming out of an economic slump.
Penetration is also low with only one in 10 Egyptians estimated to have a bank account.
mkassem@thenational.ae
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