FAB agrees to buy Bank Audi's Egypt subsidiary
The deal will significantly increase the size and scale of FAB’s operations in North Africa's largest economy
First Abu Dhabi Bank, the UAE’s largest lender by assets, will buy the Egyptian subsidiary of Lebanon's Bank Audi for an undisclosed sum.
The deal, which already has a preliminary approval from the Central Bank of Egypt, will make FAB one of the largest foreign lenders by assets in the Arab world's most populous country and North Africa's largest economy, FAB said in a statement on Wednesday.
The deal in Egypt accelerates the UAE lender's "expansion in a high potential market ... offering the scale, expertise and financial strength to support our growth journey and sustainable returns," FAB group chief executive André Sayegh said.
The agreement is subject to further regulatory approvals in the UAE and Egypt, the statement added.
Bank Audi said the proceeds from the sale will help improve its capitalisation and contribute to its financial resilience. It is also in line with directives from the Central Bank of Lebanon to Lebanese lenders to raise their capital by 20 per cent to ride out any liquidity issues amid a worsening economic crisis in the country. Lebanon's banks could risk being shut out of the market if they do not comply by the end of next month.
Bank Audi Egypt has 53 branches with total assets of $5.3 billion at the end of September. FAB already has 17 branches in Egypt.
FAB had started talks last year to acquire the Egyptian unit of Bank Audi but later suspended discussions due to the pandemic.
In December, Bank Audi struck a deal to sell its businesses in Jordan and Iraq to Capital Bank Group.
Earlier this month, Lebanon's Blom Bank sold its Egyptian assets to Bahrain's Bank ABC.
Published: January 20, 2021 07:04 PM