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. Victor Besa / The National
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. Victor Besa / The National
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. Victor Besa / The National
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. Victor Besa / The National

Business

FAB to complete integration of Bank Audi Egypt by 2022

The bank agreed to buy the Egyptian arm of Lebanon-based Bank Audi in January this year

The National

May 05, 2021

  • English
  • Arabic

First Abu Dhabi Bank, the UAE's largest lender by assets, has completed the transfer of Bank Audi Egypt's shares and will begin integrating its operations.

The lender, which announced in April that it had received approval from regulators to transfer the shares, expects to complete the process by 2022, it said in a statement on Wednesday to the Abu Dhabi Securities Exchange, where its shares trade.

FAB agreed to buy the Egyptian arm of Bank Audi, based in Lebanon, in January this year for an undisclosed sum. The deal is expected to significantly increase the FAB's footprint in Egypt.

The integration of Bank Audi Egypt into FAB's Egyptian operations will make FAB one of the biggest foreign banks in the Arab world's most populous nation, with assets of 130 billion 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, JP Morgan and Broadgate Advisors.

Bank Audi Egypt has 53 branches with total assets of $5.3bn as of the end of September. FAB already has 17 branches in Egypt.

FAB had initially started talks in 2020 to acquire the Egyptian unit of Bank Audi but later suspended discussions owing to the coronavirus pandemic.

The lender is pressing ahead with its expansion plans after it posted a 3 per cent rise in first-quarter net profit this year thanks to lower impairment charges and a broader economic recovery.

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Also on December 7 to 9, the third edition of the Gulf Car Festival (www.gulfcarfestival.com) will take over Dubai Festival City Mall, a new venue for the event. Last year's festival brought together about 900 cars worth more than Dh300 million from across the Emirates and wider Gulf region – and that first figure is set to swell by several hundred this time around, with between 1,000 and 1,200 cars expected. The first day is themed around American muscle; the second centres on supercars, exotics, European cars and classics; and the final day will major in JDM (Japanese domestic market) cars, tuned vehicles and trucks. Individuals and car clubs can register their vehicles, although the festival isn’t all static displays, with stunt drifting, a rev battle, car pulls and a burnout competition.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Soft power was first mentioned in 1990 by former US Defence Secretary Joseph Nye. 
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