SHARM EL SHEIKH // Mashreq has joined the shortlist of potential buyers for Citigroup’s Egyptian consumer banking operations as the UAE’s biggest banks compete for a slice of the fast-growing market.
Abu Dhabi Islamic Bank (ADIB) on Saturday told The National it was in the final rounds of the sale process. Emirates NBD, Dubai's biggest bank, is also reported to be in the running but a spokesman for the bank declined to confirm this yesterday.
All are keen to expand into the Arab world’s most populous nation to grow their businesses in an overcrowded home market that will slow this year amid the drop in oil prices.
"Egypt is a no-brainer expansion because there are not that many other places left for expansion in the Arab world," Abdul Aziz Al Ghurair, Mashreq's chief executive, told The National on the sidelines of Egypt's economic development conference in the resort of Sharm El Sheikh.
“Luckily we have a presence in Egypt, so for us it’s not extremely critical because we have it,” he said. “If we can get it at a reasonable price, using the synergies and infrastructure duplication that would be good.”
For UAE and Arabian Gulf banks, expansion into Egypt represents a good hedge as profits for them this year are unlikely to be as buoyant as in 2014. Unlike Gulf countries, Egypt is a net oil importer and a drop in cost of the government’s energy subsidy programme will free up capital for much-needed investment in other areas such as infrastructure.
The country is also poised to grow economically following several years of erratic output in the aftermath of the Arab Spring. The president Abdel Fattah El Sisi outlined a number of reforms over the weekend to lure investors and forecast that his nation’s economy would grow by more than 6 per cent a year over the next five years. Last year, the Egyptian economy grew 2.2 per cent, according to the IMF.
ADIB has been operating in the country since 2007 while Mashreq and National Bank of Abu Dhabi have been there for decades.
Alex Thursby, NBAD's chief executive, said this month that he plans to overhaul the bank's branch network in Egypt in a bid to drum up more business. He said he wasn't interested in Citibank's operations in Egypt, preferring to grow organically.
mkassem@thenational.ae
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