Abu Dhabi Islamic in bid to buy Egyptian bank

ABU DHABI • Abu Dhabi Islamic Bank said yesterday it was competing with Saudi banks to take over Egypt's National Development Bank and enter the most populous Arab country.

It could be the first foreign acquisition for Abu Dhabi Islamic, the Gulf's sixth-largest Islamic lender by market value, which wants to expand outside the increasingly competitive United Arab Emirates market.

The Abu Dhabi bank wants to buy at least 51 per cent of the Egyptian lender and could bid for as much as 100 per cent with its partner, Emirates International Investment Co, a company owned by the ruling family of Abu Dhabi.

Saudi banks were also in the race to buy National Development Bank and the outcome could be decided by Friday, Amjad Younes, Abu Dhabi Islamic's senior vice president said yesterday, declining to name the other bidders. UAE daily Al Bayan reported on Saturday Saudi Arabia's National Commercial Bank, the Gulf's largest bank by assets, was among three bidders for the Egyptian lender. A National Commercial Bank spokeswoman had no immediate comment.

Egypt's central bank is encouraging consolidation in the banking sector and wants the government to reduce its holdings in lenders. Bank of Alexandria was the first of four big state-owned banks to be privatised last year. "Getting a licence is very difficult in Egypt and the only way to enter that market is by acquiring a bank," Younes said. "We do not want to lose the opportunity now," he said, declining to comment on the value of the bid. National Development Bank, which has market value of around 993 million Egyptian pounds ($174.3m), is a commercial bank operating some branches under Islamic rules that ban lending on interest.

It will be converted into an Islamic bank if Abu Dhabi Islamic wins the bid, Younes said. "Abu Dhabi Islamic Bank covers almost all of the UAE, including remote areas. So, now the bank needs to expand to other markets to diversify risks," Younes said.

Growing competition is forcing Gulf Arab banks to consider mergers and acquisitions as their governments open up markets to foreign banks to comply with international agreements, including with the WTO.

Source ::: REUTERS
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