First Abu Dhabi Bank (FAB), the largest bank in the UAE has restarted its discussions for the acquisition of Lebanon-based financial services company Bank Audi’s activities in Egypt.
In January, the UAE’s largest lender said that it was in talks with Bank Audi to acquire its business in Egypt and it also formed a working group for the purpose. But later in May, the bank had suspended the discussions due to unprecedented economic conditions caused by the pandemic.
“These negotiations are subject to the requirements of due diligence examination, agreement on final transactions and the required regulatory approvals,” the bank added in a disclosure statement to the Abu Dhabi Stock Exchange.
Mohamed Bedeir, CEO and managing director of Bank Audi stated that exclusive negotiations have started again between the banks regarding the sale of its completely owned subsidiary in Egypt to the FAB.
The current ongoing talks are regarding confirmation of examination, signing of contracts and securing required permissions from the authorities, including the approval from the Central Bank of Egypt.
Bank Audi’s Egyptian subsidiary has 50 branches with total assets of about $4.4 billion as of the end of September. The group works in several markets, led by Egypt, Turkey, Switzerland, France, Jordan, Iraq, Qatar and the UAE and employs about 6,200 people.
According to sources, the lenders may have to step back from other markets other than Egypt to follow the obligations of the Lebanese central bank, which has asked banks there to make a 20 percent increment in their capital by the end of next June.
Bank Audi’s Egyptian subsidiary is said to be one of the strongest pillars for the Lebanese group, as it accounted for 16.4 percent of the lender’s profits at the end of June 2020 and about 9.2 percent of the group’s total assets. The group commenced its operations in Egypt after buying Cairo Far East Bank in March 2006.