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BNP to seek initial bids for Egyptian retail arm sale
French lender to invite bids in couple of weeks; Potential sale to generate over $400 mln for BNP; Sale may attract top Gulf Arab lenders
August 15, 2012 10:52 by Reuters
BNP Paribas will seek preliminary bids for its Egyptian retail banking business in the next two weeks, sources aware of the matter said on Tuesday, in a deal likely to generate over $400 million for the French lender.
BNP wants to sell the Egyptian business to help shore up its capital base and quit non-core operations, banking sources told Reuters in June.
“BNP has a relatively small market share in Egypt but with good potential for growth. They are still examining any potential expressions of interest for the operation there that may arise,” a source close to the bank said.
BNP declined comment. The sources did not want to be named as the matter has not been made public.
The lender operates nearly 70 branches in the North African country where political unrest last year toppled the regime of former president Hosni Mubarak.
The sale may attract top regional banks in the Gulf Arab region, such as National Bank of Abu Dhabi (NBAD) and Qatar National Bank, who are looking to expand in Egypt and see the country as a long-term play, a banking source said.
BNP’s Egypt retail business has a book value of around $350 million, according to the source.
Gulf banks are on the hunt as European lenders put profitable businesses from Turkey to Egypt on the auction block, at a time when valuations are near multi-year lows due to volatility in financial markets.
NBAD, the largest UAE lender by market value, would be keen to buy the Egyptian operations of French banks, its Chief Executive Michael Tomalin said in July.
BNP, which has sped up asset sales and slashed jobs in the wake of the eurozone crisis, is also taking advantage of a snag in the sale of the Egyptian arm of Greece’s fourth-largest lender Piraeus Bank, a second banking source said.
“Now that the Piraeus process is stalled, BNP is moving in with a formal sale plan for its Egyptian retail business. The big question will be whether it attracts enough serious buyers given the prevailing situation in Egypt,” the source said.
Piraeus, whose Egyptian arm had attracted at least five suitors from the Middle East and North Africa region, according to the source, said last month it had dropped plans to sell the unit.
Aside from retail business, BNP has corporate and private banking operations in Egypt which have been kept away from the sale. Earlier in August it said it had hit a target to strengthen its capital base six months early, beating many rivals as it strives to reassure investors worried about its exposure to the region’s debt crisis.
(Additional reporting by Christian Plumb in Paris; Editing by David Holmes)