The British-based banking group Standard Chartered has decided this week to pull out of drawn out talks to acquire a majority stake in the Egyptian American Bank (EAB), citing uncertainty over prospects in the Middle East. EAB’s major shareholders, American Express Bank (AMEX) and Bank of Alexandria, have subsequently taken EAB off the market and will now press ahead with developing the bank’s corporate, consumer and treasury businesses, a statement confirmed.
AMEX and Bank of Alexandria and announced in July that they intend to sell all of their associated stakes in EAB, equivalent to 73.3 percent of the bank's total shares. Emerging markets specialist Standard Chartered admitted interest in bidding for the majority stake, however EAB rejected the offer, saying the bid was too low. Other potential bidders reportedly included Citibank, the Kuwait National Bank (NBK) and another unnamed Kuwaiti bank.
In a statement released in October, EAB said that "the Bank of Alexandria and AMEX have substantially completed negotiations with Standard Chartered Bank on the terms and conditions of the acquisition of EAB." However, a final decision on the sale was deferred due to “global economic uncertainties… in hopes that a clearer outlook will emerge.” A Standard Chartered Bank spokesman said that EAB “still makes a good fit for our Middle East strategy… but there's no deal yet.”
Established in 1976, the joint venture EAB provides banking and financial services to private and corporate clients. The bank became publicly held in July 1996, following a 20 percent capital increase. Today, AMEX holds a 40.83 percent stake in EAB, while Bank of Alexandria holds 32.50 percent and the rest is publicly traded. EAB has 29 branches nationwide.
Net Income before Provisions and Tax recorded 183.8 million Egyptian pounds ($40.48 million) for the year ending December 31, 2000, compared to EP143.9 million the previous year, realizing a 27.7 percent growth. Interest on loans & bank deposits accounted for 74 percent of 2000 revenues. Interest income from treasury bills and bonds accounted for eight percent of last year’s revenues, commissions and fees for 11 percent and other non-interest income, seven percent. — (menareport.com)
© 2001 Mena Report (www.menareport.com)
