SocGen Says Qatar QNB Is in Talks to Buy Its Egyptian Unit

Qatar National Bank (QNBS) is in talks to buy a majority stake in Societe Generale SA (GLE)’s Egyptian unit as it seeks to expand overseas to boost profit.

Negotiations to buy the Paris-based company’s 77.2 percent stake in National Societe Generale Bank SAE (NSGB) are at an early stage, Cairo-based NSGB, Egypt’s second-largest publicly traded bank, said today in a statement. The holding currently has a value of about 10.8 billion Egyptian pounds ($1.77 billion), based on NSGB’s 14 billion-pound market capitalization.

Qatar National Bank said in April it had a five-year plan to make itself an “icon” in the Middle East and Africa by expansion and “diversifying income sources.” The lender said today it raised its stake in Dubai-based Commercial Bank International PCS (CBI) to 39.9 percent from 16.5 percent. NSGB rose 0.2 percent to 31.61 Egyptian pounds in Cairo before the announcement, which came after the close of trading.

“QNB has been looking at entering the Egyptian market for some time,” Sara Boutros, banking analyst at Cairo-based Beltone Financial, said by phone today. “NSGB has a cleaner book, a larger market share and better growth prospects than the local units of BNP Paribas SA (BNP) and Piraeus Bank SA. (TPEIR)

Due Diligence

A request to conduct due diligence was presented today to Egypt’s Central Bank, NSGB said. The bank said this month second-quarter profit climbed 18 percent to 435.6 million pounds, beating analysts’ estimates on gains from interest and fee income. NSGB operates 160 branches in Egypt, while Commercial International Bank Egypt SAE (COMI), the country’s biggest publicly traded lender, has 153 branches, data on the companies’ websites show.

NSGB shares gained 71 percent this year, outperforming the benchmark EGX 30 Index, which climbed 47 percent. Societe Generale fell 1.7 percent to 20.50 euros by 5 p.m. in Paris.

Qatar National Bank advanced 0.5 percent to 134.1 riyals at the close in Doha, valuing the lender at 93.8 billion riyals ($25.8 billion). The bank may report an 18 percent increase in profit this year to 8.67 billion riyals, according to the mean estimate of 11 analysts surveyed by Bloomberg.

Qatar National Bank is the second institution in the world’s biggest exporter of liquefied natural gas to move to acquire an Egypt-based financial institution. QInvest LLC, a unit of Qatar Islamic Bank (QIBK), is seeking to form a joint venture with Cairo-based investment bank EFG-Hermes Holding SAE in which it will control 60 percent.

The Qatari government has also deposited $500 million in the Egyptian central bank as part of a $2 billion package to help the economy of the most populous Arab country recover from last year’s popular uprising.

To contact the reporters on this story: Alaa Shahine in Dubai at asalha@bloomberg.net; Ahmed A. Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editors responsible for this story: Claudia Maedler at cmaedler@bloomberg.net; Dale Crofts at dcrofts@bloomberg.net

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