Qatar National Bank expects to complete the due diligence process to buy a stake in Societe Generale SA’s Egyptian unit this month, said an official, who asked not to be identified in line with the bank’s policy.
The Middle East’s biggest lender by assets received approval from Egypt’s central bank last month to begin the process on the 77.2 percent stake in Cairo-based National Societe Generale Bank. QNB will have to “make an offer by the end of the month, otherwise they can’t submit a bid for six months,” said Jaap Meijer, head bank analyst at Arqaam Capital Ltd. in Dubai, citing the bank official’s call with analysts yesterday.
QNB, which raised $3.5 billion in a rights issue last year and sold $1 billion of bonds in February, is expanding to counter limited domestic growth in the country of 1.7 million people. Shares of QNB are set to surge more than 50 percent if a deal is concluded, JPMorgan Chase & Co. said in a note this week, with the stock of the Doha-based bank potentially reaching 207 riyals.
The shares rose as much as 1 percent today to 135.9 riyals, before trimming gains to 135 riyals at 12:25 p.m. in Doha. NSGB shares rose 1.7 percent in Cairo after surging 6.1 percent yesterday.
Third-quarter profit at QNB, which missed out to OAO Sberbank in its bid to buy Dexia SA’s Turkish unit Denizbank AS, increased 11 percent on higher lending. Ten analysts recommend investors buy the shares, while one has a hold rating, according to data compiled by Bloomberg.