Al-Ahli Bank of Kuwait will pay about $150 million to acquire Piraeus Bank Egypt SAE, it said in a filing to the Kuwait Stock Exchange Thursday.
The announcement signals the exit of Greece’s second-biggest bank by assets from the Egyptian market 10 years after it paid $23 million for a 70 percent stake in Egyptian Commercial Bank. Attijariwafa Bank, Morocco’s biggest listed lender, and Lebanon’s Byblos Bank were also in the running, two people with knowledge of the deal said last week.
Persian Gulf banks are gaining an increased foothold in Egypt after the uprising that ousted Hosni Mubarak in 2011. Emirates NBD PJSC and Qatar National Bank bought the local units of Societe Generale SA and BNP Paribas SA in 2012. The most populous Arab country has received billions of dollars from Saudi Arabia, United Arab Emirates and Kuwait since its military toppled Islamists in 2013 and consolidated power.
The purchase “gives us a full platform,” Al-Ahli Chief Executive Officer Michel Accad said by phone from Cairo on Thursday. The Kuwaiti bank will take control of 39 branches handling corporate and retail clients and is committed to investing and letting the franchise grow, he said.
Al-Ahli will pay cash for the 98.5 percent stake in Piraeus Egypt and expects the deal to close “around August” depending on regulatory approval, Accad said. The lender had about $545 million of cash at the end of last quarter, according to data compiled by Bloomberg. The deal values Piraeus Egypt at 1.5 times its book value at the end of last year, the Greek bank said in an e-mailed statement.
Banks seeking to start operations in Egypt have little option than to buy existing companies, because officials have almost stopped issuing new licenses. The country has granted one new banking license since 2006, according to central bank data.
Piraeus shares rose 3.2 percent at the close in Athens, paring this year’s decline to 50 percent. The sale increases the Greek banks liquidity by 200 million euros ($222 million), it said in the statement. As part of the deal, the Kuwaiti lender will takeover $23 million of Piraeus’s loans related to Egyptian operations, it said.