Banque du Caire takes to the pitch with a 30% IPO

BdC just gave the EGX’s IPO revival some weight: Banque du Caire (BdC) will hit the stock market just weeks after MNT-Halan, following yesterday’s intention-to-float notice for 30% of the state-owned lender. Banque Misr is offloading 4.575 bn of its shares in the bank and pocketing all the proceeds. The notice sees subscriptions wrapping up in late October with a November trading debut, pending the Financial Regulatory Authority’s (FRA) sign-off on the public subscription notice and EGX approval. At the EGP 80-80.5 bn fair value we reported in September, the stake is worth about EGP 24 bn (c. USD 460 mn), by our math. That’s around triple the USD 150 mn on offer in MNT’s IPO, which is itself the EGX’s largest debut in USD terms since eFinance in 2021.

Whether the market can digest both IPOs comes down to the calendar, banking analyst Hany Abou El Fotouh tells EnterpriseAM. BdC’s book stands a better chance if it opens once MNT has refunded unallocated cash, and a worse one if it opens before. Fund managers may also treat the two as competing for a single Egypt allocation, he says. Neither listing has a demand figure to go on yet, so “you can’t say for certain whether there’s a liquidity squeeze or demand that can absorb both offerings.” What BdC will show, he says, is “investors’ readiness to turn interest into actual participation.”

The IPO has reportedly already drummed up interest from foreign institutions. A European roadshow last month helped bring international investors on board for a large part of the private placement, a government source tells EnterpriseAM. Roadshows for BdC and Misr Life Ins. are still underway, while back home, the government is also in talks with major local institutions — including the National Social Ins. Authority, Egypt Post, and the Awqaf Authority — to get them to increase their exposure to equities ahead of the upcoming state IPOs. The pitch to the social ins. funds is that blue-chip stocks offer better returns as yields on debt instruments and bank deposits come down, the source says.

The stakes go beyond one bank. The state has been trying to sell BdC since 2008, and its privatization record is one of the things the IMF tracks under the USD 8 bn program. In December, we reported that perceptions of slow progress may be holding up reviews of the USD 8 bn program. BdC would be the state’s first IPO since United Bank floated in late 2024. The roughly 20 state companies added to the EGX since then have been temporary listings with no shares sold. Abou El Fotouh cautions against reading too much into a single transaction. The message to markets “is stronger if it’s followed by completed transactions on announced terms,” he says.

What we don’t know

No price range, tranche split, or cornerstone investors were disclosed. The offering pairs a private placement for qualified investors, at home and abroad under Rule 144A and Regulation S, with a public tranche open to subscribers in Egypt. Every peg pricing that will hang on is still missing.

30% matches where the plan began: Our December sources pegged the sale at up to 30%. Officials later talked bigger: Hashem El Sayed of the cabinet’s State-Owned Enterprises Unit put the range at 30-40% in June, and a government official spoke of roughly 40% last month. We’d argued in April for selling right up to the 49% cap.

The DFI piece doesn’t entirely fit the structure: In August, we reported that the EBRD and the IFC were eyeing 10% of the bank between them, and an EBRD official said the lender wanted to “contribute to Banque du Caire’s capital.” Yesterday’s notice doesn’t name either institution. And because nothing new is being issued, BdC itself won’t raise any capital from the offering.

OUR TAKE- That doesn’t necessarily rule them out as buyers. Both lenders had already expressed interest in minority stakes back in March, a senior government official told us at the time, and a “capital contribution” can’t happen inside a fully secondary sale, which suggests they could still come in separately, alongside the IPO or after it.

A margins story, really

Rate cuts haven’t dented BdC’s margin. The bank’s net interest margin held up through a cumulative 825 bps of CBE easing between April 2025 and February 2026, edging up to an annualized 7.4% in 1H 2026 from 7.3% last year, and well above the 4.9% it posted in 2021. Management points to cheap funding, with current and savings accounts at 53.4% of deposits, and a retail loan book that’s mostly fixed-rate. It also says its margin held steady across 2024-2025 while most rivals’ margins compressed.

BdC’s bottom line is running at a strong clip. First-half earnings reached EGP 8.9 bn, up some 22% y-o-y, on EGP 18.8 bn in net interest income and EGP 3.4 bn in fees and commissions, for an annualized ROAE of 27.6% (29.7% for full-year 2025). BdC earned EGP 16.1 bn last year, and it says that figure has compounded at 45.9% a year since 2021. At end-June, the bank had EGP 561.2 bn in assets, including EGP 280.3 bn of gross loans, against EGP 443.9 bn in deposits, with EGP 66.8 bn in equity and a 22.1% capital adequacy ratio.

Eight years of restructuring show up in the ratios. Since 2017, the CASA share of deposits is up from 35.2% and cost-to-income is down from 48.7% to 35.9%, while fee income climbed from EGP 0.9 bn to EGP 6.5 bn in 2025. Bad loans sit at 3.7% of the book including interbank lending, and at 2.5% on loans written since 2020, by management’s count. Retirements between now and 2030 should push efficiency further, the bank says. Non-interest income was 17.8% of net banking income last year, which BdC says tops every listed tier-1 Egyptian bank.

BdC’s edge is reach outside Cairo. Its 233 branches, the largest network outside Banque Misr, NBE, and the Agricultural Bank of Egypt, include 143 beyond Greater Cairo. The bank also runs 2,205 ATMs and serves 3.2 mn customers. According to management figures, retail lending of EGP 98.1 bn is the biggest book outside the two state giants, though corporate loans are larger still at EGP 115.0 bn. SME lending stands at EGP 20.9 bn across 10,585 clients, and microfinance at EGP 8.8 bn for some 145k borrowers — representing a 14% share of bank lending to microfinance clients, per I-Score. On the digital front, mobile banking users have more than tripled since 2021 to 1 mn, QaheraCash has 471k users, and POS terminals jumped from 571 in 2022 to 13,410. The bank switched its core system to Temenos T24 in July.

Priced like the sector, for now

The fair value puts BdC near the sector multiple. It implies about 1.2x book and roughly 5x 2025 earnings, by our math, against a banking-sector trailing P/E of 5.17 in EGX’s 11 October data (pdf). Listed banks span roughly 3.5x (USD-traded Egyptian Gulf Bank) to 7.2x (United Bank), with CIB at 5.08x. Abou El Fotouh notes that fair value isn’t an offer price: foreign institutions will want the final prospectus to weigh the valuation against earnings, asset quality, capital, and peers. Reports of strong interest, he says, don’t tell you what discount buyers will want.

The foreign money test

Foreigners have been sellers all year, especially of banks. They’ve shed a net EGP 12.5 bn of listed Egyptian shares YTD, according to EGX data (pdf), including EGP 2.8 bn of bank stocks in 3Q alone. The quarter saw foreign investors make up over a third of banking-sector turnover, according to the latest quarterly report. MNT’s bankers had billed its IPO as a chance to bring foreign institutions back to the EGX. At roughly three times the size, BdC’s offering will test that appetite at a larger scale.

EFG may have previewed this one: At the EnterpriseAM Forum last week, EFG Holding CEO Karim Awad flagged one of the group’s three remaining IPOs this year, unnamed, as one that could rank among Egypt’s largest in USD terms in 15-20 years. He said it would carry a “very sizable” freefloat and serve as “a true test of large foreign investors coming back into the stock market.”

A warmer market

The EGX30 was up 24.8% YTD at yesterday’s close, according to market data. That’s some 8% below the 56,937 intraday peak it hit in September. Listed stocks traded EGP 7.0 bn across some 210k transactions. Investors are taking the bourse more seriously as an exit route: “When we raised Funds I and II, we spoke lightly of an EGX IPO. Today it’s a lot more serious,” Ezdehar’s Emad Barsoum previously told us. He added a caveat, though: “The EGX needs more depth.”

IPO activity is picking back up: Counting MNT, BdC would be the fourth EGX debut of 2026. Premium grocer Gourmet kicked off the year with a blockbuster debut in February, followed by energy solutions firm Korra Energi in May. MNT’s subscription opened last week at EGP 24.5 per share. Other state-owned enterprises are also in the pipeline, including Misr Life Ins. and a handful of petroleum companies.

Macro tailwinds: S&P and Fitch both reaffirmed Egypt at B last week. CBE data put banking-sector net foreign assets at USD 31.2 bn in August, the highest since January 2020, with net international reserves at a record USD 57.35 bn in September.

Who’s running it

CEO Hussein Abaza is a familiar face to foreign investors from his CIB years. He joined in 2024 with three decades of banking experience and several Extel awards to his name. His deputies each have at least 25 years in the sector: Bahaa El Shafie (joined 2021, from QNB Al Ahli), Hisham Abdelaal (2024, with stints at Bank NXT, AAIB, Arab Bank, and NBAD), and Ahmed Effat (2023, from Citibank Egypt, Banque Misr, and ADIB-Egypt). CFO Mohamed Ibrahim, CRO Hala El Kasar, and treasury head Mohamed Aly have worked on the turnaround since it started in 2018. Abaza says the bank’s strategy centers on “delivering profitable margins, disciplined risk and portfolio management, and maintaining a solid balance sheet.”

18 years in the making

The government first tried to sell BdC in 2008, and an IPO was part of the plan even then. That June, the state scrapped an auction for up to 67% of what was then the country’s third-largest bank after bids came in below its valuation committee’s floor. National Bank of Greece (NBG) led with an offer valuing BdC at USD 2.025 bn, or 4.1x book, according to a Beltone note at the time. A planned 28% EGX float was dropped along with the auction.

That bid was above today’s fair value, but the NBG was the outlier. The EGP 80-80.5 bn fair value works out to about USD 1.5 bn, or 1.2x book, by our math. The NBG outbid Dubai-based Mashreq Bank, which valued BdC at USD 1.3 bn, and a consortium of Arab National Bank and Arab Bank Group at USD 1.2 bn, according to banking sources cited at the time. The comparison is imperfect, since all three were bidding for control. BdC’s assets have also grown elevenfold in EGP terms from EGP 50.1 bn in 2007, though far less in USD.

The idea returned after the 2016 currency float: The state has weighed selling BdC to a strategic investor or listing it since around 2016. The bank’s shares were listed on the EGX in 2017 but never traded, and the planned offering slipped repeatedly.

Covid thwarted the 2020 attempt: BdC was set to raise some USD 500 mn in a 2020 offering managed by EFG Hermes and HSBC, with the EBRD and the Sovereign Fund of Egypt lined up as anchors for up to USD 75 mn, before the pandemic forced it to delay in April that year.

It ran aground in 2022: BdC delayed again in July 2022 amid market turmoil triggered by the Russia-Ukraine war, and the FRA extended its listing deadline to March 2023 before the plan was eventually dropped.

Then a strategic sale fell through: Banque Misr was seeking USD 1-1.2 bn for 45% of the bank in March 2025, implying a valuation of around USD 2.2-2.7 bn by our math, as Emirates NBD ran due diligence. Talks collapsed over valuation months later.

This round started with a December test run. CI Capital took the bank on an “early look” roadshow through London, New York, and the UAE, sounding out potential anchors with the firepower to take a meaningful slice of an offering then pegged at up to USD 500 mn. Investors who took part told us at the time that appetite was strong. The Iran war knocked the planned 2Q 2026 listing off course, El Sayed pushed it to year-end in June, and a cabinet committee signed off on a refreshed fair value methodology in September.

What we’re waiting on

The public subscription notice should fill most of the gaps: price, tranche sizes, Banque Misr’s lock-up, and whether the DFIs show up as cornerstones. On dividends, the ITF only commits to returning capital through payouts, with no ratio.

ADVISORS- CI Capital is lead global coordinator and joint bookrunner, while EFG Hermes is joint global coordinator and join bookrunner. Baker McKenzie is advising the BdC and its parent on US and English law, while Helmy, Hamza, & Partners — a Baker McKenzie member firm — is counsel on matters of Egyptian law. Enterprise Advisory is investor relations advisor.