United Bank to make its EGX debut early next year: The Central Bank of Egypt will offer a stake of United Bank’s shares on the bourse, with the initial public offering set to take place before the end of 1Q 2025, the CBE said in a statement (pdf). The CBE is in the process of obtaining the required approvals from the Financial Regulatory Authority and the EGX for the offering.

The question is, how much is being offered? While the CBE did not disclose how much of its stake in United Bank it will be offering, Al Mal sources say the bank will offer between 30-40% of its stake in the lender. Asharq Business puts the stake size at somewhere between 30-45%, based on comments from an unnamed government source.

The central bank is still on the lookout for a strategic investor: The central bank remains on the hunt for a strategic investor to acquire a majority stake in the lender, a senior banking source told Enterprise, adding that offering a portion of the bank on the EGX will make it more appealing to potential investors.

Background: The Qatar Islamic Bank (QIB) was the last to back out of the race to acquire United Bank after it failed to agree on a valuation for the lender with the CBE. Both QIB and Kuwait Finance House (KFH) completed their due diligence for United Bank in December. There were no reports of KFH submitting an official offer for the bank.

How much is United Bank worth? Before the float of the EGP back in March, the transaction was set to reel in the USD equivalent of EGP 22 bn — pre-float that was the equivalent of USD 712 mn and at today’s exchange rate it’s the equivalent of USD 454 mn. Last year, the bank saw its net income rise 31% y-o-y to EGP 1.7 bn, while its assets saw a 19% y-o-y growth to record EGP 101 bn.

It’s been a long time coming: The CBE — which owns 99.9% of the bank — first announced its plan to sell the bank in 2017, but the Covid pandemic put the plans on ice. United Bank was also listed in the lineup of state companies and assets earmarked for privatization in the rebooted privatization program unveiled in February 2023.

The privatization program seems to have been picking up steam in recent days: We heard only a couple of days ago that the government is reportedly looking to sell an additional 10% of its stake in Telecom Egypt before the end of this year. In addition, we also reported in yesterday’s issue that the Madbouly government has reportedly resumed negotiations for the sale of the state’s remaining 20% stake in Alexbank to Italy's Intesa Sanpaolo Group, which currently holds the remaining 80% of the lender.

The international press also picked up the story: Reuters | Bloomberg.

Tags: