{"id":562453,"date":"2021-05-25T03:53:10","date_gmt":"2021-05-25T03:53:10","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/05\/25\/efg-hermes-awad-on-the-aib-acquisition-taking-his-franchise-outside-egypt-and-what-will-bring-foreign-investors-back-to-the-market-part-1-of-2\/"},"modified":"2021-05-25T03:53:10","modified_gmt":"2021-05-25T03:53:10","slug":"efg-hermes-awad-on-the-aib-acquisition-taking-his-franchise-outside-egypt-and-what-will-bring-foreign-investors-back-to-the-market-part-1-of-2","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/05\/25\/efg-hermes-awad-on-the-aib-acquisition-taking-his-franchise-outside-egypt-and-what-will-bring-foreign-investors-back-to-the-market-part-1-of-2\/","title":{"rendered":"EFG Hermes\u2019 Awad on the AIB acquisition, taking his franchise outside Egypt, and what will bring foreign investors back to the market \u2014 part 1 of 2"},"content":{"rendered":"

<\/a> Few transactions have been as closely followed in Egypt\u2019s banking and finance<\/strong> industries as has EFG Hermes\u2019 acquisition of a controlling stake in the commercial bank AIB<\/strong> in a partnership with the Sovereign Fund of Egypt (SFE). Was the SFE serious about public-private partnership? Did EFG Hermes\u2019 management have a vision for universal banking that could succeed where its earlier bid with Bank Audi never fully took off? Would the regulatory stars align?<\/p>\n

The answers are \u201cYes,\u201d \u201cYes,\u201d and \u201cIt seems so\u201d <\/strong>after the firm announced at the end of last week that it was acquiring a supermajority stake in Arab Investment Bank in a EGP 3.8 bn transaction that sees it partnering with the SFE. It\u2019s a landmark transaction for the Sisi administration\u2019s bid to show it is serious about partnering with the private sector to unlock growth.<\/p>\n

The transaction in brief:<\/strong> Once the sale closes, EFG will become AIB\u2019s controlling shareholder with a 51% stake, while the SFE will take 25% through its financial services and digital transformation sub-fund. The state-owned National Investment Bank will retain a 24% stake of AIB post-transaction, having previously held a 91.4% stake. We have background here<\/a> and here<\/a>. Group CEO Karim <\/strong>Awad confirms the acquisition should close in 3Q2021<\/strong>, subject to the usual post-closing conditions and regulatory approvals, including from the Central Bank of Egypt.<\/p>\n

The stakes are high for EFG Hermes<\/strong>, which has now transformed itself from a huge fish in a small pond (Egypt investment banking) into a Cairo-headquartered universal bank with operations spanning 13 countries on four continents. On Awad\u2019s watch, EFG established a market-leading non-bank financial services (NBFS \u2014 or non-bank financial institution, NBFI, as Awad calls it) platform that has leasing, factoring, payments, consumer finance, mortgage lending, microfinance and ins. under one roof. Its investment bankers, brokers, asset managers and private equity types now go to work each day in Cairo, London and New York \u2014 and in Dubai, Abu Dhabi, Riyadh, Nairobi and Lagos. Today, it\u2019s on the verge of adding a commercial bank to its arsenal.<\/p>\n

We sat down for an exclusive interview with Awad <\/strong>looking at what\u2019s next for EFG Hermes and for the wider market. Edited excerpts follow. Part 1, covering the AIB transaction, is below. Part 2, which focuses largely on the domestic industry, will appear in this afternoon\u2019s edition of EnterprisePM.<\/p>\n

Among the key takeaways in part 1 of our discussion: <\/strong><\/p>\n