CBUAE clears NBE to take over Banque Misr’s UAE branches weeks after US moved to cut them off

The Banque Misr UAE branches that Washington wants cut off from the US banking system could soon belong to someone else. The Central Bank of the UAE (CBUAE) gave the National Bank of Egypt (NBE) preliminary approval to take over Banque Misr’s branches in the Emirates, the two state-owned lenders said in a joint statement (pdf). The move is set to fold both banks’ UAE operations into a single entity under UAE rules.

IN CONTEXT- Those are the same branches the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) proposed on 28 August to cut off from correspondent banking access to American institutions, though the decision is not yet finalized and a 30-day public comment window is still open. The US regulator alleges the branches moved some USD 1.8 bn between January 2024 and June 2026 for 103 companies it links to Iranian shadow-banking networks. The CBUAE launched its own investigation of the branches, looking at the same period covered by the US allegations. Banque Misr operates five branches in the UAE.

Behind the move

Why it matters: The statement makes no reference to the US measure, though the transfer looks like a way out of it. Moving the branches to NBE offers a regulatory route to dealing with the FinCEN proposal and is “possibly the only one available right now,” banking analyst Hany Abou El Fotouh tells EnterpriseAM. He says it’s hard to see the move happening without prior coordination between the two central banks. Customer rights and obligations would move with the branches to NBE, leaving it responsible for compliance going forward.

“A purely political solution” is how Motaz El Dreny, founding partner of Dreny & Co., describes the acquisition. Without it, Banque Misr would have exited the UAE entirely, leaving no Egyptian banking presence there. He says the acquisition was likely proposed by the UAE side itself, and that NBE was chosen “because it is the only bank capable of the acquisition, based on the unity of ownership” — both are fully state-owned.

The US Federal Reserve was likely briefed on the solutions under consideration, El Dreny says, to “confirm whether this solution achieves its purpose, which is lifting the sanctions.” He stops short of declaring the sanctions will be dropped but says “logic and reason indicate this step would not have been taken unless it was among the proposed solutions that would effectively lead to lifting the sanctions.” The speed of the CBUAE’s preliminary approval signals the urgency of presenting this to the Fed for final clearance, he argues.

The bigger picture

Banque Misr UAE is the first publicly named financial-sector target of Operation Economic Outcast, US Treasury Secretary Scott Bessent’s campaign to cut Iran’s financial connections by going after the banks, facilitators, and networks Washington says help Tehran evade sanctions. The FinCEN proposal came 10 days after the UAE halted all trade, commercial exchanges, and financial transactions with Iran until further notice, following Iranian missile fire toward the country on 18 August. The Emirates had been Iran’s largest trading partner and a key gateway for its access to goods and finance.

What it means for the UAE: The CBUAE’s special examination of the branches, a forensic lookback on the transactions of the companies Washington named, hasn’t been closed, and the statement doesn’t say how its findings will be handled once the branches change hands. The regulator has said it was weighing its options on the bank’s status if FinCEN goes ahead with the measure.