{"id":16970,"date":"2025-03-20T13:54:11","date_gmt":"2025-03-20T11:54:11","guid":{"rendered":"https:\/\/zawia3.com\/?p=16970"},"modified":"2026-10-07T09:24:06","modified_gmt":"2026-10-07T07:24:06","slug":"banque-du-caire","status":"publish","type":"post","link":"https:\/\/zawia3.com\/en\/banque-du-caire\/","title":{"rendered":"A Direct Sale: What Do We Know About the Proposed Banque du Caire Deal?"},"content":{"rendered":"

Reports of a possible sale of a stake in Banque du Caire to the UAE\u2019s Emirates NBD<\/a> provoked widespread debate in Egypt. Specialists questioned the reported price<\/a>, arguing that it undervalued the country\u2019s third-largest state-owned bank. They pointed to earlier foreign bids<\/a> reportedly worth more than twice the proposed transaction, which was described as a 45% stake for $1 billion\u2013$1.2 billion.<\/p>\n

The figures concern a proposed partial stake, not a confirmed sale of the whole bank. No final transaction details had been officially announced at the time of the Arabic report.<\/p>\n

Several lawyers filed an urgent case<\/a> with the State Council\u2019s Administrative Court on Monday, seeking to stop the sale process. The lawsuit<\/a> named President Abdel Fattah El Sisi, Prime Minister Mostafa Madbouly and Central Bank Governor Hassan Abdalla.<\/p>\n

The applicants emphasised Banque du Caire\u2019s history and role in supporting the economy and financing development. They warned of potential consequences for national economic security and banking independence and demanded transparent procedures serving the public interest.<\/p>\n

On Wednesday, Madbouly said the government\u2019s offering programme included the United Bank and Banque du Caire, with a specialist adviser assessing the latter\u2019s value. Meanwhile, media reports suggested negotiations over a stake at approximately $1 billion\u2013$2 billion, potentially within 45 days. These remained reported proposals, rather than an announced completed transaction.<\/p>\n

Sources also described an alternative stock-exchange offering<\/a> if an agreement with the UAE buyer did not proceed, with advisers appointed to oversee the flotation.<\/p>\n

Mohamed Ramadan, an economic researcher at the Egyptian Initiative for Personal Rights, tells Zawia3 that listing state banks could be appropriate. Banks have broad, loyal customer bases and relatively stable financial indicators even during crises, making them attractive to investors.<\/p>\n

He cites Commercial International Bank\u2019s substantial weighting in the EGX30\u2014around 20%\u201325% in his account\u2014as an illustration of the sector\u2019s market influence.<\/p>\n

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Bringing new investors in through the stock exchange could be more beneficial than direct acquisitions that risk excessive concentration, Ramadan argues.<\/p>\n<\/blockquote>\n

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The question is transparency<\/h2>\n

Maha Abdel Nasser, an Egyptian Social Democratic Party MP, says the central problem is not the idea of selling a state-owned bank but the absence of clear valuation and decision-making procedures.<\/p>\n

\u201cSelling a bank is not in itself the problem; banks have been acquired before without a crisis,\u201d she tells Zawia3. \u201cThe issue is the valuation: how are the assets selected, on what basis is their value determined, and who is responsible?\u201d<\/p>\n

She asks why the government would choose an external buyer rather than listing shares if the objective is to raise money. Citizens, she says, have a right to know what happens to public assets.<\/p>\n

Zawia3 obtained a copy of Abdel Nasser\u2019s parliamentary request for a briefing. It called for full disclosure and cited net profits of EGP 12.4 billion in 2024, up 86% from 2023, alongside strong operating performance.<\/p>\n

The request also cited EGP 8.6 billion in profits with 90% growth. The original report described this as the third quarter alone, but the bank\u2019s September 2024 results<\/a> identify it as the first nine months\u2019 profit; the third quarter alone generated approximately EGP 2.93 billion.<\/p>\n

Abdel Nasser questions whether the reported price reflects the bank\u2019s performance. She believes its earning capacity warrants reconsidering the economics of a sale and says previous transfers of public assets to foreign investors should be carefully reviewed for their long-term consequences.<\/p>\n

Her questions include why a sale was chosen over raising capital through the stock exchange, how the buyer was selected, whether other investors could compete and what guarantees would preserve the bank\u2019s developmental role.<\/p>\n

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A change in privatisation practices<\/h2>\n

Economic researcher Wael Gamal says this is not Egypt\u2019s first attempt to privatise public banks. He cites the 2006 sale of Bank of Alexandria and subsequent plans for Banque du Caire within a policy direction supported by the IMF and World Bank to reduce state ownership in banking.<\/p>\n

He nevertheless sees weaker disclosure than in earlier attempts, describing the reported process as a direct sale without an auction or genuine competition. His account refers to a single Emirati investor, raising questions over valuation and pricing; the buyer\u2019s identity and terms had not been officially finalised.<\/p>\n

Earlier privatisations, despite criticism, followed identifiable legal procedures, Gamal argues. Transferring public assets to the sovereign fund places decisions more directly in executive hands and bypasses traditional governance, in his assessment.<\/p>\n

He also considers the timing unfavourable. Pound depreciation reduces a bank\u2019s dollar valuation, while high interest rates support banking profits through investment in government debt. Selling now, he argues, could transfer future income to a foreign investor rather than retain it for the state.<\/p>\n

Banque du Caire\u2019s 2024 results<\/a> show strong growth. Its own financial release<\/a> puts profit before tax at EGP 17.9 billion, up 64% from EGP 11 billion in 2023. Net profit grew 86%, supported by retail banking, treasury, corporate services and small and medium enterprise banking.<\/p>\n

Interest income increased 40% to EGP 68.7 billion, while interest expenses rose 30%, producing a 58% increase in net interest income. Operating income grew 56% to EGP 34.7 billion.<\/p>\n

Gamal says bringing in overseas expertise and improving management once served as arguments for bank privatisation, but Banque du Caire has already undergone substantial restructuring. He sees a sale primarily as a way to obtain dollars rather than an improvement to productive capacity.<\/p>\n

He argues that previous sales, including stakes in Eastern Company and fertiliser businesses, can have negative long-term effects when profits are repatriated, draining foreign currency instead of sustainably strengthening its supply.<\/p>\n

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Uncertainty over price and the buyer<\/h2>\n

Political economy professor Karim El Omda says Banque du Caire has repeatedly generated controversy when offered for sale. He recalls difficulties in the mid-2000s and a proposed valuation for an 80% stake that he puts at around EGP 1.5 billion. This is his historical recollection rather than a verified transaction price.<\/p>\n

He compares the process with the approximately $1.6 billion sale of Bank of Alexandria to Italy\u2019s Sanpaolo and mentions international interest in Banque du Caire before an earlier sale was abandoned.<\/p>\n

El Omda also recounts reports that former defence minister Hussein Tantawi opposed the sale because the bank was a strategic asset with a large customer base. He presents this as information circulated about the earlier process, rather than an officially documented explanation.<\/p>\n

He says IMF-backed policies continue to press Egypt to reduce the state\u2019s economic role, including ownership of public institutions. But judging whether a bank is undervalued requires clarity over the method used: earnings, customers and deposits, branch coverage or other assets.<\/p>\n

El Omda cites around 350 branches in discussing the bank\u2019s strength. A separate figure cited later in the Arabic report lists 249 domestic branches; these differing counts are not reconciled in the source and should not be treated as one confirmed measure.<\/p>\n

He says the price remained unsettled and suggests the public debate could exert pressure on the government and potential buyer to arrive at a balanced valuation.<\/p>\n

His comments refer at one point to First Abu Dhabi Bank, whereas the reported negotiations elsewhere concern Emirates NBD. These are separate institutions. The discussion therefore does not establish a single confirmed buyer.<\/p>\n

El Omda says the UAE is strongly interested in Egyptian banking assets and has available investment capital, while acquisitions often involve negotiations not disclosed publicly.<\/p>\n

He also describes excess staffing as a challenge any buyer would need to address. Global financial institutions may see Egypt\u2019s market as attractive, he says, but the Central Bank has tightened entry requirements, including higher capital thresholds and standards to protect deposits following earlier banking difficulties.<\/p>\n

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A long history of postponed sales<\/h2>\n

Banque du Caire\u2019s importance extends beyond the proposed stake. The branch-network account cited in the report<\/a> lists 249 branches in Egypt, six in Arab countries and two in African COMESA countries.<\/p>\n

The bank has faced repeated sale attempts<\/a> since appearing in the privatisation plans associated with Kamal El Ganzouri\u2019s government under President Hosni Mubarak in 1997. The programme stalled amid economic difficulties before that government left office in October 1999.<\/p>\n

Ahmed Nazif\u2019s government later revived privatisation, selling 80% of Bank of Alexandria to Sanpaolo in October 2006. The International Finance Corporation subsequently acquired 9.75% of the Italian bank\u2019s stake, while the state retained 20% of Bank of Alexandria.<\/p>\n

In early 2008, the government offered Banque du Caire for sale<\/a> again. The transaction was abandoned amid concerns over valuation and the global financial crisis. The source also cites eight attempts since the 2016 flotation of the pound<\/a>, repeatedly postponed under unstable economic conditions.<\/p>\n

Ramadan says the bank had been expected to list under the government\u2019s offering programme since 2016, with the idea dating further back to the years after Bank of Alexandria\u2019s sale.<\/p>\n

He describes waves of mergers and acquisitions following banking crises in the 1990s and early 2000s, reducing the number of banks to around 38 by the time of this report, compared with more than 80 in the 1990s and over 100 in the late 1970s.<\/p>\n

Ramadan raises concerns over concentration as Emirati banks acquire a substantial share of private-sector deposits. He says state banks still hold the largest share, citing National Bank of Egypt\u2019s dominant position, but argues that expanding foreign ownership warrants scrutiny of its future effects.<\/p>\n

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\u201cMost of these acquisitions focus on existing assets, rather than new investment that expands the banking base,\u201d Ramadan says.<\/p>\n<\/blockquote>\n

High profitability attracts buyers but can place pressure on the balance of payments when earnings are transferred abroad, he argues. That limits the expected positive impact and calls for a longer-term assessment of profit repatriation.<\/p>\n

Uncertainty over the proposed deal continues to drive public and economic debate. The government presents its offering programme as a route to attract investment and strengthen foreign-currency resources; critics ask for clear valuations, competition and accountability.<\/p>\n

The central question is whether any sale would be a considered decision serving the state and its citizens, or a short-term liquidity measure whose longer-term consequences for banking and the wider economy receive too little attention.<\/p>\n","protected":false},"excerpt":{"rendered":"

Reports of a possible sale of a 45% stake sparked legal and parliamentary challenges, with questions over valuation, transparency and whether a stock-market offering would better serve Egypt.<\/p>\n","protected":false},"author":4,"featured_media":12118,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[409,410],"tags":[],"kateb":[6247],"class_list":["post-16970","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics-en","category-investigations-en","kateb-rasha-ammar"],"jetpack_featured_media_url":"https:\/\/zawia3.com\/wp-content\/uploads\/2025\/03\/480_F_247956336_pUIJxSMnOb80aCwFlXnSHB7z6gasyKJe.jpg","_links":{"self":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts\/16970","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/comments?post=16970"}],"version-history":[{"count":1,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts\/16970\/revisions"}],"predecessor-version":[{"id":16971,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts\/16970\/revisions\/16971"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/media\/12118"}],"wp:attachment":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/media?parent=16970"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/categories?post=16970"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/tags?post=16970"},{"taxonomy":"kateb","embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/kateb?post=16970"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}