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Thursday, 3 December 2020

The Great Lebanese Bank Sell Off, Act I

The Great Lebanese Bank Sell Off is gaining steam: Gulf banks First Abu Dhabi Bank and Bank ABC are both reportedly expediting their attempts to purchase the assets of ailing Lebanese banks and increase their share of the Egyptian banking sector. Bank ABC appears to be in pole position to acquire Blom Bank’s Egypt unit after the Lebanese bank said yesterday it was in “exclusive talks” to sell its 99.42% stake. Fellow GCC lender Emirates NBD had also been interested in Blom’s Egypt arm, but now appears to be out of the running. Reports last month had suggested Bank ABC is planning to make a “generous offer” for Blom after wrapping up its due diligence.

Meanwhile- First Abu Dhabi Bank (FAB) is reportedly accelerating its due diligence on Bank Audi Egypt and plans to make an offer this month or early next year, Masrawy reports, citing unnamed industry sources. FAB bank wants to avoid giving any of its rivals a chance to lodge a bid for the assets, which could be valued at around USD 700 mn. The Emirati bank resumed negotiations in September after they were put on hold in May due to covid-19. Lebanese banks have been looking to exit Egypt due to the financial crisis roiling their home country.

The ongoing financial crisis in Lebanon has forced both Bank Audi and Blom to head for the exit as liquidity issues and new, stringent capital requirements at home put pressure on their balance sheets.

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