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Thursday, 10 June 2021

State banks get plenty of funding from global lenders

Banque du Caire (BdC) signed a financing agreement worth USD 200 mn with the African Export-Import Bank (Afreximbank), chairman and CEO of BdC Tarek Fayed told Al Mal in an interview today. The funding will be directed at BdC’s expansion plans in Africa and financing intra-trade across the continent, he added. The bank has had its gaze on African for some time, as evident from its acquisition of 100% of Cairo International Bank in Uganda back in 2019. BdC had previously owned 60% of the bank, and acquired the 40% stake from the National Bank of Egypt (NBE) and Banque Misr.

This comes as part of its move to become a continental trade financier: Afreximbank had accredited BdC as a trade financing intermediary in late 2020, along with six other Egyptian banks. This means that BdC can extend Afreximbank’s initiatives and credit solutions to its clients with the ultimate aim to facilitate trade development across Africa.

BdC is also looking to buy stakes in fintech and other startups, Fayed told the newspaper. He attributed the move to the CBE allowing retail banks to own stakes in SMEs provided their stakes are limited to 50%, and that they do not expend more than 10% of their capital on the acquisition.

Meanwhile, National Bank of Egypt (NBE) and European Investment Bank (EIB) signed today a USD 100 mn green SME financing agreement, Youm7 reports. The fund will be on-lent to SMEs in the manufacturing, trade and agriculture sectors to become more green. The financing facility was announced by the European Bank for Reconstruction and Development (EBRD) earlier this week.

This is the third loan the NBE has landed from the EBRD under a green economy financing facility (GEFF). In June 2020, the EBRD had extended a USD 100 mn loan to the NBE with the aim to support SMEs facing liquidity issues due to covid-19, as well as another USD 100 mn increase to its trade finance program. In 2019, the EBRD had provided a USD 150 mn loan for SMEs.

And while we’re on NBE, the bank plans to exit PE investments worth EGP 1.1 bn in the coming period, Al Mal writes, quoting VP of NBE Yehia Abou Elfotouh. He gave no further details on the bank’s plan. NBE officials were not available for comment as of dispatch time.

IN OTHER DEBT NEWS-

We’re waiting for funding from ITFC: International Cooperation Minister Rania Al Mashat discussed the timing of a finance package worth USD 1.1 bn from the International Islamic Trade Finance Corporation (ITFC) signed last January at a meeting with ITFC head Hany Sonbol, according to a ministry statement. About USD 700 mn should be directed at the Egyptian General Petroleum Corporation, while USD 400 mn are earmarked for the General Authority for Supply Commodities (GASC).

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