CAIRO: The Central Bank of Egypt has given four banks permission to undertake due diligence checks on United Bank of Egypt (UBE) as the prelude to a possible takeover, a UBE official said on Monday.
The banks are Lebanon s Bank Audi, Suez Canal Bank, Egyptian Gulf Bank and Egyptian Commercial Bank, said the official, who asked not to be named.
The official had earlier identified Commercial International Bank (CIB) among the four interested parties,but later said the fourth bank was Egyptian Commercial Bank rather than CIB.
The central bank has approved (due diligence checks) for the four banks,which are interested in buying us, she said.
The central bank has been encouraging mergers in the banking sector to create fewer, larger institutions and has introduced demands such as higher capital requirements. Some smaller banks have not been able to meet the new requirements.
With the central bank reluctant to approve new banking licenses, foreign banks have shown an interest in acquisitions in Egypt as the best way to gain a foothold in the market.
At the end of 2002, the last year for which it gives figures on its Website, United Bank of Egypt had assets of LE 4.33 billion ($750 million).
Its main shareholders are state-owned Banque du Caire (21.8 percent), state-owned Misr Insurance (10.7 percent) and Suez Canal Bank. About 14 percent of the shares float freely on the Egyptian stock exchange but have not traded for many months, according to stock exchange data.
Bank Audi has also shown an interest in Cairo Far East Bank. Reuters
