Two state banks to merge by year end

CAIRO: Egypt s second and third-largest state-owned bank would merge by the end of the year, chairman of Banque Misr, one of the two banks, said in remarks published on Sunday. The government had announced plans to merge Banque Misr and Banque du Caire last year as part of a move to create fewer, bigger banks that could compete more vigorously and tackle bad debts. The merger had been expected to take place early in 2006. The new bank would be called Banque Misr and will have assets estimated at LE 160 billion ($27.9 billion), said Mohamed Barakat, who would carry on as chairman. Our strategy is to compete domestically, regionally and internationally in the coming years, Barakat told the state-owned Al Ahram daily newspaper. He said Banque Misr has restructured debts worth around LE 15 billion. The new bank would solve the problem of Banque du Caire s bad debts, he added. Analysts had said the merger between the two banks could make handling bad debts easier. Barakat also said the bank would not force early retirement on its employees. Both banks employ around 27,500 people. The government has set Oct. 16 as the deadline for bids for a stake of between 75 percent and 80 percent in Bank of Alexandria, the country s smallest state-owned bank. Egypt has shortlisted six candidates to buy the stake in Bank of Alexandria, which had assets of about 40 billion Egyptian pounds in February.