DAVOS: Egypt s number one bank EFG-Hermes has $1.2-$1.3 billion of spare capital after the sale of its stake in Audi Bank that it will use for purchases and to venture into new banking businesses.
EFG-Hermes sold its stake in Lebanon s Bank Audi for $913.4 million earlier in January, as the 28 percent investment was tying up too much of its funds and afforded no prospect of control.
We have a very solid firepower today. We have something like $1.2/$ 1.3 billion that could be invested, EFG-Hermes Chief Executive Officer Yasser El-Mallawany told Reuters on the sidelines of the World Economic Forum in Davos.
He said EFG-Hermes would use the cash to broaden its product offering beyond its traditional equities rights business. It has already started to branch out into fixed-income underwriting by handling the issue of a 1.5 billion Egyptian pounds ($274.8 million) bond by mobile firm Mobinil.
Some of the capital will also be used to grow merchant banking operations, with the rest allocated to acquisitions.
If and when we find the opportunity to zoom in on a commercial bank that will deliver us the universal banking model, we will move, he said.
There are lot of depressed assets but you need something that gives you scale.
Mallawany said EFG-Hermes had no specific target as yet but was screening assets in the Middle East and, for the first time, in sub-Saharan Africa.
Talking about the crisis that has rocked the Gulf Arab business hub of Dubai in recent months, Mallawany said the situation there was still challenging.
Until they (Dubai) sort out the restructuring of the debt things are going to be challenging, he said
It is a matter of prudence and ability to reach an agreement with the creditors and also of support from the government to get through though times, he said.
I think 2010 and 2011 will be the years of restructuring for Dubai.
