Monday 24 June 2024

BNP plans to sell Egypt retail operations

Dubai, June 13, 2012

BNP Paribas, France's biggest listed bank, is planning to sell its retail banking operations in Egypt as the lender seeks to shore up its capital base and exit non-core operations, two banking sources said.

BNP, with around 70 branches in the North African country, may raise as much as $400 million if the sale goes through, one of the sources said, speaking on condition of anonymity.

Both the sources said talks were at very early stages.

BNP has been shedding assets to meet tougher capital requirements under new banking regulations, intended to crack down on risk taking, that have forced many European banks to slash their balance sheets.

The sources did not want to be named as the matter is not public.

A spokeswoman for BNP said the lender would examine any "expressions of interest" for the business while declining to provide any additional details. Dow Jones reported the news earlier.

"BNP has had a strategic review of their international operations and decided to hive off the Egyptian retail business. It's not a massive business and talks are happening at very initial stages," the first source said.

Qatar National Bank (QNB), the largest lender in the Gulf Arab state, is one of the parties which has expressed initial interest, the source said.

QNB, which has an ambitious regional expansion plan, recently lost out to Russia's Sberbank in bidding for Turkey's DenizBank. The bank was not immediately available for comment.

BNP has retail, corporate banking and private banking operations in Egypt but is only looking to sell the retail business, the sources said.

Egypt's economy has taken a hit after more than a year of political unrest led to a sharp drop in tourism revenues and kept foreign investors at bay.

European banks, hit by the euro zone sovereign debt crisis, have been retrenching from the Mena region and Turkey as they look to boost their capital bases to cope with a sluggish economy and a rise in non-performing loans.

Greek lender EFG Eurobank agreed to sell its Turkish arm to Kuwait's Burgan Bank in a $355 million deal in April.

Smaller rival Piraeus Bank is also trying to dispose of its Egyptian operations, a sale seen generating over $200 million.

BNP agreed to sell more than half its stake in real-estate firm Klepierre SA to Simon Property Group in March, reaping a 1.5 billion euro ($1.9 billion) capital gain.-Reuters

Tags: Egypt | BNP Paribas | Retail banking | Sale |

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