By Hadeel Al Sayegh
DUBAI, Jan 22 (Reuters) – United Arab Emirates'(UAE) largest lender First Abu Dhabi Bank (FAB) is in talks to potentially acquire the Egyptian subsidiary of Lebanon’s Bank Audi, two sources familiar with the matter told Reuters.
Discussions are at an early stage, the sources said, speaking on conditions of anonymity because the matter is not public.
FAB and Bank Audi did not immediately respond to requests for comment.
Bank Audi Egypt has grown from a three-branch operation acquired by Bank Audi in 2005 to 50 branches with total assets of $4.4 billion at the end of September, Bank Audi’s Chief Financial Officer Tamer Ghazaleh said last week, when he told Reuters the bank was considering selling the unit.
Bank Audi’s chief executive Samir Hanna earlier this month had meetings with FAB’s group chief executive Abdulhamid Saeed to discuss the sale, and a non disclosure agreement (NDA) has been signed, the sources said.
Bank Audi’s Ghazaleh said the Egyptian bank was a “very profitable operation” and had received interest from lenders.
Since protests directed at Lebanon’s elite erupted on Oct. 17, commercial banks have been partly blamed by demonstrators for the resulting economic crisis, the worst in decades.
A dollar shortage has prompted Lebanonâ€™s commercial banks to impose strict caps on withdrawing dollars and a block on most transfers abroad, leaving Lebanese, many of whom are paid in dollars, strapped for cash.
Former Lebanese Prime Minister Saad al-Hariri said months ago the UAE had promised investments and financial aid to his deeply indebted country, but this was before his resignation in October, which left the country without an effective government for months.
Lebanon formed a new government this week after Shiâ€™ite Hezbollah and its allies clinched a deal on a cabinet.
Lebanonâ€™s central bank instructed banks in November to raise their Common Equity Tier 1 capital, a key measure of financial strength, by 10% through cash injections by the end of the year and a further 10% by June 30 this year.
FAB has recently appointed Mohamed Abbas Fayed as chief executive for its Egypt operation, hiring him from Bank Audi’s subsidiary in Egypt, where he was chief executive and managing director. (Reporting by Hadeel Al Sayegh; Editing by Mark Potter)