The Central Bank of Egypt (CBE) selected EFG Hermes and Evercore alliance as the financial advisor to offering an equity stake of the state-owned United Bank to strategic investors.
According to the CBE’s Sunday statement, they selected the duo out of five investment banks that were bidding for the role.
The winning coalition will be responsible for various tasks, including promoting the deal to a select group of financial institutions, preparing a preliminary fair value study for the United Bank, and representing the CBE and the United Bank to potential holders.
Earlier, the CBE’s Governor Tarek Amer has said that Egypt’s biggest investment banks, including EFG Hermes, CI Capital Holding, Pharos Holding, and HC Securities & Investment were among the bidders for the role.
The governor also said in February that a US-based investment fund had made an offer to acquire the bank after the completion of the due diligence process.
He added that the proposing US fund has a significant banking activity, particularly in SME financing, with a total capital of $104bn.
However, Amer told Daily News Egypt in April, that the CBE will retain a stake in the bank, without revealing the size of this stake. The CBE owns 99.9% of the bank’s shares.
The size of the share “depends on the value that the investor will bring to the market,” and could be either a majority stake or a minority stake with a management agreement, Amer said.
The United Bank was established in 2006. It has a capital of EGP 3.5bn and owns 54 branches across the country.
The United Bank acquired three failing entities that were not able to withstand the laws and policies of banking reform. Those three entities were: the ex-Egyptian United Bank, the ex-Islamic Bank for Development and Investment, and the ex-Nile Bank. It is Egypt’s third-largest state-owned bank in terms of paid-in capital, with EGP 3.5bn ($217m).
The CBE did approve in principle in 2017 to sell the United Bank to a strategic investor.