Cairo- In the context of its plan to exit from several companies and with the aim of implementing the economic reform program, the Egyptian government is heading to sell the Cairo Bank, which is the third largest bank after Al -Ahly and Egypt.
The Egyptian Prime Minister, Mustafa Madbouly, said that the sale of Cairo Bank comes as part of the government’s plans to launch a group of state banks on the stock exchange or for sale to foreign investors.
The International Monetary Fund requires the Egyptian government to increase the contribution of the private sector to economic activity within the economic reform program to obtain a loan of $ 8 billion.
Madbouly added during a press conference held last Wednesday, that the government is currently conducting an evaluation process to determine the value of the bank and then stabilize the proportion of the offering.
Local newspapers spoke that the value of the sale will not exceed one billion dollars, and that the Egyptian Central Bank allowed the Emirates NBD to deny ignorance in preparation for the completion of the deal.
While the Prime Minister commented on the trading number as a value of the deal that it is unfounded.
For his part, Banque Misr, in its capacity as the main shareholder at Cairo Bank, issued a statement in which he affirmed the commitment to the highest levels of control and governance, while complying with all the laws, regulations and requirements of disclosure in force in any sale or exit deal when necessary.
What about the bank?
- The Bank of Cairo was established in 1952 as an Egyptian joint stock company, then its ownership of the government moved in conjunction with the nationalization decisions in the early 1960s.
- 249 branches and banking units have different parts of the country, and the ATM network is about 1710 machines.
- The bank recorded profits of about 356 million dollars at the end of last year, an increase of 64% over the profits of 2023.
- Customer deposits rose to about $ 7 billion by the end of 2024, an increase of 17% over 2023.
- The total assets rose to 9.5 billion dollars by the end of 2024, an increase of 20% compared to the end of 2023.
- The bank owns about 30 origins in Sinai, and the fate of these assets remains mysterious, given the prevention of Egyptian law, foreigners have any assets in Sinai, with the exception of Sharm El Sheikh.
Previous attempts for sale
The current endeavors for the sale of Cairo Bank are not the first of its kind. Nearly 20 years ago, in 2006, the Egyptian government offered a share of the bank for sale of up to 67%, and then several foreign banks submitted offers for purchase.
At the time, the National Bank of Greek presented the highest bid of more than two billion dollars, “At the time, the dollar was equal to 5.5 pounds, while now 50.27”, but the government has retracted the completion of the deal, due to a large wave of popular and elite rejection expressed by economists, parliamentarians and media.
At the beginning of the year 2020, the government was preparing to offer a share of the bank on the stock exchange, but the circumstances that the country witnessed due to the Korona pandemic prevented this.
In 2022, Banque Misr acquired 99.9% after it bought 1.12 billion shares of 7 billion pounds.
Parliamentary and legal action
The sale of Cairo Bank was met An interest on the part of a number of deputies bThe Egyptian Parliament, who expressed their concerns about the dimensions and circumstances of the deal.
MP Maha Abdel Nasser, in an urgent statement addressed to the Prime Minister and the ministers of investment and finance, said that the financial statements for the past year showed high growth rates and great profits, denouncing that the sale deal with a value of one billion dollars.
She added: “The bank is able, through its profits, to collect the amount of the deal within a short period, and this raises a question about the economic feasibility of abandoning this successful banking entity.”
For his part, MP Ahmed Al -Barlassi called for the suspension of the sale deal, expressing his concern about the absence of transparency about its details that are moving forward without the involvement of Parliament, which he considered a violation of the people’s right to know the facts related to national economic institutions.
In a related context, a number of Egyptian lawyers filed an urgent lawsuit before the Administrative Judicial Court, to demand the suspension of procedures for selling Bank Cairo.
The lawsuit was specialized in the President, Prime Minister, and Governor of the Central Bank.
A mysterious deal
The journalist specialized in economic affairs, Mustafa Abdel Salam, has put many question marks regarding the sale of Cairo Bank, which he described as one of the pyramids of the Egyptian banking sector.
He asked, in his interview with Al -Jazeera Net, about the feasibility of selling a bank that achieves profits such as the Bank of Cairo, and said, “Is the billion dollars offered, as it was reported, it is a fair value to the Bank of Cairo?
On the impact of the increasing foreign control over the country’s banks, Abdel Salam said that the banking sector has a privacy, and this raises a danger to foreigners’ control over it, as they manages the funds of society and the most importantly they see its financial secrets.
Abdel Salam added: “Is it not sufficient for foreigners to control more than 35% of the units of the Egyptian banking sector, or does some want to raise the percentage to more than 50%?”
He indicated that the UAE already has 5 banks in Egypt, while no foreign country has such a number in the Egyptian banking sector.
The economist affirmed the specificity of the Cairo Bank in the Egyptian sector, as it is charged with financing projects with economic and social dimensions in the sectors of industry, construction and tourism, which is not accepted by the foreign investor for its high cost and unpopular profit.
Debt
In turn, the professor of finance and economy, Ashraf Dabaab, saw that the policy of selling assets began during the era of former President Hosni Mubarak, pointing to the current authority’s resort to the same policy in order to find funding to pay accumulated loans.
The value of Egypt’s external debt reached about 155 billion dollars, according to the latest official data.
Ashraf Dababa added to Al -Jazeera Net that the sale of all the assets of the state and not only the Bank of Cairo is the current government approach as a process that it described as a “debt patching policy.”
The Egyptian academic reduced concerns that privatization will lead to foreign control in the banking sector.
But the concerns of Dubaa expand to include the entire economy, because the state is heading to privatize everything for the benefit of foreigners, especially specific countries, which means those countries control the country’s economy.
The threat of the deal
Put off The former director of the risk management of the Egyptian Stock Exchange Medhat Nafi, A different point of view, in an article entitled “Bank of Cairo and the Othman shirt”.
Nafeh said that whenever the Egyptian government has made a long way towards improving the investment environment by alleviating its grip on the markets, the objections and protests appear in its inaccurate and without audited information.
He pointed to the failure of the sale of Cairo Bank more than once because of what he called the “Othman shirt”, which the protesters throw to the sale in the face of the Egyptian street, as they promote the fact that the government is excessive in the bank of historical value and wasted the rights of citizens.
He warned that the societal uproar aroused about selling any asset that pays the investor to request guarantees or reduce price and threatens the deal by failing more than about.
