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HSBC sells CIE stake to Credit Agricole – source
By Khaled Diab and Rachel Noeman
CAIRO,
May 21, 2001 (Reuters) - London-based bank HSBC Holdings Plc is selling its
stake in Credit International d'Egypte (CIE) to France's Credit Agricole and an
Egyptian business group, a banking source said on Monday.
The source said HSBC was
selling 75 percent of its 90 percent stake in the commercial bank to Credit
Agricole and the remaining 25 percent to Mansour Maghrabi, an Egyptian business
group. The price tag was not immediately known.
HSBC did not comment on the
sale. A Credit Agricole spokeswoman in Paris declined to comment. No one could
immediately be reached at either the Mansour Group or at Maghrabi for comment.
CIE shares rose 1.58 pounds,
or the maximum five percent allowed per session, to 33.85 pounds early on
Monday, giving the company a market capitalisation of 203.87 million pounds
($52.54 million).
HSBC has owned the stake in
CIE since taking over its former owner Credit Commercial de France, Cairo
banking analysts said. The remaining 10 percent or so is owned by bank
employees or freely floated.
HSBC had been expected to
sell CIE since it had already acquired a local banking operation by increasing
its stake in a bank formerly known as Egyptian-British bank, which has since
been renamed HSBC.
Credit Agricole has been
seeking acquisitions in Egypt after its Credit Agricole Indosuez bid
unsuccessfully last year for Misr America International Bank (MAIB) .The share
price of CIE rose 1.58 pounds, or the maximum five percent allowed per session,
to 33.85 pounds early on Monday, giving the company a market capitalisation of
203.87 million pounds ($52.54 million).
Several other foreign banks
have been seeking acquisitions in Egypt, including Standard Chartered and
National Bank of Kuwait . Egyptian American Bank (EAB) last week said it was up
for sale but did not name a buyer.
CSFB banking analyst Ghassan
Medawar said that foreign banks have usually had to pay a premium for banking
acquisitions in Egypt because authorities give no banking licences for
greenfield operations to encourage consolidation.In terms of absolute numbers
of banks, Egypt is overbanked, Medawar said.
“But in terms of branches
which offer retail banking and services, it is very much underbanked. That is
what attracts foreign players,” he said. "Definitely, relative to other
sectors in recent years, the banking sector is one of the leading sectors for
foreign direct investment in the country,” he added.
“It has fuelled a lot of
foreign and regional interest.”
A research report by Cairo's
HC Brokerage highlighted the opportunity presented by retail banking in Egypt.
“Retail banking products have long neglected a 66.5 million population, with
rising per capita income,” it said.
“Egypt's population is
concentrated in five percent of Egypt's area, meaning minimal branch network
expansion to increase effective penetration. Pent-up demand for retail banking
products, such as personal loans, durable goods loans, debit and credit cards,
was not met by banks in the past.” (Additional reporting by Clelia Oziel in
London).
ã Reuters Limited 2001.
ã2004 K. Diab. Unless otherwise stated, all the content on this website is
the copyright of Khaled Diab.