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24 February 2020
INVESTMENT

Banque Misr plans to borrow $250 million, expand its African footprint

Banque Misr is benefiting from sweeping reforms enacted by Egypt over the past three years that helped revive economic growth which stalled in the wake of the 2011 uprising

Basque Misr is targeting around 40 new domestic branches this year, raising the total to roughly 750/Bloomberg

by Bloomberg

Egypt’s Banque Misr seeks to borrow $250 million from international lenders this year to boost financing at home, while it presses on with plans to expand into three sub-Saharan Africa countries.

Mohamed Eletreby, Banque Misr’s Chairman said that Egypt’s second-largest state-owned lender will use the debt to finance SMEs among other purposes. Banque Misr expects a further boost in liquidity when it sells a stake in Banque du Caire in the first half of the year.

“We are in talks with two international institutions on loans with competitive interest rates, the lender is holding direct negotiations without an adviser, seeking to secure $150 million from one bank and $100 million from the other,” said Eletreby.

The Central Bank of Egypt gave Banque Misr approval to open a branch in Somalia—an unusual step for a foreign lender—while it’s also seeking to enter Kenya and the tiny Horn of Africa nation of Djibouti, either via branches or representative offices, added Eletreby.

The bank already has branches in the UAE and France, units in Lebanon and Germany and representative offices in China, Russia, South Korea and Italy.

Banque Misr is benefiting from sweeping reforms enacted by Egypt over the past three years that helped revive economic growth which stalled in the wake of the 2011 uprising. A steep devaluation of the pound and soaring interest rates have spurred a surge of investment in local debt, helping end crippling dollar shortages.

Eletreby said that the bank saw $15.6 billion in foreign-currency inflows in 2019 and $2 billion in January 2020 alone. Egyptian workers’ remittances and purchases of local Treasury bills were among the main sources.

Basque Misr is targeting around 40 new domestic branches this year, raising the total to roughly 750.

Plans to sell part of Banque du Caire, which Eletreby’s bank fully owns, are finally taking shape too. Earlier this month, Hisham Tawfik, Egypt’s Public Enterprise Minister, said that initial public offerings of government-owned companies will resume in March 2020, with the lender being the second of three firms in line.

Egypt announced plans about three years ago to either list or sell additional stakes in-state companies but moved ahead with only one before the initiative stalled amid a market downturn. While Eletreby has previously suggested 30 to 40 per cent of Banque du Caire will be up for grabs, he said a final decision has yet to be taken.

A recent roadshow to promote the bank in London, the US and the Arabian Gulf revealed an appetite from foreign investors due to its good performance, said Eletreby.


RELATED STORIES: Banque Misr Banque du Caire Central Bank of Egypt

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