Published: December 20, 2012
The French bank will sell to Dubai’s Emirates NBD, the latest in a series of asset transfers from European to Middle Eastern institutions.
BNP Paribas is to sell its Egyptian business to Dubai-based Emirates NBD in a US$500mn deal. The arrangement will see Emirates purchase the French bank’s 95.2% stake (US$476mn) in BNP Paribas Egypt, and offer to buy the balance from the minority shareholders at the same price. The agreed price is 1.6 times the Egyptian unit’s book value at the end of September.
A spokesperson from BNP Paribas told EMEA Finance that although the bank views the Egyptian subsidiary as a “good asset”, its “market share was sub-scale”. She added that the Emirates NBD deal was the best of a number of last-minute approaches and that the bank is booking a capital gain of around €100mn, which should equate to about 5 basis points on the CET1 ratio (Tier 1 common equity, under Basel regulations).
The agreed sum is 1.6-times the Egyptian business’s book value at the end of September. The transaction is set to close at the end of Q1 2013.
BNP Paribas is the second French bank this month to sell Egyptian assets to a Middle Eastern institution. Societe Generale last week offloaded its Egyptian subsidiary to Qatar National Bank for US$1.97bn, twice its end-September book value.
A weak eurozone and funding difficulties among French banks could see more such deals over 2013, particularly as banks from the Gulf region start to look for new, higher-growth opportunities.