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UAE's FAB to decide on Bank Audi Egypt acquisition in Q2

UAE's FAB to decide on Bank Audi Egypt acquisition in Q2

First Abu Dhabi Bank will decide in the second quarter whether to buy Bank Audi’s Egyptian business, a senior executive said on Monday, as it looks to expand in the Arab world’s most populous nation.

Bank Audi Egypt, a subsidiary of Lebanon’s Bank Audi , had 50 branches across the country with total assets of $4.4 billion as of September.

FAB, the United Arab Emirates’ biggest lender, already has a presence in Egypt, one of two key markets it has identified for overseas growth.

“There will not be a big lapse in time between finishing the due diligence and taking the decision. So something should happen in the second quarter of 2020,” Karim Karoui, group head of subsidiaries, strategy & transformation, told reporters in Abu Dhabi.

The potential asset sale comes as Lebanese banks try to strengthen their ability to withstand the country’s worst financial crisis since the civil war.

FAB also stepped in as a possible suitor after Lebanon’s then-Prime Minister Saad al-Hariri said in October the UAE had promised investments to the deeply indebted country.

Along with Egypt, FAB, formed in 2017 through a merger between National Bank of Abu Dhabi and First Gulf Bank, is also interested in growing its business in Saudi Arabia.

“We believe there are good opportunities there,” Chief Financial Officer James Burdett said, citing close ties the UAE has with the two countries and their gross domestic product.

However, in its home market it is focused on organic growth and has no immediate plans for another merger with a local bank, he said.

FAB could also raise an equivalent of a further $2 billion this year, having already issued debt for the same amount in the first two months of the year.

“We’re not just doing it blindly ... but the plan is (to raise) between $3 billion and $4 billion” this year, Burdett said.

He also said FAB was not seeing a “very large impact” on its business from the new coronavirus outbreak and that the bank did not expect there to be a big impact, citing its small presence in Asia compared with other banks there.

FAB shareholders on Monday also approved the distribution of a 0.74 dirham per share dividend, implying total cash dividends of 8.08 billion UAE dirham ($2.20 billion) for the financial year that ended in December.

Source: Reuters

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