Emirates NBD has signed a definitive agreement to buy HSBC’s retail banking operations in Egypt, as it looks to continue to strengthen its presence in the most populous Arab market.
Emirates NBD Egypt, the fully owned subsidiary of ENBD, Dubai’s biggest lender by assets, is acquiring retail banking assets from HSBC Bank Egypt, which is an indirect subsidiary of Europe’s top lender, Emirates NBD said on Sunday.
The final closing of the deal remains subject to regulatory approvals, Emirates NBD said in statement to the Dubai Financial Market, where its shares are traded.
Emirates NBD did not give financial details of the transaction. HSBC said the deal would yield a pre-tax gain of $300 million.
The London-headquartered bank said Egypt remains an important market for HSBC, and the bank will continue to support its corporate and institutional banking clients in the country.
Emirates NBD said move to further solidify the UAE bank’s presence in Egypt underpins its importance as a market. It is a “key pillar for driving the group’s regional growth ambitions”, the bank said.
As part of the transaction, Emirates NBD Egypt will take over the entire retail portfolio of HSBC Egypt along with the associated branch and ATM network, customer base and relevant employees.
The deal will help Emirates NBD achieve its goal of becoming a “leading retail and premium banking franchise in Egypt”, further improving the bank’s connectivity across the UAE-Egypt trade and investment corridor, it said.
“Our investment reflects our continued confidence in Egypt’s dynamic market and its long-term growth prospects,” said Hesham Al Qassim, vice chairman and managing director of Emirates NBD.
Emirates NBD has operations in countries including Egypt, India, Türkiye, Saudi Arabia, Singapore, the UK, Austria, Germany, Russia and Bahrain. It also has representative offices in China and Indonesia.
The lender, which is majority owned by the Dubai government through Investment Corporation of Dubai and Dubai Holding Group, in recent years has pushed to enter new markets and consolidate its operations through mergers and acquisitions.
In October last year, the lender announced an investment of $3.05 billion to buy a majority stake in Indian private lender RBL Bank, marking the largest foreign direct investment in India’s financial sector.
The deal to acquire a 60 per cent stake in RBL Bank through a preferential issue of shares, was completed in June last year.
Emirates NBD entered the Egyptian market in 2013, when it acquired BNP Paribas Egypt and set up the Emirates NBD Egypt. It currently serves customers through a network of 64 branches spanning Egypt’s major regions including Greater Cairo, North Coast, Delta, Canal, Upper Egypt and the Red Sea.
The bank, which employs a team of more than 2,300 employees across Egypt, reported assets worth $5 billion at the end of June this year.