EGYPT'S banking sector was turned head over heels in 2006. Blom, Audi, United Arab, Piraeus, these are some of the new banks that Egyptians began to spot around corners in the past 12 months. The more familiar names of Misr- Romania Bank, Commercial Egyptian Bank, Cairo Far East Bank, Delta International Bank have vanished off the map. Another well-known bank is on its way to extinction, namely Banque du Caire, after its scheduled merger with Banque Misr at the end of 2006. The Banque Misr and Banque du Caire merger brings together the second and third largest Egyptian banks in the country, and once complete the new entity will have some LE136 billion in assets. This would make it larger than the National Bank of Egypt (NBE), which holds LE131.7 billion in assets. The year will also go down in history because the government kept its word by selling one of the four public sector banks. The Italian bank SanPaolo IMI paid $1.6 billion to buy an 80 per cent stake in Bank of Alexandria (BoA) during an auction in October. Large Egyptian private banks had their share of changes as well, including Société Générale becoming the largest private commercial bank in Egypt following its purchase of 91 per cent of Misr International Bank (MIBank) in September 2005. Crédit Agricole Egypt (CAE), a 60 per cent subsidiary of the Crédit Agricole group and the result of the recent merger between EAB and Calyon Bank, is now Egypt's third largest private commercial bank by assets. The deal was one of the most controversial of the year, with accusations that the price offered by Calyon to sweep EAB was undervalued. A recent study by EFG-Hermes notes that today the number of Egyptian banks stands at 39, compared to 57 two years ago. This was made possible due to a wave of consolidation brought about by a stipulation in the Unified Banking Law (year?) to raise capital requirements of banks. The law stated that the minimum paid-in capital of banks should be LE500 million, compared to the previous LE100 million. "The capital requirements aimed at pushing inefficient undercapitalised banks out of the market or causing them to be overtaken by larger regional and international financial institutions," stated the EFG- Hermes study. Among the smaller banks which disappeared in this process were the Mohandes Bank and the Bank of Commerce and Development, which were taken up by NBE. After the takeovers across the board, the study continued, "in general, private sector banks operating in Egypt are today financially more solid than they were, and the market can be considered a more competitive place compared to a few years back."
