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Bank selling itself
Al-Ahram Weekly Published in Al-Ahram Weekly on 19 - 05 - 2005

THE BOARD of directors of the Egyptian Commercial Bank (ECB) announced this Monday that their bank is being acquired by the Greek Piraeus Bank Group.
The ECB board of directors had decided late last year to look for investors to purchase or join the bank in order to be able to increase its capital.
The capital increase was needed for two purposes; firstly to meet the requirements of the new banking law which stipulates that the capital of Egyptian banks should be no less than LE500 million, and secondly to improve the bank's position.
Founded in 1978, the bank boasts 9,626,122 shares, 80 per cent of which are owned by major stockholders who have agreed in principle to the sale, and 17 per cent of which are traded in the stock market. The nominal value of the share is LE15.58. According to the offer made by Piraeus Group, they will purchase the share at no less than LE20 per share which means that should Piraeus Group purchase 100 per cent of the bank, it will be paying some LE193 million.
Piraeus Group was one of two contenders for the purchase of the bank, beating out an Arab-Egyptian investment group. Both had made similar offers requesting to buy no less than 65 per cent of the bank's shares. Both committed to increasing the Bank's capital from the current LE150 million to LE500 million. However, when the competing offers were presented to the Central Bank (CBE) of Egypt for approval, the CBE approved Piraeus Group's bid. According to Gamal Moharam, deputy chairman and managing director of the bank, the CBE tends to prefer sale to financial institutions which tend to stay over the long term and expand the bank's activities, rather than investment groups, who typically sell off the institutions they purchase after only five years.
The new owners of the bank, according to Moharam, intend to encourage the bank's activities in the area of retail, mortgage, leasing and venture capital.
Currently the bank has 17 branches, scheduled to increase to 25 by the end of the year, with the board of directors aiming for 50 branches by 2006.

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