Increasing capital BARCLAYS Bank has announced that it is in the process of increasing its paid-in capital to LE500 million before next July. By doing this, the bank hopes to conform to the new minimum capital rate set by the Central Bank of Egypt. The bank's chairman, Elie Khouri, made the announcement on Sunday during a press conference to announce that the bank had changed its name from Cairo Barclays to just Barclays Bank. The bank's capital currently stands at LE362 million. The bank also hopes to expand its activities, by boosting the number of branches in 2005 from seven to 14, and adding new Automated Teller Machines (ATM). Barclays Bank bought the state-owned Banque Du Caire's 40 per cent stake of Cairo Barclays bank last March, thus assuming 100 per cent control of the bank. More bank moves FRANCE'S Societé Générale Group (SocGen) has offered to buy the state-owned National Bank of Egypt's (NBE) stake in the Cairo-based National Societé Générale Bank (NSGB) at LE54 ($9) per share. NBE owns 18.92 per cent of NSGB, which is 54 per cent owned by the French group, with the remaining portion represented in free float shares in the Egyptian stock market. Cairo-based financial group EFG-Hermes has rated NSGB shares as having a fair value of LE68 per share, based on the bank's strong financial results over the first 3Q of 2004. Established in 1978 as a joint-stock company, NSGB offers retail and corporate banking services in both local and foreign currencies, and is Egypt's second largest private sector bank in terms of assets. It is also the largest Egyptian bank with a foreign affiliation. The Egyptian government is implementing a plan to sell its stakes in local joint-venture banks, which also involved the sale of Banque Du Caire's shares in Cairo Barclays to the British Barclays Bank. The NSGB offer came only few days after SocGen Chairman Daniel Bouton met Prime Minister Ahmed Nazif. Bouton subsequently announced that his group had plans to increase its investments in the Egyptian market, particularly in the mortgage industry and government-sponsored development projects. TE bonds STATE-OWNED Telecom Egypt (TE) launched a LE2 billion ($321 million) five-year bond in late December, a move that experts called the largest ever corporate debt issued in Egyptian pounds. Two equal trenches of bonds with a face value of LE100 pounds were issued. The first trench carries a fixed yield of 10.95 per cent, while the second yields 0.7 of a percentage point more than the Central Bank of Egypt's discount rate, currently standing at 10 per cent. Interest is payable quarterly, and the underwriters are the state-owned Banque du Caire and Bank of Alexandria, together with African International Bank and Citigroup. TE received an "AA" national scale credit rating with a "stable" outlook from Meris (Middle East Ratings and Investors Service) -- Moody's Investors Service partner and affiliate in Egypt. TE will use the money to refinance part of its debt and to help fund expansion plans. According to company officials, its bank loans, which carry an interest rate of 17 per cent, will be refinanced. The company's debt is estimated at LE4.7 billion, or $750 million, owed to banks and the government. TE originally planned to sell the bonds in October, but postponed the issue until December to obtain better rates. TE, Egypt's incumbent telecommunications operator, was established in 1998 to carry on the work of ARENTO (Arab Republic of Egypt National Telecommunication Organisation). The company has a fixed line subscriber base in excess of nine million subscribers, which makes it the largest fixed line provider in the Middle East and Africa. Its positive potential stems from being the fixed line state monopoly in a country where only 12-15 per cent of the 70 million population have access to a fixed phone line. Raising the stakes A CONSORTIUM led by US insurer ACE INA International Holding has offered to buy up the remaining 49 per cent it does not own in ACE-Commercial International Insurance Company (ACE-CIIC) for $6.07 million. The consortium includes ACE INA Services UK Limited and ACE European Holding LTD, with stakes amounting to 5,000 shares each. ACE-CIIC, which started operating in the Egyptian insurance market in 2003, with paid-in capital amounting to LE30.4 million ($5 million), is primarily involved in the reinsurance and non-life insurance businesses. The company's shareholder structure includes ACE INA International, which owns 51 per cent of the company; the Commercial International Investment Company, which has a 47 per cent stake; and individual investors, who own two per cent of the company. The Egyptian insurance sector has recently drawn greater attention from foreign investors. The government has announced plans to sell one of the big four state-owned insurers in 2005, although it has yet to decide which one. International insurance companies account for 75 per cent of the Egyptian insurance market. Investment friendliness ADDRESSING a conference on boosting investment in rural Egypt, organised by the Egyptian Young Bankers Association, Investment Minister Mahmoud Mohieddin promised to boost foreign capital inflows. Mohieddin admitted that investment had steadily deteriorated over the past few years. The highest foreign capital inflows -- $1.66 billion -- were in fiscal year 1999-2000. Since then the figure has dropped to a 2004 low of $407 million. Mohieddin said that in Singapore, investors only needed to spend up to eight days doing seven procedures to start a business -- at a cost equal to 1.2 per cent of annual per capita income. In Egypt, however, it might take 43 days and 13 procedures at a cost equal to 63 per cent of annual per capita income. Although there have been some recent improvements in the country's overall business climate, the minister said, "we still need to show more respect to investors."
