Dubai's biggest bank Emirates NBD is negotiating with Lebanese Blom Bank management to make an offer to buy its unit in Egypt, banking sources told Arab News on Monday. Emirates NBD is looking to strengthen its presence in the Egyptian banking sector, which it already operates in through Emirates NBD Egypt (formerly BNP Paribas). Reports said that NBD has estimated the value of BLOM Bank Egypt at 6.5 to 7 billion Egyptian pounds approximately ($413 to $444 million), around one-and-a-half times the total ownership rights in the bank. The Bahraini Arab Banking Corporation (ABC) is competing for the acquisition of Blom Egypt and has been conducting since late September due diligence on the deal, which is expected to complete by mid-November. Blom Bank Egypt owns 41 branches and has a paid-up capital of 2 billion Egyptian pounds ($127 million), according to the Lebanese bank's website. It began operating in Egypt in 2005. In July, Blom reported a 77 percent fall in its 2019 net profits driven by a financial and economic crisis that hit Lebanon and external auditors had given an "adverse opinion" concerning its financial statements in the country for the year. Later in August, the Lebanese bank announced it was considering the sale of its Egyptian unit, and that Egypt's central bank had given it approval to begin the due diligence process. It added then that any sale should have to be approved by the Blom board of directors. Accordingly, Moody's said in a report released in August that Blom Bank's sale of its Egyptian unit would provide much-needed capital enhancement. The sale would increase Blom Bank's capital base and foreign-currency liquidity, a credit positive amid Lebanon's deep economic, financial, and social crises, Moody's report added. "The Egyptian unit was one of the group's most profitable units last year. Although Blom Bank would sacrifice diversification, future growth and earnings, the sale could fetch a significant multiple over book value," Moody's report read. UAE lenders are aiming to expand their market share in Egypt, the Arab world's most populous country. First Abu Dhabi Bank (FAB), the United Arab Emirates' biggest lender, has made a binding offer on September 7 to buy Blom Bank Egypt.
