Dubai: First Abu Dhabi Bank (FAB) confirmed on Thursday that it is in exclusive discussions with Bank Audi to acquire its fully-owned subsidiary in Egypt, Bank Audi-Egypt.
FAB said that a group has been formed to assess the potential acquisition, but no valuations have been announced so far. It added that “there is no certainty that these discussions will result in a transaction.”
The bank said the talks around the acquisition are in line with its strategy to pursue growth opportunities in the UAE and other targeted markets.
Media reports had earlier cited anonymous sources who said that FAB is in talks to potentially acquire the Egyptian subsidiary of Lebanon’s Bank Audi.
A top executive from the bank told Reuters that Bank Audi was considering selling the Egyptian unit, while the bank’s chief executive separately said that he was meeting with FAB to discuss the sale.
The talks between the two sides come at a time when Lebanon’s banks — and its wider economy — face pressing challenges amid a dollar shortage in the country and wide protests. Traditionally, such crises could attract foreign buyers who may look to buy assets for cheaper valuations.
Tamer Ghazaleh, Bank Audi’s chief financial officer, said the bank’s unit in Egypt is “very profitable” and has received interest from lenders, according to Reuters reports.
For FAB, the bank had earlier said it would be focusing operations on the UAE and certain markets in the region that were lucrative. This included Saudi Arabia, where FAB set up operations in 2018 and 2019.
FAB’s share prices inched up by 0.76 per cent on Thursday, prior to the disclosure confirming the acquisition talks. The bank’s share prices gained around 8.6 per cent in 2019, as per Gulf News calculations, and especially garnered attention when FAB hiked its foreign ownership limit and said it was considering raising that limit to 100 per cent.