The transaction is expected to close in Q2 2021, subject to mandatory regulatory approvals
Bahrain’s Arab Banking Corporation (Bank ABC) has officially announced that they have completed an agreement for the acqusition of Blom Bank Egypt, obtaining a 99.4 percent stake for EGP 6.7 billion ($427 million).
Reuters broke the news on Thursday, stating the transaction included all of Blom Bank Egypt’s physical and non-physical assets as well as customer accounts according to two banking sources.
The transaction is expected to close in Q2 2021, subject to mandatory regulatory approvals, including the approval of CBE and Egypt’s Financial Regulatory Authority (FRA).
“We have an active relationship with our regulators and will be working to secure their approvals to complete the deal as swiftly as possible. We will then look forward to working with our new BLOM Bank Egypt team to combine ABC Egypt and BLOM Egypt thereby creating a new powerhouse in the Egyptian banking sector," said Group CEO of ABC, Khaled Kawan.
Blom Bank, a subsidiary of Lebanon's BLOM Bank SAL, announced its plans to exit Egypt back in August 2020 in response to Lebanon’s financial crisis in the wake of August’s Lebanon port explosion that has sunk the currency and fueled a rise in poverty and unemployment.
Lebanon is expected to witness a -25 percent decline in its real GDP growth in 2021, according to the International Monetary Fund (IMF).
Chairman and General Manager of Blom Bank, Saad Azhari said that the acquisition will allow BLOM BANK to comply with the latest regulations issued by the Central Bank of Lebanon which stipulate that all Lebanese banks must raise their equity by 20 percent.
The acquisition will support ABC Bank’s expansion in Egypt, growing their Egyptian subsidiary’s network of branches from 28 to 69 branches with Blom’s 41 branches.
Blom Bank employees expect the arrival of a Bank ABC delegation who will review the bank’s work system. It is also said that the bank will undergo rebranding in the near future.
The bank recorded profits amounting to about EGP 630.590 million by the end of September 2020, compared to about EGP 746.451 million at the end of September 2019. The bank’s capital records EGP 2 billion over 42 branches in the country, according to Blom, the bank has branches in 12 countries around the world.
