BNP Paribas to sell Egyptian arm to Dubai-based Emirates NBD

French lender BNP Paribas SA (EPA:BNP) has entered into an agreement to sell its entire 95.2% interest in its Egyptian unit to Dubai-based bank Emirates NBD PJSC (DFM:ENBD), the parties announced today.

In addition, Emirates NBD will acquire the rest of the shares in BNP Paribas Egypt SAE from minority shareholders at the same price, paying a total of about USD500m (EUR377.9m) for the entire business. The figure represents a multiple of 1.6 times the unit’s book value as of September 2012.

The transaction is pending clearance from the Central Bank of Egypt and certain local and UAE regulators. It is seen to be finalised by the end of next year’s first quarter. Through the acquisition, Emirates NBD would enter the Egyptian market as part of its plan to boost presence in retail and corporate banking outside of the UAE.

The Cairo-based bank has a network of 69 branches across the country, some 1,450 employees and about 200,000 retail and 3,000 corporate customers. Last year, it registered net earnings of EGP222m (USD36m/EUR27m) on revenues of EGP731m.

BNP Paribas Corporate Finance and Allen & Overy LLP are consulting the vendor, while Perella Weinberg Partners, HC Securities and Investment, Freshfields Bruckhaus Deringer LLP, Matouk Bassiouny as well as Deloitte and McKinsey & Company Inc are advising the buyer.

Dubai economy now on the up, say DED and HSBC Banking

Traditionally a treasure chest of good news for the financial and banking world, Dubai is boasting more positive data these days, according to reports by HSBC and Dubai Department of Economic Development (DED).

DED has showed that the recovery in the Gulf country is now well on its way – a stark contrast with the situation of troubled Eurozone countries.

The governmental institute recorded in the first quarter of the year an increase in trade licences by 27 per cent over the same period last year.

This has been interpreted as a sign of mounting business confidence, a trend which was also noted earlier this month by HSBC, which highlighted a 10 per cent increase on the number of visitors to Dubai over the previous year.

At the same time, reports by HSBC Holdings also showed that, in the month of April, non-oil private sector business reached a 10-month high thanks to new business orders and more staff being hired.

This was accompanied by increasing sales revenues and an encouraging atmosphere surrounding services and trading sectors.

On a more general level, Dubai’s GDP is now expected to grow by 4 to 5 per cent this year, a number that exceeds previous predictions of 2.5 per cent.

Most of the credit goes now to Dubai’s thriving trade sector which, combined with tourism and five more sectors represents 96 per cent of the country’s GDP, and is a symbol of the country’s expanding business opportunities.

Mohammed Shael Al Saadi, chief executive of business registration and licensing at DED, also welcomed the data, and said that it will drive “growing interest in engaging in diverse business activities in Dubai”.

Al Saadi words were followed by chief economist at Dubai’s Economic Council, Ali Tawfiq Al Sadeq, who added: “Growth this year will be supported by expansion in overall economic activities and strong performance of key factors. This was shown in the first quarter of 2012.”

 

Dubai Islamic Bank reports an 11% increase in first quarter net profit

Dubai Islamic Bank booked a net profit of AED245m (USD66.7m/EUR50.4m) in the first three months of the year, up 11% from the AED222m recorded in the same period in 2011, the Dubai-based lender said on Sunday.

The bank’s revenue eased to AED1.23bn in the first quarter from AED1.28bn in the first three months of 2011. The lender’s core business saw continued growth in the period, with income from financing and investing assets and investment sukuks rising by 2%. Dubai Islamic Bank booked additional provisions of AED299m in the period, continuing to boost its balance sheet.

Customers deposits at the bank amounted to AED68.1bn at the end of March, up from AED64.7bn at the end of 2011. Total assets added up to AED92.5bn as of 31 March.

The bank’s liquidity position remained strong, with its financing-to-deposit ratio stable at 77% at the end of March. The lender’s capital adequacy ratio under Basel II was 18.2% as of 31 March.

During the quarter to March, the bank opened three branches, which brought the total number of branches across the UAE to 74. The bank also launched its portal Al Islami Business Online, offering more than 75 services.