The privatization of the United Bank reflects Egypt's ongoing efforts to attract foreign investment and stabilize its economy amidst challenging conditions.
The growth in United Bank's assets and profits suggests a positive trajectory for the bank, which may enhance investor confidence during this IPO.
If the privatization is successful, it could pave the way for further sales of state-owned assets in Egypt, potentially leading to increased foreign investment and economic growth.
The ongoing economic reforms may result in a more flexible and competitive banking sector in Egypt, which could benefit consumers and businesses alike.
Egypt's Central Bank has initiated the sale of 30% of the United Bank's shares on the Egyptian Stock Exchange, marking the second privatization of a state-owned bank in four years. This move follows a decade-long pause in such sales and is expected to raise approximately 5.15 billion pounds ($104 million). The offering includes 330 million shares, with 313.5 million allocated for institutional investors and 16.5 million for individual investors.
The United Bank, which provides Islamic banking and other financial services through its 68 branches and 225 ATMs, has shown significant growth. Its assets increased from EGP 72 billion ($1.48 billion) in 2021 to EGP 106 billion ($2.18 billion) by June 2024. Additionally, the bank's profits rose from EGP 1.14 billion ($23.52 million) in December 2021 to EGP 1.74 billion ($35.91 million) by the end of December 2023.
This privatization effort is part of a broader economic reform program supported by the International Monetary Fund (IMF), which aims to reduce state involvement in the economy and allow the Egyptian pound's exchange rate to be determined by market forces. Other potential government asset sales include stakes in Arab African International Bank and Banque du Caire.
