A senior official told Daily News Egypt that the procedures for the National Bank of Greece (NBG) exiting the Egyptian market have not actually started thus far.
A senior banking source disclosed last week that the NBG had submitted an official request to the Central Bank of Egypt (CBE) to leave Egypt, noting that the bank’s exit from Egypt had nothing to do with the Egyptian market, but rather with problems facing the parent group due to Greece’s debt problems.
The bank currently provides all banking services in the Egyptian market for individuals and companies through a network of 17 branches in Cairo, Alexandria, Port Said, Hurghada, and 10th of Ramadan City, in addition to its headquarters in Cairo.
According to the source, who preferred not to be named, the bank’s management in Egypt has not yet received any formal requests from any party to carry out the technical examination of the due diligence of the bank’s portfolio in preparation for selling.
He explained that the bank does not have a license as a joint stock company, but rather works in the Egyptian market by authorising banking activity as a branch of a foreign bank. Moreover, he added that if the parent bank in Greece insists on exiting the Egyptian market, there are two scenarios for carrying out the move.
The first scenario is the sale of the bank’s assets and liabilities to a bank, as was done with Canada’s Bank of Nova Scotia, which was acquired by the Arab African International Bank.
This scenario is also similar in part to Citibank, which has sold its retail banking and card services activities in Egypt to the Commercial International Bank (CIB), while continuing to provide banking, investment, and treasury services to companies and institutions in the public and private sectors, as well as multinational financial institutions operating in Egypt. Yet, the source said this scenario is unlikely to be repeated with the NBG.
The second scenario is that the bank liquidates its activity in the same way as it was with the National Bank of Oman several years ago. This scenario requires a long time, which is difficult to implement in the case of the NBG, given it needs quick liquidity to support its position in Greece.
The source said that the bank’s activity in the Egyptian market is proceeding normally, both in regard to attracting deposits or granting loans of various types, pointing out that the process of exiting the bank from Egypt may take a long time, as this previously happened with foreign banks that were in the same situation.
DNE had exclusively announced last year the news about the NBG’s desire to sell its banking unit in Egypt after more than a century has passed with its presence in the Egyptian market.
The NBG appointed Ernst & Young Financial Consultants to take over the role of financial advisor in a transaction to be taken out of Egypt, and Freshfield and Matouk Bassiouny as legal advisers for the bank in that transaction.
The move came as a result of pressure from the European Union, which set up a fund to support Greece and protect it from bankruptcy, and provided for the continuation of this support, the NBG withdrew all its foreign investments and focused on the Greek market only before 2018.
The NBG was established at the beginning of the last century as the first Greek banking investment in Egypt to serve the Greek community at the time, and work to strengthen the bonds of a joint cooperation between Egypt and Greece, while strengthening civilisational ties and strengthening economic relations between the two countries.
Additionally, in light of the changes that took place in the social, economic, and investment climate in Egypt during the 1960s, specifically in 1961, the bank stopped its activity like all other foreign banks operating in Egypt at the time, and again—reopened a representative office in Cairo in 1975.
By 1979, the bank re-opened its branches in Egypt again, in line with the beginning of the implementation of the policy of opening up the economy and the start of the influx of foreign investments back to Egypt.
The NBG is the strongest commercial bank in Greece and has a strong presence in Southeast Europe and the Eastern Mediterranean and has subsidiaries in more than 18 countries, including Egypt, Turkey, Cyprus, Russia, Bulgaria, and South Africa.
Egypt has five branches of foreign banks that are not joint stock companies, namely Mashreq Bank, Arab Bank, Abu Dhabi National Bank, Citibank, and the NBG.
A few days ago, the official gazette published the CBE’s approval to write off the registration of Scotiabank, registered under No 68 from the CBE’s bank’s registry.