Egyptian largest private sector bank by assets Commercial International Bank (CIB) is seeking to acquire more banks to strengthen its presence in the East African region.
This, the bank says, will help finance Egyptian investors looking for opportunities in Africa’s fastest growing region.
The lender with over $27.24 billion worth of assets acquired a 51 percent stake in the Kenyan Mayfair Bank, its initial buyout in the African continent last year, viewing the deal as a springboard to the rest of the African countries and particularly in East Africa.
It was understood that the acquisition of Mayfair Bank is expected to facilitate trade finance and credit facilities for Egyptian corporates looking to engage in Africa.
“The Group will seek to better the performance of its trading and sales activities by expanding into other African nations, supported by the recent acquisition of Kenya’s Mayfair Bank. This expansion will authorize the Group to act as a hub for international investors and support our representative office with a range of treasury solutions,” the bank said.
The lender which is listed on the Egyptian Stock Exchange and London Stock Exchange (LSE) disclosed through its annual report for last year that it harbours ambition of becoming the region’s banking giant in corporate and SME funding and the force to reckon with in the trade financing business.
The lender is also looking to expand its offering by approaching players in the mortgage sector to add them to its client base and also help in increasing the penetration in other non-bank financial institution (NBFI) sectors such as leasing, car finance, microfinance, factoring and consumer.
“To diversify our operations, balance sheet structure, and sources of income, CIB embarked on a journey to look for expansion opportunities across the border. In light of its geographical location, historic and cultural ties, its macroeconomic and demographic potential, Sub-Saharan was tapped as a key opportunity,” the bank said.
“In particular, East Africa has been identified as the most attractive region for CIB to do business. The region is home to some of the fastest growing economies in the world, while it will also provide a platform for CIB to learn and adopt the strides taken toward digital transformation and financial inclusion.” In 2019, the Egyptian lender established its commercial representative office in Addis Ababa with the aim of strengthening its relationships with local banks, promote Egyptian exports and gain market insights and in 2020 it acquired 51 percent stake in Mayfair Bank in Kenyan in a deal estimated at $35 million
“CIB’s mandate is to explore and assess opportunities in Africa, building a bridge for Egyptian customers to benefit from regional integration efforts across the continent and benefiting from the prospects available from being Common Market for Eastern and Southern Africa (Comesa) members and the recent African Continental Free Trade Agreement (ACFTA),” the bank says.
CIB said will continue to work on growing and solidifying its continental footprint, especially after the establishment of its representative office in Ethiopia and the acquisition of a majority stake in a local Kenyan bank.
“In short, we aim to position CIB as a trade finance hub for Egypt and East Africa, focusing on both corporate and SMEs. Capturing pent-up capital expenditure and investment flow is the route CIB has set its eyes on to continue its solid and consistent financial performance and creating value for our stakeholders,” according to the report.
“We will particularly focus on supporting the growth and development of our subsidiary in Kenya, while identifying potential African trade finance opportunities as well as select infrastructure projects involving Egyptian contractors in key markets in the East African region,” the bank said.
SOURCE: The East African
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