Egyptian parliamentarians push to block sale of Banque du Caire

A group of Egyptian MPs have come together to protest the reported sale of Banque du Caire to the UAE, expressing concerns about Egypt’s economic independence and the increasing influence of Gulf nations over the country’s banking sector. 

According to The New Arab’s Arabic-language sister site, Al-Araby al-Jadeed, members of Egypt’s House of Representatives, including Maha Abdel Nasser, have urged the government to present the proposed sale to Parliament before proceeding with any transaction to a foreign investor or listing it on the stock exchange. 

MPs have also called for broader discussions within Parliament regarding the sale, with the aim of holding the government accountable for ensuring the thorough review of the expertise of the entities responsible for evaluating the bank and overseeing the offering process. 

As reported by Al-Araby al-Jadeed, these discussions would aim to secure the highest returns for the state, and explore alternative options to privatise the bank or, potentially, avoid the sale altogether, given its high profitability and the potential for its value to exceed its current assets in a short period.  

This follows a denial from Egyptian Prime Minister Moustafa Madbouli on Wednesday, who dismissed initial reports about the sale of Banque du Caire, calling the claims “baseless.”

During a press briefing, he claimed that Banque du Caire is part of the government’s previously announced public offering strategy. 

Madbouli explained that a consultancy firm has been appointed to conduct a thorough due diligence review to assess the bank’s current value.  

He further stated that “the government and the Central Bank of Egypt will determine the optimal offering strategy, whether it be to a strategic investor or through the stock market.” 

He also emphasised that the specific percentage of shares to be offered would only be decided after the completion of the due diligence process, ensuring transparency and alignment with Egypt’s broader economic objectives. 

However, Maha Abdel Nasser told Al-Araby al-Jadeed that despite Madbouli’s recent statements that the bank has not yet been put up for sale, she has called for further investigation into the reasons behind hastening the process of selling Banque du Caire. 

The parliamentarian specifically questioned the economic rationale behind the government’s decision to divest Banque du Caire, the country’s third-largest state-owned bank, which operates efficiently. 

Abdel Nasser further raised concerns about the government’s motives, expressing to Al-Araby al-Jadeed her hope that the government would provide a transparent and clear explanation for determining the announced sale price, the entity responsible for the valuation, the criteria used in the valuation process, and the reasons for not offering the bank for sale on the stock exchange to citizens and local investors.  

She suggested that selling the bank directly to a foreign investor might not maximise the benefit to the state. 

Rising political criticism in Egypt follows reports that Emirates NBD is conducting its review of Banque du Caire, as the Dubai-based lender looks to acquire an undisclosed share in the state-owned bank.  

This move reflects the ongoing strategic relationship between the UAE and Egypt, which was also seen in the Ras al-Hekma project last year.  

This agreement, worth $35 billion, saw Cairo and Abu Dhabi partner to develop a 40,600-acre area located 350 km northwest of the Egyptian capital.  

Experts argue that the deal provided Egypt with some relief from its foreign currency debt and opened the door for a new arrangement with the International Monetary Fund (IMF).  

This arrangement gave Egypt the leeway to devalue its currency by nearly 40 percent against the US dollar, a crucial condition for the IMF.  

Gulf nations, drawn by the devaluation and incentives offered by President Abdel Fattah al-Sisi, view Egypt as a promising investment destination.