QNB has dropped its interest in buying the Egyptian operations of France’s BNP Paribas, favouring instead the assets of Societe Generale there due to SocGen’s bigger retail banking network, people familiar with the matter said.
“QNB’s interest in Egypt only lies in Societe Generale,” one person close to the situation and who asked not to be named, told Zawya Dow Jones. No discussions with BNP Paribas are currently taking place, the person added.
BNP Paribas declined to comment.
In June, people with knowledge of the matter said BNP Paribas was approached by Middle Eastern banks, including QNB, regarding the possible sale of its 67-branch Egyptian retail bank. At the time, talks were said to be at a very early stage. But in August, SocGen said it was in talks to sell its Egyptian subsidiary to QNB, as the French lender forges ahead with plans to shed assets and bolster its balance sheet.
QNB got approval from the Egyptian central bank last week to start due diligence on National Societe Generale Bank, which has been valued between QR7bn ($1.92bn) and QR8.5bn by JP Morgan, the bank advising the Doha-based lender on the deal. This process will last 60 days at which point the Arab Gulf bank must decide whether submit a formal bid for the Cairo-based bank to buy Societe Generale’s 77.17% stake in the lender.
National Societe Generale declined to comment. The lender, majority owned by France’s SocGen, operates about 160 retail branches in Egypt, far more than the 67-strong retail network of BNP Paribas in Egypt.
QNB, 50%-owned by the government, is aggressively expanding overseas. Its focus on Egypt comes as the Qatari government has promised $18bn of investment to Egypt over the next five years to prop up its battered economy after months of political unrest.
Egypt, the world’s most populous country in the Arab world, offers huge growth potential, analysts say.
“QNB is interested in Egypt and they are looking to see what the best target is, and they have determined that SocGen has the size and other elements that makes it most appropriate,” said another person familiar with the matter.
National Societe Generale would offer QNB a huge retail market that is lacking from its domestic business in Qatar with a population of around 1.6mn, said Rami Sidani, head of investment at Schroders Investment Management for the Middle East and North Africa.
Earlier this year QNB couldn’t acquire Turkey’s Denizbank following a disagreement over price and despite being in exclusive talks for several months.
“The retail story in Qatar is missing,” said Sidani. “SocGen would be a great compliment to what they have at home which is mostly government lending.”
Zawya
