Kuwait’s Al Ahli Bank (ABK) will pay $150 million for a 98.5 percent stake in the Egyptian unit of Greece’s Piraeus Bank, using its own cash resources to support a regional expansion drive, it said in a statement on Thursday.
Kuwait’s seventh-largest bank by assets said the deal required approvals from the central banks of Kuwait and Egypt.
“(Buying it) will cost us $150 million, which is not a great sum for us. We will finance the deal from our sources,” Fawzy al-Thunayan, general manager of board affairs at the bank, told Reuters.
Thunayan added the deal would help with the bank’s regional expansion, but declined to talk about specific plans for Piraeus Bank Egypt.
Piraeus Bank Egypt, which was bought by the Greek lender in 2005, has 39 branches and total assets worth 9.66 billion Egyptian pounds ($1.27 billion) at the end of March, according to its website.
Al Ahli Bank, with assets worth 3.58 billion dinars ($11.86 billion), has branches in Kuwait and the United Arab Emirates, according to its website.
Both lenders stand to benefit from the transaction.
Greek banks have been offloading assets as they seek to cope with the country’s debt crisis, with concerns increasing in recent weeks that banks’ liquidity is drying up as Greece’s government tries to renegotiate with its creditors.
For the Kuwaiti lender the deal is the latest in the North African country by Gulf Arab banks looking to expand beyond their highly competitive domestic markets and increase their profitability.
Qatar National Bank and Dubai’s Emirates NBD bought the Egyptian operations of Societe Generale and BNP Paribas respectively in 2013, while Gulf lenders are heavily featured among suitors in the sale of Citigroup’s consumer banking business.
Shares in Piraeus Bank traded up 1.1 percent at 1203 GMT, having gained as much as 1.8 percent after the announcement was made by the Kuwaiti lender after market hours in the Gulf nation. Al Ahli Bank earlier closed flat.
