Egyptian banks complete merger but M&A activity falls

Pexels/Andrea Piacquadio

• Bank ABC Egypt merges with Blom
• M&A activity down 53% in 2023
• Mena deals increase by 4%

Bank ABC Egypt has announced the completion of its merger with Blom Bank Egypt, which aims to treble its market share in the North African country.

The integration has doubled the size of the Egyptian network of branches and ATMs of Bahrain-based Bank ABC.

It follows Bank ABC’s acquisition of a 99.5 percent stake in Blom Bank Egypt in August 2021.

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Bank ABC’s latest financial results showed a 53 percent surge in net profit to $235 million last year. Its asset base reached $44 billion, a rise of 20 percent year on year.

Following the merger, a new mobile app for retail customers will be launched, alongside online trade and cash management tools for businesses. 

Merger and acquisition activity in Egypt fell sharply in 2023, according to law firm Baker McKenzie.

It said in a research paper that total M&A volume declined by 53 percent to 139 deals, while value fell by 62 percent to nearly $3.5 billion.

• Merger activity tipped to rebound in Middle East
• Egypt’s largest private bank gets $150m capital top-up
• Mergers drive growth in Bahrain’s Islamic finance sector

Although deal activity in Egypt remained subdued for most of the year, December emerged as the strongest month, with 20 deals. Value-wise, it outperformed all other months, reaching $1.6 billion.

“While the M&A landscape in Egypt faced notable challenges throughout 2023, the surge in total value in the second half of the year signals resilience and opportunities within the market,” said Hani Nassef, M&A partner at Helmy, Hamza & Partners, Baker McKenzie Cairo.

The majority of cross-border deals in 2023 were inbound, comprising 69 deals valued at $1.4 billion, compared with 18 outbound deals worth $112 million.

Within the inbound investments, the financial industry emerged as the top target sector, securing 18 deals.

In the wider Middle East and North Africa, a separate report by EY said that dealmaking during 2023 reached $86 billion, up 4 percent on the previous year. 

The GCC region accounted for the majority of deals at 565, valued at $83.2 billion.

Earlier this month, Moody’s Ratings affirmed the long-term bank deposit ratings of five Egyptian banks, while it revised their outlook from negative to positive.

The decision came days after the agency raised Egypt’s credit outlook from negative to positive following the expanded $8 billion funding from the International Monetary Fund.