Retail investors offered 1.5% of Egypt’s United Bank in IPO

United Bank

• 30% stake up for grabs
• Most sold to institutions
• Could raise $104m

A small stake in Egypt’s United Bank is to be offered to retail investors on Wednesday, when 16.5 million shares of the state-owned bank will be floated on the Egyptian Exchange as part of an IPO.

The retail tranche, 1.5 percent of the bank’s shares, is part of an initial public offering of 330 million shares, equal to 30 percent of all the shares.

The other 313.5 million shares, 95 percent of the IPO, were offered to institutional buyers in a private placement that ran from 20 November to 25 November. 

The bank set the indicative price range of EGP12.7 to EGP15.6 ($0.26 to $0.31) per share. Egyptian media reported that the private placement was six times oversubscribed.

The retail tranche of the United Bank IPO will run for a week from 27 November to 3 December. The bank could raise EGP5.15 billion ($104 million) through the 30 percent sell-off, the first public offering for a state-owned bank in more than 10 years. It is also the first IPO of a state-owned company since 2021. 

Egypt has been under consistent pressure from the International Monetary Fund to reduce the public sector’s share of the economy and raise money from state asset sell-offs. 

At the start of 2023, the country prepared a list of 32 state-owned companies, which included three banks, Banque du Caire SAE, Arab African International Bank and United Bank, in which it announced it planned to sell stakes.

• Egypt generates $5.6bn from stake sale in 14 companies

• Late-year flurry of flotations forecast for Gulf

• Egypt’s new capital developer plans IPO in 2024

In September, the Central Bank of Egypt, which owns 99.9 percent of United Bank’s shares, announced its intention to pursue an IPO in the first quarter of 2025, without giving details of the size of the stake to be sold.

On 11 November, the bank released a press statement announcing that the IPO would be brought forward to this month. 

The decision coincided with an increased period of tension between the IMF, which has been leaning on Egypt to cut its subsidy spending, and the government, which has voiced its concern over the inflationary effects of further austerity measures.

United Bank’s latest financial statements show its paid-up capital at the end of the financial year ending June 2024 was EGP5.5 billion, while its total assets stood at EGP106.5 billion. 

In that financial year, the bank recorded a net profit of EGP1.64 billion before income tax. The bank has 68 branches and 1,800 employees.