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UPDATE 2-SocGen nears sale of Egypt arm to QNB - sources
November 12, 2012 / 12:36 PM / 5 years ago

UPDATE 2-SocGen nears sale of Egypt arm to QNB - sources

* Deal likely to value Egypt arm at about $2.6 bln - sources

* QNB to make mandatory offer for remaining stake

* Deal likely to be announced by end Nov - sources

* SocGen’s Egypt exit to boost capital for French lender (Recasts, adds details)

By Dinesh Nair and Sophie Sassard and Christian Plumb

DUBAI/PARIS, Nov 12 (Reuters) - Societe Generale is nearing the sale of its majority stake in an Egyptian bank to Qatar National Bank (QNB), sources familiar with the matter said, in a move to help shore up the French lender’s capital base.

QNB, part-owned by Qatar’s sovereign wealth fund, will also make a mandatory offer to minority shareholders for the remaining 23 percent of Egypt’s National Societe Generale Bank (NSGB), the sources said.

The two deals will value all of NSGB at about $2.6 billion, three sources told Reuters, speaking on condition of anonymity as the matter is not public.

That is below NSGB’s stock market value of around $3.2 billion, based on Sunday’s closing price. However, the shares have risen nearly 40 percent in the 10 weeks since SocGen said it was in talks with QNB and are up 140 percent year-to-date.

QNB officials were not immediately available to comment, while SocGen declined to comment. In a statement to the Egyptian bourse, NSGB said its parent has made it aware that negotiations with QNB were still ongoing but no price had been determined.

Trade in NSGB shares was suspended on Monday pending a statement by the bank on the talks, the stock exchange said. The shares had risen 3.6 percent prior to the suspension.

QATARI EXPANSION SPREE

QNB, the Gulf state’s largest lender by assets, approached SocGen early this year to buy its 77 percent stake in NSGB as part of plans by the Qatari bank to beef up its regional footprint.

For SocGen, which recently sold its fund management unit TCW, a sale of one of its best-performing overseas assets is a way to shore up its capital base, which has been hit hard by the sovereign debt crisis in Europe.

France’s No. 2 listed bank lags its larger peer BNP Paribas in capital strength and although its management has said its expects to comply with tougher Basel III capital targets by the end of 2013, analysts have said that depended in part on the bank’s ability to sell assets at the right price.

QNB, meanwhile, which has a market value of around $26 billion, has been on an expansion spree, snapping up stakes in regional lenders as it seeks to build an emerging market franchise with the backing of its gas-rich government.

The bank, which raised $1 billion in a bond issue last week, raised its stake in Commercial Bank International to 39.9 percent from 16.5 percent recently. It also increased its stake in Iraq’s Mansour Bank and bought a 49 percent stake in Libya’s Bank of Commerce and Development in April.

However, the lender lost out to Russia’s Sberbank in its bid for Turkey’s Denizbank earlier this year.

NSGB, which operates around 160 branches across Egypt, is one of the largest banks in the North African country and has assets of around $10.5 billion. It also offers private banking and investment banking services in Egypt.

BNP is also seeking bids for the sale of its Egyptian retail arm, expected to generate around $400 million to $500 million, sources said in August.

SocGen shares were up 0.7 percent at 1415 GMT. QNB shares closed down 0.2 percent in Doha. (Additional reporting by Patrick Werr in Cairo and Lionel Laurent in Paris; Editing by Andrew Torchia, Mike Nesbit and Mark Potter)

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