The National Bank of Kuwait (NBK) has paid the highest acquisition price in its history in order to takeover Al Watany Bank of Egypt beating off rivals Commercial Bank of Kuwait.
NBK, the largest bank in Kuwait, won the US$516m tender in line with its strategic expansion plan. Ibrahim Dabdoub, CEO of NBK told Arabian Business that the bank's next move would be in Syria: "The takeover was a successful move in NBK's regional expansion plan. We have been planning to enter the Egyptian market for some time and have now achieved it through a very good deal and a good bank."
"We believe it is a very promising and healthy market with a lot of potential and NBK can offer a lot to this market. We will continue with our strategy and hopefully our next move will be in Syria" he continued.
"The bid is high but you have to consider it's one of the few remaining changes to enter the market.
"The bank is free from substantial problems and its results over the past year have been impressive," said Hatem Alaa, a banking analyst at HC Brokerage in Cairo.
The second highest bid for Al Watany came from Commercial Bank of Kuwait followed by EFG Eurobank.
A statement from the finance house said the Central Bank of Egypt is expected to approve the deal within a month and that board members and principal shareholders would sign the final deal with the National Bank of Kuwait in the next coming days.
In a company statement Dabdoub also highlighted the significance of this deal for NBK's future in light of the magnitude of the Egyptian market, the largest in the Arab world and the deeply rooted and historical ties between the two countries.
The bid follows a recent of upgrade of NBK's long-term foreign currency deposit rating to Aa2 from Aa3 by Moody's. Commenting on the upgrade, Dabdoub added: "We are pleased to see our strategic actions continue to yield a positive response." NBK is present in Kuwait, Qatar, Bahrain, KSA, Lebanon, Jordan, Turkey, Egypt, London, Paris, New York, Geneva, Singapore, China and Vietnam. Last month the Kuwaiti bank reported its record profits of US$50m in the first six months of 2007.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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