Font Size

- Aa +

Tue 29 Nov 2011 07:33 AM

Font Size

- Aa +

StanChart ends talks to buy Piraeus Egypt arm

Lender blames economic climate for move to end talks with Greece’s Piraeus Bank

StanChart ends talks to buy Piraeus Egypt arm
Standard Chartered said the worsening global economic situation was behind the decision

Standard
Chartered has ended talks to acquire the Egyptian unit of Greece's Piraeus Bank
because of a worsening economic climate, Piraeus said on Monday.

Egypt's
crisis-hit economy suffered a fresh blow last week when street violence and
political chaos helped push the pound currency to its lowest in more than six
years and Standard & Poor's lowered its credit rating on Egypt, saying a
"weak political and economic profile" had worsened.

Piraeus
said Standard Chartered's decision was taken in light of "a deteriorating
global macroeconomic environment and not on account of issues arising out of
their due diligence of Piraeus Bank Egypt," according to a statement confirmed
by an official at the Greek bank in Athens.

It
said it had received expressions of interest in the Egyptian business from
third parties during the talks and would now make contact with them.

Egypt's
central bank had given initial approval to a sale of Piraeus Bank Egypt to
Standard Chartered. Piraeus has been trying to strengthen its balance sheet in
light of the crisis facing Greece's debt-laden economy.

Piraeus
Bank Egypt had equity capital of €103m ($137.52m), a €737m loan book, assets
totalling €1.38bn and 48 branches at the end of March.

The
Greek bank said the unit "continues to maintain high levels of capital
adequacy and liquidity on a standalone basis, and will continue to provide
banking services to its Egyptian client base as a member of Piraeus Bank
Group."

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.