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Thu 12 Apr 2007 12:49 PM

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UAE consortium bids for Egyptian bank

Abu Dhabi Islamic Bank is part of the consortium bidding for the National Bank for Development.

A consortium including Abu Dhabi Islamic Bank and Emirates International Investment Co. has offered to buy all of Egypt's National Bank for Development at 11 Egyptian pounds ($1.93) a share, the Egyptian stock exchange said on Wednesday.

The shares were suspended on Wednesday and closed on Tuesday 36.17 pounds.

The bid was below the year's low of 13.14 pounds, hit on January 31.

Two other potential bidders, Egypt's Commercial International Bank and Saudi Arabia's National Commercial Bank, did not submit bids at a sealed-bid session held on Tuesday, it added in a statement.

National Bank for Development had 28.19 million share issued at the end of 2006, which would value the bid at 310 million pounds.

The statement did not say whether the bid at 11 pounds was the only bid received nor whether the owners had accepted it. Officials were not available at the bank to comment.

The statement said that the winning bank must undertake to raise the bank's capital to 500 million pounds.

The Egyptian government owns 17.86% of the bank, with the balance of 72.14% in private hands, it said.

Egypt's central bank is encouraging consolidation in the banking sector and wants the government to reduce its holdings in lenders. Bank of Alexandria was the first of four big state-owned banks to be privatised last year.

If it wins acquisition, Abu Dhabi Islamic bank plans to convert National Bank for Development into a wholly Islamic bank. It already has some Islamic branches.

The Egyptian banking sector has seen a wave of mergers and acquisitions over the past two to three years, with much foreign interest in existing banks.

Bankers say interest is driven in part by the difficulty obtaining a licence for a new bank.

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