SHARM EL-SHEIKH, Egypt, 21 May 2006 — National Bank of Kuwait is looking to buy an Egyptian bank with a strong retail business next year and hopes to push into the United Arab Emirates and Syria soon, its chief executive said yesterday.
Kuwait’s largest bank is expected to emerge unscathed from a regional stock market slump and looks set to top last year’s net profit, Ibrahim Dabdoub told Reuters. And any loss of momentum in the second half of 2006 will be minimal.
National Bank of Kuwait (NBK), which has the highest credit rating among banks in the Gulf Arab region, is flush with cash and unlikely to have to borrow to finance any acquisition.
“We are awash with liquidity. At the moment our capital adequacy ratio is a bit high which is inefficient. So we are looking to spend,” Dabdoub said in an interview on the sidelines of the World Economic Forum in Egypt. “Now there are many banks available for sale in Egypt and I hope that we will be doing something once we digest our present expansion,” he said.
NBK has already launched new operations in Qatar, Jordan, Iraq, China and Saudi Arabia and is now the latest foreign player to set its sights on Egypt, where reforms and a booming economy have made the financial services sector more attractive.
The central bank has been encouraging Egyptian banks to merge and public sector banks to sell off holdings in joint-venture banks.
Central bank policy makes it hard to enter the market without acquiring an existing bank. Asked when he thought the acquisition might be announced, Dabdoub said: “I think 2007 is the best bet.”
He declined to name a potential target, but speaking about the kind of bank NBK would like to acquire, he said: “NBK’s core strength is retail. Spread of branches, that’s the key thing.”
