Egypt’s EFG-Hermes plans to distribute 1.08bn Egyptian pounds ($122mn) to shareholders and step up its growth strategy after selling a 40% stake in Lebanese lender Credit Libanais, it said yesterday.
Having completed the $310mn stake sale last week, Egypt’s largest investment bank will reward its shareholders in cash and share buybacks while also pursuing plans to boost capital reserves at subsidiaries in the UAE, Kuwait and possibly Saudi Arabia.
“We will be required to enhance capital structure, meet capital adequacy requirements and embrace opportunities as they appear by injecting capital in our subsidiaries,” EFG-Hermes said in a bourse statement. EFG-Hermes also said it plans to expand its assets under management.
The company is studying several projects that would require capital deployment in the coming months, it said, and is also eyeing new markets. “We have started a due diligence process for the acquisition of a Pakistani entity and we believe there are more geographies that could offer great opportunities, including Morocco, Vietnam, Bangladesh, Sri Lanka and Kenya,” the company said.
EFG-Hermes’ board had approved the sale of a 40% stake in Credit Libanais to Arab and Lebanese investors for $33 per share, along with plans to sell the rest of its shares at the same price by May next year.
According to its website, EFG-Hermes held a total of 63.7% of shares in Credit Libanais before the sale. EFG-Hermes bought the stake in 2010 for $542mn.
At the time it said that the investment would help it to expand into Lebanon and the Levant and broaden its product range, but Lebanese banks and the broader economy have been hit hard by the civil war in neighbouring Syria.