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The largest bank in the United Arab Emirates, First Abu Dhabi Bank (FAB), has withdrawn its non-binding preliminary offer to acquire a stake in EFG Hermes Holding, an Egypt-based financial services group led by a leading Egyptian investment banker Karim Awad.
FAB disclosed in a bourse filing on the Egyptian Stock Exchange on Thursday that it will not proceed with the proposed acquisition deal due to ongoing global market uncertainty and volatile macroeconomic conditions.
“Egypt remains a strategically important market for FAB, where the bank will continue to support its customers and employees, as well as invest in the expansion of its well-established partnerships and operations in Egypt,” the bank said.
The recent disclosure comes nearly two months after the Abu Dhabi-based bank announced its intention to acquire a majority 51-percent stake in EFG Hermes Holding in a deal worth EGP9.4 billion ($600 million). The offer came just a few months after it bought Lebanon’s Bank Audi’s Egyptian business in 2021.
Since Feb. 10, when FAB expressed interest in acquiring stakes in EFG Hermes, shares in the Egyptian-based financial services group have risen from EGP14.71 ($0.93) to EGP19.42 ($1.056) at the time of writing.
EFG Hermes reported a double-digit percentage increase in profit at the end of 2021, under the leadership of Egyptian investment banker Karim Awad, as revenue surpassed the EGP6-billion ($330 million) mark to reach EGP6.1 billion ($332 million).
According to its earnings report for 2021, its consolidated net profit increased by 12 percent from EGP1.31 billion ($71.4 million) at the end of 2020 to EGP1.46 billion ($79.6 million), boosted by a 12 percent increase in revenue from EGP5.4 billion ($294.3 million) to EGP6.1 billion ($332.5 million).
The group’s earnings power and revenue were significantly boosted by a slower increase in operating costs driven by the management’s cost-cutting strategies, as well as the consolidation of Arab Investment Bank (aiBANK) following the acquisition of a 51-percent stake in the bank in Q4 2021.
