|
|  |
| Bank of Alexandria |
|
| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26092 |
| Company name | Bank of Alexandria |
| Country | Egypt |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Disbursement |
|
| Date SPI disclosed | August 22, 2007 |
| Projected board date | September 21, 2007 |
| Previous Events | Signed: October 1, 2008
Approved: October 4, 2007 |
|
| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed project involves IFC acquiring a minority equity stake in Bank of Alexandria (BoA or the Bank), alongside Intesa Sanpaolo (ISP), which acquired a majority stake in the Bank’s shareholding following a competitive bidding process. BoA is Egypt’s third largest bank in terms of total assets, and the first public sector bank to be privatized in the context of a comprehensive national financial sector reform program aimed at building a more competitive financial sector, with a sound banking system and insurance industry. |
|
| Project sponsor and major shareholders of project company |
Intesa Sanpaolo is the largest commercial group in Italy and one of the top banking groups in the euro zone, with total assets of about €599 billion and shareholders’ equity of €51 billion as of March 31, 2007. ISP operates through a network of over 5,800 branches well distributed throughout the country, with market shares above 15% in most Italian regions and serving about 10,5 million clients. ISP has a selected presence in Central and Eastern Europe and the Mediterranean Basin with a network of over 1,200 branches serving 7 million customers of subsidiaries operating in retail and commercial banking.
Bank of Alexandria was established as a joint-stock state-owned company in 1957, through the take over of Barclays Bank’s assets and liabilities in Egypt. In 1971, the state-owned El-Mansoura Savings Bank was merged with BoA. BoA has always occupied a distinguished status in the Egyptian market and was chosen to be the first public sector bank to be privatized. In anticipation of its privatization, BoA has been undergoing a restructuring process to upgrade its operational capabilities, and refocusing its lending activities toward small and medium sized enterprises (SMEs), retail customers and large corporates. Today, BoA is the third largest bank in Egypt with total assets of $5.8 billion as of June 2006 (following the merger of Banque du Caire and Banque Misr). It currently has one of the largest retail networks in Egypt with 188 branches and 111 ATMs covering all parts of the country. |
| Total project cost and amount and nature of IFC's investment |
| The proposed project consists of an IFC equity investment for a minority stake in BoA. |
| Location of project and description of site |
| The Bank is headquartered in Cairo, Egypt and operates a nation-wide network of 188 branches. |
|
| Anticipated development impact of the project |
| This project is expected to have a high developmental impact by fostering competition and the provision of quality banking services in an increasingly private sector-led financial sector in Egypt. The combination of ISP’s know-how, particularly in the areas of SME and retail banking, and BoA’s scale and outreach in Egypt will result in increased and improved access to finance to those underserved segments. The project will also enhance the credibility of the bank privatization process in Egypt as it is a key pillar in the Government’s overall financial sector reform program. Indeed, the growth and continued success of Bank of Alexandria is a key part of Egypt’s strategy of increasing competition in the sector, and inducing further privatizations. Finally, the project will reinforce the already strong economic ties between Egypt and Italy, one of its largest trading partner (second and fifth export and import partner respectively in 2005), by introducing the leading financial services group from that country. |
 |
| IFC's expected development contribution |
| IFC’s role in this project stems from its ability to engage strategically with ISP, and to positively influence the long-term success of BoA and the banking sector reform in Egypt, where ISP has no presence. IFC’s participation in the most important privatization transaction will send a strong signal for Egypt’s financial sector reform program and the introduction of a European bank from Italy will foster healthy competition in the country’s banking sector, induce further privatizations and contribute to further development of the financial sector. Also, through improved corporate governance, efficiencies and stronger operating performance resulting from the introduction of international best practices, BoA could become a model institution for other banks in Egypt to emulate, and influence other domestic banks to improve their operations. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
During appraisal IFC will review, the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS) and its compliance with the IFC Exclusion list, the applicable National Social and Environmental Laws and regulations and IFC performance standards. If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS.
Based on the review, the project will be required to:
- Develop an, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable Performance Requirements; and
- Submit a periodic report to IFC as per a format to be provided by IFC. |
|
| For inquiries about the project, contact: |
Mr. Fabrizio Centrone, Head of MENA and Asia
Telephone: +390287937504
Fax: +390287937745 |
|
| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
|
|
|
|