Egypt’s second-largest state-owned bank Banque Misr’s plans to open an office in Kenya are still on course.
The bank was planning to open the offices in 2018 but it seems that the process has taken longer than anticipated.
Banque Misr is Egypt’s second-largest bank and its entry into Kenya is a platform for seeking lending deals in East Africa while serving Egyptian firms in the region.
To enable this expansion, which will also coincide with a planned entry into Somalia and Djibouti, the bank is seeking US$250 million from international lenders this year.
Banque Misr Chairman, Mohamed Eletreby, said, “We are in talks with two international institutions on loans with competitive interest rates.”
He added that the bank could set up a representative office or branches as it enters East Africa’s biggest economy.
With branches in the UAE and France, Lebanon and Germany, the bank has representative offices in Italy, Russia, South Korea and China.
If the bank succeeds in setting up in Kenya, it will join a league of more than 40 lenders serving a small percentage of the 47 million people operating a bank account.
Banque Misr has been eyeing Mayfair Bank which is a Tier III lender in a deal that could solidify its presence in the local banking industry.
The lender is targeting trading finance billions in the trade between Kenya and Egypt as it seeks to grow its market share.
Banque Misr will expand its services in 15 new markets across Africa and it has already obtained the Central Bank of Egypt (CBE)’s approval to open a new branch in Somalia and a representative office in Tanzania in addition to the Kenyan one.
If the Dubai International Financial Centre (DIFC) approves the bank’s interest in obtaining a full banking licence, then Banque Misr will enable its branch there to accept deposits.
The bank was founded by industrialist Talaat Pasha Harb in 1920. It was nationalized later under President Gamal Abdel Nasser in 1960.
According to the Kenya Bankers Association’s inaugural State of the Banking (SBI) report, the Kenyan banking industry is on a strong footing picking steadily picking momentum as it adjusts from the market shocks of 2015 – 2016 and the Banking Amendment Act 2016 that introduced interest rate caps.
“The outstanding loans and advances are on an increasing path, although the pace has been tapering over the past three years. With the industry remaining well capitalised and liquidity being sufficient and increasingly well distributed, it is anticipated that the credit growth tapering is at an inflection point. The stretch of that point will be influenced by the extent to which the downside challenges to the industry’s optimal operations are redressed,” notes the report.
With this happening, Banque Misr could just be in time for the good tidings the sector may have to offer.