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Standard Chartered plans to acquire bank in Egypt

Standard Chartered is considering acquiring a bank in Egypt in a bid to strengthen its offshore banking operations and tap the business opportunities evolving in the Middle East and African markets.

Additionally, it is also looking for opportunities to expand its footprint in Iraq this year, as reported by Reuters.

Increased regulatory pressure and implementation of new capital rules have forced many global banks to cut their risky exposure and focus on home market by selling offshore operations. However, such pressures do not seem to deter Standard Chartered from exploring the Middle East market, reported Reuters.

Standard Chartered Middle East, North Africa and Pakistan chief executive Christos Papadopoulos was quoted by the news agency as saying that the Middle East is not only a regional hub for the company but also a global hub as a trade corridor between Asia and Africa.

Commenting on Egypt, he added, "The foreign reserves are at critical levels. Currency is depreciating and I won’t be surprised if it depreciates further."

However, he also expects that the country’s economy will become stable in future, which will attract long term investment.

Due to worsening macroeconomic environment across the globe, the bank abandoned its plan to acquire the Egyptian operations of Greece-based Piraeus Bank, which was estimated to be nearly $200m.

Without disclosing further information about the potential acquisition, Papadopoulos said, "We expect that there could be other banks coming to the market for sale, and we will be ready to grab the opportunity."

French lender Societe Generale and BNP Paribas are gearing up to offload their Egyptian operations and it is expected that France’s Credit Agricole and Intesa Sanpaolo in Italy may also sell their units in Egypt.

Unveiling its Iraqi expansion plan, Standard Chartered, which has a representative office in the country, will launch new offices in Baghdad, Basra and Erbil.

Papadopoulos added that the amount of economic activity in Iraq now is substantial. "We always wanted to be onshore in Iraq. It was never a question of if but a question of when," he added.