Banque Misr in Advanced Talks to Secure $650 Million in Loans

(Bloomberg) -- Banque Misr is in advanced talks with international lenders to secure $650 million in loans and expects to sign the deals in March as it looks to expand its reach, according to the chairman of the state-run lender, Mohamed Eletreby.

The bank has also secured central bank authorization to set up representative offices in Italy, South Korea and Kenya this year, Eletreby said in an interview. It is awaiting approval from authorities in those countries.

The expansion comes as Egypt pushes ahead with ambitious reforms aimed at reviving an economy battered by the 2011 uprising that ousted Hosni Mubarak. Boosting the banking sector has been key to that push, including through expanding overseas reach and encouraging lenders to provide funding for small and medium-sized enterprises.

The reforms have helped to lure more investor interest in the sector. Eletreby said banks sold 842 billion Egyptian pounds of 16 percent and 20 percent investment certificates between November 2016 -- when the central bank floated the currency -- and Jan. 4.

While Banque Misr, the country’s second-largest state bank, is planning on issuing international bonds, it won’t do so soon, Eletreby said. “We are relying on loans from international institutions,” he said.

Banque Misr has already secured a dollar loan valued at 250 million euros from the European Investment Bank to support SMEs, and the funds are “ready for use,” Eletreby said. Another loan for the same amount will be signed after the first is used up, he said.

The bank has also signed a $75 million loan deal with the European Bank for Reconstruction and Development in November to support SMEs, as well as one for $50 million with the Arab Bank for Economic Development in Africa. Eletreby said the bank is also in advanced talks with the EBRD for a $50 million loan for trade, which is expected to be signed in February.

To contact the reporter on this story: Mirette Magdy in Cairo at mmagdy1@bloomberg.net.

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Amy Teibel, Tarek El-Tablawy

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