Reuters/Dubai


Qatar National Bank hopes to complete the purchase of Societe Generale’s Egyptian unit in the next two months and won’t be deterred by the currency crisis in the north African country, it said yesterday.
The Gulf State’s largest bank said in December it would buy the French bank’s 77% stake in National Societe Generale Bank, with the buyout of minority shareholders taking the price to around $2.56bn.
Egypt has subsequently been hit by a currency crisis, with the pound dropping around 6% in value against the dollar to 6.58 since the introduction of a new system of foreign currency auctions on December 30.
“When we priced the deal, we went in expecting the exchange rate to drop — we expected 10 to 15% and that is embedded in the deal,” Ramzi Mari, QNB’s chief financial officer, said.
He added the bank wouldn’t withdraw its offer if the pound dropped below 7 to the dollar, equivalent to a decline of between 15 and 17%.
Mari added any depreciation in the currency both before and after NSGB was formally purchased wouldn’t impact QNB’s profits.
QNB expects Egypt’s central bank to approve the purchase in the next two weeks, Mari said, with the buying process hopefully completed in two months and with NSGB consolidated into QNB’s accounts from the second quarter of 2013 onwards.
A tender offer to minority shareholders which control 23% of NSGB’s stock must be completed under Egyptian market rules.
No date for this has been announced but it is likely to be after central bank approval has been secured.
QNB is also targeting further acquisitions in north Africa and Turkey, but the bank had “nothing material happening” in terms of asset buys, Mari said, adding it had enough cash to complete a purchase without raising funds from the market.
The Qatari bank, along with Commonwealth Bank of Australia and Industrial and Commercial Bank of China, is a suitor for Rabobank’s Indonesian unit, sources said yesterday.
Before including NSGB in its accounts, QNB expects net profit to rise 10% in 2013, with loan growth around 15%, Mari said. QNB reported on Sunday respective growth for 2012 of 11.1% and 28.9%.
The bank said at the time it would pay a cash dividend of 60% of nominal earnings per share value, equivalent to QR6 per share.
Mari said the cash dividend was higher than the 35-40% offered in previous years and would be an “exception” as the bank judged the right blend of cash and stock dividend.
QNB paid no bonus shares this year, a move that upset local investors who had expected a stock component — the share price suffered its biggest one-day drop in 12 months the day following the results announcement.
In terms of future dividends, Mari said the bank had the capital reserves to continue paying cash dividends above 40% without threatening its capital position.
“Whether we pay 40-50%, it doesn’t matter. Any time we need new capital, our biggest shareholder will be happy to put in new funds,” Mari said.
QNB is 50% owned by the Qatar Investment Authority, the sovereign wealth fund which has led the bulk of the Gulf State’s international acquisitions in recent years, including stakes in Barclays, car maker Volkswagen and luxury store Harrods.

QNB, others ‘eye Rabobank’s Indonesia unit”
QNB, Commonwealth Bank of Australia and, Industrial and Commercial Bank of China and are among the suitors expected to submit preliminary bids to buy Rabobank’s Indonesian unit in a $400mn deal, sources said.
First-round bids are due by the end of January, and some suitors are already working with financial advisers to place indicative proposals, the sources said.
The strong line-up for Rabobank’s Indonesian business reflects foreign banks’ interest in increasing their presence in Southeast Asia’s biggest economy, where more than half the population of 240mn still do not have bank accounts.
Rabobank, which has its roots in the Dutch farming sector, is shedding subscale and non-strategic businesses to focus its international operations on the agricultural industry. The planned sale of its Indonesian unit is part of that process.
Late last year, it sold its majority stake in private Swiss bank Sarasin for 1.04bn Swiss francs ($1.1bn) to global private banking group Safra.
The deal would be subject to Indonesia’s new bank ownership rules that cap foreign ownership in domestic banks at 40%, subject to some exemptions from the central bank.
Indonesia is the only Asian country in which the Dutch bank has retail operations. Rabobank entered Indonesia in 1990, and expanded to 90 branches and has an estimated book value of $135mn, one of the sources said. Applying a multiple of up to three times book value, the business could fetch about $400mn.
QNB and CBA have hired financial advisers to help with the Indonesia purchase and are working towards submitting first-round bids, the sources added.
CBA, Australia’s top bank by market value, has largely been focused on its Australia and New Zealand business. Outside its home market, CBA has been quietly bolstering its presence without acquisitions. ICBC, the world’s biggest bank by market value, has been gradually expanding its global footprint by making smaller acquisitions.