Jordan-based Capital Bank has commenced due diligence to buy Lebanon-based Bank Audi’s businesses in Jordan and Iraq, Reuters reported.
A bourse disclosure revealed that Capital Bank signed a letter of intent to acquire Bank Audi’s assets and liabilities.
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The banks have already secured initial approvals from the monetary authorities of both the countries, the report added.
Capital Bank chairman Bassem Al Salem said: “We have begun the process of due diligence and it will take some time, then we come up with an offer. We are agreed on the basic principles.”
Al Salem added that he anticipates a binding offer by October end, “subject to the results of the due diligence”.
As at the end of June 2020, Capital Bank had $3.5bn in total assets.
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By GlobalDataThe acquisition of Bank Audi’s units will help Capital Bank to expand its footprint locally and regionally.
By purchasing Bank Audi’s unit in Jordan, the corporate bank will be able to move into the retail banking space with its 15 local branches.
By acquiring its Iraq’s business, Capital Bank will be able to expand in a niche corporate market banking space.
The bank already has a presence in this segment through a 62% stake in retail lender National Bank of Iraq.
Al Salem added: “We applied to get both their operations since we are interested in both markets to expand.”
Banks in Lebanon are planning to strengthen their balance sheets as the country grapples with a major financial crisis.
Gulf deals
Last week, Bahrain’s Bank ABC began preliminary talks to acquire Blom Bank’s Egypt unit.
Meanwhile, UAE’s First Abu Dhabi Bank (FAB) is planning to resume talks to acquire Bank Audi’s Egyptian business. The bank had halted the talks in May due to Covid-19-related uncertainties.
Earlier this month, FAB also reportedly began talks with Bank Hapoalim and Bank Leumi to form cooperation in the financial sector as UAE and Israel normalised their diplomatic ties.
This comes close on the heels of Bank Leumi entering into preliminary discussions with Emirates NBD to forge a partnership after the peace deal.
Last month, Blom Bank said it is considering selling its Egyptian business for up to $300m.
In the same month, a report said that Dubai government-owned Emirates NBD is planning to buy the assets of Bank Audi Egypt, as well as the assets of Lebanon’s Blom Bank.
