Lebanese lender Blom Bank has commenced exclusive talks with Bahrain’s Bank ABC to divest its stake in Blom Bank Egypt.
The move comes as Blom Bank is exploring different strategic options after financial crisis gripped the domestic banking industry in Lebanon.
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Currently, the lender holds 99.42% of the issued share capital of Blom Bank Egypt, Reuters reported citing a bank statement.
The statement further added: “Both parties will consequently enter into negotiations in order to reach a final agreement, however, there is no certainty that any transaction will be completed.”
In September, Bank ABC started preliminary talks to buy the Egyptian unit. Separately, it was also reported that Emirates NBD is interested to acquire Blom Bank assets.
The sale of Blom Bank Egypt is expected to fetch around $250-300m and will help in boosting Blom Bank’s balance sheet, according to earlier reports.
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By GlobalDataBlom Bank Egypt, which offers retail and corporate banking services, has 42 branches.
In 2019, listed Lebanese banks, including Blom Bank, posted a combined net after-tax loss of $770.4m, registering their worst performance in history.
In the previous year, the banks reported a net profit of $1.44bn, according to Arabian Business.
Due to dismal situation, the central bank of the country also asked the lenders to raise their capital by 20% by the end of February.
