Egypt lender to fund trade on Mayfair deal

Egypt’s largest private lender Commercial International Bank (CIB) will focus on financing trade between Kenya and the North African country following the acquisition of a controlling stake in Mayfair Bank.

CIB chairman and managing director Hisham Ezz Al-Arab said the lender would gather market intelligence to deepen presence and support clients who operate in the country by promoting Egyptian exports.

“In Kenya, we will offer back-to-back trade finance, facilitating Egyptian exports to (and imports from) this vital East African market, while we look forward to exploring the exciting Ethiopian market as it embarks on a period of political and economic reform,” said Mr Al-Arab in the latest annual report.

CIB recently got Central Bank of Kenya approval to acquire 51 per cent stake in tier III lender Mayfair Bank and will inject Sh3.7 billion ($35 million) into firm up operations.

Mayfair’s current target has been high net worth individuals and corporates but the Egyptian lender wants to offer requisite skills, resources and infrastructure to scale up the business.

CIB last year launched Trade Finance Online, an Internet-based platform that allows clients to conduct and manage trade finance transactions online, eliminating paperwork.

Trade and investment ties between Kenya and Egypt have been growing over time, making Egypt a crucial partner in the Common Market for Eastern and Southern Africa.

Kenyan exports to Egypt grew to Sh20.13 billion in 2018 from Sh19 billion posted the previous year, data from Kenya National Bureau of Statistics shows. Imports from Egypt grew by 2.7 per cent to Sh36.3 billion during this period.

CIB in June last year also established a commercial representative office in Addis Ababa, the capital of Ethiopia, to capture growth opportunities.

“The office gives CIB a first-mover advantage once the Ethiopian banking sector opens to foreign investors,” said the chairman.

CIB has been in operation since August 1975 and is currently the leading private bank in Egypt with an asset base of Sh2.45 trillion ($24.18 billion).

It is listed on the Egyptian Stock Exchange, London Stock Exchange and trades over the counter on the New York Stock Exchange.

Foreign banks have increasingly found Kenya an attractive market in the region. Other lenders that have come in the recent past include SBM Bank of Mauritius and United Bank of Africa and Guarantee Trust Bank, both from Nigeria.