Here's what you need to know on Egypt's United Bank IPO

CAIRO - 25 November 2024: Local media have reported that the subscription to United Bank’s initial private offering (IPO) on the Egyptian Exchange (EGX) has generated overwhelming interest, being oversubscribed by three times its allocated shares. The offering closed today, with buy orders reaching 938 million shares by the end of Sunday’s trading session, far surpassing the 313.5 million shares allocated to this tranche. Reserved for institutions and financially solvent individuals, the private offering accounts for 95% of the total shares on offer. 

 

The United Bank’s IPO is structured into two tranches: a private offering of 313.5 million shares and a public offering of 16.5 million shares. The public tranche, targeted at retail investors, will open for subscription from November 27th to December 3rd. The bank’s authorized capital stands at EGP 7.5 billion, with issued and paid-up capital at EGP 5.5 billion.

 

This marks Egypt’s first IPO since 2021, signaling a revival of the country’s privatization efforts. This move aligns with the government’s strategy to reduce state involvement in the economy and attract foreign investment. 

 

The Central Bank of Egypt is offering 330 million shares of United Bank, representing a 30% stake. The shares are priced at a maximum of 15.6 Egyptian pounds each, with the aim of raising up to $104 million. 

 

The IPO is structured in two phases: a private placement of 313.5 million shares, followed by a public offering of the remaining 5% of shares. This approach is designed to attract both institutional and individual investors.

 

The United Bank’s IPO is part of Egypt’s broader privatization program, which includes the divestment of assets across various sectors, such as banking, energy, and real estate. The government aims to enhance state assets and stimulate economic growth through strategic asset divestiture.

 

As of June 2024, United Bank’s total assets increased to 106 billion Egyptian pounds, up from 72 billion pounds in 2021. Net profit rose to 1.74 billion pounds in 2023, reflecting the bank’s strong financial performance and market position. The IPO represents a significant step in Egypt’s economic reform and privatization agenda, aiming to attract investment and foster growth in the financial sector.