National Bank of Greece (NBG) has submitted an application to the Central Bank of Egypt to terminate its activities in the Egyptian market after several unsuccessful attempts to sell its network in the country.
NBG has a network of 17 branches in the country, most of which are located in the greater Cairo area, Alexandria and Hurghada in the Red Sea, while it employs a total of 247 employees.
The bank’s decision to close its branches and terminate its presence in Egypt was a result of the unsuccessful attempts to sell NBG Egypt due to the lack of interest. The sale of the Egyptian activities is an obligation undertaken by National Bank to the European authorities due to the state aid it had received in the context of previous recapitalizations.
In May 2019 the Greek lender had signed a final agreement with Bank Audi SAE for the sale of its Egypt branches, a transaction that did not receive the approval of the Central Bank of Egypt, forcing Bank Audi to withdraw its offer and cancel the deal.
90-year journey
With the end of its business in Egypt, National Bank is winding up a journey of almost 90 years. The lender was one of the first Greek banks to develop operations in Egypt, while in the 1930s, after the merger of National Bank with the Bank of Athens, the activities of the two banks were consolidated in Egypt, creating the Banque Nationale de Grèce et d ' Athens.
In the 1960s, the Banque Nationale de Grèce et d’Athènes came under the control of the Egyptian government after the nationalization of all banks in Egypt. In 1979, when conditions allowed, the National Bank returned to the country with the opening of a branch in Cairo. In 2007, shortly before the outbreak of the financial crisis in the USA, NBG significantly strengthen its position in the Egyptian market by creating 10 new branches.
According to National Bank sources, the cessation of operations in Egypt fulfills the bank's commitment to drastically reduce international activities. It is recalled that NBG has also proceeded with the sale of its subsidiaries in Romania and Turkey.
The only incomplete sale of foreign activities concerns National Bank Cyprus. It is noted that in the case of Cyprus, NBG had announced (November 2019) the signing of an agreement with Astrobank for the sale of 100% of its subsidiary in an agreement that was canceled a year later as Astrobank failed to meet the conditions.
Following the decision to close operations in Egypt, NBG’s international operations will be limited to just two countries, Northern Macedonia (Stopanska) and Malta (NBG Malta) whose contribution to the group's profit amounted to just 11 million euros. Operating revenues from abroad amounted to just 74 million euros compared to organic revenues of 1.35 billion euros in Greece, reflecting the drastic reduction of global business.
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