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Six Egyptian banks to merge with others

CAIRO - Six Egyptian banks will merge with others in a government-led restructuring of Egypt's banking sector, a presidential spokesman said yesterday.

The banks are Mohandes Bank, Misr Exterior Bank, United Bank of Egypt, Islamic International Bank for Investment and Development, Nile Bank, and Commerce and Development Bank, said spokesman Maged Abdel Fattah, quoted by the state news agency MENA.

Public-sector banks have large stocks in most of the banks, giving the government a controlling interest.

The spokesman described the banks as the weakest six operating in Egypt and said the aim of the mergers would be "to avoid any danger arising from the lack of regularity in the financial and monetary performance in these banks".

He did not say which banks would take them over.

The plan to have the six banks merge with others is part of a larger plan for the banking sector discussed by President Hosni Mubarak and a group of ministers yesterday.

The plan includes tackling the problem of non-performing loans over the next two to three years, with help from an arbitration committee to be set up at the central bank.

The government intends to turn the public-sector banks, which still dominate the Egyptian banking scene, into "strong Egyptian institutions, some of which can be privatised in the future", the spokesman said.

The government has sold off its stakes in some small to medium-sized joint venture banks but the market has been waiting for a decade for the privatisation of one of the big four banks. Selling off stakes in the joint-venture banks will continue over one to two years, he added.