The past 12 months have been a busy period for Egyptian banks expanding into new African markets.
In January, Commercial International Bank (CIB), the country’s largest private sector bank, took full control of Kenya’s Mayfair CIB Bank (MCIB) after acquiring the remaining 51% stake – it originally bought 49% in 2020, marking the completion of CIB’s first cross-border acquisition.
CIB first started to expand in African markets in 2019 when it established a commercial representative office in Addis Ababa, Ethiopia.
Egypt’s banks are not alone in north Africa for seeking diversification and growth outside of their domestic market, but the trend is one of the most pronounced in the continent’s banking industry. So what’s going on?
Hussein Abaza, CEO and managing director, CIB, says there are a couple of key reasons why the bank is looking beyond the country’s borders.
“First, CIB's expansion strategy in Africa, and particularly east Africa, is designed to build a bridge for Egyptian customers so that they can benefit from regional integration efforts across the continent. They will also benefit from the prospects available to them from being Common Market for Eastern and Southern Africa (COMESA) members, and from the recent African Continental Free Trade Agreement (ACFTA).”
CIB's expansion strategy in Africa, and particularly east Africa, is designed to build a bridge for Egyptian customers so that they can benefit from regional integration efforts across the continent
“Second, CIB's expansion strategy aims to diversify CIB’s operations and revenue streams. The region is home to some of the world’s fastest growing economies, many of which benefit from their geographic location, economic potential, and historic and cultural ties with Egypt.”
East Africa ambitions
Most of the African economies are forecasted by the International Monetary Fund to grow at over 5% this year – economic growth rates most developed economies would be envious of.
For CIB, it is aiming to support and facilitate the robust economic growth and development in the region, an ambition it wants to fulfil by operating as a business hub for the east Africa region.
Part of CIB's strength comes from its corporate and SME trade finance capabilities, which together, with a comprehensive set of banking services, creates a strong proposition.
“CIB is looking to position itself as a trade finance hub for Egypt and east Africa, focusing on corporates and SMEs, “ says Abaza. “To these clients, the bank will provide corporate banking services, including trade finance, cash management, project finance, direct investment, as well as retail and SME banking.”
He adds that CIB Kenya Ltd – renamed from MICB after taking full ownership earlier this year – already provides the full suite of corporate and retail banking solutions, including transactional accounts, corporate loans, trade finance, savings accounts, and personal secured loans.
This is the first in a series of four sponsored articles in association with CIB.