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December 12, 2012 8:03 pm
Société Générale is to sell its majority stake in NSGB, its Egyptian bank, to Qatar National Bank for $2bn, netting the French bank a gain of €350m and boosting its capital base.
The deal, which will close in the first half of next year, represents the culmination of talks that began in August. The proceeds will add 0.3 per cent to SocGen’s core tier one ratio – a key measure of balance sheet strength – by the end of next year, the Paris-based bank said on Wednesday.
SocGen is aiming for a core tier one capital ratio under the new Basel III regulations of between 9-9.5 per cent by the end of next year. The sale of the Egyptian bank will help it reach that target.
The offer by state-backed Qatar National Bank values the whole of NSGB at $2.6bn and is equivalent to a multiple of two times NSGB’s book value. NSGB had deposits of €6.6bn at the end of 2011 and loans of €4.7bn.
SocGen, like domestic rivals BNP Paribas and Crédit Agricole, has spent the past year selling assets and reducing activities to increase its capital reserves in the face of the eurozone debt crisis and tougher regulatory requirements.
Qatar National Bank said earlier this year that it was pursuing a five-year plan to expand significantly in the Middle East and Africa.
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