WASHINGTON, D.C., May 25 -- The International Finance Corporation (IFC) has approved its largest initial investment in a financial institution by taking an equity stake of 5% in Commercial International Bank S.A.E (CIB) in Egypt. IFC's investment will support the privatization of CIB, which is expected to be the first in the banking sector in Egypt. CIB's privatization will involve large equity issues by the bank. IFC's participation will also help strengthen the bank, enabling CIB to expand its existing operational capability and diversify its product range. CIB is a leading Egyptian commercial bank with a focus on private corporate business. It was established in 1975 as a joint venture between the National Bank of Egypt (NBE) and the Chase Manhattan Banking Corporation of US. In 1987 Chase sold its stake in the bank to NBE. CIB is at present 70% owned by NBE and 30% by employees. "The government of Egypt is implementing a comprehensive broad-based program of policy reform and structural adjustment," said A
ndre Hovaguimian, IFC director for Middle East, North Africa and Central Asia department. "Privatization of financial institutions is the cornerstone of the adjustment policies being implemented by the government and is vital to achieving a major transformation in the economy." "IFC has pursued a three-pronged strategy in Egypt to broaden and deepen the financial markets," said Khaleel Ahmed, IFC investment officer in charge of the project. "Through a combination of technical assistance, institution building and resource mobilization activities, IFC has been able to contribute steadily to the development of Egypt's financial sector and IFC's investment in CIB is part of this effort. The project will enable CIB to take advantage of recent legislative and regulatory reforms designed to foster the development of a competitive financial market and strong banking institutions in Egypt. It will also assist the overall Egyptian privatization effort and encourage CIB's development as an efficient corporate bank that
is well positioned to better serve the requirements of Egyptian enterprises." IFC is the private sector arm of the World Bank and the largest source of direct project financing for private sector projects in developing countries. (30)
