Local media reported that subscription to the United Bank’s initial private offering (IPO) on the Egyptian Exchange (EGX) has generated overwhelming interest, being oversubscribed by three times its allocated shares. The offering closed today and witnessed buy orders reaching 938 million shares by the end of Sunday’s trading session, far surpassing the 313.5 million shares allocated to this tranche. Reserved for institutions and financially solvent individuals, the private offering accounts for 95% of the total shares on offer.

The United Bank’s IPO is structured into two tranches: a private offering of 313.5 million shares and a public offering of 16.5 million shares. The public tranche, targeted at retail investors, will open for subscription from November 27th to December 3rd. The bank’s authorized capital stands at EGP 7.5 billion, with issued and paid-up capital at EGP 5.5 billion.

1. Egypt’s first IPO since 2021

The United Bank’s IPO is Egypt’s first since 2021, signaling a revival of the country’s privatization efforts. This move aligns with the government’s strategy to reduce state involvement in the economy and attract foreign investment.

2. Sale of a 30% stake

The Central Bank of Egypt is offering 330 million shares of United Bank, representing a 30% stake. The shares are priced at a maximum of 15.6 Egyptian pounds each, aiming to raise up to $104 million.

3. Structured two-Phase offering

The IPO is structured in two phases: a private placement of 313.5 million shares, followed by a public offering of the remaining 5% of shares. This approach is designed to attract both institutional and individual investors.

4. Part of a broader privatization program

The United Bank’s IPO is part of Egypt’s broader plan to divest assets across various sectors, including banking, energy, and real estate. The government aims to enhance state assets and stimulate economic growth through strategic asset divestiture.

5. Financial growth and market position

As of June 2024, United Bank’s total assets increased to 106 billion Egyptian pounds, up from 72 billion pounds in 2021. Net profit rose to 1.74 billion pounds in 2023, reflecting the bank’s robust financial performance and market position.

The United Bank’s IPO represents a significant step in Egypt’s economic reform and privatization agenda, aiming to attract investment and stimulate growth in the financial sector.