1 July 2020

CDC Group and Commercial International Bank of Egypt close deal on US$100m Tier 2 Capital facility

  • CDC’s capital commitment aligns to UN’s Sustainable Development Goal to support decent work and economic growth
  • The facility comes at a critical time as African economies are impacted by the COVID-19 crisis

 

CDC Group, the UK’s impact investor and development finance institution, has closed a deal to provide US$100m of Tier 2 capital to Commercial International Bank (Egypt) (CIB).

Tier 2 capital continues to be scarce in Africa, with the main providers being DFIs. The purpose of the Tier 2 capital is two-fold:

  • To strengthen the bank’s capital base, so it can underpin growth and expansion in lending;
  • To support its lending to exporting sectors of the economy, in line with the Government’s agenda to develop alternative sources of hard currency outside of tourism.

This deal comes just a year after the regulator granted CDC approval to provide Tier 2 capital to the Egyptian banking sector. The closing of the $100m follows the signing of an MoU between CDC and CIB at the African Investment Summit in London in January.

CIB is the leading commercial bank in Egypt and is listed on the Egyptian stock exchange, has a GDR program listed on London stock exchange and its level 1 ADR program is traded on the OTCQX platform, with a market capitalisation of US$6.2billion. It provides affordable access to finance to over a million customers.

Nick O’Donohoe, Chief Executive of CDC, said: “This ground-breaking deal with CIB will enable the bank to support more customers at this crucial time. Supporting capital markets and banking ecosystems at this time is vital if African economies are to weather the COVID-19 storm”.

Commenting on the deal, Hussein Abaza, Chief Executive Officer & Board Member of CIB, said: “As a relationship based institution, we greatly value our partnership with CDC and we are very pleased to see the conclusion of this deal. This tier two capital facility comes as part of the bank’s ongoing plan to further solidify its capital base and support CIB’s future growth plans as we all look forward to coming out of these unprecedented times even stronger.”

British Ambassador to Egypt, Sir Geoffrey Adams, said: “It is great to see the outcomes of the UK Africa Investment Summit in January already having such a tangible impact on the ground. This financing facility will provide crucial support to businesses at a challenging time, helping to sustain their operations and protect Egypt’s workforce.”

CDC is among the first bilateral development finance institution to be given clearance to provide Tier 2 capital to Egypt’s banking sector. CDC has invested in Egypt since 2003 and sees the country as an increasingly important focus for its investment activities. Its capital currently supports 20 companies in the country that employ over 9,000 people. CDC has provided over US$115 million investment to those companies, and plans to expand its investment activities in the country even further in the coming years.

ENDS

 

Media Contact:

CDC Group

Andrew Murray-Watson

Email: amurray-watson@cdcgroup.com

Tel: +44 (0)7515695232

 

About CDC

CDC Group is the UK’s first impact investor with over 70 years of experience of successfully supporting the sustainable, long-term growth of businesses in South Asia and Africa.

CDC is a leading player in the fight against climate change and a UK champion of the UN’s Sustainable Development Goals – the global blueprint to achieve a better and more sustainable future for us all.

The company has investments in over 1,200 businesses in emerging economies and a total portfolio value of £5.8bn. This year CDC will invest over $1.5bn in companies in Africa and Asia with a focus on fighting climate change, empowering women and creating new jobs and opportunities for millions of people.

CDC is funded by the UK government and all proceeds from its investments are reinvested to improve the lives of millions of people in Africa and South Asia.

CDC’s expertise makes it the perfect partner for private investors looking to devote capital to making a measurable environmental and social impact in countries most in need of investment.

 

About CIB

Established in 1975, Commercial International Bank (CIB) – Egypt is Egypt’s leading private-sector bank. Each of CIB’s 7000 employees is dedicated to achieving the bank’s mission:  delivering a distinctive customer experience through innovation and big data analytics to provide customer-centric solutions and services that meet their needs. With a well-established network of over 200 branches, first-rate remote channels, and digital solutions, CIB provides individuals, households, high-net-worth individuals, large corporations, and small businesses with exceptional, 24-7 services.

CIB has consistently been recognized as the most profitable bank operating in Egypt and the bank of choice for over 500 of Egypt’s largest corporations. CIB was named the World’s Best Bank in Emerging Markets by Global Finance in 2018, one year after it was awarded the same title by Euromoney. CIB is also the first institution in the Middle East to be the subject of a business case study as part of the London Business School’s curriculum for graduate students. In 2019, Bloomberg included CIB in its “Gender Equality Index”, making it the first company in Egypt and Africa to be listed on the index, which includes 230 companies from 36 countries representing 10 sectors.

For further information about CIB products and services, please visit our website cibeg.com