ADX said that the bank’s decision is driven by the ongoing global market uncertainty and volatile macro-economic conditions.
FAB also submitted its decision to Egypt’s Financial Regulatory Authority (FRA).
On 9 February, FAB submitted to FRA a non-binding offer for a potential cash acquisition of a majority stake in EGX-listed financial services institution EFG Hermes to Egypt’s.
Yet, FAB stressed that Egypt remains a strategically important market for FAB, where the bank will continue to support its customers and employees and continue to invest in the growth of its well-established partnerships and operations in Egypt.
The action comes few days after Abu Dhabi Developmental Holding Company (Abu Dhabi wealth fund) had undertaken several transactions regarding purchasing state-owned stakes in five private and state-run companies.
In a recent report, Fitch Ratings said that Egypt experienced around $5 billion of net outflows in from September to December 2021, and further outflows due to the Ukrainian-Russian conflict without giving a specific amount.
Egypt’s net international reserves (NIRs) dropped to about $37 billion by end of March, down from $40.9 billion in February, the first drop since May 2020, the Central Bank of Egypt (CBE) announced last week.
CBE attributed the decline to the war in Ukraine, which has caused massive sell-offs in emerging markets, and volatility in global asset prices.
Fitch Solutions expected in a recent report that Russia’s invasion of Ukraine will result in a wider current account deficit in Egypt, to post at 4.3 percent of GDP in the current FY2021/2022 (ends by end of June 2022) and 4.2 percent of GDP in FY2022/2023 (starts as of 1 July).
It also anticipated that higher wheat prices will increase the import bill while declining tourist arrivals from the two countries will depress the country’s service exports.
Egypt is currently in talks with the International Monetary Fund (IMF) for a new loan programme to help the country keeping the gains of its economic reform programme and to counter the negative impacts of the Russian invasion.