26092 - Bank of Alexandria

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Summary of Proposed Investment

Project Number

26092

Company Name

BANK OF ALEXANDRIA S.A.E.

Date SPI Disclosed

Aug 22, 2007

Country

Egypt, Arab Republic of

Industry

Financial Markets

Projected Board Date

Sep 21, 2007

Status

Completed

Sector

Commercial Banking - General

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Oct 4, 2007
Signed : Oct 1, 2008
Invested : Mar 12, 2009

Project Description

The proposed project involves IFC acquiring a minority equity stake in Bank of Alexandria (BoA or the Bank), alongside Intesa Sanpaolo (ISP), which acquired a majority stake in the Bank’s shareholding following a competitive bidding process. BoA is Egypt’s third largest bank in terms of total assets, and the first public sector bank to be privatized in the context of a comprehensive national financial sector reform program aimed at building a more competitive financial sector, with a sound banking system and insurance industry.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	200.0

Development Impact

This project is expected to have a high developmental impact by fostering competition and the provision of quality banking services in an increasingly private sector-led financial sector in Egypt. The combination of ISP’s know-how, particularly in the areas of SME and retail banking, and BoA’s scale and outreach in Egypt will result in increased and improved access to finance to those underserved segments. The project will also enhance the credibility of the bank privatization process in Egypt as it is a key pillar in the Government’s overall financial sector reform program. Indeed, the growth and continued success of Bank of Alexandria is a key part of Egypt’s strategy of increasing competition in the sector, and inducing further privatizations. Finally, the project will reinforce the already strong economic ties between Egypt and Italy, one of its largest trading partner (second and fifth export and import partner respectively in 2005), by introducing the leading financial services group from that country.

IFC’s role in this project stems from its ability to engage strategically with ISP, and to positively influence the long-term success of BoA and the banking sector reform in Egypt, where ISP has no presence. IFC’s participation in the most important privatization transaction will send a strong signal for Egypt’s financial sector reform program and the introduction of a European bank from Italy will foster healthy competition in the country’s banking sector, induce further privatizations and contribute to further development of the financial sector. Also, through improved corporate governance, efficiencies and stronger operating performance resulting from the introduction of international best practices, BoA could become a model institution for other banks in Egypt to emulate, and influence other domestic banks to improve their operations.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal IFC will review, the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS) and its compliance with the IFC Exclusion list, the applicable National Social and Environmental Laws and regulations and IFC performance standards. If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS.

Based on the review, the project will be required to:

- Develop an, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable Performance Requirements; and
- Submit a periodic report to IFC as per a format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Mr. Fabrizio Centrone, Head of MENA and Asia

Telephone: +390287937504
Fax: +390287937745

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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