Dubai Group to take stake in 5 banks

Dubai Group, which acquired a 5.24 per cent stake in Egypt's Commercial International Bank (CIB) for Dh580 million, is to actively fulfill its role as the leading diversified financial services company, said its CEO.

The investment was made through Dubai Capital Group, the regional investment management company of Dubai Group.

Commercial International Bank is the highest rated bank in Egypt with total assets of $11 billion (Dh40bn).

In a conference call with reporters yesterday, Tom Volpe said the Dubai Capital Group was planning to become a full-fledged investment bank by acquiring stakes in various financial sectors such as banking and insurance.

"There are no specific plans to float any of the Dubai Group companies," he said, when asked if there were plans for listing.

"Dubai Group will not get a place on the CIB Board as a result of this transaction, but we are very happy with the current management and look forward to working with them as a partner in the future, mainly in terms of bringing in business contacts from the region," said Volpe in the conference call.

But he added there were no plans to raise the stake in CIB in the forseeable future.

"Despite the recent market turmoil, the group is still looking to buy assets in the region and was looking at variety of investment opportunities," he said.

"We are very actively engaged in looking at a number of institutions in the region and outside the region," he said, adding that the insurance sector was the key.

He said the group, which has stakes in several banks locally and the region, was looking at buying stakes in five banks [which includes the Egyptian bank] by the year-end. "The stakes could be small investment [where it will be a passive player] or large stakes where it well be more actively involved," he added. "However this will depend ultimately on the type of opportunities that exist and the market situation. There are no concrete plans to share on this," he added. "The (CIB) investment is in line with Dubai Group's long-term strategic plan to capitalise on opportunities in the rapidly expanding Egyptian market, as well as empower the bank's capital base for further growth across the region," said Volpe.

He added this latest acquisition of Dubai Group is more clearly understood within the context of the core objective of Dubai Group, to actively fulfill its role as the leading diversified financial services company of Dubai Holding.

Egypt is an important market for Dubai Group as it provides excellent growth opportunities in different sectors, particularly banking and finance, he said.