Emirates NBD sells
40 percent of its BoB shares

Deal valued at $39 million

Bank of Beirut (BoB) acquired more than 40 percent of Emirates NBD’s stake in the bank, valued at $39 million. It represents 2.7 percent of BoB shares out of a total 6.5 percent of the Emirates NBD stake. An EMIRATES NBD is a UAE-based bank.

A source at BoB downplayed the significance of the sale transfer. “It represents 1.2 percent of the bank’s equity,” he said. It is the first divestiture of a UAE investment from the country after the political crisis with Saudi Arabia last November. Several international banks have withdrawn from the local market in the past few years, the last of which was HSBC which sold its branches to BLOM Bank.

BoB’s regular shares were valued at $18.8 at the time of the sale on the Beirut Stock Exchange. Emirates NBD acquired its BoB shares in 1998 for $22 million. This implies an Internal Rate of Return of eight percent over the investment period, or a Compound Annual Growth rate (CAGR) of 7.5 percent.

Emirates NBD will remain a non-executive member of the board, represented by Loubna Kassem at BoB.

BoB’s total equities reached $2.4 billion as of November, assets $18 billion, and deposits $13 billion. Profits are expected to reach $200 million for 2017.