As protests flared again on the streets of Egypt last month, senior bankers from two GCC lenders were inking deals to snap up large banking units in the country.
In the space of a few days, Qatar National Bank (QNB) had agreed to purchase Société Générale's Egyptian operation for US$2 billion (Dh7.34bn), while separately, Emirates NBD struck a deal to buy the Egyptian unit of BNP Paribas for $500 million.
Neither bank was deterred by the latest instability rocking the country, viewing it as just a bump in the road to recovery from the uprising that removed Hosni Mubarak from the presidency in February 2011.
"We believe in the long-term potential of Egypt and that it is going through a transitional phase and that, over time, these inconsistencies will iron themselves out," says Neeraj Makin, the associate vice president of special projects and strategic acquisitions at Emirates NBD."It's one of the most important economies in the Mena region and has a solid future."
It was an optimism that helped both banks land deals below market expectations. QNB secured a price two times above the book value, while Emirates NBD's deal was 1.6 times over the book value.
By comparison, National Bank of Kuwait, another GCC lender, paid a premium when it entered the Egyptian market in August 2007, a time when the country was considered the darling of international investors. It won a tender to buy Al Watany Bank for $516m, more than four times the book value.
The latest acquisitions are likely to be just the first in a spree of foreign deals by liquid GCC banks. Analysts say in the coming months they stand to be able to take their pick of regional assets being hived off by European lenders keen to shore up capital buffers at home.
For GCC banks, the drivers for overseas acquisitions are similar.
"Growth in the UAE and Qatar is becoming quite difficult for banks, so they need to look outside their countries for new opportunities," says Sara Boutros, a banking analyst at Beltone Financial in Egypt.
Credit growth in the UAE is tipped to climb to 5 per cent or 6 per cent this year, still a long way short of the double-digit figures of the boom years that fuelled fat profits for the industry. Although lending opportunities in Qatar are brighter, economic growth there is expected to slow to 4.8 per cent this year, its slowest rate since 2002.
There are other reasons to look abroad, too, says Naveed Ahmed, the senior financial analyst at Kuwait's Global Investment House.
"Banks are aware that they need to diversify their risk geography as well through exposure to different economies," says Naveed Ahmed, senior financial analyst at Kuwait's Global Investment House.
Outside Egypt, Turkey is another country that is drawing banks' interest. With a large bankable population and healthy credit growth supported by a strong economy, the country's banking industry offered investment openings for Arabian Gulf banks, Fitch Ratings said in a report last week.
Burgan Bank, a Kuwaiti lender, said last month that it had completed the acquisition of a 99.3 per cent stake in Eurobank Tekfen, the Turkish unit of the Greek bank Eurobank Ergasias. It already has a regional presence in Jordan, Iraq, Algeria and Tunisia.
It could soon be followed into the Turkish market by Commercial Bank of Qatar (CBQ). Qatar's second-largest bank is in talks to buy Alternatif Bank, a Turkish lender.
Emirates NBD is also eying possible acquisitions in Turkey and Indonesia, as well as smaller markets, says Mr Makin. It already has representative offices in India and China, as well as branches in Saudi Arabia, Singapore and the United Kingdom.
"We are looking at growth markets where there are trade linkages with the UAE," he says.
Following regulatory approval, Emirates NBD expects to complete the purchase of BNP Paribas Egypt by the end of the first quarter of this year.
QNB, which has signalled its interest in acquiring a Turkish bank, says it is focused on achieving its vision to become a Middle East and Africa "icon" by 2017. It is already present in 24 countries across the Middle East, Asia, Africa and Europe.
In addition to the Egypt deal, last year the bank acquired a 49 per cent stake in the Bank of Commerce and Development in Libya, the country's biggest private sector lender, and raised its stakes in the UAE-based Commercial Bank International and Mansour Bank based in Iraq.
One of the few regional markets lenders will probably continue to skirt around is Saudi Arabia. Despite its large population and buoyant economy, a tight mesh of regulations for foreigners has made the kingdom tricky for Emirates NBD and others to navigate.
Still, there are likely to be sufficient juicy openings for banks emerging elsewhere in the region.