EFG Hermes' joint venture deal with Qatar's QInvest is close to collapse, with less than a month to go to secure consent for the deal from Egyptian authorities before the deal expires.
The Egyptian Financial Supervisory Authority has not approved the deal, first announced almost a year ago, EFG said in a statement.
"If EFG does not receive a 'no objection' from the Egyptian Financial Supervisory Authority in the coming days, it will be difficult to implement the joint venture agreement," the statement added.
EFG Hermes, Egypt's biggest investment bank, was targeted by QInvest last year in a bid that would split its assets into a new company, EFG Hermes Qatar. The new entity would aim to position itself as a regional banking champion to chase deals across the Middle East. QInvest, which counts Qatar Islamic Bank as its biggest shareholder, had aimed to control 60 per cent of the newly created entity. QInvest said that it would invest US$250m (Dh918.2m) into the joint venture.
After QNB's $1.9bn takeover of the Egyptian operations of France's Société Générale, the deal was expected to be the biggest investment in Egypt by a Qatari company last year.
However, the deal has proven controversial from the start.
Last May, EFG Hermes fought off a legal challenge from Planet Investment Banking, which attempted to block QInvest from breaking up EFG's business. Planet's alternative deal, which would have involved submitting a full takeover bid to EFG's shareholders, ultimately fizzled out. EFG Hermes reported a net loss of 46.8m Egyptian pounds (Dh25.1m) for the fourth quarter of 2012, nearly triple its losses in the corresponding period a year earlier.
Meanwhile, Qatar National Bank reported an increase in net profits for the first quarter of this year as it grew its loan book throughout the Middle East. The region's biggest bank by assets, QNB reported net profits of 2.1 billion Qatari riyals (Dh2.1bn), a 6.7 per cent increase on the same period last year, but a miss on consensus estimates of 2.2bn riyals.
The bank has missed estimates for four out of the past six quarters.
Loans and advances increased 3.6 per cent during the quarter to 259bn riyals, while deposits grew by 3.6 per cent to 280bn riyals.
The results do not include QNB's recently concluded takeover of National Société Générale Bank Egypt.
