National Bank of Egypt (NBE) has agreed to acquire Banque Misr’s operations in the United Arab Emirates, bringing the overseas operations of Egypt’s two state-owned banks closer together weeks after US authorities proposed restrictions on Banque Misr’s UAE business over alleged links to Iranian financial activity.
The UAE central bank has granted preliminary approval for the transaction, according to a joint statement by NBE and Banque Misr. The deal remains subject to the required regulatory approvals and other completion conditions.
The proposed acquisition comes after the US Treasury’s Financial Crimes Enforcement Network (FinCEN) on August 28 proposed restricting Banque Misr UAE’s access to correspondent banking services in the United States.
FinCEN classified the UAE operation as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act. The proposed measure would prevent US financial institutions from maintaining correspondent accounts for Banque Misr UAE and introduce additional safeguards for transactions involving the bank.
The US proposal applies specifically to Banque Misr’s UAE operation and not to the bank’s activities in other countries.
NBE and Banque Misr did not directly refer to the US action in announcing the transaction. Instead, they described the move as part of a broader restructuring of their international banking operations.
‘As part of its efforts to keep pace with the current development of foreign banking markets and the entailed requirements during the next phase, Banque Misr and the National Bank of Egypt announced a preliminary agreement on rearranging their banking presence in the United Arab Emirates,’ the banks said.
The lenders said the transaction reflects their shared objective of integrating their international banking presence while ensuring that banking services continue without disruption.
Both NBE and Banque Misr are owned by the Egyptian government. NBE also maintains a representative office in Dubai.
FinCEN’s proposed action followed US scrutiny of transactions involving Banque Misr UAE and financial networks linked to Iran. The agency said the measure was intended to prevent the UAE operation from providing access to the US financial system that could facilitate transactions connected to Iranian shadow banking activity.
The US action remains a proposal and has not become a final measure. FinCEN’s public record lists the Banque Misr UAE action under proposed special measures dated August 28, with no final rule currently listed.
The development comes against a wider backdrop of regulatory scrutiny of financial institutions and businesses suspected of helping Iranian entities bypass US sanctions. The UAE has also remained an important financial and commercial channel for Iranian businesses.
For NBE and Banque Misr, the planned transfer would consolidate their banking presence in the UAE while the regulatory process surrounding Banque Misr UAE continues. The transaction will still require the applicable approvals before completion.