Standard Chartered is thought to be considering bids for Royal Bank of Scotland's stake in Saudi Hollandi Bank and Egypt's state-owned Banque du Caire to plug gaps in its booming business in the Arab world.
The UK bank is said to have joined local bidders in expressing preliminary interest in a 40 per cent interest in Saudi Hollandi, which RBS and its consortium partners acquired in the takeover of ABN Amro. Standard Chartered was interested in the stake – worth about £800m at current prices – in Saudi Arabia's oldest bank when ABN considered selling it in 2006.
Standard Chartered is also in the running to buy 67 per cent of Banque du Caire from Egypt's central bank. Egypt has given the go-ahead for five short-listed bidders to carry out due diligence on the company's books.
Saudi Arabia and Egypt are the main gaps for Standard Chartered's business in the Arab world, where soaring oil prices and economic diversification helped to drive the bank's profit growth last year. The company's operating income from the Middle East and South Asia, excluding India, rose 33 per cent last year to $1.43bn (£710m). Banque du Caire is the third-largest bank in Egypt with a 6 per cent market share in terms of assets and deposits. Egypt is planning to sell up to 67 per cent of the bank in a public auction, and will sell a further 28 per cent in an initial public offering on the Egyptian stock exchange after the stake sale. Another 5 per cent of shares will go to the bank's employees.
The other bidders are said to be regional players and National Bank of Greece.
A Standard Chartered spokesman said the bank had put in an indicative, non-binding bid for the Banque du Caire stake. He declined to comment on Standard Chartered's interest in Saudi Hollandi.
Buying the Saudi Hollandi stake would give Standard Chartered a much-coveted banking licence in the world's dominant oil producer. The pace of the sale is said to be slow due to regulatory considerations.
Standard Chartered has made a string of acquisitions in the past three years in South Korea, Pakistan and Taiwan. It has also bought American Express Bank and a number of smaller businesses.
RBS and its partners Fortis and Santander have said that the Saudi Hollandi stake is one of the non-core ABN businesses they will consider selling. The deal would help RBS as it seeks to rebuild its capital ratios, although it has said it does not need to dispose of businesses to do so.