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Jordan's Capital Bank Begins Due Diligence to Buy Lebanon's Audi Units in Jordan, Iraq

Jordan's Capital Bank Begins Due Diligence to Buy Lebanon's Audi Units in Jordan, Iraq

Sunday, 13 September, 2020 - 18:30
The logo of Bank Audi is seen at the main entrance of the Bank's head office in Beirut, Lebanon January 24, 2017. REUTERS/Jamal Saidi

Jordan's Capital Bank has begun due diligence on buying Lebanese Bank Audi's Iraq and Jordan units in an acquisition that will help the Jordanian bank to diversify and expand domestically and regionally, its chairman said.

Capital Bank said on Sunday in a bourse disclosure that both sides signed a letter of intent to acquire assets and liabilities of Lebanon's major lender Audi Bank and that it obtained initial approval from both monetary authorities.

"We have begun the process of due diligence and it will take some time, then we come up with an offer. We agreed on the basic principles," Bassem Al Salem, chairman of Capital Bank, told Reuters.

Al Salem said he expected a binding offer by end of October "subject to the results of the due diligence".

Capital Bank, a major Jordanian corporate bank with $3.5 billion in assets by end of June, would be able to diversify into retail banking through acquiring Audi's Jordan operations with its 15 local branches.

The acquisition of Audi's unit Iraq would allow Capital Bank to expand in a niche corporate market banking scene where Capital Bank already has a presence through a 62% shareholding in National Bank of Iraq, a retail bank with over $533 million in assets.

"We applied to get both their operations since we are interested in both markets to expand," Al Salem added.

Some Lebanese lenders are trying to divest non-core assets to fulfill a requirement from Lebanon’s central bank to increase their equity.

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