The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide US$240mn in loan and equity financing to Bahrain’s Ahli United Bank to support its expansion into frontier and emerging markets of the Middle East and North Africa. This is IFC’s largest investment in the region to date.

IFC’s financing, which includes US$200mn in a tier II convertible long-term subordinated loan, will help Ahli United Bank in its successfully pursued strategy of becoming a significant financial group, with a broader network of banks and financial institutions in the region’s developing countries, including Egypt, Iran, Iraq, Lebanon, Oman, and Yemen. IFC will also subscribe up to 10 percent equity (up to $40 million) in Delta International Bank of Egypt, which AUB Group recently acquired, through a future capital increase.

Michael Essex, IFC’s Director for Middle East and North Africa, said, “IFC is pleased to enter into a long term partnership with Ahli United Bank as they expand their presence across the region and create a network of banks which  will provide a much needed channel for private sector investment from resource-rich Gulf Cooperation Council markets to lower-income countries.”

Hamad Al Marzouq, Ahli United Bank’s deputy chairman, says, “We are pleased to begin a long term relationship with IFC, and we look forward to IFC’s partnership as we expand through the region and diversify our financial services products.”

Jyrki Koskelo, IFC’s director of global financial markets, adds, “The regional expansion of AUB will support trade, financial flows, remittances, tourism, and investments from the resource-surplus Gulf Cooperation Council countries into parts of the region that need economic growth through productive private sector investment.”

Adel El-Labban, Ahli United Bank’s Group CEO and managing director, comments, “The IFC investment is an important step in AUB’s ongoing plans to expand and diversify its capital and shareholding base and opens various opportunities for future regional cooperation.”