Mlak Finance has completed the sale of its subsidiary in Egypt to Al Baraka Bank Egypt for EGP 400 million, marking its full exit from the Egyptian market. This strategic divestment aligns with the company’s broader objectives of streamlining operations and refocusing on other regions. The sale, as disclosed by Mlak Finance, will have a significant impact on its financial position, particularly affecting its retained earnings by AED 94 million.
The decision to sell the Egyptian subsidiary follows a broader trend within Mlak Finance to concentrate its resources in markets with stronger growth potential. The exit comes amidst an environment of financial instability in Egypt, largely driven by currency devaluation. The company’s move also reflects the challenging economic conditions in the region, which have placed pressure on businesses operating in Egypt. The sale to Al Baraka Bank Egypt will be finalized over the course of the third and fourth quarters of 2025.
Mlak Finance’s financial results will show a reduction in retained earnings, primarily due to the significant devaluation of the Egyptian pound. The foreign currency devaluation has been one of the key factors in the decision to divest, with the company assessing its exposure to the Egyptian market as increasingly untenable. The decision to exit at this time is considered a strategic realignment in light of current economic challenges.
The transaction reflects the ongoing reshaping of Mlak Finance’s portfolio, as the company seeks to capitalise on more promising growth opportunities outside of Egypt. Al Baraka Bank Egypt, a prominent player in the Egyptian financial services sector, is expected to benefit from the acquisition, gaining valuable assets and an enhanced market position.
This sale also comes in the wake of a series of similar transactions across the financial industry in Egypt, as many international companies reassess their investments in the region. Egypt’s ongoing economic difficulties, including inflationary pressures and currency depreciation, have made it increasingly difficult for businesses to maintain profitability. As a result, many foreign investors have opted to pull out or scale down their operations.
For Mlak Finance, the decision to exit Egypt is not merely a financial manoeuvre but also a reflection of shifting strategic priorities. The company is now placing greater emphasis on markets with more favourable economic conditions, which offer better prospects for growth and stability. This move will likely position Mlak Finance to strengthen its operations in other markets, potentially expanding its footprint in the Gulf region, where growth prospects remain strong.
The sale also has broader implications for Al Baraka Bank Egypt, which is expected to integrate the acquired subsidiary into its existing operations. The acquisition strengthens the bank’s position in the Egyptian market, providing it with an expanded portfolio of financial services and a wider customer base. Al Baraka Bank Egypt’s acquisition strategy signals a commitment to bolstering its market share in the face of ongoing economic uncertainty.