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Al-Ahram Weekly 18 - 24 February 1999 Issue No. 417 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 18 - 24 February 1999 Issue No. 417
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Special Travel Living Sports People Time Out Chronicles Cartoons Letters Banking trail-blazer resigns
By Sherine Abdel-RazekIn a sudden and unexpected move, Adel El-Labban, Commercial International Bank's (CIB) managing director and board member, resigned this week, triggering speculation about the reasons behind his resignation and who his successor might be.
In a press release issued by the CIB board of directors on Sunday, CIB Chairman Mahmoud Abdel-Aziz announced that El-Labban, 42, was leaving to "work abroad". The press release, which failed to mention any of El-Labban's achievements throughout his tenure since 1990, said that because of CIB's unique status, other international business institutions have always been tempted to attract its specialised bankers.
However, Al-Ahram Weekly has learnt that El-Labban's resignation was prompted by several months of disagreement with the bank's top management following disputes over an employee bonus share distribution plan that was rejected by CIB's general assembly meeting last May -- a move that pushed CIB's shares, and the market as a whole, over the edge for several weeks.
The press release stated that an "international Egyptian banker" who has worked as managing director for two international banks is about to join the CIB's senior management . It did not name him.
El-Labban, a frequent contributor to Al-Ahram Weekly, is considered the architect of Egypt's first banking privatisation process which started in 1993. In the same year, CIB offered 1.5 million of its shares for public subscription, lowering the state-owned National Bank of Egypt's (NBE) holdings to 42 per cent.
Under El-Labban's management, CIB became the first Egyptian enterprise to be listed and traded on international markets. In 1996, NBE offered about half its share stake in CIB on the London Stock Exchange in the form of Global Depository Receipts (GDRs).
CIB also succeeded, during El-Labban's tenure, in extending its activities by establishing a number of affiliates: the Commercial International Investment Company for investment banking activities, the Commercial International Brokerage Company and, recently, the Commercial International Portfolio Management -- in which the British Barings Asset Management holds a 40 per cent stake.
Before his appointment as managing director of CIB, El-Labban held the position of vice-president of corporate finance at the US-based Morgan Stanley's investment banking division.
Unexpectedly the market's reaction to the resignation favoured both CIB shares and GDRs. The shares ended the second day of the trading, Monday, with an LE2 increase to settle at LE37.7. Meanwhile, the value of GDRs rose to the equivalent of LE37.1 compared to LE36.8 on the previous day.
This increase surprised brokers who had expected a severe drop in bank shares. "This is abnormal," a prominent stock market broker, who spoke on condition of anonymity, commented. "Such reaction was not expected, unless there is someone who bought CIB shares to prove that the bank is not being affected by El-Labban's departure," the broker added.
