* Interested in Citi's Egypt retail unit - CEO
* 2015 profit growth target 6-10 pct, loan growth 5-8 pct
* Plans $500 mln Tier 2 bond once got shareholder assent
* Q4 net profit 644.3 mln dhs, up 28 pct y-o-y (Recasts, updates with CEO comments, detail, context)
By David French
DUBAI, Jan 18 (Reuters) - Mashreq is holding talks with Citigroup about acquiring its retail banking business in Egypt and is targeting net profit growth in 2015 of between 6 percent and 10 percent, the Dubai bank's chief executive said on Sunday.
Abdul Aziz al-Ghurair made the remarks to reporters after the emirate's third-largest bank by assets reported a 28 percent jump in fourth-quarter earnings on the back of improved operating income.
With Emirates NBD, which recorded a 82 percent net profit increase, it marked a positive start to the fourth-quarter reporting season for the United Arab Emirates' banks, who have benefited from strong domestic economic conditions in recent quarters.
Citi has received bids from ten banks for its Egyptian consumer business after putting it up for sale in October to trim costs, sources told Reuters last week.
"We are in dialogue with Citi and the regulator in Egypt to explore the potential of this business," Ghurair confirmed, adding Mashreq had yet to appoint advisors but would do so as the process progressed.
Citi's assets can only be sold to banks already operating in the North African country as the U.S. lender is retaining its banking licence, Ghurair said. Mashreq has around 10 branches in Egypt.
Across the Gulf, strong competition at home is forcing banks to look overseas for their next stage of growth. Ghurair admitted in September that Mashreq was looking to expand in Egypt and Turkey.
The bank hopes to generate 25 percent of its revenue from international sources, up from 18 percent now.
LOAN GROWTH
Mashreq made 644.3 million dirhams ($175.4 million) for the three months to Dec. 31, compared with 504.6 million dirhams in the corresponding period of 2013, boosted by a 20 percent and 18 percent year-on-year rise in fee and net interest income respectively.
Rarely traded, Mashreq's shares gained 2.3 percent in positive trading on the Dubai bourse.
Into 2015, Mashreq's loan growth was expected to be around 5 percent to 8 percent as increased lending to large corporates and state-linked entities, who could ride out any disruption in the local economy from oil price-related volatility, offset a decline in consumer lending, according to Ghurair.
The CEO said he expected its retail business would shrink in the coming 6-12 months as the UAE's recently-introduced credit bureau highlighted customers' total borrowings for the first time, making banks generally more cautious on retail lending.