(Incorporates earlier bid, adds background)

CAIRO, Feb 8 (Reuters) - National Bank of Egypt's investment banking arm said on Monday it had dropped its bid to buy CIB subsidiary CI Capital , announced earlier in the day, after failing to agree on a timeframe to complete feasibility studies.

"Al Ahly Capital has decided not to resume procedures for its acquisition bid and hopes that CIB achieves its goals in the interests of its stakeholders," it said in a statement.

CIB said earlier on Monday that Al Ahly had submitted a non-binding offer to buy 100 percent of its investment banking business for 1 billion Egyptian pounds ($127.71 million).

CI Capital had already accepted in December a 1-billion pound bid from Orascom Telecom and Technology , but the deal had not been finalised.

OTMT plans to merge CI Capital with Beltone Financial, which it bought in November for almost 650 million Egyptian pounds.

OTMT is owned by Egyptian billionaire Naguib Sawiris, one of the country's most prominent businessmen and founder of the Free Egyptians political party, which had a strong performance in recent parliamentary elections.

OTMT has holdings in media, technology and cable businesses as well as energy, transport and logistics.

CI Capital is working on four initial public offerings this year in the construction, consumption and tourism sectors. It also plans to open a brokerage firm in the United Arab Emirates in the second quarter of this year.

($1 = 7.8300 Egyptian pounds)

(Reporting by Ehab Farouk; Writing by Lin Noueihed; Editing by Greg Mahlich and Jan Harvey) ((lin.noueihed@thomsonreuters.com; +202 2 394 8039; Reuters Messaging: lin.noueihed.thomsonreuters.com@reuters.net))

Keywords: CICAPITAL M&A/NBE FAIL