Lebanon’s Banking Sector
In its annual survey of the Arab world’s Top 100 commercial banks, The Banker magazine included 7 Lebanese banks on the list, none of which ranked in the top 10 banks in the Middle East.
Banque de la Méditerranée was the highest ranked Lebanese bank, coming in 35th place. It was followed by Byblos Bank (47th), Banque du Liban et d’Outre Mer (58th), Banque Audi (60th), Fransabank (62nd), Banque Libano-Française (72nd) and Crédit Libanais (92nd). BLOM had the highest return on capital in the Arab world.
The rankings are based on Tier One capital as defined by the Bank for International Settlements. The Banker said the definition is stricter than total shareholders’ equity and covers only the core of a bank’s strength, namely the shareholders’ equity available to cover actual or potential losses. The top ranked Arab bank was the Saudi American Bank.
Prime Minister Rafik Hariri announced that the government will propose new laws to facilitate the operations of Islamic banks in Lebanon. Mr. Hariri assured Arab and Muslim investors that the Lebanese government will press ahead with new legislation to enable Islamic banks to operate and invest with total freedom in Lebanon. He expressed hope that such institutions would play a leading role in Lebanon’s investment drive and economic recovery, adding that the unique experience of the banking sector in Lebanon would pave the way for Islamic banks to operate in the country.
The Association of Banks in Lebanon said that allowing Islamic banks to operate in Lebanon would require an amendment to the Central Bank's money and credit law. But the Central Bank has allowed some institutions such as Al-Baraka Bank and Allied Business Bank to provide services based on Islamic principles.
The Organization of Petroleum Exporting Countries’ (OPEC) Fund for International Development signed an agreement with Byblos Bank SAL extending a $5 million line of credit to the bank. The credit line will be used to extend loans to small and medium-size Lebanese firms that are expected to play an important role in the country’s reconstruction program. The agreement with Byblos is the fund’s first contribution to Lebanon’s private sector. The OPEC Fund has previously extended loans to a number of public institutions in Lebanon to finance projects in agriculture, education, health, water supply and sewage.
The Extraordinary General Assembly of the Finance Bank SAL approved the bank’s capital increase from $12.45 million to $15.50 million, the third such increase from realized profits in the past six years. The bank’s chairman declared that the capital increase reaffirms the bank’s commitment to develop and finance projects such as SkyBridge.
He previously said that his institution is positioning itself as a niche player in corporate banking and project finance, and that it has originated the SkyBridge project and presented it to the Ministry of Post and Telecommunications (MPT). The Finance Bank also negotiated the deal between the MPT and SkyBridge, leading to the signed memorandum of understanding between the two sides to bring satellite-based broadband telecommunications to the Middle East.
The bank plans to invite Lebanese and Arab investors to subscribe to a new holding company that will finance the $4.8 billion project. The Finance Bank is 98 percent owned by Intra Investments, a state-owned holding company.
Standard Chartered Bank SAL (SCB) announced the opening of four new branches in Lebanon in addition to its existing two branches in Antelias and Zouk. Two of the new branches will be in Beirut, with the other two in Mansourieh and Jbeil. SCB intends to focus on consumer lending and retail banking to expand its business in Lebanon. Part of the bank’s strategy is to focus on the Lebanese Diaspora in the Middle East, the Americas and Australia. SCB plans to use Lebanon as a base to reach other regional markets such as Jordan, Syria and possibly Iraq. SCB acquired 89 percent of the local Metropolitan Bank SAL in February for about $18-22 million.
The London-based Standard Chartered is an emerging markets commercial bank that employs 26,000 people in 50 countries throughout Asia, India, the Middle East, Africa and Latin America. The bank posted pre-tax profits of $815 million in 1999. — ( Lebanon Invest )
© 2000 Mena Report (www.menareport.com)