(MEBG) – Lebanon’s largest bank in terms of assets, Banque Liban Et D'Outre Mer (BLOM), is considering expanding into Syria—a country that has prevented the entry of private sector banks.
The new Syrian President, Bashar al-Assad, who vowed last week in his inaugural speech to restructure the state-dominated economy, will most likely welcome such a move.
Naaman Azhari, chairman of BLOM, pointed out that the bank will highly benefit from its opening in Syria because of it long-standing ties with Syrian clients as well as its experience and knowledge of the Syrian market.
Foreign investment is likely to be a cornerstone of the new Syrian president’s economic strategy. This may help end 40 years of a state-controlled banking sector, which lacks modern financial facilities such as automated teller machines, consumer loans and even credit cards. Syria nationalized its financial sector in the 1960s.
Syria’s initial steps toward reform can be seen in the government’s recent authorization of foreign banks to set up branches in free-trade zones, and the potential legalizing of partnerships between private Arab and Syrian banks.
BLOM has recently displayed a strong economic performance, with a 14.6 percent increase in profits for the first half of 2000, and expected profits of over $78 million by year-end—a 10 percent increase over the 1999 figure.
"The reasons for our strong performance include our loyal customer base which provides the bank with a stable source of funding, which we believe is of paramount importance, especially during difficult economic conditions," Azhari said.
Despite the economic recession that Lebanon is experiencing, with public debt estimated at 140 percent of GDP in May, Azhari said the banking sector was in "generally good shape".
© 2000 Mena Report (www.menareport.com )