The Council of Ministers approved a draft law to unify the various share categories of commercial banks. The new law will create a single class of bank shares, eliminating the current differences between ‘A’, ‘B’ and ‘C’ categories.
The ‘A’ shares have been restricted to Lebanese investors and ‘B’ and ‘C’ shares are open to foreign and local investors, while the ‘C’ shares are publicly traded.
Banks will be allowed to list all their shares on the stock exchange compared to 30 percent of their stock under current laws. Bank stocks will be freely traded, but single ownership of more than 5 percent of the bank’s stock would require Central Bank approval.
Foreigners will also be allowed to own 100 percent of a bank’s shares instead of the current two-thirds limit. The law also grants the Central Bank veto power over the appointment of a bank’s chairman and board members, and will introduce stock options to the banking system. Central Bank Governor Riyad Salameh recently said that stock options will provide added incentive to bank managers and staff to improve their bank’s performance. — ( Lebanon Invest )