Following the recent election of a new board of directors, the chairman of Banque Libanaise pour le Commerce (BLC), Chafik Muharram, has predicted strong profits for the Bank in 2001.
The Bank’s outgoing board had met at the request of leading businessman and recently elected parliamentarian Mohammed Safadi and his Saudi partners, who together own 56 percent of BLC.
The Safadi group and his partners accumulated their stake by purchasing both the shares of former BLC owners, the Aboujaoude family, and also $24 million worth of global depositary receipts from the Central Bank, reports Lebanon’s Daily Star.
The board meeting was the first to be held following approval of the merger of BLC with United Bank of Lebanon, which was first announced in summer 1999 but only received final approval from the Central Bank in August this year. BLC recorded a heavy loss last year after provisioning $9 million to cover non-performing loans. The half-year results for 2000 have not yet been disclosed.
BLC made most of the poor-loan provisions to cover controversial loans of more than $40 million made by former BLC chairman Safi Harb and former general manager Jean Felix Aboujaoude to themselves and their relatives. The Bank seized all properties acquired with these loans earlier this year. Within the next two years, the BLC will auction off these assets, which include the Cadmos Hotel and other valuable properties.
A number of developments, however, suggest an improved future performance for the Bank. As a gesture of goodwill, Lebanon’s Central Bank agreed to make a soft loan of $70 million to the merged bank to help the modernization efforts and fund the compensation of the redundant staff. BLC eventually plans to layoff between 10 and 15 percent of its staff. The Bank said all the redundant staff would be given adequate compensation.
The Bank is planning to hire foreign experts to help modernize all the branches. It is also setting the groundwork to introduce ATM machines and launch new products next year to increase its market share.
BLC, which maintains 47 branches in Lebanon and the United Arab Emirates, is one of Lebanon’s 10 largest banks with deposits of $1.5 billion. The Bank’s shares on the Beirut bourse have traded only once since March and remain at $10. –(Albawaba-MEBG)
