The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has formalized a three million dollar equity investment for a 10 percent shareholding in Bank of Syria and Overseas (BSO), helping create Syria's first private sector bank since nationalization of the system in 1963.
IFC's equity stake in BSO represents its first investment in a Syrian financial intermediary. IFC Executive Vice President Peter Woicke, noted at the BSO inauguration ceremony in Damascus that "by promoting the country's first private sector banking institution, IFC will assist in Syria's economic transition to a more open and liberalized financial system, driven by greater private sector participation."
BSO aims to provide modern commercial banking products that have not been available to local private retail and corporate firms, enhance competition in the banking system by creating a model of "best practices" for current and future commercial banks in Syria to follow, said an IFC press release.
Total capitalization of BSO amounts to $30 million, with BLOM Bank of Lebanon the anchor investor in BSO, holding a 39 percent equity stake and exercising managerial control as well. Other shareholders in BSO include a group of prominent Syrian businessmen, led by head of the Federation of Syrian Chambers of Commerce and Industry, Rateb Shallah and 38 percent held by Syrian citizens through an initial public offering.
The Government of France provided funding, through IFC's Technical Assistance Trust Fund program, for the evaluation of the strength and weaknesses of Syria's financial system, including banks, insurance company, and other long-term savings institutions. The technical assistance also included the review of the legal and regulatory framework in the country and the identification of the material impediments in the development of the banking sector. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
