Byblos seeks extra $250 million
After obtaining shareholder approval on February 19, Byblos Bank is set to proceed with a $250 million capital increase, to be completed by the end of June. The bank expects the hike to come from common and priority shareholders primarily, with some capital coming from holders of global depository receipts. The bank said the goal of the increase was to help expand its services in emerging markets and to be better able to lend to small and medium-sized projects. Also contributing to the capital hike was Byblos Invest Holdings’ sale of $47.62 million of Byblos shares to the International Finance Corp. (IFC), concluded at the final price of $100 million. After the capital increase, the IFC will own 8 percent of Byblos Bank.
Mikati buys Audi stake
Members of the Mikati family confirmed to Bloomberg on February 3 that M1 Group, the family’s holding company, bought 50 percent of the $913 million of Bank Audi shares that EFG-Hermes sold in January. Azmi Mikati told media that M1 paid $450 million for half of the 21.95 percent stake that EFG offered up for sale. Bank Audi holds “great potential and is the leading financial institution in Lebanon growing at a very rapid pace. It has the potential to further expand in the region,” said M1 chief executive officer Azmi Mikati. The other half of EFG’s stake went to individuals already owning stock in the bank, as well as a number of unspecified parties, though none own more than 5 percent of Bank Audi, according to a January 18 filing with the Beirut Stock Exchange. Lebanon’s Central Bank Governor Riad Salameh said in a January 20 interview that the central bank had aided in the sale. “The main element for us was stability in the banking sector and its reputation, because we don’t want foreign investors to be stuck in any investment in Lebanon,” he said. Salameh has not commented on the claims made by Al Akhbar newspaper that the Central Bank bought $154 million in shares of Bank Audi in January. His reasoning was that the central bank is not legally permitted to discuss the activities of its clients, and all banks in Lebanon are its clients, said Salameh.
Armed thieves bust Beirut bank for $200,0000
Four gunmen robbed a Beirut bank of more than $200,000 on February 20. “Four masked, armed men entered the First National Bank in Jnah in broad daylight on Saturday and managed to steal an as yet unspecified amount of money by threatening the manager and staff at gunpoint,” a police officer told AFP. According to the officer, no one was harmed in the robbery and security forces subsequently sealed the area to question witnesses. The state-owned National News agency reported that the robbers stole the equivalent of $200,000 in Lebanese lira. The police officer, who declined to be named, also mentioned that bank robberies in Lebanon are rare.
Lebanese banks in the rankings
Lebanon’s two largest banks, BLOM Bank and Bank Audi, have made it into The Banker magazine’s top 500 banking brands list, released in February. “One of the side effects of the financial crisis is that it has woken up banks to the importance of their brand,” the magazine said of the importance of branding in today’s volatile banking environment. The magazine also noted that emerging markets such as Lebanon continue to increase their strength in the world of branding. BLOM Bank was given 414th place out of the 500 top banking brands, and Bank Audi came in 422nd place. Both the banks were given a brand rating of “A,” signifying a strong brand according to The Banker’s brand ratings definitions. Of the 500 banks listed, 37 were from Arab countries. Emirates NBD received the highest ranking of all of the regional banks with a brand rating of “AA-,” or very strong. Four gunmen robbed a Beirut bank of more than $200,000 on February 20. “Four masked, armed men entered the First National Bank in Jnah in broad daylight on Saturday and managed to steal an as yet unspecified amount of money by threatening the manager and staff at gunpoint,” a police officer told AFP. According to the officer, no one was harmed in the robbery and security forces subsequently sealed the area to question witnesses. The state-owned National News agency reported that the robbers stole the equivalent of $200,000 in Lebanese lira. The police officer, who declined to be named, also mentioned that bank robberies in Lebanon are rare.
F.N.B. grows into group
First National Bank (FNB) announced the formation of FNB Group on February 17, resulting from the acquisition of Capital Finance Company (CFC) and Middle East Capital Group (MECG) by the Lebanese bank. “Our choice to own CFC and MECG was based on a future vision and market needs,” said Rami Nemer, general manager and chairman of the board of directors of FNB. “Such [an] operation helped us strengthen our existence in the retail lending sector through CFC and in the investment management sector through MECG.” CFC, which specializes in retail loans, cost FNB $60 million, or $1.65 per share when the acquisition finalized on February 12. MECG, an investment firm, was sold to FNB almost one year ago.
Saad and Al Gosaibi creditors’ 60-cent dollar
The chairman of the Union of Arab Banks said he believed that lenders would be able to collect 60 percent of the funds lent to the debt-ridden investment conglomerates Saad Group and Ahmad Hamad Al Gosaibi Bros. and Co. “Saad and Al Gosaibi are now behind the banking sector,” said Chairman Adnan Yousif to Zawya Dow Jones on February 22. The Saad and Al Gosaibi defaults left their lenders with $20 billion in exposure, most of which is assumed to belong to Middle East institutions. Though no official strategy for repayment to creditors has been reached, the chairman said that banks have adequately prepared for the losses. “Most banks have created good provisions for them,” he said. At the same time, Yousif downplayed regional exposure to Dubai World’s $22 billion in yet-to-be restructured debt, saying, “I don’t think these borrowers have a default problem, just a cash flow squeeze and they will overcome it.” John Tofarides, a Moody’s financial institution group analyst, said that collecting 60 cents on the dollar of Dubai World’s debt “would hurt profits, but not jeopardize solvency.” The ratings service estimates that United Arab Emirates banks are owed $15 billion by Dubai World, though few have disclosed their exposure.
Jordan offers interest lifeline
The Central Bank of Jordan cut three key interest rates by 50 basis points, effective February 21, to stimulate the country’s wavering economy. The cuts lowered the discount rate to 4.75 percent, the repo rate to 4.5 percent and the overnight window rate to 2.5 percent in what is the fifth round of interest rate cuts since November 2008. New resident private sector lending has slowed to a virtual halt with only 1.3 percent year-on-year growth at the end of 2009. The lowered rates are intended to restart lending in this stagnated market. Resident private sector deposits however, showed an increase of 13.7 percent year-on-year at the end of 2009, totaling $22.87 billion.
Libya opens to foreign accounts
The Central Bank of Libya issued a statement on February 16 inviting foreign banks to apply for permission to open subsidiaries in the country. Formerly an internationally isolated economy, Libya has been slowly opening to the outside world. The deadline for applications will be the end of March. Banks wishing to open subsidiaries in Libya are required to have $2 billion in capital and a Moody’s rating of Baa2, or a BBB rating from Standard and Poor’s or Fitch. These subsidiaries must be 51 percent owned by Libyan investors, but management and control would go to the participating foreign banks. “An important part of Libya’s financial sector reform strategy is to allow foreign banks to operate in the country,” said the statement.
