Gold boosts BDL assets
Total assets at Banque du Liban (BDL), Lebanon’s central bank, rose 6.2 percent in August to reach $72.75 billion, mainly due to an increase in the international price of gold. The value of BDL’s gold reserves increased by 12.5 percent to $16.75 billion, accounting for 44 percent of the rise in total assets. Lebanon plans to keep its gold reserves at around $17 billion as it tries to protect its economy from domestic unrest in neighboring countries, according to BDL Governor Riad Salameh. The central bank’s foreign assets (excluding gold) rose by 5.6 percent in August to $32.14 billion due to an increase in confidence in the Lebanese currency. On the liabilities side, private sector deposits increased 3.7 percent to $48.6 billion, while public sector deposits went up around 7 percent to $6.08 billion.
HSBC axes Lebanon branches and jobs
HSBC is closing three branches in Lebanon, consolidating its network by half, not including its headquarters. The move is part of an ongoing global effort of the HSBC Group to “improve efficiency”. The bank plans to cut 30,000 jobs by 2013, which amounts to approximately 10 percent of HSBC’s total workforce. As well as the job cuts, HSBC is closing its retail banking operations in Russia and Poland and selling three insurance businesses as part of pre-announced plans to save $2.5 billion to $3.5 billion by 2013. HSBC recently sold 195 retail branches in the United States, primarily in New York, to First Niagara Bank for approximately $1 billion.
Lebanon moves up the global competitiveness ranks
Lebanon is ranked 89th in The World Economic Forum’s global competitiveness report for 2011-2012, up three places year-on-year. Qatar is the most competitive country in the Middle East and ranked number 14 overall, up three places from a year ago, followed by Saudi Arabia (17), which enters the top 20 for the first time and gained four places on the year before. The United Arab Emirates (27) fell two slots. The most competitive country in the world is Switzerland, followed by Singapore, which overtook Sweden for second position. Northern and Western European countries dominate the top 10.
Iran’s banking scam reaches Ahmadinejad
Several Iranian banks have been targeted in one of the biggest frauds in the Islamic republic’s history, losing nearly $2.6 billion over more than two years. The financial scandal involved the forging of documents to secure credit from various financial institutions, including Bank Saderat, one of the largest in the Middle East. The proceeds were then used to purchase state-owned enterprises, such as the Khuzestan Steel Company, as the government implemented its controversial privatization scheme, which began in 2004. Iran’s Minister of Economic Affairs and Finance Shamseddin Hosseini said on September 18 that the chief suspect of the banking scam had been detained but gave no further information. Kayhan, a conservative newspaper under the direct supervision of the Office of the Supreme Leader, identified the suspect as billionaire mogul Amir-Mansour Aria and alleged complicity on the part of President Mahmoud Ahmadinejad’s top ally, chief of staff Esfandiar Rahim Mashaei. Ahmadinejad denies Mashaei’s link to the scandal.
Growth forecast in Syria hit by ongoing unrest
The International Monetary Fund (IMF) cut its growth forecast for some countries in the Middle East and North Africa due to the continuing social unrest in the region and the volatility in the oil price. According to the report, “the outlook is subject to large downside risks”. Lebanon is expected to grow 1.5 percent in 2011 and 3.5 percent in 2012. For oil-exporting economies, the IMF expects a 5 percent growth in 2011 and 4 percent growth in 2012. Qatar will continue to lead the way, followed by Iraq (which has the highest growth forecast in 2012) and Saudi Arabia. For oil importers in the MENA, the forecast is grim, as the IMF expects average growth of 1.5 percent in 2011 and 2.5 percent in 2012. Syria has the worst growth forecast in the MENA region, as it is expected to contract by 2 percent this year (down from an April forecast of 3 percent growth) due to the more than six month uprising and European sanctions.
Qatar investing in Greek banks
EFG Eurobank and Alpha Bank, the second and third largest banks in Greece, respectively, are to merge with the help of Qatar. The merger will take place via an all-share swap with a 1.25 billion euro [$1.68 billion] rights issue, followed by a 500 million euro [$672.7 million] convertible bond to be covered by Qatar. Alpha will offer Eurobank investors five new shares for each seven they hold. The expected deal will result in the formation of the biggest bank in southeast Europe. Qatar, which already owns 4.5 percent of Alpha, will become the largest shareholder with a 17 percent stake in the combined bank. Banks are not the only assets in Greece that Qatar seems interested in. According to the Greek Reporter, the ruler of Qatar, Sheikh Hamad bin Khalifa al-Thani, is interested in acquiring two islands, including Scorpios, which was originally bought by Greek billionaire Aristotle Onassis and whose granddaughter is now looking to sell the land. But according to Theodoros Varikos, mayor of the region, the elder Onassis specified in his will that the island could not be sold.
US targets Israeli banks
In its effort to pursue offshore tax evaders, the United States is now targeting Israel, as three of its largest banks are suspected of helping American clients evade taxes through their Swiss outposts. The banks targeted by the US Justice Department’s criminal tax division are Bank Hapoalim, Bank Leumi le-Israel B.M. and Mizrahi-Tefahot. The inspection of the three Swiss branches of the Israeli banks comes during a wide-ranging campaign by the Justice Department to force nearly a dozen Swiss banks now under scrutiny to pay collectively billions of dollars in fines and to admit to criminal wrongdoing.
