Audi and BankMed empires expand
Bank Audi has acquired a majority stake in Arabeya Online (AOLb), Egypt’s first online trading platform. In the agreement, Audi will own a 90 percent stake in the online brokerage, bought from Naeem Holding, leaving founder and chief executive officer Hesham Tawfiq, who owned 80 percent of the company, at his post. Tawfiq’s stake will decease to 10 percent when the deal is finalized. The value of the sale has not been released, but according to Egyptian newspaper Al-Borsa, AOLb has $4.3 million in operating capital. The paper also said in June that Tawfiq had received offers from about eight regional financial institutions. AOLb is Egypt’s ninth biggest brokerage, posting $3.2 billion in trading in 2009, and offers conditional orders, mobile trading and margin trading. Bank Audi also announced this month that Audi Capital Syria has begun operations after receiving approval from the country’s Central Bank. Audi Capital Syria is now permitted to perform brokerage activities, manage IPOs and provide consultancy services as well as publishing information regarding securities. In another expansion of Lebanese Alpha banks, BankMed announced on July 30 that it had increased its stake in Turkland Bank from 41 percent to 50 percent, purchasing the additional shares from individual stakeholder Mehmet Mazif Gunal. Jordan’s Arab Bank Limited owns the other half of the Turkish bank.
Remittances up, both ways
Electronic transfers both into and out of Lebanon increased by 14.5 percent between 2008 and 2009, according to recent Central Bank figures. Total cash electronic transfers in and out of the country increased from $1.4 billion in 2008 to $1.6 billion in 2009. Transfers out of Lebanon saw the largest jump, growing to $494 million for the whole of 2009, representing a 15 percent increase. The average value of these outgoing transfers was $478. These transfers went most frequently to the Philippines (16 percent of the total value) followed by Egypt (11 percent), Ethiopia (8.3 percent), Sri Lanka (7.4 percent), Bangladesh (6.5 percent), India (4.5 percent), the United Arab Emirates (4.6 percent), Syria (3.7 percent), the United States (3.4 percent) and Nepal (3.2 percent), with other countries making up the remainder. Electronic transfers into Lebanon, though much larger in amount at an average value of $1,073, showed slightly lower growth, increasing 14.3 percent year-on-year. Transfers into Lebanon totaled $1.1 billion in 2009. The largest percentage of these transfers came from the UAE, representing 24 percent of incoming transfers. The UAE was followed by Saudi Arabia (13.5 percent), Qatar (9.3 percent), Kuwait (8.8 percent), Australia (6.2 percent), the United States (6 percent), Iraq (4.5 percent), Gabon (3.7 percent), Canada (2.3 percent) and Jordan (2.2 percent).
QNB comes to Beirut
Qatar National Bank will open its first branch in Lebanon after receiving approval from Banque du Liban (BDL), Lebanon’s Central Bank. The branch will offer retail services as well as corporate banking, advisory services and trade finance. QNB has a presence in 24 countries and already has representation in Syria, Jordan and the occupied Palestinian territories. The half state-owned bank is the largest bank in Qatar, posting $2.4 billion in net profits for the first half of 2010, representing nearly half of the entire sector’s profits, and up from $600 million in the first half of 2009. Qatar has been praised for its quick reaction in shoring up its banks at the onset of the financial crisis, with the government injecting capital into the system as early as October 2008, cushioning the blow of market dips and deposit decreases. “The Qatari banking sector kicked off 2010 on a highly positive note and is currently enjoying comfortable liquidity, relentless public credit demand and low-risk profile compared to regional peers,” said a Shuaa Capital report this month.
UAE banks’ rocky road to recovery
Results were mixed for the UAE’s banks in the first half of 2010, with Abu Dhabi Commercial Bank the only major bank posting losses. Of the 12 banks that released first half results for 2010, the total net profits grew by 2.2 percent to $2.24 billion, up from $2.19 billion last year. Abu Dhabi Commercial posted losses for the first half of approximately $83 million compared to $178.9 million in earnings in the first six months of 2009. The bank attributes these losses to its $1.8 billion in exposure to Dubai World. Emirates NBD, the UAE’s largest bank by assets, did not face losses, but did see negative profit growth. The bank posted just $400 million in net profits for the first half of 2010, down from $574.7 million at the same point in 2009. Emirates NBD blames the downward trend on exposure to Dubai World, though it has not released the value of the bank’s exposure. Sharjah Islamic Bank, National Bank of Umm Al Quwain and Invest Bank also reported negative profit growth. Banks with positive net earnings growth include First Gulf Bank, the state-owned National Bank of Abu Dhabi, Union National Bank, Mashreq Bank, National Bank of Fukairah, Abu Dhabi Islamic Bank and Commercial Bank of Dubai. Slow growth is likely attributable to the continued provisioning of the UAE’s banks against non-performing loans and exposure to Dubai World and troubled Saudi family companies. Central Bank data shows that in June, UAE banks provisioned almost $463 million, bringing the total amount of provisioning by the country’s 23 local and 28 foreign banks to $10 billion. The Institute of International Finance, which is based in Washington, DC, has published figures estimating that the non-performing loans (NPLs) ratio of UAE banks has risen from 2.5 percent at the end 2008 to 4.3 percent at the end of 2009.
Syrian banks movin’ up
Syria’s banking sector is growing at a regionally unrivaled rate, with bank assets surpassing $40 billion for the first time in history. Both the dominant state-owned banks and the growing private banking sector witnessed double-digit asset growth for the first half of 2010, according to Central Bank data. The country’s state-owned banks, representing 74.5 percent of bank deposits, saw 9.5 percent year-on-year asset growth. Private banks, having been largely under developed until recent changes in Syria’s banking laws, saw assets grow by 29.04 percent year-on-year. Moves to develop private sector banking began in January when Syria’s Central Bank raised the foreign ownership ceiling in banks from 49 percent to 60 percent. The country currently has 14 private banks, all with foreign ownership from within the Arab world. Though the strength of private banks is certainly growing, the number of private banks may not follow suit, as Syria’s minimum capital requirements are notoriously high for new entrants. Also in January, the Central Bank raised minimum capital requirements of conventional banks from $32.25 million to $214.4 million. Lending is also growing in double digits across the sector. In public banks, loans grew to $22.1 billion, representing 14.7 percent growth year-on-year. Private conventional banks, meanwhile, posted impressive 33 percent lending growth. These increases are due in part to the lifting of reserve requirements for loans to the manufacturing sector.
UN sanction pressure means Iraq likely closed to Iran’s banks
Two Iranian banks seeking permission to open up shop in Iraq are unlikely to be successful, according to an official at Iraq’s Central Bank. Karafin Bank and Bank Parsian have both applied for Central Bank approval to begin operations in Baghdad, but will probably be denied because of the newest round of United Nations sanctions. “No approval has been made so far. We are awaiting a reply from [the Foreign Ministry] and I personally expect that their reply will be a no,” Waleed Eedi, acting director-general of banking supervision at the Iraqi Central Bank, told Reuters. Strong economic ties between the two majority Shia countries make Iraq a natural target for Iran’s banks. In July, Iraq’s Central Bank said that six or seven foreign banks, including some Lebanese institutions, were in talks to expand their operations into the country. Bank of Beirut and the Arab Countries (BBAC), Byblos Bank and International Bank of Lebanon (IBL) all already have operations in Iraq. The presence of Lebanese banks in the country is likely to grow as Iraq is looking to attract foreign investment to help diversify its economy and bring maturity to the country’s banking sector.
