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BDL foreign assets jump

Foreign assets at Banque du Liban (BDL), Lebanon’s Central Bank, grew 6 percent from the start of 2010 to the middle of July to reach $30.7 billion, showing a $370 million rise in the first half of July alone. Total assets of the Central Bank  also increased by 6 percent in the same period, to reach $58.23 billion. According to BLOMINVEST, this rise in total assets can largely be attributed to the increasing value of gold, brought on by a rush of wary investors looking for safe bets in light of the European debt crisis. Gold reserves at the Central Bank grew 10 percent from the beginning of 2010 to mid-July, with 1.68 percent of the growth occurring in July alone. Lebanon’s gold reserves are currently worth approximately $11.5 billion.

AUDI set to grow

In continuing to spread its reach outside Lebanon, Bank Audi will be expanding its presence to the United Kingdom this year, with Tunisia and Algeria next on the list.

“We have plans to open hopefully by year-end a branch in the United Kingdom to mainly do private banking,” Chief Financial Officer Freddie Baz told Zawya. Furthermore, the bank said it would be finalizing its acquisition of Dresdner Bank Monaco in the coming weeks. The bank will offer private banking services in Monaco, southern France and northern Italy. “Our ultimate aim is to become a regional bank through cross-selling markets and business lines,” said Baz. Lebanon’s largest lender by assets already has 76 branches outside of Lebanon in Egypt, Syria, Jordan, Switzerland, France, Sudan, Saudi Arabia, Qatar and the UAE. In the first three months of 2010, Bank Audi’s net profits saw 31.6 percent growth, reaching $80.2 million.

Lebanon’s insurance market trumps in MENA

Lebanon is first in the region in terms of insurance premiums to GDP ratio for the fifth year running, despite its low penetration rate. According to Swiss Re’s “World Insurance in 2009” report, Lebanon’s insurance penetration as a percentage of GDP is 3.1 percent, trailed closely by Morocco with 2.8 percent, the United Arab Emirates with 2.5 percent and Jordan and Bahrain with 2.3 percent each. Lebanon ranked 48th among the 159 countries included in the report. Though Lebanon leads the region, insurance penetration relative to GDP actually decreased from 3.4 percent in 2008. The 3.1 percent penetration in 2009 represents $952 million in total premiums, showing an 8.1 percent year-on-year growth in total value. Insurance density, meaning premiums per capita, was $225.5 for 2009. The report also noted that the ratio of non-life to life premiums is increasing in a market already heavily dominated by non-life policies. For 2009, non-life policies yielded 75.6 percent of all premiums. This trend is even more exaggerated in the region as a whole, with non-life premiums representing 82.2 percent of the total. The report covers 12 countries from the Middle East and North Africa region, including Tunisia, Oman, Saudi Arabia, Qatar, Egypt Algeria and Kuwait. The region’s average insurance penetration remains quite low at 1.7 percent, compared to the global average of 7 percent.

Plastic preferred

The sound Lebanese economy and successful tourist season played out in the payment card statistics published by the Central Bank this month. The number of credit and debit cards issued by Lebanese banks grew 4 percent year-on-year as of April 2010, to reach 1.7 million cards. Of these cardholders 97.2 percent are residents. Payments by these residents reached $103.5 million for the first four months of the year, representing 31.4 percent growth year-on-year, a significant increase on the 16.3 percent growth seen last year in the same time period. Monthly purchases related to payment cards by non-residents increased 1.7 percent compared to last year, reaching $1.7 million. The number of ATMs in Lebanon has grown 7.7 percent with the average monthly withdrawal from ATMs per resident increasing 8.7 percent, to reach $383.1. Non-resident monthly withdrawals also increased by 12.7 percent for the first four months of the year totaling $5.6 million.

Costlier than Casablanca, cheaper than Chad

Beirut is the 80th most expensive city for expatriates in the world, according to a cost of living survey conducted by Mercer Human Resource Consulting. The study covered 214 cities worldwide and, according to Mercer, “is used to help multinational companies and governments determine compensation allowance for their expatriate employees.” In the Middle East and North Africa region, Beirut came in fourth place among the 12 regional cities included in the survey. According to the study, cost of living in Beirut is more expensive than Amman, Cairo and Casablanca but less expensive than Djibouti, Dubai or Abu Dhabi. The survey’s results are based on a comparative analysis of over 200 expenses in each city including housing, transportation, food, clothing, household items and entertainment. Housing is the most important indicator of these as it is the largest expense for expatriates. All prices are compared to the prices in New York and ranked compared to this baseline. New York is the 27th most expensive city in this year’s survey. The top five cities with the highest cost of living were Geneva, Switzerland; Moscow, Russia; N’Djamena, Chad; and Tokyo, Japan, with Luanda in Angola taking the top spot as the world’s most expensive city.

Lebanese Canadian Bank revised

In our July edition, Executive printed a story entitled “Who owns the banks?” in which we laid out the stakeholders and the board of directors for the largest banks in Lebanon in an effort to promote transparency in the sector. In regards to the Lebanese Canadian Bank (LCB), our breakdown of the stakeholder percentages did not accurately portray the current share each stakeholder in the bank owns. The following chart is the correct breakdown of LCB’s ownership.  

STAKE HOLDERS

Georges Zard Abou Jaoude, Wadih Nasrallah, Makarem Makari, Edouard Zard Abou Jaoude,  Carlos Abou Jaoude, Raymond Diab, Ghazi Abu Nahl,  Fadi Ghazi Abu Nahl, Hamad Ghazi Abu Nahl, Kamel Ghazi Abu Nahl, Nasser bin Aly bin Saoud bin Thani al-Thani, Jamal Abdelrahman Abou Nahl, Trust International Insurance Co Cyprus ltd, Trust International Insurance and Re-insurance Co Bahrain, Investment Holding Co. for Jordanian Expatriates, Compass Insurance, Qatar Gerneral Insurance and Re-insurance, Nevian LCB, Eurynome Holding, Capital Holding

Commercial banks offer favorable rates for farmers

Lebanese farmers will now be able to obtain soft loans from commercial banks in the country. A soft loan is a general term meaning a loan with generous terms of repayment such as below market interest rates and extended time periods. In this case, farmers will be able to obtain loans ranging between approximately $2,000 and  $17,000 that can be repaid over a period of up to 36 months. Furthermore, these loans can be approved without collateral. These loans will also be exempt from the reserve requirements of the Central Bank, allowing banks to lower the interest rates below market rate.

“The Agriculture Ministry will give the guarantee that these applicants for loans are qualified. The Central Bank will also support this program through subsidizing interest rates,” said Joseph Torbey, president of the Association of Banks in Lebanon, who was present at the July 9 deal signing. “We want to make sure that farmers will make a profit from their business and we will be glad to give them all the advice and guidance,” said Agriculture Minister Hussein al-Hajj Hassan.