Lebanon’s Byblos Bank to open Sudanese subsidiary
By Lin Noueihed
BEIRUT, Aug 21 (Reuters) – Byblos Bank , one of Lebanon’s top three banks, will open a Sudanese subsidiary next month as it sets its sights on regional expansion, a bank official said on Thursday.
“We are setting up a new Sudanese bank in which Byblos Bank will be the main shareholder,” said George Andraos of Byblos’ Financial Institutions and Public Sector department.
“We hope to begin operations at the start of September,” he told Reuters.
Byblos Bank Africa, a subsidiary of the Lebanese firm, has $18 million of capital, including a minority equity stake held by the OPEC Fund for International Development, Andraos said.
The OPEC Fund said on Thursday it signed a $5 million equity financing deal with Byblos Bank Africa to help finance the new bank, a move seen by bankers as a vote of confidence in Sudan’s war-weary economy.
“The Fund will participate in the $18 million capital of the new enterprise by means of a minority equity participation, together with a subordinated loan,” it said in a statement. Byblos Chairman Francois Bassil told Reuters last year the bank expected to start operations in another Arab country by the middle of 2003, but declined to specify where.
Andraos said Byblos had already applied for a licence to operate in Syria, which this year opened its command economy to a handful of private banks for the first time since nationalising its financial sector in the 1960s.
“Syria is one our next targets but we don’t have a licence yet,” said Andraos, who had a leading role in the Sudan project.
EYE ON EXPANSION
Byblos has embarked on a policy of expansion in recent years, buying up Dutch bank ABN AMRO’s Lebanon operations in a $36 million cash deal last November.
That deal followed Byblos’ purchase in 2001 of the Lebanese assets of ING Barings and its merger with the medium-sized Wedge Bank.
Faced with a sluggish economy, Lebanon’s monetary authorities have intervened to force its more than 60 banks to merge or raise their capital adequacy levels.
Bassil has said large Lebanese banks should consolidate to create viable regional players. He said last year Byblos was in talks with a medium-sized bank in the region but was still deciding whether to acquire it or enter a joint venture.
Andraos said Byblos Bank Africa would start operating mainly as a corporate bank based in Khartoum, but would introduce more retail services and branches later on.
Sudan was a natural choice for Byblos, he added, since the bank had been active in that market since the 1970s.
“We see the market as having potential, especially with peace talks,” said Andraos. “We will offer trade finance and Islamic banking to local firms,” he said, adding that Sudan had issued Byblos with the licence in mid-January.