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03 October 2023

Three major Lebanese banks post double-digit profit growth in 2008

Bank Audi's total assets grew to LBP30.77trn at the end of 2008. (REUTERS)

By Agencies

Three major Lebanese banks yesterday released results announcing double-digit growth in 2008 profits based on interest income and fees and commissions' income.

Bank Audi, the largest bank in Lebanon in terms of assets and other indicators, said its 2008 full-year net profit rose 19 per cent to LBP359.53 billion (Dh874.58 million) from LBP301.91bn a year earlier due to a growth in interest income and fees and commissions' income.

The lender, whose two major shareholders are US-based Deutsche Bank Trust Company Americas and Egypt's EFG-Hermes Holding, said its basic earnings per share for the period rose to LBP9,778 from LBP7,994 a year earlier.

Net interest income increased 25 per cent to LBP648.92bn from LBP520.55bn in 2007, said the bank also known as Audi Saradar Group. Net fees and commissions' income surged 38 per cent to LBP220.54bn from LBP160.25bn a year earlier, the bank said.

Total assets grew to LBP30.77 trillion at the end of 2008, up 18 per cent from LBP26.11trn at the end of 2007, the statement said.

Customers' deposits stood at LBP25.79trn at the end of 2008, up 22 per cent from LBP21.16trn a year earlier.

Last November, Bank Audi and EFG-Hermes Holding said they have discontinued talks about a potential merger due to the financial market conditions. Bank Audi's market capitalisation stood at $1.83bn (Dh6.72bn) at the close of trading on Friday.

Byblos Bank, Lebanon's third largest bank, said its 2008 full-year net profit rose 23 per cent to $122m from $99m a year earlier due to a growth in net interest income. Earnings per common share rose to $0.228 in 2008 from $0.185 a year earlier, the lender said in a statement.

Net interest income jumped 28 per cent to $236m from $184.4m in 2007, the bank said.

The cost-to-income ratio fell to 48 per cent from 51 per cent while the tier one capital ratio according to the Basel II requirements rose to 12 per cent "despite the bank's continuous expansion in high margin emerging markets such as Armenia, Iraq, Nigeria, Sudan, and Syria", the statement said.

Total assets stood at $11.24bn at the end of 2008, up 19 per cent from $9.48bn a year earlier.

"Loan-to-customer deposit ratio stood still at a low 33 per cent due to the large liquidity maintained by the bank over the years," the lender said.

Total customers' deposits grew 15 per cent to $8.36bn at the end of 2008 from $7.26bn at the end of 2007.

"The bank's major core business will continue to be its backbone traditional consumer and small and medium enterprises commercial banking as well as international trade finance, in both its domestic and overseas markets," Byblos Bank said.

"Cost-effectiveness, loan quality and continuous high liquidity levels will be the focus throughout 2009 while planning to achieve same profit levels as in 2008, within the current challenging international environment," the bank added. Byblos Bank's market capitalisation stood at $985.42m at the close of trading on Friday.

Blom Bank, the largest Lebanese lender by profit, said net income rose 24 per cent in 2008 to $252m as deposits increased by more than 10 per cent.

"We managed, along with the largest banks in Lebanon, to ride the wave of the political uncertainty in Lebanon and the global financial crisis by posting excellent results for 2008 and with a return on equity of 18 per cent," Saad Azhari, Chairman of the Beirut-based bank, said in an interview.

Blom Bank opened an office in Abu Dhabi in November and is expanding in Qatar and Saudi Arabia this year. The bank has avoided investment in countries that have been highly affected by the global economic downturn, Azhari said.

"The bank is very conservative in terms of international investment and therefore we did not invest in corporate shares or government bonds abroad," he said.

Blom Bank's aim is to maintain profit this year at 2008 levels, as 2009 will be a difficult year with interest rates continuing to fall, Azhari said. "Our financial institution in Saudi Arabia will start in March with a capital of SAR100m [Dh97.88m] and a $10m investment unit in Qatar will be operational in April," Azhari said.