Lebanon’s largest bank plots aggressive expansion in foreign deposits
Lebanon’s Bank Audi is planning to double in size in the next three to five years through an organic international expansion.
The bank aims to become one of the top five regional banks by pursuing new licences in Algeria, Turkey and London, and expanding its branch network in Egypt and Syria.
Exploiting opportunities in rising inter-Arab trade is also on the agenda. “We want to become one of the top five regional banks, but in order to do so we have to build captive market shares in inter-regional trade, which is huge with more than $40bn a year in turnover,” says Freddie Baz, chief financial officer and strategy director at Bank Audi.
|Bank Audi deposits|
|Mena=Middle East and North Africa. Source: Bank Audi|
Baz says he also plans an aggressive pursuit of deposits outside Lebanon to even out its desposit base. Customer deposits are currently $25bn, with 70 per cent from Lebanon and only 30 per cent from outside the country. The bank is aiming to reach a 50:50 split between local and international deposits.
Although the bank has ambitious medium-term growth plans, Baz says the political unrest in the region has forced the lender to put them on hold for the rest of the year.
“This is the year for consolidation. We have a growth strategy, but there is a very cautious sentiment in the Middle East at large. We have to be very cautious in order to adjust to these lasting developments and the potential contagion effect,” says Baz.
Bank Audi is still pursuing new licence applications despite the unrest and has submitted an application to the Central Bank of Algeria. “Algeria is an enticing market, it witnessed tremendous economic growth over past 10 years and has engaged in significant infrastructural investments. But the country has also faced political problems, so we have a wait and see,” says Baz.
The bank is exploring opportunities in Turkey, which Baz says is complementary to the Arab region. “If our interest is to go through an acquisition in Turkey, we’ll do it, but it will not be a material acquisition. Our aim is to get a licence and a footprint. We do not need to buy assets, we would like to buy presence,” says Baz.
It is also looking to expand its presence in Europe by opening a branch in London through its French subsidiary Bank Audi France. This subsidiary will focus primarily on private banking. A licence application will be submitted soon, according to Baz.
Bank Audi has operations in Jordan, Saudi Arabia, Sudan, Qatar, Switzerland, France, Gibralatar and Monaco. It had more than $28bn in assets as of December 2010.
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