Beirut banks join forces

21 June 2002

A series of merger announcements in mid June signalled a new round of consolidation in Lebanon's crowded financial sector.

Banque Audiand Banque Libano-Francaisejointly announced that they are discussing a merger that would create the biggest bank in Beirut and one of the largest in the region. The merged entity would have combined assets of about $7,900 million, $6,550 million in customer deposits, $2,310 million in loans, $595 million in shareholders' equity and some 83 operating branches.

Merrill Lynchand BNP Paribashave been asked to value the assets of both banks. Banque Libano-Francaise, which is 51 per cent owned by Credit Agricole Indosuez, earlier this year called off merger negotiations with Banque Saradar, after the two sides reportedly disagreed over the valuation of Saradar's assets (MEED 1:2:02).

Banque du Liban (central bank) has approved the merger of Bank of Beirutand Beirut Riyad Bank, creating the sixth largest bank in the country. The new entity will have about $3,000 million in combined assets and $2,390 million in customer deposits. The integration of the two banks is expected to take 18 months.

First National Bank has signed a merger agreement with Societe Bancaire du Liban. First National is a medium-sized bank with $421 million in assets in 2001. The smaller Societe Bancaire has assets of about $95 million.

Banking conglomerate Groupe Mediterraneehas finalised negotiations to acquire Lebanon & Gulf Bank, a privately held institution which ranks 17th in Lebanon in terms of assets and customer deposits. Groupe Mediterranee owns 99 per cent of Banque de la Mediterranee, which is Beirut's largest financial institution at present. It also owns 90 per cent of Allied Business Bank, which it acquired in October last year, and 74.99 per cent of the Saudi-Lebanese Bank.

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