First foreign banks offer shares in local market

20 October 2003
The first three foreign banks granted licences to operate locally all launched share offerings in mid-October. The shares will be on sale solely to resident and non-resident Syrian investors, fulfilling the requirement that the banks must be 51 per cent locally-owned (MEED 20:6:03). All three of the new banks have the minimum paid-up capital of£Syr 1,500 million ($30 million) and are offering shares priced at£Syr 500 ($0.9).

Jordan's Housing Bank for Trade & Financelaunched a subscription on 13 October, offering the entire 51 per cent of its local content. Subscription closes on 21 October. The joint venture is called International Bank for Trade & Financeand aims to be operational by early 2004.

Lebanon's Banque du Liban et d'Outre Mer (BLOM)on 16 October offered 38 per cent of shares in the venture it leads, having already invited investments from a number of local businessmen who took a 13 per cent stake. The bank, Banque de Syrie et d'Outre Mer, is 39 per cent owned by Banque Europeen pour le Moyen Orient (BEMO)and 10 per cent by the International Finance Corporation (IFC), the private-sector lending arm of the World Bank. 'We aim to start operations by the beginning of 2004,' says a BLOM official.

The third of the foreign banks granted final Central Bank of Syria approval is majority-owned by Banque Saudi Fransi with a 27 per cent holding. BEMO has a 22 per cent stake while the local Obegi family holds 3 per cent. The remaining 49 per cent will be offered from 11-20 October. 'We have already seen strong appetite for the shares, both from local investors and from Syrians resident in Lebanon and Saudi Arabia, where we are also doing marketing,' says a BEMO official. 'Our Damascus office is already established and we aim to begin operations by the end of the year.'

In addition to the banks with full licences, three further banks were granted preliminary approval in June - Societe Generale, Arab Bankand a joint venture between local and Bahraini investors called Bank of Syria & Bahrain. Damascus passed a law in March 2002 permitting foreign banks to operate onshore in the country as part of efforts to liberalise the economy and attract foreign investment (MEED 12:4:02).

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