Union de Banques Arabes et Francaises (UBAF) is to increase the number of representative offices in the Middle East as part of a three- year strategy to expand its corporate operations and boost trade finance activities. The new strategy has been put in place after the bank reported a turnaround in its performance with profits in 1994 of FF 47.2 million ($8.8 million), compared with a FF 743 million ($126 million) loss a year earlier (MEED 16:6:95).
‘The bulk of our income will still come from trade finance, which accounts for 50 per cent of gross revenues,’ says Guy de Jaquelot du Boisrouvray, chairman of the management board. ‘As far as corporate activities are concerned we want to do business with selected Arab companies.’ The focus will be on firms in Egypt, Morocco, Tunisia, Lebanon and Syria, and will mainly involve offering short-term facilities, such as overdrafts, letters of credit and letters of guarantee.
To develop contacts with local firms, and increase the bank’s merchant banking activities, UBAF is opening two new offices in Middle East and is expanding a third. The Central Bank of the UAE is expected to give approval for a representative office in Dubai at the end of 1995, and in Beirut, UBAF plans to re-open its representative office before the end of the year. In Egypt, the previously shared offices with Arab American Bank, are now dedicated to UBAF business. All three offices will be staffed by four people each.
Jacquelot says the bank’s performance in 1995 will continue to strengthen, after the recapitalisation during 1994. UBAF now has a Cooke ratio of more than 15 per cent. An increase in trade finance activity, as well as a strong performance in the money markets, are expected to contribute to greater profitability, says Jacquelot ‘We hope to achieve between $12 million-14 million net profits,’ he says. ‘We’re on target.’
UBAF shareholders include Banque Exterieure d’Algerie, Central Bank of Egypt, Bank Al-Mahgrib, Libyan Arab Foreign Bank, Arab African International Bank Credit Lyonnais and UBAC Nederland. The shareholders injected FF 502 million ($95 million) of new capital into the bank last year to help cover losses in 1993 (MEED 24:6:94).