Bank of Beirut may acquire 2 foreign banks


bank of beirut -logo Bank of Beirut SAL, a Lebanese lender, may acquire by September two banks in Africa and Asia with assets of about $1 billion each, Chairman Salim Sfeir said

“Bank lending is growing but not as much as deposits are growing and this is why we are compelled to look for other opportunities out of the country,” Sfeir said in an interview in Muscat, Oman, today. He didn’t identify the banks involved.

The Lebanese banking industry is becoming saturated and banks “don’t have all the opportunities you’d like to have in Lebanon because the flow of deposits is much higher than the demand for loans,” Sfeir said.

Lebanese banks received more than $1.5 billion a month from abroad in 2009 and kept interest rates on deposits in Lebanese pounds at about 7 percent, while rates elsewhere in the world tumbled. The inflow of funds allowed the central bank to reduce reserve requirements on lending for housing, health-care, education, environmental projects and start-up businesses.

Credit leaped about 16 percent in 2009 and likely will rise by a similar amount this year, Governor Riad Salameh said in an interview on Jan. 20. Lebanon’s economy may grow more than 5 percent this year, according to the central bank. The International Monetary Fund forecasts 6 percent growth.

”The economic environment is healthy in Lebanon and it was never as it is now,” Sfeir said. ”In the history of Lebanon, it was never as liquid as it was now.”

Lebanon’s central bank resumed the sale of certificates of deposit in March to help absorb excess liquidity in the banking system and keep control of inflation, which Salameh estimates will be 3 percent or lower this year. The bank also reduced the overnight lending rate to 2.75 percent from 3.25 percent last month to try to curtail inflows.

Lebanon’s foreign currency reserves, excluding gold, exceed $30 billion, central bank Vice Governor Saad Andary said in an April 16 interview. The country has additional gold reserves of about $10 billion.

Bank of Beirut’s profit should increase as much as 25 percent this year from 2009, Sfeir said. Bloomberg/BW



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