$20 million EBRD loans to BUTEC for smart metering. First corporate loan by European Bank

The European Bank for Reconstruction and Development (EBRD) will grant BUTEC Utility Services (BUS) a $20 million loan for the implementation for the installation of smart electricity meters.

BUS is one of three distribution service providers in charge of providing operations, maintenance, and bill collection services to public electricity subscribers. BUS handles these operations in the North.

"This is the first corporate loan granted by the EBRD in the local market," said Fadi Ab...

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UPDATE: Lebanon’s outlook downgraded by Moody's. Cites rising risks to liquidity position and financial stability

Moody's Investors Service said it has changed the outlook on the Lebanese government to negative from stable and that it affirmed the ratings at B3.

"The negative outlook reflects an increase in risks to the government's liquidity position and the country's financial stability, in large part as a consequence of domestic and geopolitical risks that have become more intractable," the credit rating agency said in a statement.

Moody's said it would change the outlook to...

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Bank Audi to provide $200M for green energy projects. Audi secures $90 million from European Bank and $10 million from TaiwanICDF

Bank Audi said it will offer $200 million in financing for green energy projects. Ventures to be funded include projects that aim to reduce greenhouse gas emissions and improve energy efficiency.

Financing will be funded by a $90 million loan obtained from the European Bank for Reconstruction and Development (EBRD) and a concessional facility worth $10 million from the International Cooperation and Development Fund (TaiwanICDF). The remaining $100 million will be financed from Bank Audi'...

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Average maturity of deposits nearly quadruples in one year. Longer tenure reduces risks of bank runs

The average maturity of deposits has increased to 5.7 months, up from just 45 days before the resignation of Prime Minister Saad Hariri in November 2017. The average maturity had been stable at around 45 days for 20 years.

"The average maturity of deposits is still rising and the fact that depositors are engaging in longer maturities is a signal of confidence. A longer maturity also enables us to face any emerging crisis," said a source at the Central Bank. More than two-thirds of total d...

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US sanctions against Iran will not affect local banks. Lenders are already in full compliance

Local banks will not be affected if SWIFT complies with U.S. sanctions against Iran, which have been put into effect.

SWIFT, the Society for Worldwide Interbank Financial Telecommunication, provides financial messaging services, such as money transfer instructions, between banks across the world.

Makram Sader, Secretary General of the Association of Banks, said that Lebanese banks don't have any correspondent relationships with Iranian banks. Local banks stopped de facto dealings e...

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$66.3 million interest subsid for housing loans for one yea. Loans granted via the Public Corporation for Housing

Parliament has approved the allocation of LL100 billion ($66.3 million) to subsidize the interest rates of housing loans for one year.

The loans eligible for the subsidies are those that are provided through the state-owned Public Corporation for Housing (PCH) and that target low and middle-income people. Borrowers can expect to pay around 3.74 percent interest. PCH loans have a ceiling of $180,000.

The value of the subsidy corresponds to loans worth some LL1,000 billion ($663 mill...

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Lump sum tax postponed again. In response to demands by private sector

The lump sum tax on businesses and professionals has been temporarily suspended.

The decision was made following an agreement between the President of the Republic, the caretaker Prime Minister, and caretaker Minister of Finance.

The Ministry of Finance said that taxpayers were asking the authorities to postpone this tax once again, and that he is well aware of the current economic and financial challenges. The government has postponed the levying of this controversial tax since 20...

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No bank losses from Iraqi gang. Torbey: Assault did not result in any capital withdrawals

Local banks did not suffer any direct material loss from the recent attempt by an Iraq-based gang to defraud and blackmail them, according to Joseph Torbey Chairman of the Association of Banks.

He said that these attacks did not result in any capital withdrawals from the banking system.

"The main perpetrators have been incarcerated and law enforcement agencies are working to arrest their accomplices. It is the banks that are now waging a counter-attack on these gangs," Torbey said....

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$1.7 billion subscribed in investment funds. Fixed-income securities are favored

Total subscriptions in local and foreign investment funds reached $1.7 billion in 2017, a drop of three percent compared with the previous year, according to the annual report of the Capital Markets Authority (CMA) for 2017.

The number of local and foreign funds with local subscriptions increased last year by 7.6 percent to 527.

Subscriptions in local funds fell 6.6 percent to $791 million while the funds' total number increased by 15 percent to 23.

Subscriptions in local f...

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FNB subsidizes housing loans. LL20 billion for 100 homes

First National Bank (FNB) has approved more than 100 housing loans worth over LL20 billion ($13.3 million) at an interest rate of 4.5 percent, said Najib Semaan, General Manager of FNB.

"We intend to launch soon a similar package of approximately the same size," Semaan said.

The interest subsidy cost will be assumed by FNB and the loans will be provided through the Public Corporation for Housing (PCH). The Central Bank (BDL) has approved the program. FNB and PCH have signed a proto...

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Fransabank biometric card makes pin codes obsolete. High-tech Mastercard enters local market

Fransabank said it has launched, in partnership with Mastercard, a biometric payment card with an embedded fingerprint sensor.

The biometric authentication technology of the card, which has been introduced for the first time on the local market, allows cardholders to complete a purchase without having to use a pin code or signature.

"The deployment of biometric cards will be launched in phases to cover gradually our entire customer base," said Nadim Kassar, General Manager of Fran...

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M1 Group denies housing loan violations. Loans taken according to Decision no. 7835

M1 Group did not acquire loans from the Housing Bank or those guaranteed by the Public Corporation for Housing (PCH), it said in a statement released today, in response to claims made by the Media Focal Center (MFC).

MFC earlier alleged that M1 Group is one of several politically-backed businesses that are responsible for housing loans running out early this year.

"Individuals from our group applied for housing loans in 2011 and 2013 according to Central Bank Decision No. 7835, iss...

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Bank Audi is not merging with Bankmed. Baz: “We are redeploying employees not laying them off”

Bank Audi is not considering a merger with any big bank, and claims that it is in talks to acquire Bankmed are baseless, according to Freddie Baz, Vice Chairman and Strategy Director of the Bank Audi group.

Mega mergers cannot happen in Lebanon because the Governor of the Central Bank has repeatedly stated that such kinds of mergers are not encouraged under current circumstances. Since the global financial crisis in 2008, international and local regulators have become more wary of oversiz...

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Central Bank to banks: Know your real client. Central Bank’s decision is part of anti-money laundering compliance

The Central Bank (BDL) has issued a circular instructing banks and financial entities to identify the ultimate owners or controllers, technically called 'beneficial owners', of their institutional and individual clients.

They must also open a specific register that lists the names of the ultimate beneficial owners for each of their customers.

The circular comes in compliance with the recommendations of the Financial Action Task Force (FATF). FATF is an international inter-governme...

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Banks OK’d to trade in financial instruments. CMA to monitor accounts

The Central Bank (BDL) has reauthorized commercial banks and financial institutions to directly carry out transactions involving financial instruments on behalf of their clients, according to two new BDL circulars.

The new circulars overturn a November 2016 BDL decision that prohibited such transactions unless they were done through specialized banks or brokerage firms. That decision was frozen following an objection by the Association of Banks, said Amine Awad, General Manager of BLOM Ba...

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BLC to sell Cypriot bank to Maurice Sehnaoui. Sehnaoui to exit stake in BLC

A group of investors led by Maurice Sehnaoui is in talks with BLC Bank to buy its stake in the Cyprus-based USB Bank. Sehnaoui will in turn exit his stake in BLC Bank in favor to the Kassar family, which owns the majority of it.

BLC Bank owns 99.25 percent of USB Bank, whose shareholders' equity stood at around $85.5 million at the end of 2016. Sehanoui holds a 23 percent stake in BLC Bank, whose equity totaled $559.8 million at the end of 2017. He owns 18.4 percent through Holding M. Seh...

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Fidus to morph into a specialized or private bank. Equity increased to $25 million

Fidus SAL, a subsidiary of Société Générale de Banque au Liban (SGBL), has received preliminary approval from the Central Bank (BDL) to convert into a specialized bank, according to Jean Hanna, the company's Deputy General Manager.

For this purpose, Fidus increased its capital from $5 million to $20 million, and boosted shareholders' equity from $7.5 million to $25 million.

The new bank, tentatively named Fidus Invest or SGBL Private Bank, is expected t...

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Berytech Fund invests in Capital Banking Solutions. Company to expand to the Gulf

Berytech Fund II has acquired a stake in software developer Capital Banking Solutions (CBS) for $5 million.

Both parties declined to disclose the new shareholding distribution. Sources close to the deal estimated Berytech's share to be under 40 percent.

Samer Hanna, Chairman of CBS, said that the proceeds will be used for geographical expansion as well as the creation of new products.

"We will beef up our team in order to grow faster," he said. The company plans to enter t...

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Finance Bank under investigation. Problems to be solved within months

The Higher Banking Commission, which is the judicial arm of the Central Bank (BDL), has instructed the newly appointed general manager of Finance Bank to investigate suspected wrongdoing at the bank and to prepare a recovery plan.

The Commission appointed Nadim Rahal in April as General Manager of Finance Bank after it discharged the bank's board of directors and its previous Chairman Hassan Farran. The move came after Iraqi authorities took legal action against Farran on bribery allegati...

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Raoul Nehme named top gun at Bankmed. Second managerial change this year

Raoul Nehme has been appointed as Executive General Manager of Bank Med. He is replacing Mohamed Ali Beyhum who is leaving the bank. Beyhum has been in the position since 2010.

Nehme, who will take charge of his new job in June, was Chairman of the Executive Committee of ASTROBank in Cyprus. He was previously General Manager of Holding M. Sehnaoui which is one of the major shareholders in ASTROBank. Prior to that, Nehme was General Manager of BLC Bank in which Holding M. Sehnaoui also own...

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$200 million financed by European Bank. Energy and infrastructure projects are targeted

The investments made by the European Bank for Reconstruction and Development (EBRD) will reach more than $100 million in its first year of operation in Lebanon, according to Alain Pilloux, EBRD's Vice President for Banking. The bank plans to double this amount next year and has ambitious plans for the future as there is no upper limit for its investment, Pilloux said.

Locally, EBRD has so far invested $75 million.

The multilateral bank plans to finance projects in the energy secto...

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Banks to subsidize pre-approved housing loans. Mortgages from before March 15 can benefit

The Association of Banks (ABL) said it has asked the banks to bear the subsidy costs of already approved housing loans until the end of 2018. Loans accepted by the banks and submitted to the Central Bank (BDL) before March 15, 2018 will benefit from the banks' support.

A banking source said that an agreement has been reached between the banks and BDL in this regard. The source said that the value of these loans is estimated at around $300 million.

BDL will take over for the year 20...

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Financial crimes on the rise 597 cases reported. Embezzlement is the most reported crime

The number of money laundering and terrorism financing crimes reported to the Central Bank's Special Investigation Commission (SIC) increased 27 percent to 597 cases in 2017.

Nearly 80 percent of the cases were reported by local entities with the remaining 20 percent received from foreign entities.

The SIC has so far investigated 514 of these cases, or 86 percent of the total. It has referred 250 of the investigated cases to the General Prosecutor and to requesting authorities. The...

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Lebanese-Australian buys five pct of Bank of Beirut. Stake acquired for $57.3 million

Sarkis Nassif, CEO of Australia-based Holdmark Real Estate Property Group, will acquire five percent of Bank of Beirut for $57.3 million.

The bank will issue 3.05 million new common shares to Nassif at the current market price of $18.8 per share, a source said.

The conclusion of the deal requires the Central Bank's approval.

Salim Sfeir, the bank's Chairman, said the move is part of Bank of Beirut's expansion policy and that cooperation with Nassif "will allow us to foster f...

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Government plans $700 million bond issue. Move to unlock $4 billion in funding for infrastructure

The government plans to issue within one month special bonds on the local market in order to raise $700 million, said Nadim Munla, senior adviser to the Prime Minister.

This move will help the State unlock additional funding of $4 billion for 40 infrastructure projects from international financial institutions such as European Investment Bank and the World Bank. The $700 million represents the local contribution necessary to unlock these loans.

There has been an agreement between ...

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Fransabank to lend $150 million for energy. Bank will issue ‘green’ bonds

Fransabank plans to launch a $150 million program to finance local projects in the renewable energy sector and that targets energy efficiency, said Adnan Kassar, the bank's Chairman. "This is part of Fransabank's Green Strategy," he said.

The issuance of the first series of the program's 'Green Bonds' will be announced soon and will amount to $60 million, he said.

The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) will subs...

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Banks required to apply the Liquidity Coverage Ratio. Decision is part of Basel III requirements

The Central Bank (BDL) has instructed banks to apply the Liquidity Coverage Ratio (LCR) on their local and overseas operations, according to a new basic circular.

The LCR, which is one of the Basel III requirements, must be calculated separately for each significant currency. A currency is considered significant if it represents five percent or more of a bank's total liabilities.

According to the circular, BDL's Banking Control Commission (BCCL) will issue the relevant instructions...

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European Bank, IFC will invest $100 million. Targeting capital markets, bonds, SMEs

This year, the International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD) are preparing to launch investments in the financial sector.

Saad Sabra, IFC Country Head in Lebanon, Syria, and Yemen, said: "This year, we have in the pipeline local projects that will exceed $100 million with the goal to enhance the capacity of capital markets to allow more access to finance to investors."

The IFC is targeting investments in capital markets, such as...

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Alaa Al Khawaja chairs GroupMed. Mohammed Hariri is still Chairman of Bankmed

Egypt-based Jordanian businessman Alaa Al Khawaja, who last year acquired a 42.24 percent stake in GroupMed Holding, has become the group's Chairman.

Khawaja has replaced Mohammed Hariri who is still in his position as Chairman and General Manager of Bankmed which is fully owned by GroupMed. Mohamed Ali Beyhum has remained the bank's Executive General Manager.

Khawaja acquired the stake through his company OLT Holding from Ayman Rafic Hariri for around $535 million as GroupMed was...

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Circular published by BDL on new stimulus package. Interest rates slightly raised on productive sectors and some housing programs

The Central Bank (BDL) has launched a new stimulus program to subsidize housing loans and loans to the productive sectors.

BDL said in a new circular that it will subsidize up to $1 billion of loans this year. The loans denominated in lira that will be eligible for the subsidies total LL810 billion ($540 million) with the remaining $460 million consisting of loans denominated in US dollars. The dollar loans are mainly provided to the productive sectors.

The lion's share of the s...

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IFC funds EIP $60 million for SMEs. To invest in 18 industrial, agriculture and trade sector companies

The EIP Levant Fund, which was established and is managed by Emerging Investment Partners (EIP), a Beirut-based private equity fund management company, has received commitments to become shareholders in its capital from the International Finance Corporation (IFC), and Dutch Good Growth Fund (DGGF).

The value of the fund is between $50 and $60 million. The first phase of subscriptions will be closed in the first quarter of this year.

The fund will employ its capital in the coming ...

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Banks required to submit strategic plans. To be submitted regularly to Banking Control Commission

The Central Bank's Banking Control Commission (BCCL) has asked all banks to prepare strategic plans and related action plans, according to BCCL's circular no 292.

The banks must update these plans at least once a year and when needed. They should submit them annually to the BCCL before the end of January.

The action plans are used to execute the bank's general strategy.

The strategic and action plans must cover a period of at least three years. They should also encompas...

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Banks barred from insurance. Brokers are likely to benefit most

The Central Bank (BDL) has instructed banks and financial institutions not to engage in insurance or reinsurance activities or market and advertise insurance contracts.

Insurance companies owned by banks can continue their business operations as usual but they cannot market their deals through the banks.

BDL said that the banks and financial institutions are also prohibited from allowing representatives of insurance companies to have a work space on their premises.

A numb...

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Central Bank assets rise 16 percent. Loans to financial sector double to $12.7 billion

The total assets of the Central Bank (BDL) grew to $118.3 billion at the end of 2017, rising by $15.9 billion or 16 percent compared with a year earlier, according to BDL's data.

Deposits by the financial sector surged over the same period by $13.3 billion, or 16 percent, to $97.5 billion. The banks' deposits at BDL include a variety of items such as lira and dollar deposits, reserve requirements, and certificates of deposit (CDs).

The Central Bank's loans to the financial sec...

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