22 June 2015
BEIRUT: Credit Libanais decision to move its headquarters to a new $120 million smart building in Adlieh signals the banks long-term goal of cementing its presence in Lebanon while continuing expansion abroad in promising markets such as Africa, the banks chairman says.
This was an important move for us. We have first managed to reduce operating expenses by half after we brought all different departments that were located in different areas to one location. And second, we wanted to convey a message that the banking sector in Lebanon is still strong and sound, Joseph Torbey told The Daily Star in an interview.
Built over an area of 6,000 square meters, the 32-floor glass tower was constructed to act as a nerve center for branches and operations in Lebanon and abroad.
Speaking from his new office with a panoramic view of the capital, Torbey said the new location has enabled the bank to reduce administrative expenses by more than $2 million a year.
Torbey said expansion abroad was part of the long-term strategy of Credit Libanais to diversify revenues and boost profits.
But he remained cautious about regional expansion in light of the turmoil and mounting tensions in some Arab countries.
However, this tension in the region could lure, or at least we hope, some Arab funds and deposits to the Lebanese banking systems. The Lebanese banking sector continued to register steady growth despite the problems surrounding Lebanon, and this is one of the factors that could encourage Arab nationals to deposit their money in our local banks, he said.
Torbey pinned high hopes on the prospects of the banks expansion to African countries that have large Lebanese communities.
We have a presence in Senegal and we are planning to spread over the next few years to Ghana and the Ivory Coast. The central bank of Senegal has direct jurisdiction in seven African countries and this will make our job easier, he said.
Torbey said the main aim behind expansion in Africa is to capitalize on the presence of large Lebanese communities in these countries.
Lebanese expats in the Ivory Coast and other African countries are very powerful and actually control the economies of these states, he said.
Torbey stressed that the bank would move to any country that has potential, and above all political and security stability.
As for the possibility of acquiring another bank in Lebanon, he said Credit Libanais would only make such a move if the conditions were ripe and the price was reasonable.
The banking operations in Lebanon and the world have become very costly. You have to raise your equity and comply with Basel III recommendations and for this reason we have to take all these factors into account if we want to contemplate the acquisition of another bank, Torbey said.
Credit Libanais is one of the largest banks in Lebanon in terms of assets and customer deposits.
Total assets of the bank at the end of March stood at $8 billion while customer deposits were more than $7 billion. The bank recorded a net profit of $16.6 million in the first quarter of the year.
Our profits in the first six months of this year went up by 16 percent, and we hope to maintain the same results at the end of 2015, Torbey said.
He noted that Lebanese banks have weathered difficult times over the past decades, especially the Civil War in the country.
All government institutions were paralyzed during the war and the collection of taxes came to a halt. Instead, the militias who controlled most parts of the country levied illegal taxes on citizens. But in the meantime, Lebanese banks continued to operate despite the difficult conditions at that time and provided all services to citizens, Torbey said.
He added that even Lebanese investors and businessmen who travel abroad to expand their operations have to rely on Lebanese banks to finance their work.
The most important thing these days is to have correspondent banks abroad and Lebanese banks are the only ones capable of providing this service to all Lebanese, Torbey said.
He assured that the relations with the correspondent banks remained strong despite the strict requirements imposed by the international community in terms of money transfers from one country to another.
We are fully compliant with all money-laundering and terrorist-financing conditions. Credit Libanais for example received four awards from correspondent banks in recognition of its full compliance with rules and regulations.
Torbey also downplayed the impact of Syrias war on Lebanon, despite some difficulties that the conflict has created. It seems that all regional and international powers want Lebanon to remain immune to the ongoing tensions in some countries. These positive developments have helped the performance of the banking sector, he said.
Torbey also expressed confidence that the banking sector would continue to register growth in 2015 but underlined the importance of electing a president of the republic as soon as possible to reduce tension and restore the credibility of the state.
Copyright The Daily Star 2015.
